DRAFT RED HERRING PROSPECTUS

Dated February 23, 2021

(This Draft Red Herring Prospectus will be updated upon filing with the RoC)
Please read section 32 of the Companies Act, 2013
Book Built Offer

SONA BLW PRECISION FORGINGS LIMITED

Our Company was originally incorporated as “Sona Okegawa Precision Forgings Limited” at New Delhi as a public limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated October 27, 1995,
issued by the Registrar of Companies, NCT of Delhi and Haryana at New Delhi (“RoC”) and commenced operations pursuant to the certificate of commencement of business dated November 16, 1995 issued by the RoC. The name
of our Company was changed to “Sona BLW Precision Forgings Limited” as approved by our Shareholders by way of a resolution dated June 28, 2013 and a fresh certificate of incorporation dated July 23, 2013, consequent upon
change of name was issued by the RoC. For details in relation to the change in our Registered and Corporate Office of our Company, see “History and Certain Corporate Matters” beginning on page 191.
Registered and Corporate Office: Sona Enclave Village, Begumpur Khatola, Sector 35, Gurugram, Haryana – 122004, India
Telephone: +91 0124 476 8200; Contact Person: Ajay Pratap Singh, Vice President (Legal), Company Secretary and Compliance Officer
E-mail: [email protected]; Website: www.sonacomstar.com
Corporate Identity Number: U27300HR1995PLC083037
PROMOTERS OF OUR COMPANY: SUNJAY KAPUR, SONA AUTOCOMP HOLDING PRIVATE LIMITED AND SINGAPORE VII TOPCO III PTE. LTD.
INITIAL PUBLIC OFFER OF UP TO [●] EQUITY SHARES OF FACE VALUE OF ₹ 10 EACH (“EQUITY SHARES”) OF SONA BLW PRECISION FORGINGS LIMITED (“COMPANY”) FOR CASH AT A
PRICE OF ₹ [●] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF ₹ [●] PER EQUITY SHARE) (“OFFER PRICE”) AGGREGATING UP TO ₹ 60,000 MILLION COMPRISING A FRESH ISSUANCE
OF UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹ 3,000 MILLION BY OUR COMPANY (“FRESH ISSUE”) AND AN OFFER FOR SALE OF UP TO [●] EQUITY SHARES AGGREGATING UP TO ₹
57,000 MILLION BY SINGAPORE VII TOPCO III PTE. LTD. (“SELLING SHAREHOLDER”) AND SUCH EQUITY SHARES OFFERED BY THE SELLING SHAREHOLDER, THE “OFFERED SHARES”)
(SUCH OFFER BY THE SELLING SHAREHOLDER, THE “OFFER FOR SALE” AND TOGETHER WITH THE FRESH ISSUE, THE “OFFER”). THE OFFER SHALL CONSTITUTE [●]% OF THE POST-
OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
THE FACE VALUE OF EQUITY SHARES IS ₹ 10 EACH. THE OFFER PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE
DECIDED BY OUR COMPANY AND THE SELLING SHAREHOLDER, IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGERS AND WILL BE ADVERTISED IN ALL EDITIONS OF [●]AND
ALL EDITIONS OF [●] (WHICH ARE WIDELY CIRCULATED ENGLISH DAILY NEWSPAPERS AND HINDI DAILY NEWSPAPERS, HINDI ALSO BEING THE REGIONAL LANGUAGE OF HARYANA,
WHERE OUR REGISTERED AND CORPORATE OFFICE IS LOCATED), AT LEAST TWO WORKING DAYS PRIOR TO THE BID/OFFER OPENING DATE AND SHALL BE MADE AVAILABLE TO BSE
LIMITED (“BSE”) AND NATIONAL STOCK EXCHANGE OF INDIA LIMITED (“NSE”, AND TOGETHER WITH BSE, THE “STOCK EXCHANGES”) FOR THE PURPOSE OF UPLOADING ON THEIR
RESPECTIVE WEBSITES.
In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days following such revision of the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days.
In cases of force majeure, banking strike or similar circumstances, our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, may for reasons to be recorded in writing, extend the Bid/Offer
Period for a minimum of three Working Days, subject to the Bid/Offer Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by
notification to the Stock Exchanges, by issuing a public notice, and also by indicating the change on the respective websites of the Book Running Lead Managers and at the terminals of the Syndicate Members and by intimation to
Self-Certified Syndicate Banks (“SCSBs”), other Designated Intermediaries and the Sponsor Bank, as applicable.
This Offer is being made in terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”) read with Regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended (“SEBI ICDR Regulations”). This Offer is being made in accordance with Regulation 6(2) of the SEBI ICDR Regulations and through a Book Building Process wherein not less than
75% of the Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”, and such portion, the “QIB Portion”). Our Company and the Selling Shareholder may, in consultation with the
Book Running Lead Managers, allocate up to 60% of the QIB Portion to Anchor Investors on a discretionary basis in accordance with the SEBI ICDR Regulations (“Anchor Investor Portion”), out of which one-third shall be
available for allocation to domestic Mutual Funds only, subject to valid Bids being received from the domestic Mutual Funds at or above the Anchor Investor Allocation Price. Further, 5% of the QIB Portion (excluding the Anchor
Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders other than Anchor
Investors, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Equity Shares available for
allocation in the Mutual Fund Portion will be added to the remaining QIB Portion for proportionate allocation to QIBs. Further, not more than 15% of the Offer shall be available for allocation on a proportionate basis to Non-
Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidder(s) in accordance with SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price.
All potential Bidders, other than Anchor Investors, are required to mandatorily utilise the Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank account (including UPI ID
(defined hereinafter) in case of Retail Individual Bidder(s)) in which the corresponding Bid Amounts will be blocked by the SCSBs, to participate in the Offer. Anchor Investors are not permitted to participate in the Anchor Investor
Portion through the ASBA process. For details, see “Offer Procedure” beginning on page 419.
RISKS IN RELATION TO THE FIRST OFFER
This being the first public issue of Equity Shares of our Company, there has been no formal market for the Equity Shares. The face value of each Equity Share is ₹ 10. The Floor Price, Cap Price and Offer Price (determined and
justified by our Company and the Selling Shareholder in consultation with the Book Running Lead Managers, in accordance with the SEBI ICDR Regulations, and on the basis of the assessment of market demand for the Equity
Shares by way of the Book Building Process as stated in “Basis for Offer Price” beginning on page 88) 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 or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing.
GENERAL RISK
Investments in equity and equity-related securities involve a degree of risk and Bidders should not invest any funds in the Offer unless they can afford to take the risk of losing their investment. Bidders are advised to read the risk
factors carefully before taking an investment decision in the Offer. For taking an investment decision, Bidders must rely on their own examination of our Company and the Offer, including the risks involved. The Equity Shares in
the Offer have neither been recommended, nor approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific
attention of the Bidders is invited to “Risk Factors” beginning on page 25.
COMPANY’S AND SELLING SHAREHOLDER’S 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 Offer, which is material in the context
of the Offer, 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.
Further, the Selling Shareholder, accepts responsibility for and confirms only statements expressly made by it in this Draft Red Herring Prospectus solely in relation to itself and the Offered Shares and assumes responsibility that
such statements are true and correct in all material respects and not misleading in any material respect. The Selling Shareholder assumes no responsibility for any other statements, including, inter alia, any of the statements made
by or relating to our Company or in relation to our business in this Draft Red Herring Prospectus.
LISTING
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed the Stock Exchanges. Our Company has received ‘in-principle’ approvals from BSE and NSE for the listing of the Equity Shares pursuant to
letters dated [●] and [●], respectively. For the purposes of the Offer, the Designated Stock Exchange shall be [●]. A copy of the Red Herring Prospectus and the Prospectus shall be delivered to the RoC for filing in accordance
under Section 26(4) and Section 32 of the Companies Act. For details of the material contracts and documents available for inspection from the date of the Red Herring Prospectus up to the Bid/Offer Closing Date, see “Material
Contracts and Documents for Inspection” beginning on page 444.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE OFFER

Kotak Mahindra Capital Credit Suisse Securities (India) JM Financial Limited J.P. Morgan India Private Nomura Financial Advisory and KFin Technologies Private Limited
Company Limited Private Limited 7th Floor, Cnergy Limited Securities (India) Private Limited (formerly known as Karvy Fintech
1st Floor, 27 BKC Ceejay House, 9 th Floor, Appasaheb Marathe Marg J.P. Morgan Tower Ceejay House, Level 11 Plot F, Private Limited)
Plot No. 27, ‘G’ Block Plot F, Shivsagar Estate Prabhadevi, Off. C.S.T. Road Shivsagar Estate, Dr. Annie Besant Selenium Tower-B, Plot 31 & 32
Bandra Kurla Complex Dr. Annie Besant Mumbai, Maharashtra – 400025, Kalina, Santacruz (East) Road, Worli Gachibowli, Financial District,
Bandra (E) Road Worli, Mumbai India Mumbai – 400 098 Maharashtra, Mumbai – 400 018 Nanakramguda, Serilingampally,
Mumbai, Maharashtra – 400051, Maharashtra – 400018, India Tel: +91 22 6630 3030 India Maharashtra, India Hyderabad, Telangana – 500032, India
India Tel: +91 22 6777 3885 E-mail: Tel: +91 22 6157 3000 Tel: +91 22 4037 4037 Tel: +91 40 6716 2222
Tel: +91 22 4336 0000 E-mail: list.sonaipo@credit- [email protected] E-mail: E-mail: E-mail:
E-mail: suisse.com Investor Grievance E-mail: SONACOMSTAR_IPO@jpmorga [email protected] [email protected]
[email protected] Investor Grievance E-mail: [email protected] n.com Investor Grievance E-mail: Investor Grievance E-mail:
Website: list.igcellmer-bnkg@credit- Website: www.jmfl.com Investor Grievance E-mail: investorgrievances- [email protected]
www.investmentbank.kotak.com suisse.com Contact Person: Prachee Dhuri [email protected] [email protected] Website: www.kfintech.com
Investor Grievance E-mail: Website: SEBI Registration No.: m Website: Contact Person: M Murali Krishna
[email protected] www.credit- INM000010361 Website: www.nomuraholdings.com/compan SEBI Registration No.:
Contact Person: Ganesh Rane suisse.com/in/en/investment- www.jpmipl.com y/group/asia/india/index.html INR000000221
SEBI Registration No.: banking-apac/investment- Contact Person: Saarthak K Soni Contact Person: Vishal Kanjani /
INM000008704 banking-in-india/ipo.html SEBI Registration No.: Prithvi Ghag
Contact Person: Abhishek Joshi INM000002970 SEBI Registration No.:
SEBI Registration No.: INM000011419
INM000011161
BID/OFFER PROGRAMME
BID/OFFER OPENS ON* [●]
BID/OFFER CLOSES ON** [●]
* Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, consider participation by Anchor Investors in accordance with the SEBI ICDR Regulations. The Anchor
Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date.
** Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date in
accordance with the SEBI ICDR Regulations.
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 TABLE OF CONTENTS

SECTION I: GENERAL .................................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS ......................................................................................................................... 1
CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ........................ 13
FORWARD-LOOKING STATEMENTS ........................................................................................................................ 18
SUMMARY OF THE OFFER DOCUMENT................................................................................................................... 19
SECTION II: RISK FACTORS ....................................................................................................................................... 25
SECTION III: INTRODUCTION.................................................................................................................................... 54
THE OFFER................................................................................................................................................................... 54
SUMMARY OF RESTATED CONSOLIDATED FINANCIAL INFORMATION ........................................................... 55
SUMMARY OF PRO FORMA CONSOLIDATED FINANCIAL INFORMATION......................................................... 59
GENERAL INFORMATION.......................................................................................................................................... 63
CAPITAL STRUCTURE ................................................................................................................................................ 71
OBJECTS OF THE OFFER ............................................................................................................................................ 82
BASIS FOR OFFER PRICE ............................................................................................................................................ 88
STATEMENT OF SPECIAL TAX BENEFITS ............................................................................................................... 91
SECTION IV: ABOUT OUR COMPANY .................................................................................................................... 100
INDUSTRY OVERVIEW............................................................................................................................................. 100
OUR BUSINESS .......................................................................................................................................................... 159
KEY REGULATIONS AND POLICIES IN INDIA ....................................................................................................... 187
HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................ 191
OUR MANAGEMENT................................................................................................................................................. 204
OUR PROMOTERS AND PROMOTER GROUP ......................................................................................................... 220
OUR GROUP COMPANIES ........................................................................................................................................ 225
DIVIDEND POLICY.................................................................................................................................................... 229
SECTION V: FINANCIAL INFORMATION ............................................................................................................... 230
RESTATED CONSOLIDATED FINANCIAL INFORMATION ................................................................................... 230
PROFORMA CONSOLIDATED FINANCIAL INFORMATION ................................................................................. 310
OTHER FINANCIAL INFORMATION........................................................................................................................ 347
CAPITALISATION STATEMENT .............................................................................................................................. 348
FINANCIAL INDEBTEDNESS ................................................................................................................................... 349
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
..................................................................................................................................................................................... 351
SECTION VII: LEGAL AND OTHER INFORMATION ............................................................................................ 392
OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ....................................................................... 392
GOVERNMENT AND OTHER APPROVALS ............................................................................................................. 396
OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................... 399
SECTION VIII: OFFER INFORMATION ................................................................................................................... 412
TERMS OF THE OFFER.............................................................................................................................................. 412
OFFER STRUCTURE .................................................................................................................................................. 417
OFFER PROCEDURE.................................................................................................................................................. 419
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES.................................................................. 435
SECTION IX: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ................................................................. 436
SECTION X: OTHER INFORMATION ....................................................................................................................... 444
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION.......................................................................... 444
DECLARATION ............................................................................................................................................................ 447

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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, or unless otherwise specified, shall have the meaning as provided below. References to any legislations, acts,
regulations, rules, guidelines, circulars, notifications, clarifications or policies shall be to such legislations, acts, regulations,
rules, guidelines or policies as amended, updated, supplemented, re-enacted or modified, from time to time, and any reference
to a statutory provision shall include any subordinate legislation made, from time to time, under such provision.

The words and expressions used in this Draft Red Herring Prospectus, but not defined herein shall have the meaning ascribed
to such terms under the SEBI ICDR Regulations, the Companies Act, the SCRA, and the Depositories Act and the rules and
regulations made thereunder.

The terms not defined herein but used in “Statement of Special Tax Benefits”, “Industry Overview”, “Key Regulations and
Policies in India”, “Restated Consolidated Financial Information”, “Pro Forma Consolidated Financial Information”,
“Outstanding Litigation and Material Developments”, “Main Provisions of Articles of Association” and “Offer Procedure”
beginning on pages 91, 100, 187, 230, 310, 392, 436 and 419, respectively, shall have the meanings ascribed to such terms in
these respective sections.

General Terms

Term Description
“our Company” or “the Issuer” or Sona BLW Precision Forgings Limited, a public limited company incorporated under the Companies
“the Company” Act, 1956 and having its Registered and Corporate Office at Sona Enclave Village, Begumpur Khatola,
Sector 35, Gurugram, Haryana – 122 001, India.
“we” or “us” or “our” Unless the context otherwise indicates or implies, our Company together with its Subsidiaries, on a
consolidated basis

Company Related Terms

Term Description
“Articles of Association” or “AoA” Articles of association of our Company, as amended from time to time
or “Articles”
Audit Committee Audit committee of our Board, as described in “Our Management - Committees of the Board” beginning
on page 212
“Board” or “Board of Directors” Board of Directors of our Company or a duly constituted committee thereof
Chairman Chairman and Non-Executive Director of our Board, namely, Sunjay Kapur
“Chief Financial Officer” or “CFO” Group chief financial officer of our Company, namely, Rohit Nanda
Committee(s) Duly constituted committee(s) of our Board of Directors
Comstar Automotive Comstar Automotive Technologies Private Limited
Comstar Automotive HK Comstar Automotive Hong Kong Limited
Comstar Entities Comstar Automotive and Comstar Automotive HK
Corporate Promoters Sona Autocomp and the Singapore Topco
“Corporate Social Responsibility Corporate social responsibility committee of our Board, as described in “Our Management - Committees
Committee” or “CSR Committee” of the Board” beginning on page 212
Director(s) Director(s) on the Board of our Company
Equity Shares Unless otherwise stated, equity shares of our Company bearing face value of ₹ 10 each
“ESOP 2020” or “Employee Stock Sona BLW Precision Forgings Limited – Employee Stock Option Scheme 2020, as amended
Option Plan 2020”
Executive Director(s) Executive director(s) of our Company. For details of the Executive Directors, see “Our Management”
beginning on page 204
Foreign Subsidiaries The foreign subsidiaries of our Company, namely:
1. Comstar Automotive Hong Kong Ltd.;
2. Comstar Automotive USA LLC;
3. Comstar Automotive (Hangzhou) Co. Ltd.;
4. Comstar Hong Kong Mexico No1 LLC;
5. Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V;
6. Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V; and
7. Comestel Automotive Technologies Mexicana
Group Companies Companies as identified in “Our Group Companies” beginning on page 225
“Gurugram Unit I” or “Gurugram Our manufacturing facility located at Sona Enclave, Village Begumpur Khatola
Unit II” or “Gurugram Unit III” sector 35, P.O. – 90, Gurugram, Haryana – 122 004, India
Independent Director(s) Independent director(s) on our Board. For details of the Independent Directors, see “Our Management”
beginning on page 204

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 Term Description
IPO Committee The IPO committee of our Board
Indian Subsidiaries The Indian subsidiaries of our Company, namely:
1. Comstar Automotive;
2. Comstar Automotive Technology Services Private Limited; and
3. Sona Comstar eDrive Private Limited
Key Managerial Personnel Key managerial personnel of our Company in terms of Regulation 2(1)(bb) of the SEBI ICDR
Regulations and Section 2(51) of the Companies Act, as described in “Our Management - Key
Managerial Personnel” beginning on page 218
JM Financial Trustee JM Financial Trustee Company Private Limited
Managing Director and Group Managing Director and Group Chief Executive Officer of our Company, namely, Vivek Vikram Singh
Chief Executive Officer
Manesar Unit Our manufacturing facility located at plot no. – 13, sector 2, IMT Manesar,
Gurugram, Haryana – 122 051, India
Material Foreign Subsidiary Comstar Automotive USA LLC
Materiality Policy The policy adopted by our Board on February 12, 2021, for identification of Group Companies, material
outstanding litigation and outstanding dues to material creditors, in accordance with the disclosure
requirements under the SEBI ICDR Regulations
Material Subsidiaries Comstar Automotive and Comstar Automotive USA LLC
“Memorandum of Association” or Memorandum of association of our Company, as amended from time to time
“MoA”
“Nomination and Remuneration Nomination and remuneration committee of our Board, as described in “Our Management - Committees
Committee” or “NRC Committee” of the Board” beginning on page 212
Preference Shares Compulsorily convertible cumulative preference shares of face value of ₹ 10 each of our Company
Promoters Promoters of our Company, being, Sona Promoters and Singapore Topco
Promoter Group(s) The Sona Promoter Group and the Singapore Topco Promoter Group
Pro Forma Consolidated Financial The pro forma consolidated financial information for illustrative purposes presented in “Financial
Information Information – Pro Forma Consolidated Financial Information” on page 310, is meant to show the
impact of the acquisition of Comstar Entities on our Company, as if the acquisition had been completed
at a date prior to the first period presented therein. Further, the erstwhile subsidiary SONA BV and its
subsidiaries, and the erstwhile associate, Sona Skill Development Centre Limited, have not been
considered for consolidation in the Pro Forma Consolidated Financial Information
Pune Unit I Our manufacturing facility located at T-46, MIDC, Bhosari Industrial Area
Pune, Maharashtra – 411 026, India
Pune Unit II Our manufacturing facility located at A-78/2, MIDC, Chakan Industries Phase II Villi, Wasuli,
Pune, Maharashtra – 410 501, India
Registered and Corporate Office The registered and corporate office of our Company located at Sona Enclave Village, Begumpur
Khatola, Sector 35, Gurugram, Haryana – 122 001, India
“Registrar of Companies” or Registrar of Companies, NCT of Delhi and Haryana at New Delhi
“RoC”
Restated Consolidated Financial Our restated consolidated summary statements of assets and liabilities as at December 31, 2020 and
Information March 31, 2020, March 31, 2019 and March 31, 2018 and the restated consolidated statements of profit
and loss, cash flow statement and changes in equity for the nine months period ended December 31,
2020 and for the year ended March 31, 2020, March 31, 2019 and March 31, 2018 of our Company
together with the statement of significant accounting policies, and other explanatory information
thereon, derived from audited consolidated special purpose financial statements as at and for the nine
month period ended December 31, 2020 and the audited consolidated financial statements for the years
ended March 31, 2020, March 31, 2019 and March 31, 2018, together with the annexures and notes
thereto, and the examination report thereon, prepared in accordance with Ind AS, and restated in
accordance with the SEBI ICDR Regulations and the Guidance Note on “Reports in Company
Prospectuses (Revised 2019)” issued by the ICAI
Risk Management Committee Risk management committee of our Board, as described in “Our Management - Committees of the
Board” beginning on page 212
Scheme of Amalgamation The scheme of amalgamation approved by our Board on December 20, 2019 and filed with the NCLT
Chandigarh for the amalgamation of Comstar Automotive with our Company with effect from July 5,
2019, being the appointed date as described in “History and Certain Corporate Matters” on page 191
Selling Shareholder Singapore VII Topco III Pte. Ltd.
SHA The shareholders’ agreement dated October 16, 2018 executed between our Company, Sona Autocomp,
Sunjay Kapur and BCP Topco VI Pte. Ltd. read with (i) the assignment agreement dated February 14,
2019 executed between BCP Topco VI Pte. Ltd. and Singapore VII Topco III Pte. Ltd.; (ii) deed of
adherence dated February 14, 2019; and (iii) the waiver cum amendment agreement dated February 22,
2021
Shareholder(s) Shareholder(s) of our Company from time to time
Singapore Topco One of our Promoters, being, Singapore VII Topco III Pte. Ltd., an affiliate of The Blackstone Group
Inc.

2
 Term Description
Singapore Topco Promoter Group Persons and entities constituting the promoter group of Singapore Topco in terms of Regulation 2(1)(pp)
of the SEBI ICDR Regulations, as described in “Our Promoters and Promoter Group” beginning on
page 220
Sona Autocomp Sona Autocomp Holding Private Limited
SONA BV Sona Holdings B.V., The Netherlands
Sona BV Group Sona Holding B.V., Netherlands and its subsidiaries
Sona Promoters Sona Autocomp and Sunjay Kapur
Sona Promoter Group Persons and entities constituting the promoter group of the Sona Promoters in terms of Regulation
2(1)(pp) of the SEBI ICDR Regulations, as described in “Our Promoters and Promoter Group”
beginning on page 220
SSSPA The share subscription and share purchase agreement dated October 16, 2018 executed between our
Company, Sona Autocomp, Sunjay Kapur, JM Financial Trustee and BCP Topco VI Pte. Ltd.
Stakeholders’ Relationship Stakeholders’ relationship committee of our Board, as described in “Our Management - Committees of
Committee the Board” beginning on page 212
Statutory Auditors The statutory auditors of our Company, being Walker Chandiok & Co LLP, Chartered Accountants
Subsidiaries The subsidiaries of our Company, namely:
1. Comstar Automotive;
2. Comstar Automotive Technology Services Private Limited;
3. Comstar Automotive Hong Kong Ltd.;
4. Comstar Automotive USA LLC;
5. Comstar Automotive (Hangzhou) Co. Ltd.;
6. Comstar Hong Kong Mexico No1 LLC;
7. Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V;
8. Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V;
9. Comestel Automotive Technologies Mexicana; and
10. Sona Comstar eDrive Private Limited
“Vice President (Legal), Company Vice President (Legal), Company Secretary and Compliance officer of our Company, namely, Ajay
Secretary and Compliance Officer” Pratap Singh
or “Compliance Officer” or
“Company Secretary”

Offer Related Terms

Term Description
Acknowledgement Slip The slip or document issued by the relevant Designated Intermediary(ies) to a Bidder as proof of
registration of the Bid cum Application Form
Allot, Allotment or Allotted Unless the context otherwise requires, allotment (in case of the Fresh Issue) or transfer (in case of the
Offer for Sale), of the Equity Shares pursuant to the Offer to the successful Bidders
Allotment Advice A note or advice or intimation of Allotment sent to the successful Bidders who have been or are to be
Allotted Equity Shares after the Basis of Allotment has been approved by the Designated Stock
Exchange
Allottee A successful Bidder to whom the Equity Shares are Allotted
Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion in accordance with the
requirements specified in the SEBI ICDR Regulations and the Red Herring Prospectus and who has Bid
for an amount of at least ₹ 100 million
Anchor Investor Allocation Price The price at which Equity Shares will be allocated to the Anchor Investors in terms of the Red Herring
Prospectus, which will be decided by our Company and the Selling Shareholder, in consultation with
the Book Running Lead Managers
Anchor Investor Application Form The application form used by an Anchor Investor to make a Bid in the Anchor Investor Portion and
which will be considered as an application for Allotment in terms of the Red Herring Prospectus and
the Prospectus
Anchor Investor Bid/Offer Period One Working Day prior to the Bid/Offer Opening Date, on which Bids by Anchor Investors shall be
submitted and allocation to Anchor Investors shall be completed
Anchor Investor Offer Price The final price at which the Equity Shares will be Allotted to the Anchor Investors in terms of the Red
Herring Prospectus and the Prospectus, which price will be equal to or higher than the Offer Price but
not higher than the Cap Price

The Anchor Investor Offer Price will be decided by our Company and the Selling Shareholder, in
consultation with the Book Running Lead Managers
Anchor Investor Pay-in Date With respect to Anchor Investor(s), the Anchor Investor Bid/Offer Period, and in the event the Anchor
Investor Allocation Price is lower than the Anchor Investor Offer Price, not later than two Working
Days after the Bid/ Offer Closing Date
Anchor Investor Portion Up to 60% of the QIB Portion or up to [●] Equity Shares which may be allocated by our Company and
the Selling Shareholder, in consultation with the Book Running Lead Managers, to the Anchor Investors
on a discretionary basis in accordance with the SEBI ICDR Regulations

3
 Term Description
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 An application, whether physical or electronic, used by ASBA Bidders, to make a Bid and authorising
Amount” or an SCSB to block the Bid Amount in the ASBA Account and will include amounts blocked by the SCSB
ASBA” upon acceptance of UPI Mandate Request by RIBs using the UPI Mechanism
ASBA Account A bank account maintained by ASBA Bidder with an SCSB for blocking the Bid Amount mentioned in
the ASBA Form and will include a bank account of RIBs linked with UPI ID, which is blocked upon
acceptance of a UPI Mandate Request made by the RIB using the UPI Mechanism
ASBA Bidders All Bidders except Anchor Investors
ASBA Form An application form, whether physical or electronic, used by ASBA Bidders to submit Bids, which will
be considered as the application for Allotment in terms of the Red Herring Prospectus and the Prospectus
Banker(s) to the Offer Collectively, the Escrow Collection Bank, Refund Bank, Public Offer Bank and Sponsor Bank
Basis of Allotment The basis on which Equity Shares will be Allotted to successful Bidders under the Offer. For details,
see “Offer Procedure” beginning on page 419
Bid An indication to make an offer during the Bid/Offer Period by an ASBA Bidder pursuant to submission
of the ASBA Form, or during the Anchor Investor Bid/Offer Period by an Anchor Investor, pursuant to
submission of the Anchor Investor Application Form, to subscribe to or purchase the Equity Shares at a
price within the Price Band, including all revisions and modifications thereto as permitted under the
SEBI ICDR Regulations and 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 optional Bids indicated in the Bid cum Application Form and payable by the Bidder
or blocked in the ASBA Account of the ASBA Bidders, as the case maybe, upon submission of the Bid
Bid cum Application Form Anchor Investor Application Form or the ASBA Form, as the context requires
Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter
Bid/Offer Closing Date Except in relation to any Bids received from the Anchor Investors, the date after which the Designated
Intermediaries will not accept any Bids, being [●], which shall be notified in all editions of [●] and all
editions of [●] (which are widely circulated English daily newspapers and Hindi daily newspapers,
Hindi also being the regional language of Haryana, where our Registered and Corporate Office is
located)

In case of any revisions, the extended Bid/ Offer Closing Date will be widely disseminated by
notification to the Stock Exchanges, by issuing a public notice, and also by indicating the change on the
websites of the Book Running Lead Managers and at the terminals of the other members of the Syndicate
and by intimation to the Designated Intermediaries and the Sponsor Bank

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, may
consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date
in accordance with the SEBI ICDR Regulations
Bid/Offer Opening Date Except in relation to any Bids received from the Anchor Investors, the date on which the Designated
Intermediaries shall start accepting Bids, being [●], which shall be published in all editions of [●] and
all editions of [●] (which are widely circulated English daily newspapers and Hindi daily newspapers,
Hindi also being the regional language of Haryana, where our Registered and Corporate Office is
located)
Bid/Offer Period Except in relation to Anchor Investors, the period between the Bid/Offer Opening Date and the
Bid/Offer Closing Date, inclusive of both days, during which Bidders can submit their Bids, including
any revisions thereof, in accordance with the SEBI ICDR Regulations, provided that such period shall
be kept open for a minimum of three Working Days

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, may
consider closing the Bid/Offer Period for QIBs one Working Day prior to the Bid/Offer Closing Date
in accordance with the SEBI ICDR Regulations
Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the
Bid cum Application Form and unless otherwise stated or implied, which includes an ASBA Bidder and
an Anchor Investor
Bidding Centres The centres at which the Designated Intermediaries shall accept the Bid cum Application Forms, being
the Designated Branches for SCSBs, Specified Locations for the Syndicate, Broker Centres for
Registered Brokers, Designated RTA Locations for RTAs and Designated CDP Locations for CDPs
Book Building Process Book building process, as provided in Schedule XIII of the SEBI ICDR Regulations, in terms of which
the Offer is being made
“Book Running Lead Managers” or The book running lead managers to the Offer namely, Kotak, Credit Suisse, JM Financial, J.P. Morgan
“BRLMs” and Nomura
Broker Centres The broker centres notified by the Stock Exchanges where ASBA Bidders can submit the ASBA Forms
to a Registered Broker

The details of such Broker Centres, along with the names and the contact details of the Registered
Brokers are available on the websites of the Stock Exchanges (www.bseindia.com and
www.nseindia.com)

4
 Term Description
Cap Price The higher end of the Price Band, above which the Offer Price and Anchor Investor Offer Price will not
be finalised and above which no Bids will be accepted
Client ID The client identification number maintained with one of the Depositories in relation to demat account
“Collecting Depository A depository participant as defined under the Depositories Act, 1996, registered with SEBI and who is
Participant” or “CDP” eligible to procure Bids from relevant Bidders at the Designated CDP Locations in terms of SEBI
circular number CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI
“Confirmation of Allocation Note” A notice or intimation of allocation of the Equity Shares sent to Anchor Investors, who have been
or “CAN” allocated Equity Shares, after the Anchor Investor Bid/Offer Period
Credit Suisse Credit Suisse Securities (India) Private Limited
CRIS CRISIL’s Ratings Division / CRISIL Risk and Infrastructure Solutions Ltd.
CRISIL CRISIL Limited
CRISIL Industry Report Industry report entitled “Assessment of Indian Market Potential for Specific Precision Forged and
Electrical Components” dated January 2021 by CRISIL
Industry Reports CRISIL Industry Report and Ricardo Industry Report
Cut-off Price The Offer Price finalised by our Company and the Selling Shareholder, in consultation with the Book
Running Lead Managers which shall be any price within the Price Band

Only RIBs (subject to the Bid Amount being up to ₹ 200,000) are entitled to Bid at the Cut-off Price.
QIBs (including Anchor Investors) and Non-Institutional Bidders are not entitled to Bid at the Cut-off
Price
Demographic Details The demographic details of the Bidders including the Bidders’ address, name of the Bidders’ father or
husband, investor status, occupation, bank account details, PAN and UPI ID, where applicable
Designated Branches Such branches of the SCSBs which shall collect the ASBA Forms from relevant Bidders, a list of which
is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35, or at such
other website as may be prescribed by SEBI from time to time
Designated CDP Locations Such locations of the CDPs where relevant ASBA Bidders can submit the ASBA Forms.

The details of such Designated CDP Locations, along with names and contact details of the CDPs
eligible to accept ASBA Forms are available on the websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
Designated Date The date on which the Escrow Collection Bank(s) transfer funds from the Escrow Account to the Public
Offer Account or the Refund Account, as the case may be, and the instructions are issued to the SCSBs
(in case of RIBs using UPI Mechanism, instruction issued through the Sponsor Bank) for the transfer of
amounts blocked by the SCSBs in the ASBA Accounts to the Public Offer Account, in terms of the Red
Herring Prospectus and the Prospectus, following which the Equity Shares will be Allotted in the Offer
Designated Intermediary(ies) Collectively, the members of the Syndicate, sub-syndicate or agents, SCSBs (other than RIBs using the
UPI Mechanism), Registered Brokers, CDPs and RTAs, who are authorised to collect Bid cum
Application Forms from the relevant Bidders, in relation to the Offer
Designated RTA Locations Such locations of the RTAs where relevant ASBA Bidders can submit the ASBA Forms to RTAs.

The details of such Designated RTA Locations, along with names and contact details of the RTAs
eligible to accept ASBA Forms are available on the websites of the Stock Exchanges
(www.bseindia.com and www.nseindia.com)
Designated Stock Exchange [●]
“Draft Red Herring Prospectus” or This draft red herring prospectus dated February 23, 2021 filed with SEBI and issued in accordance
“DRHP” with the SEBI ICDR Regulations, which does not contain complete particulars of the price at which the
Equity Shares will be Allotted and the size of the Offer, including any addenda or corrigenda thereto
Eligible FPI(s) FPI(s) that are eligible to participate in the Offer in terms of applicable law and from such jurisdictions
outside India where it is not unlawful to make an offer / invitation under the Offer and in relation to
whom the Bid cum Application Form and the Red Herring Prospectus constitutes an invitation to
subscribe to the Equity Shares
Eligible NRI(s) NRI(s) eligible to invest under Schedule 3 and Schedule 4 of the FEMA Rules, from jurisdictions outside
India where it is not unlawful to make an offer or invitation under the Offer and in relation to whom the
Bid cum Application Form and the Red Herring Prospectus will constitute an invitation to purchase the
Equity Shares
Escrow Account(s) The ‘no-lien’ and ‘non-interest bearing’ account(s) opened with the Escrow Collection Bank and in
whose favour the Bidders (excluding the ASBA Bidders) will transfer money through direct
credit/NEFT/RTGS/NACH in respect of the Bid Amount when submitting a Bid
Escrow and Sponsor Bank The escrow and sponsor bank agreement to be entered into between our Company, the Selling
Agreement Shareholder, the Book Running Lead Managers, the Registrar to the Offer, the Banker(s) to the Offer
and the Syndicate Members for, inter alia, collection of the Bid Amounts from the Anchor Investors,
transfer of funds to the Public Offer Account and where applicable, refunds of the amounts collected
from the Anchor Investors, on the terms and conditions thereof, in accordance with the UPI Circulars
Escrow Collection Bank(s) Bank(s), which are clearing members and registered with SEBI as a banker to an issue under the SEBI
BTI Regulations and with whom the Escrow Account will be opened, in this case being, [●]

5
 Term Description
First Bidder The Bidder whose name shall be mentioned in the Bid cum Application Form or the Revision Form and
in case of joint Bids, whose name also appears as the first holder of the beneficiary account held in joint
names
Floor Price The lower end of the Price Band, subject to any revision thereto, at or above which the Offer Price and
the Anchor Investor Offer Price will be finalised and below which no Bids will be accepted
Fresh Issue Fresh issue of up to [●] Equity Shares aggregating up to ₹ 3,000 million by our Company
Fugitive Economic Offender An individual who is declared a fugitive economic offender under Section 12 of the Fugitive Economic
Offenders Act, 2018
“General Information Document” The General Information Document for investing in public issues, prepared and issued in accordance
or “GID” with the circular (SEBI/HO/CFD/DL1/CIR/P/2020/37) dated March 17, 2020, suitably modified and
updated pursuant to the circular (SEBI/HO/CFD/DIL2/CIR/P/2020/50) dated March 30, 2020, as
amended from time to time and as included in “Offer Procedure” beginning on page 419
JM Financial JM Financial Limited
J.P. Morgan J.P. Morgan India Private Limited
Kotak Kotak Mahindra Capital Company Limited
Maximum RIB Allottees The maximum number of RIBs who can be allotted the minimum Bid Lot. This is computed by dividing
the total number of Equity Shares available for Allotment to RIBs by the minimum Bid Lot
Monitoring Agency [●]
Monitoring Agency Agreement The agreement to be entered into between our Company and the Monitoring Agency
Mutual Fund Portion 5 % of the Net QIB Portion or [●] Equity Shares which shall be available for allocation to Mutual Funds
only on a proportionate basis, subject to valid Bids being received at or above the Offer Price
Mutual Funds Mutual funds registered with SEBI under the Securities and Exchange Board of India (Mutual Funds)
Regulations, 1996
Net Proceeds Proceeds from the Fresh Issue less our Company’s share of the Offer expenses. For further details, see
“Objects of the Offer” beginning on page 82
Net QIB Portion The portion of the QIB Portion less the number of Equity Shares Allotted to the Anchor Investors
Nomura Nomura Financial Advisory and Securities (India) Private Limited

“Non-Institutional Bidders” or All Bidders that are not QIBs or RIBs and who have Bid for Equity Shares, for an amount of more than
“NIBs” ₹ 200,000 (but not including NRIs other than Eligible NRIs)
Non-Institutional Portion The portion of the Offer being not more than 15% of the Offer comprising [●] Equity Shares which
shall be available for allocation on a proportionate basis to Non-Institutional Bidders, subject to valid
Bids being received at or above the Offer Price
Non-Resident A person resident outside India, as defined under FEMA and includes NRIs, FPIs and FVCIs
“Non-Resident Indians” or A non-resident Indian as defined under the FEMA Rules
“NRI(s)”
Offer The initial public offer of up to [●] Equity Shares of face value of ₹ 10 each for cash at a price of ₹ [●]
each (including a share premium of ₹ [●] per Equity Share), aggregating up to ₹ 60,000 million,
comprising the Fresh Issue and the Offer for Sale
Offer Agreement The offer agreement dated February 23, 2021 entered into between our Company, the Selling
Shareholder and the Book Running Lead Managers, pursuant to which certain arrangements are agreed
to in relation to the Offer
Offer for Sale Offer for Sale of up to [●] Equity Shares aggregating up to ₹ 57,000 million by Singapore VII Topco
III Pte. Ltd.
Offer Price The final price at which Equity Shares will be Allotted to ASBA Bidders in terms of the Red Herring
Prospectus. Equity Shares will be Allotted to Anchor Investors at the Anchor Investor Offer Price in
terms of the Red Herring Prospectus

The Offer Price will be decided by our Company and the Selling Shareholder in consultation with the
Book Running Lead Managers on the Pricing Date in accordance with the Book Building Process and
the Red Herring Prospectus
Offer Proceeds The proceeds of the Offer that will be available to our Company and the Selling Shareholder. For further
details on the use of Offer Proceeds from the Fresh Issue, see “Objects of the Offer” beginning on page
82
Offered Shares Up to [●] Equity Shares aggregating to ₹ 57,000 million offered by the Selling Shareholder in the Offer
for Sale
Price Band The price band of a minimum price of ₹ [●] per Equity Share (Floor Price) and the maximum price of ₹
[●] per Equity Share (Cap Price) including revisions thereof.

The Price Band and the minimum Bid Lot for the Offer will be decided by our Company and the Selling
Shareholder in consultation with the Book Running Lead Managers and will be advertised in all editions
of [●] and all editions of [●] (which are widely circulated English daily newspapers and Hindi daily
newspapers, Hindi also being the regional language of Haryana, where our Registered and Corporate
Office is located), at least two Working Days prior to the Bid/Offer Opening Date and shall be available
to the Stock Exchanges for the purpose of uploading on their respective websites.
Pricing Date The date on which our Company and the Selling Shareholder, in consultation with the Book Running
Lead Managers, will finalise the Offer Price

6
 Term Description
Prospectus The prospectus to be filed with the RoC on or after the Pricing Date in accordance with Section 26 of
the Companies Act 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 thereto
Public Offer Account The ‘no-lien’ and ‘non-interest bearing’ account opened, in accordance with Section 40(3) of the
Companies Act with the Public Offer Bank to receive monies from the Escrow Account and the ASBA
Accounts on the Designated Date
Public Offer Bank(s) Bank(s) with whom the Public Offer Account for collection of Bid Amounts from Escrow Accounts and
ASBA Accounts will be opened, in this case being [●]
QIB Portion The portion of the Offer (including the Anchor Investor Portion) being not less than 75% of the Offer
comprising [●] Equity Shares which shall be allocated to QIBs (including Anchor Investors), subject to
valid Bids being received at or above the Offer Price
“QIBs” or “QIB Bidders” or Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI ICDR Regulations
“Qualified Institutional Buyers”
“Red Herring Prospectus” or The red herring prospectus to be issued by our Company in accordance with Section 32 of the
“RHP” Companies Act, 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 Offer, including
any addenda or corrigenda thereto

The Bid/Offer Opening Date shall be at least three Working Days after the registration of the Red
Herring Prospectus with the RoC and will become the Prospectus upon filing with the RoC on or after
the Pricing Date, including any addenda or corrigenda thereto
Refund Account(s) The ‘no-lien’ and ‘non-interest bearing’ account opened with the Refund Bank, from which refunds, if
any, of the whole or part, of the Bid Amount to the Anchor Investors shall be made
Refund Bank(s) The Banker(s) to the Offer with whom the Refund Account(s) will be opened and in this case being, [●]
Registered Brokers The stock brokers registered with the stock exchanges having nationwide terminals, other than the
members of the Syndicate and eligible to procure Bids from relevant Bidders in terms of SEBI circular
number CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar Agreement The registrar agreement dated February 20, 2021 entered into between our Company, the Selling
Shareholder 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” or Kfin Technologies Private Limited
“Registrar”
“Retail Individual Bidder(s)” or Individual Bidders submitting Bids, who have Bid for the Equity Shares for an amount not more than ₹
“Retail Individual Investor(s)” or 200,000 in any of the bidding options in the Offer (including HUFs applying through their Karta) and
“RII(s)” or “RIB(s)” Eligible NRIs
Retail Portion The portion of the Offer being not more than 10% of the Offer comprising [●] Equity Shares, which
shall be available for allocation to RIBs in accordance with the SEBI ICDR Regulations, subject to valid
Bids being received at or above the Offer Price
Revision Form The form used by 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), as applicable.

QIB Bidders and Non-Institutional Bidders are not allowed to withdraw or lower their Bids (in terms of
quantity of Equity Shares or the Bid Amount) at any stage. RIBs can revise their Bids during the
Bid/Offer Period and withdraw their Bids until Bid/Offer Closing Date
Ricardo Ricardo UK Limited
Ricardo Industry Report Industry report entitled “Global and Indian Automotive Market Overview” dated February 15, 2021 by
Ricardo
“RTAs” or “Registrar and Share The registrar and share transfer agents registered with SEBI and eligible to procure Bids from relevant
Transfer Agents” Bidders at the Designated RTA Locations in terms of SEBI circular number
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015 issued by SEBI and available on the
website of the Stock Exchanges at www.nseindia.com and www.bseindia.com
SEBI SCORES Securities and Exchange Board of India Complaints Redress System
“Self Certified Syndicate Bank(s)” The banks registered with SEBI, offering services (i) in relation to ASBA (other than through UPI
or “SCSB(s)” Mechanism), a list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34 or
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35, as
applicable, or such other website as updated from time to time, and (ii) in relation to ASBA (through
UPI Mechanism), a list of which is available on the website of SEBI at
https://sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40 or such other
website as may be prescribed by SEBI and updated from time to time
Share Escrow Agent The share escrow agent appointed pursuant to the Share Escrow Agreement namely, [●]
Share Escrow Agreement The share escrow agreement to be entered into between our Company, the Selling Shareholder and the
Share 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 accounts of the Allottees in
accordance with the Basis of Allotment

7
 Term Description
Specified Locations The Bidding centres where the Syndicate shall accept Bid cum Application Forms from relevant
Bidders, a list of which is available on the website of SEBI (www.sebi.gov.in), and updated from time
to time
Sponsor Bank [●], being a Banker to the Offer registered with SEBI, appointed by our Company to act as a conduit
between the Stock Exchanges and NPCI in order to push the mandate collect requests and / or payment
instructions of the RIBs using the UPI Mechanism, in terms of the UPI Circulars
Syndicate Agreement The syndicate agreement to be entered into between our Company, the Selling Shareholder, the Registrar
and the members of the Syndicate in relation to collection of Bid cum Application Forms by the
Syndicate
Syndicate Members The intermediaries registered with SEBI who are permitted to carry out activities as an underwriter,
namely [●]
“Syndicate” or “members of the The Book Running Lead Managers and the Syndicate Members
Syndicate”
Underwriters [●]
Underwriting Agreement The underwriting agreement to be entered into between our Company, the Selling Shareholder and the
Underwriters, on or after the Pricing Date, but prior to filing the Prospectus with the RoC
UPI Unified payments interface which is an instant payment mechanism, developed by NPCI
UPI Circulars SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, SEBI circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 SEBI circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019, SEBI Circular no.
SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30, 2020 and any subsequent circulars or
notifications issued by SEBI in this regard
UPI ID ID created on the UPI for single-window mobile payment system developed by the NPCI
UPI Mandate Request A request (intimating the RIB by way of a notification on the UPI application and by way of a SMS for
directing the RIB to such UPI mobile application) to the RIB initiated by the Sponsor Bank to authorise
blocking of funds on the UPI application equivalent to Bid Amount and subsequent debit of funds in
case of Allotment
UPI Mechanism Process for applications by RIBs submitted with intermediaries with UPI as mode of payment, in terms
of the UPI Circulars
Wilful Defaulter A company or person, as the case may be, categorised as a wilful defaulter by any bank or financial
institution or consortium thereof, in accordance with the guidelines on wilful defaulters issued by the
RBI and includes any company whose director or promoter is categorised as such
Working Day All 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, the term Working Day shall
mean all days, excluding Saturdays, Sundays and public holidays, on which commercial banks in
Mumbai are open for business; and (c) 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 circulars issued by SEBI, including the
UPI Circulars

Technical, Industry Related Terms or Abbreviations

Term Description
AV Autonomous vehicle
4WD Four-wheel drive
ACMA Automotive Components Manufacturing Association of India
ADMMS Advances in design, materials, manufacturing and surface engineering for mobility
AMP Automotive Mission Plan
Ampere Vehicles Ampere Vehicles Private Limited
Ashok Leyland Ashok Leyland Limited
ASPICE Automotive Software Process Improvement Capability Determination
AUTOSAR Automotive Open System Architecture, a global development partnership of automotive interested
parties.
AWD All-wheel drive
BEV Battery electric vehicle
BLDC motor Brushless direct current motor
BSG Belt-driven starter generator
CAFÉ Corporate average fuel efficiency
Carraro Carraro Drive Tech Italia, Carraro India Private Limited and Carraro China Drive Systems
CERCA Centre of excellence for research on clean air
CNH CNH Industrial (India) Private Limited
CSR Corporate social responsibility
CUV Crossover utility vehicle
CV Commercial vehicle
Daimler Daimler India Commercial Vehicles Private Limited
8
 Term Description
Dana Dana India Private Limited
DAT Dual arm tensioner
DC electricity Direct current electricity
DDT Dividend distribution tax
ECL expected credit loss
EHS Environment, health and safety
EIR effective interest rate
EOU Export oriented unit
EPCG Scheme Export Promotion Capital Goods Scheme
Escorts Escorts Limited
Escorts Kubota Escorts Kubota India Private Limited
EV Electric vehicle
FAME India Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India Scheme
FDG Final drive gear
FOB free on board
FOC Field orientated control
FuSa Functional safety
FVTPL Fair value through profit and loss
Geely Zhejiang Geely Holding Group Company Limited
GVW Gross vehicle weight
IAD gear Inter-axle differential gear
IATF International Automotive Task Force
ICE Internal combustion engine
ICMPE International Conference on Mechanical and Production Engineering
IIEE Institute of Electrical and Electronics Engineers
IMF International Monetary Fund
ISO International Organization for Standardization
“Jaguar Land Rover” or “JLR” Jaguar Land Rover Limited
Jing-Jin Electric Jing-Jin Electric Technology Company Limited
John Deere John Deere India Private Limited
KPIs Key performance indicators
LCV Light commercial vehicle
Linamar Linamar Corporation
Mahindra Mahindra & Mahindra Limited
Mahindra Electric Mahindra Electric Mobility Limited
Maruti Suzuki Maruti Suzuki India Limited
Maschio Maschio Gaspardo India Private Limited
MEIS Merchandise Exports from India Scheme
MISRA Motor Industry Software Reliability Association
NEMMP National Electric Mobility Mission Plan 2020
NEV Neighbourhood electric vehicle
NVH Noise, vibration and harshness
OBD On-board diagnostics
OCI Other comprehensive income
OEM Original equipment manufacturer
OHSAS Occupational health and safety assessment series
OHV Off-highway vehicle
OTA Over the air updates
PLI Scheme Production Linked Incentive Scheme
PMSM Permanent magnet synchronous motor
PPM Parts per million
PV Passenger vehicle
QPQ Quench polish quench
R&D Research and development
Renault Nissan Renault Nissan Automotive India Private Limited
Revolt Intellicorp Revolt Intellicorp Private Limited
RFQ Request for quote
ROCE Return on capital employment
ROE Return on equity
RODTEP Scheme A scheme for remission of duties and taxes on export products announced by the Ministry of Finance,
Government of India
ROU Right-of-use asset
SAE International Society of Automotive Engineers, a U.S.-based, globally active professional association and standards
developing organization for engineering professionals
SOBA Supplier on board agreement
SPPI Solely payments of principal and interest
9
 Term Description
SUV Sports utility vehicle
TAFE Tractors and Farm Equipment Limited
TPM Total productive maintenance
Volvo Cars Volvo Car Corporation
Volvo Eicher VE Commercial Vehicles Limited

Conventional and General Terms or Abbreviations

Term Description
“₹” or “Rs.” or “Rupees” or “INR” Indian Rupees
AGM Annual general meeting
AIF Alternative Investment Fund as defined in and registered with SEBI under the SEBI AIF Regulations
“AS” or “Accounting Standards” Accounting standards issued by the ICAI
AY Assessment year
“Bn” or “bn” Billion
BSE BSE Limited
CAGR Compounded annual growth rate
Category I AIF AIFs who are registered as “Category I Alternative Investment Funds” under the SEBI AIF Regulations
Category I FPIs FPIs who are registered as “Category I foreign portfolio investors” under the SEBI FPI Regulations
Category II AIF AIFs who are registered as “Category II Alternative Investment Funds” under the SEBI AIF Regulations
Category II FPIs FPIs who are registered as “Category II foreign portfolio investors” under the SEBI FPI Regulations
Category III AIF AIFs who are registered as “Category III Alternative Investment Funds” under the SEBI AIF
Regulations
CDSL Central Depository Services (India) Limited
CIN Corporate Identity Number
Civil Code Code of Civil Procedure, 1908
CLB Company Law Board
Companies Act Companies Act, 2013, as applicable, along with the relevant rules, regulations, clarifications and
modifications made thereunder
Competition Act Competition Act, 2002
CrPC The Code of Criminal Procedure, 1973
CY Calendar Year
Depositories Together, NSDL and CDSL
Depositories Act Depositories Act, 1996
DIN Director Identification Number
DP ID Depository Participant’s Identification
“DP” or “Depository Participant” A depository participant as defined under the Depositories Act
DPIIT Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry,
Government of India (formerly known as Department of Industrial Policy and Promotion)
EBIT Earnings before interest and taxes
EBITDA Earnings before interest, taxes, depreciation and amortisation
ECB Master Directions Master Direction – External Commercial Borrowings, Trade Credits and Structured Obligations dated
March 26, 2019 issued by the RBI
EGM Extraordinary general meeting
EPS Earnings per share
FDI Foreign direct investment
FDI Policy Consolidated Foreign Direct Investment Policy notified by the DPIIT under DPIIT File Number
5(2)/2020-FDI Policy dated the October 15, 2020, effective from October 15, 2020
FEMA The Foreign Exchange Management Act, 1999, read with rules and regulations thereunder
FEMA Rules Foreign Exchange Management (Non-debt Instruments) Rules, 2019
“Financial Year” or “Fiscal” or Unless stated otherwise, the period of 12 months ending March 31 of that particular year
“Fiscal Year” or “FY”
FIR First information report
FPI Foreign portfolio investors as defined under the SEBI FPI Regulations
FVCI Foreign venture capital investors as defined and registered under the SEBI FVCI Regulations
GAAR General anti-avoidance rules
Gazette Official Gazette of India
GDP Gross domestic product
“GoI” or “Government” or “Central Government of India
Government”
GST Goods and services tax
IBC The Insolvency and Bankruptcy Code, 2016
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
Income Tax Act The Income-tax Act, 1961

10
 Term Description
Ind AS Indian Accounting Standards notified under Section 133 of the Companies Act and referred to in the
Companies (Indian Accounting Standards) Rules, 2015
India Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
Indian Penal Code The Indian Penal Code, 1860
IPO Initial public offering
IRDAI Insurance Regulatory and Development Authority of India
IRDAI Investment Regulations Insurance Regulatory and Development Authority of India (Investment) Regulations, 2016, as amended
IST Indian Standard Time
IT Information Technology
IT Act The Information Technology, 2000
KYC Know Your Customer
MCA Ministry of Corporate Affairs, Government of India
MIM Multiple Investment Manager
“Mn” or “mn” Million
NACH National Automated Clearing House
National Investment Fund National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of the
GoI, published in the Gazette of India
NBFC Non-Banking Financial Companies
NAV Net Asset Value
NCLT Chandigarh National Company Law Tribunal, Chandigarh Bench at Chandigarh
NEFT National Electronic Fund Transfer
Negotiable Instruments Act The Negotiable Instruments Act, 1881
NPCI National Payments Corporation of India
NR Non-Resident
NRE Non- Residential External
NRI A person resident outside India, who is a citizen of India or a person of Indian origin, and shall have the
meaning ascribed to such term in the Foreign Exchange Management (Deposit) Regulations, 2000
NRO Non- Resident Ordinary
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
“OCB” or “Overseas Corporate A company, partnership, society or other corporate body owned directly or indirectly to the extent of at
Body” 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 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 the Offer
ODI Off-shore Derivate Instruments
p.a. Per annum
P/E Ratio Price to Earnings Ratio
PAN Permanent Account Number
PAT Profit After Tax
PMLA Prevention of Money Laundering Act, 2002
RBI Reserve Bank of India
RBI Act The Reserve Bank of India Act, 1934
Regulation S Regulation S under the U.S. Securities Act
RoNW Return on Net Worth
RTGS Real Time Gross Settlement
Rule 144A Rule 144A under the U.S. Securities Act
SARFAESI Act The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002, as amended
SBI State Bank of India
SCRA Securities Contracts (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI Securities and Exchange Board of India constituted under the SEBI Act
SEBI Act Securities and Exchange Board of India Act, 1992
SEBI AIF Regulations Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
SEBI BTI Regulations Securities and Exchange Board of India (Bankers to an Issue) Regulations, 1994
SEBI FPI Regulations Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019
SEBI FVCI Regulations Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,
2018
SEBI Listing Regulations Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015
SEBI Merchant Bankers Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992
Regulations
SEBI SBEB Regulations Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
11
 Term Description
SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,
2011
Stamp Act The Indian Stamp Act, 1899
State Government The government of a state in India
Stock Exchanges BSE and NSE
STT Securities Transaction Tax
Systemically Important NBFC Systemically important non-banking financial company as defined under Regulation 2(1)(iii) of the
SEBI ICDR Regulations
TAN Tax deduction account number
Trusts Act The Indian Trusts Act, 1882
U.S. Securities Act U.S. Securities Act of 1933, as amended
“U.S.” or “USA” or “United States” United States of America
“USD” or “US$” United States Dollars
VCFs Venture Capital Funds as defined in and registered with SEBI under the SEBI VCF Regulations

12
 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

All references to “India” contained in this Draft Red Herring Prospectus 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, as applicable. All references to the “U.S.”, “US”, “U.S.A” or
“United States” are to the United States of America and its territories and possessions.

Unless otherwise specified, any time mentioned in this Draft Red Herring Prospectus is in Indian Standard Time (“IST”). Unless
indicated otherwise, all references to a year in this Draft Red Herring Prospectus are to a calendar year.

Unless stated otherwise, all references to page numbers in this Draft Red Herring Prospectus are to the page numbers of this
Draft Red Herring Prospectus.

Financial Data

Unless stated otherwise, the financial information and financial ratios in this Draft Red Herring Prospectus have been derived
from our Restated Consolidated Financial Information. For further information, see “Financial Information” beginning on page
230.

Restated Consolidated Financial Information consists of restated consolidated summary statements of assets and liabilities as at
December 31, 2020 and March 31, 2020, March 31, 2019 and March 31, 2018 and the restated consolidated statements of profit
and loss, cash flow statement and changes in equity for the nine months period ended December 31, 2020 and for the year ended
March 31, 2020, March 31, 2019 and March 31, 2018 of our Company together with the statement of significant accounting
policies, and other explanatory information thereon, derived from audited consolidated special purpose financial statements as
at and for the nine month period ended December 31, 2020 and the audited consolidated financial statements for the years ended
March 31, 2020, March 31, 2019 and March 31, 2018, together with the annexures and notes thereto, and the examination report
thereon, prepared in accordance with Ind AS, and restated in accordance with the SEBI ICDR Regulations and the Guidance
Note on “Reports in Company Prospectuses (Revised 2019)” issued by the ICAI.

We have included in this Draft Red Herring Prospectus the Pro Forma Consolidated Financial Information (to be read in
conjunction with the “Management’s Discussion and Analysis of Financial Conditional and Results of Operations – Basis of
Preparation of the Pro Forma Consolidated Financial Information” on page 372) as at and for the years ended March 31, 2018,
2019 and 2020 and for the nine months ended December 31, 2020, to show the impact of the acquisition of Comstar Entities on
our Company, as if the acquisition had been completed at a date prior to the first period presented therein. Further, the erstwhile
subsidiary SONA BV and its subsidiaries, and the erstwhile associate, Sona Skill Development Centre Limited, have not been
considered for consolidation in the Pro Forma Consolidated Financial Information. For further details, see “Financial
Information – Pro Forma Consolidated Financial Information” on page 310; “History and Certain Corporate Matters – Material
acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation of assets in the last 10 years”
on page 199; and “Risk Factors - The Pro Forma Consolidated Financial Information included in this DRHP to reflect the
acquisition of Comstar Entities is not indicative of our future financial condition or factual financial position or results” on page
33.

Our Company’s financial year commences on April 1 and ends on March 31 of the next year. Accordingly, all references in this
Draft Red Herring Prospectus to a particular Financial Year, Fiscal or Fiscal Year, unless stated otherwise, are to the 12 month
period ended on March 31 of that particular calendar year.

There are significant differences between Ind AS, Indian GAAP, U.S. GAAP and IFRS. Our Company does not provide
reconciliation of its financial information to IFRS or U.S. GAAP. 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 it is urged that you consult your
own advisors regarding such differences and their impact on our financial data. Accordingly, the degree to which the financial
information included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the
reader’s level of familiarity with Indian accounting policies and practices, the Companies Act, Ind AS, the Indian GAAP and the
SEBI ICDR Regulations. Any reliance by persons not familiar with Indian accounting policies and practices on the financial
disclosures presented in this Draft Red Herring Prospectus should, accordingly, be limited. For risks relating to significant
differences between Ind AS, Indian GAAP and other accounting principles, see “Risk Factors – Significant differences exist
between Ind AS and other accounting principles, such as Indian GAAP, IFRS and U.S. GAAP, which may be material to
investors’ assessments of our financial condition, result of operations and cash flows” beginning on page 49.

Unless the context otherwise indicates, any percentage amounts (excluding certain operational metrics), relating to the financial
information of our Company in “Risk Factors”, “Basis for Offer Price”, “Our Business”, “Other Financial information”,
“Capitalisation Statement” and “Management’s Discussion and Analysis of Financial Conditional and Results of Operations”

13
beginning on pages 25, 88, 159, 347, 348 and 351, respectively, have been calculated on the basis of our Restated Consolidated
Financial Information.

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; and

• “USD” or “US$” are to United States Dollar, the official currency of the United States.

• "€” or “Euro” are to Euro, the official currency of the European Union.

• “Peso” or “Mexican Peso” are to Mexican Peso, the official currency of Mexico.

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.

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 Draft Red Herring Prospectus in such denominations as provided in the respective
sources.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due
to rounding off. All figures derived from our Restated Consolidated Financial Information in decimals have been rounded off to
the second decimal and all percentage figures have been rounded off to one decimal place. However, where any figures may
have been sourced from third-party industry sources, such figures may be rounded off to such number of decimal places as
provided in such respective sources.

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.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and
the US$ (in Rupees per US$):
(amount in ₹, unless otherwise specified)
Currency As on December 31, 2020 As on March 31, 2020 As on March 31, 2019 As on March 31, 2018
1 US$ 73.05 75.39 69.17 65.04
(Source: www.rbi.org.in and www.fbil.org.in)
* If the RBI reference rate is not available on a particular date due to a public holiday, exchange rates of the previous working day have been disclosed.

Industry and Market Data

Unless stated otherwise, industry and market data used in this Draft Red Herring Prospectus has been obtained or derived from
the report titled “Assessment of Indian Market Potential for Specific Precision Forged and Electrical Components” dated January
2021 prepared by CRISIL (“CRISIL Industry Report”) and the report titled “Global and Indian Automotive Market Overview”
dated February 15, 2021 prepared by Ricardo (“Ricardo Industry Report”) and publicly available information as well as other
industry publications and sources.

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 decisions should be based on such information. We believe the
industry and market data used in this Draft Red Herring Prospectus is reliable, however, it has not been independently verified
by our Company, the Selling Shareholder or the Book Running Lead Managers 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. Such data involves risk, uncertainties and assumptions, and is subject to change based on various factors.
Accordingly, investment decisions should not be based solely on such information. For details in relation to the risks involving
the Industry Reports, see “Risk Factors – Certain sections of this Draft Red Herring Prospectus disclose information from
industry reports commissioned by us and any reliance on such information for making an investment decision in the Offer is
subject to inherent risks” beginning on page 44.

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the reader’s
familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering

14
methodologies in the industry in which business of our Company is conducted, and methodologies and assumptions may vary
widely among different industry sources.

The CRISIL Industry Report and the Ricardo Industry Report have been prepared at the request of our Company.

The ratings provided in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations –
Liquidity and Capital Resources” on page 383, have been solicited by, or on behalf of, our Company, and India Ratings and
Research has been compensated by us for the provision of such ratings. The ratings do not constitute recommendations to buy,
hold or sell any securities. Further, all credit ratings assigned by India Ratings are subject to certain limitations and disclaimers.
Please read these limitations and disclaimers by following the link – https://www.indiaratings.co.in/rating-definitions.

Disclaimer of CRISIL

“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 have
the necessary permission and/or registration to carry out its business activities in this regard. Sona BLW Precision Forgings
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.”

Disclaimer of Ricardo

“This report was commissioned by Sona BLW Precision Forgings Limited (the “Company”) on terms specifically limiting
Ricardo’s liability (the “Report”). Our conclusions are the results of the exercise of our best professional judgment based upon
Ricardo internal analysis and relevant market analysis. The Report may be shared by the Company with the book running lead
managers and legal counsel in relation to the proposed initial public offering of the Company.

Any use which a third party, other than the book running lead managers, makes of this document, or any reliance on it, or
decisions to be made based on it, are the responsibility of such third party. Ricardo UK Limited accepts no duty of care or
liability of any kind whatsoever to any such third party, and no responsibility for damages, if any, suffered by any third party as
a result of decisions made, or not made, or actions taken, or not taken, based on the Report.

In preparing this Report Ricardo may have relied on data, information or statements supplied to us by third parties or available
on public sources on or prior to Report’s date (the “Data”), in which case we have not independently verified the Data unless
expressly stated in the Report, and such Data has been sourced from third parties that Ricardo considers reliable. The Data is
assumed to be accurate, complete, reliable and current as of the date of such information and no responsibility for any error or
omission in the Report arising from errors or omissions in such Data is accepted.

No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the Data
and no responsibility or liability is or will be accepted by Ricardo in relation to the Data.

Any forecasts presented in the Report were prepared using Data and the Report is dependent on it. Some of the assumptions
used to develop any forecasts may not be realised and unanticipated events and circumstances may occur. Consequently, Ricardo
does not warrant the conclusions contained in the Report as there may be material differences between forecasts and actual
results. While Ricardo has taken due care and caution in preparing the Report, Ricardo shall not be responsible for any errors
or omissions in or for the results obtained from the use of or the decisions made based on, the Report.”

In accordance with the SEBI ICDR Regulations, “Basis for Offer Price” beginning on page 88 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 Book Running Lead Managers have independently verified such information. Accordingly, no investment
decision should be made solely on the basis of such information. Such industry sources and publications are also prepared based
on information as at specific dates and may no longer be current or reflect current trends. Industry sources and publications may
also base this information on estimates and assumptions that may prove to be incorrect. Such data involves risks, uncertainties
and numerous assumptions and is subject to change based on various factors, including those disclosed in “Risk Factors”
beginning on page 25.

15
 NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED STATES

The Equity Shares have not been recommended by any U.S. federal or state securities commission or regulatory authority.
Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Draft Red Herring
Prospectus or approved or disapproved the Equity Shares. Any representation to the contrary is a criminal offence in the United
States. In making an investment decision, investors must rely on their own examination of our Company and the terms of this
Offer, including the merits and risks involved. The Equity Shares have not been and will not be registered under the U.S.
Securities Act of 1933, as amended (the “U.S. Securities Act”) or any other applicable law of the United States and, unless so
registered, may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Accordingly, the Equity
Shares are being offered and sold (a) in the United States only to “qualified institutional buyers” (as defined in Rule 144A under
the U.S. Securities Act and referred to in this Draft Red Herring Prospectus as “U.S. QIBs”) in transactions exempt from, or not
subject to, the registration requirements of the U.S. Securities Act and (b) outside the United States in offshore transactions in
reliance on Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur.
For the avoidance of doubt, the term “U.S. QIBs” does not refer to a category of institutional investors defined under applicable
Indian regulations and referred to in this Draft Red Herring Prospectus as “QIBs”.

NOTICE TO PROSPECTIVE INVESTORS IN THE EUROPEAN ECONOMIC AREA

In relation to each Member State of the European Economic Area (each a “Relevant State”), no Equity Shares have been
offered or will be offered pursuant to the Draft Red Herring Prospectus to the public in that Relevant State prior to the publication
of a prospectus in relation to the Equity Shares which has been approved by the competent authority in that Relevant State or,
where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in
accordance with the Prospectus Regulation, except that it may make an offer to the public in that Relevant State of any Shares
at any time under the following exemptions under the Prospectus Regulation:

(a) to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus
Regulation), subject to obtaining the prior consent of the Book Running Lead Managers for any such offer; or

(c) in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of the Equity Shares shall require the Issuer or any Manager to publish a prospectus pursuant to
Article 3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to the Equity Shares in any Relevant State
means the communication in any form and by any means of sufficient information on the terms of the offer and any Equity
Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Equity Shares, and the expression
“Prospectus Regulation” means Regulation (EU) 2017/1129.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”),
and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes
of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Equity Shares have been
subject to a product approval process, which has determined that such Equity Shares are: (i) compatible with an end target market
of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID
II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the “Target Market
Assessment”). Notwithstanding the Target Market Assessment, “distributors” (for the purposes of the MiFID II Product
Governance Requirements) (“Distributors”) should note that: the price of the Equity Shares may decline and investors could
lose all or part of their investment; the Equity Shares offer no guaranteed income and no capital protection; and an investment
in the Equity Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either
alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the
Offer.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any

16
other action whatsoever with respect to the Equity Shares. Each Distributor is responsible for undertaking its own target market
assessment in respect of the Equity Shares and determining appropriate distribution channels.

NOTICE TO PROSPECTIVE INVESTORS IN THE UNITED KINGDOM

No Equity Shares have been offered or will be offered pursuant to the Draft Red Herring Prospectus to the public in the United
Kingdom prior to the publication of a prospectus in relation to the Equity Shares which has been approved by the Financial
Conduct Authority is to be treated as if it had been approved by the Financial Conduct Authority in accordance with the
transitional provisions in Article 74 (transitional provisions) of the Prospectus Amendment etc (EU Exit) Regulations 2019/1234,
except that it may make an offer to the public in the United Kingdom of any Equity Shares at any time:

(a) to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation;

(b) to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus
Regulation), subject to obtaining the prior consent of the Book Running Lead Managers for any such offer; or

(c) in any other circumstances falling within Section 86 of the FSMA.

provided that no such offer of the Equity Shares shall require the Issuer or any Book Running Lead Manager to publish a
prospectus pursuant to Section 85 of the FSMA or supplement a prospectus pursuant to Article 23 of the UK Prospectus
Regulation.

For the purposes of this provision, the expression an “offer to the public” in relation to the Equity Shares in the United Kingdom
means the communication in any form and by any means of sufficient information on the terms of the offer and any Equity
Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Equity Shares and the expression “UK
Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union
(Withdrawal) Act 2018.

17
 FORWARD-LOOKING STATEMENTS

This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward-looking statements generally
can be identified by words or phrases such as “aim”, “anticipate”, “are likely”, “believe”, “expect”, “estimate”, “intend”,
“objective”, “plan”, “propose”, “project”, “will”, “will continue”, “will pursue” or other words or phrases of similar import.
Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All forward-
looking statements are subject to risks, uncertainties, expectations and assumptions about us that could cause actual results to
differ materially from those contemplated by the relevant forward-looking statement.

Actual results may differ materially from those suggested by forward-looking statements due to risks or uncertainties associated
with expectations relating to and including, regulatory changes pertaining to the industries in India and other overseas
jurisdictions in which we operate 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 its 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 and changes in competition in the
industries in which we operate.

Certain important factors that could cause actual results to differ materially from our expectations include, but are not limited to,
the following:

• Our business is dependent on the performance of the automotive sector globally, including in our key markets such as
US, Europe, India and China.

• Our business largely depends upon our top ten customers and the loss of such customers or a significant reduction in
purchases by such customers will have a significantly adverse impact on our business.

• The COVID-19 pandemic, or a similar public health threat, could adversely affect our business, financial condition, and
results of operations.

• We are dependent on the success of our R&D and the failure to develop new or improved products or process
improvements or production techniques could subject us to write-offs or otherwise adversely affect our business,
financial condition and results of operations and have a negative impact on our competitive position.

• Our growth strategy to capture market opportunity in the growing EV market may not be successful.

For further details regarding factors that could cause actual results to differ from expectations, see “Risk Factors”, “Our Business”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 25, 159 and
351, 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 gains or losses could materially differ from those that have been estimated.

There can be no assurance to Bidders that the expectations reflected in these forward-looking statements will prove to be correct.
Given these uncertainties, Bidders are cautioned not to place undue reliance on such forward-looking statements and not to
regard such statements to be a guarantee of our future performance.

Forward-looking statements reflect current views as of the date of this Draft Red Herring Prospectus and are not a guarantee of
future performance. These statements are based on our management’s beliefs and assumptions, which in turn are based on
currently available information. Although we believe the assumptions upon which these forward-looking statements are based
are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these
assumptions could be incorrect. Neither our Company, our Directors, the Selling Shareholder, the Syndicate nor any of their
respective affiliates 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 the SEBI ICDR Regulations, our Company and the Book Running Lead Managers will ensure that the Bidders
in India are informed of material developments until the time of the grant of listing and trading permission by the Stock
Exchanges for the Offer.

In accordance with regulatory requirements including requirements of SEBI and as prescribed under applicable law, the Selling
Shareholder shall ensure that the Bidders in India are informed of material developments, in relation to statements and
undertakings specifically undertaken or confirmed by it in relation to itself and the Offered Shares in the Red Herring Prospectus
until the time of the grant of listing and trading permission by the Stock Exchanges.

18
 SUMMARY OF THE OFFER DOCUMENT

The following is a general summary of the terms of the Offer and is not exhaustive, nor does it purport to contain a summary of
all the disclosures in this Draft Red Herring Prospectus or all details relevant to prospective investors. This summary should be
read in conjunction with, and is qualified in its entirety by, the more detailed information appearing in “Risk Factors”, “The
Offer”, “Capital Structure”, “Objects of the Offer”, “Industry Overview”, “Our Business”, “Our Promoters and Promoter
Group”, “Restated Consolidated Financial Information”, “Pro Forma Consolidated Financial Information”, “Offer
Procedure”, “Outstanding Litigation and Material Developments” and “Main Provisions of Articles of Association” beginning
on pages 25, 54, 71, 82, 100, 159, 220, 230, 310, 419, 392 and 436, respectively.

Summary of Business

We are one of India’s leading automotive technology companies, designing, manufacturing and supplying highly engineered,
mission critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-
hybrid starter motors, BSG systems, EV traction motors (BLDC and PMSM) and motor control units to automotive OEMs across
US, Europe, India and China, for both electrified and non-electrified powertrain segments. We have nine manufacturing and
assembly facilities across India, China, Mexico and USA, of which six are located in India. We are a technology and innovation
driven company. With a strong focus on research and development, we develop mechanical and electrical hardware systems,
components as well as base and application software solutions, to meet the evolving demands of our customers.

Summary of Industry

According to the Ricardo Report, the overall Global Light Vehicle production volumes are expected to reach approximately 92
million in calendar year 2025 as compared to approximately 70 million in calendar year 2020, with China, Europe and North
America accounting for approximately 70% of the global production volumes. Driven by stringent emission and corporate
average fuel economy (CAFE) regulations globally, pure ICE vehicles will no longer be a viable propulsion choice for passenger
vehicles according to Ricardo. Depending on the severity of CAFE norms across the regions, OEMs have a choice of micro (12v
start-stop), mild/full hybrids, BEVs (Battery Electric Vehicles) and FCEVs (Fuel Cell Electric Vehicles). As fuel economy norms
become more stringent over time and countries introduce legislation to ban fossil fuel vehicles, the proportion of BEVs will
increase. In calendar year 2025, Ricardo expects BEVs to account for approximately 12% (i.e., approximately 11 million units)
of the global production. Among the available propulsion technologies, BEV has been the fastest growing at CAGR of
approximately 46% between calendar years 2015 to 2020 and is expected to experience an increased penetration, growing at a
CAGR of approximately 36% between calendar years 2020 to 2025. According to the Ricardo Report, globally, the electrification
agenda will be driven by the passenger vehicle segment and according to the CRISIL Report, electrification in India will be led
by three-wheelers and two-wheelers, with electric two-wheelers having a CAGR of 70% to 74% between Fiscals 2021 to 2026.

Our Promoters

Sunjay Kapur, Sona Autocomp Holding Private Limited and Singapore VI Topco III Pte. Ltd. are our Promoters. For details, see
“Our Promoters and Promoter Group” beginning on page 220.

Offer Size

Offer Up to [●] Equity Shares aggregating up to ₹ 60,000 million

of which
Fresh Issue(1) Up to [●] Equity Shares aggregating up to ₹ 3,000 million
Offer for Sale(2) Up to [●] Equity Shares aggregating up to ₹ 57,000 million by the Selling Shareholder
(1)
The Offer has been authorized by resolutions of our Board dated January 27, 2021 and February 22, 2021 and the Fresh Issue has been authorized by a
special resolution of our Shareholders, dated January 30, 2021.
(2)
The Equity Shares being offered by the Selling Shareholder have been held for a period of at least one year immediately prece ding the date of this Draft
Red Herring Prospectus with the SEBI, and are eligible for being offered for sale pursuant to the Offer in terms of the SEBI ICDR Regulations. For details
of authorizations received for the Offer for Sale, see “Other Regulatory and Statutory Disclosures” on page 399.

Objects of the Offer

Our Company proposes to utilise the Net Proceeds towards the following objects:

Particulars Amount (in ₹ million)

Repayment/ pre-payment, in full or part, of certain borrowings availed by our Company 2,250
General corporate purposes(1) [●]
Net Proceeds [●]
(1) To be determined on finalisation of the Offer Price and updated in the Prospectus. The amount utilised for general corporate purposes shall not exceed
25% of the gross proceeds.

For details, see “Objects of the Offer” beginning on page 82.

19
Pre-Offer Shareholding of our Promoters, the Promoter Group and the Selling Shareholder

S. Category of Shareholders No. of Equity Shares % of total pre-Offer paid up

No. Equity Share capital
Promoters
1. Sona Autocomp Holding Private Limited 193,208,904 33.72
2. Singapore VII Topco III Pte. Ltd.* 379,771,512 66.28
3. Sunjay Kapur Nil Nil
Sub Total (A) 572,980,416 100.00
Promoter Group
1. Rani Kapur – RK Family Trust 72 Negligible
Sub Total (B) 72 Negligible
Total (A) + (B) 572,980,488 100.00
* Also the Selling Shareholder

Summary of Restated Consolidated Financial Information

(in ₹ million other than share data)
Particulars As at and for the nine As at and for the As at and for the As at and for the
months ended Financial Year ended Financial Year ended Financial Year ended
December 31, 2020 March 31, 2020 March 31, 2019 March 31, 2018

Equity Share capital(1) 477.48 477.48 277.18 277.18

Net worth (equity attributable to
the owners) 12,885.51 11,779.41 1,737.77 1.77
Total income 10,296.28 10,437.65 7,025.01 6,259.23
Profit after tax (attributable to
owners) 1,554.69 3,603.43 1,729.71 774.24
Basic and diluted earning per
share (₹ / share)(2)
- Basic (in ₹)(3) 2.71 7.06 5.20 2.33
- Diluted (in ₹)(4) 2.71 7.06 5.20 2.33
Net asset value per Equity Share
(basic) (in ₹)(5) 22.49 23.07 5.22 0.01
Net asset value per Equity Share
(diluted) (in ₹)(6) 22.49 23.07 5.22 0.01
Total borrowings (as per balance
sheet) (7) 2,846.50 3,067.82 1,460.04 4,877.92
EBITDA(8) 3,003.26 2,422.77 2,002.02 1,704.84
(1)
Includes equity share capital and instruments entirely equity in nature
(2)
EPS calculation is in accordance with the Indian Accounting Standard (Ind AS) 33 ‘Earnings per share’ prescribed by the Companies (Indian Accounting
Standard) Rules, 2015 (as amended)
(3)
Profit after tax attributable to equity shareholders / weighted average number of equity shares outstanding as on the reporting date
(4)
Profit after tax attributable to equity shareholders / weighted average number of diluted equity shares outstanding as on the reporting date
(5)
Net worth at the end of the period / weighted average number of equity shares outstanding as on the reporting date
(6)
Net worth at the end of the period / weighted average number of diluted shares outstanding as on the reporting date
(7)
Total borrowings includes current maturities of long-term borrowings, current maturities of deferred payment liabilities and interest accrued and due on
borrowings
(8)
EBITDA = (profit/ (loss) for the year/ period from continuing operations - other income – exceptional items (non-operating nature) + tax expense +
Finance costs + depreciation and amortization)
* Bonus shares issued subsequent to December 31, 2020 have been reckoned for the purpose of computing EPS and net asset value per share for the entire
reporting period; Basic earnings per equity share, Diluted earnings per equity share for the nine month period ended December 31, 2020 are not annualised

Summary of Pro Forma Consolidated Financial Information

(in ₹ million other than share data)

Particulars As at and for the nine As at and for the As at and for the As at and for the
months ended Financial Year ended Financial Year ended Financial Year ended
December 31, 2020 March 31, 2020 March 31, 2019 March 31, 2018

Equity Share capital(1) 477.48 477.48 277.18 277.18

Net worth (total equity) 12,885.51 11,779.41 12,599.30 10,943.50
Total income 10,296.28 12,276.74 14,335.01 12,332.08
Profit after tax (attributable to
1,554.69 2,217.22 2,128.75 1,714.90
owners)
Basic and diluted earning per
share (₹ / share)(2)
- Basic (in ₹)(3) 2.71 3.87 3.72 2.99
- Diluted (in ₹)(4) 2.71 3.87 3.72 2.99

20
 Particulars As at and for the nine As at and for the As at and for the As at and for the
months ended Financial Year ended Financial Year ended Financial Year ended
December 31, 2020 March 31, 2020 March 31, 2019 March 31, 2018

Net asset value per Equity Share

22.49 20.56 21.99 19.10
(basic) (in ₹)(5)
Net asset value per Equity Share
22.49 20.56 21.99 19.10
(diluted) (in ₹)(6)
Total borrowings (as per balance
2,846.50 3,067.82 1,691.04 1,909.23
sheet) (7)
EBITDA(8) 3,003.26 3,253.55 4,122.43 3,454.99
(1)
Includes equity share capital and instruments entirely equity in nature
(2)
EPS calculation is in accordance with the Indian Accounting Standard (Ind AS) 33 ‘Earnings per share’ prescribed by the Companies (Indian Accounting
Standard) Rules, 2015 (as amended)
(3)
Profit after tax attributable to equity shareholders / Weighted average number of equity shares outstanding as on the reporting date (refer to note 37 of
the Pro Forma Consolidated Financial Information on page 345)
(4)
Profit after tax attributable to equity shareholders / Weighted average number of diluted equity shares outstanding as on the reporting date (refer to note
37 of the Pro Forma Consolidated Financial Information on page 345)
(5)
Net worth at the end of the period / Weighted average number of equity shares outstanding as on the reporting date (refer to note 37 of the Pro Forma
Consolidated Financial Information on page 345)
(6)
Net worth at the end of the period / Weighted average number of diluted shares outstanding as on the reporting date (refer to note 37 of the Pro Forma
Consolidated Financial Information on page 345)
(7)
Total borrowings includes current maturities of long-term borrowings, current maturities of deferred payment liabilities and interest accrued and due on
borrowings
(8)
EBITDA = (profit/ (loss) for the year/ period - other income – exceptional items (non-operating nature) + tax expense + finance costs + depreciation and
amortization)
*Bonus shares issued subsequent to December 31, 2020 have been reckoned for the purpose of computing EPS and net asset value per share for the entire
reporting period, basic earnings per equity share, diluted earnings per equity share for the nine month period ended December 31, 2020 are not annualised

Qualifications of the Statutory Auditors which have not been given effect to in the Restated Consolidated Financial
Information

Except as disclosed below, the Restated Consolidated Financial Information does not contain any qualifications by the Statutory
Auditors.

The audit reports on the consolidated financial statements issued by us were modified and included following matters giving rise
to modifications on the financial statements as at and for the years ended March 31, 2020:

“As stated in note 49 to the accompanying consolidated financial statements, the majority shareholding in Sona Holdings B.V.,
The Netherlands, the erstwhile subsidiary company, which was classified as a ‘discontinued operation’ in the consolidated
financial statements for previous year ended 31 March 2019, was sold to Sona Autocomp Holdings Private Limited on 4 July
2019, and the Holding Company therefore, did not exercise control over the erstwhile subsidiary company from 5 July 2019.
Owing to the unavailability of the consolidated financial statements of such subsidiary company and its subsidiaries (‘SONA BV
Group’) for the period 1 April 2019 to 4 July 2019, the consolidated financial information of SONA BV Group for the period 1
April 2019 to 4 July 2019 (‘the current year period’) has not been included in the accompanying consolidated financial
statements for the year ended 31 March 2020, and the assets and liabilities of SONA BV Group have been derecognized at their
respective carrying values as at 31 March 2019 instead of 4 July 2019. The said accounting treatment is not in compliance with
the requirements of Ind AS 110 - Consolidated Financial Statements.

Had the accompanying consolidated financial statements been prepared after considering the consolidated financial statements
of SONA BV Group for the period 1 April 2019 to 4 July 2019, the “Profit or Loss from discontinued operations” would have
been higher and “Exceptional Item” would have been lower by the same amount with no effect on the consolidated profit of the
Group for the year ended 31 March 2020 and its equity attributable to the owners on that date. However, in absence of necessary
financial information, we are unable to quantify such impact on the said items in the accompanying consolidated financial
statements, and the consequential impact thereof, on the disclosures given under Note 49 as per the requirements of Ind AS 105,
Non-current Assets Held for Sale and Discontinued Operations.”

Summary of Outstanding Litigation

A summary of outstanding litigation proceedings involving our Company, Promoters, Directors and Subsidiaries as on the date
of this Draft Red Herring Prospectus, is provided below:

Types of Proceedings Number of Cases Amount (in ₹ million)*

Litigation against our Company
Direct tax proceedings 4 84.56
Indirect tax proceedings 2 15.32
Litigation by our Company
Material civil proceedings 2 39.5
21
 Types of Proceedings Number of Cases Amount (in ₹ million)*
Litigation against Comstar Automotive
Direct tax proceedings 7 172.57
Indirect tax proceedings 1 281.97
Litigation involving Comstar Automotive Technology Services Private Limited
Direct tax proceedings 1 0.15
* To the extent quantifiable.

For further details of the outstanding litigation proceedings, see “Outstanding Litigation and Material Developments” beginning
on page 392.

Risk Factors

For details in relation to certain risks applicable to us, see “Risk Factors” beginning on page 25.

Summary of contingent liabilities

The details of our contingent liabilities as per Ind AS 37 as at December 31, 2020 are set forth in the table below:

Particulars As of December 31, 2020

(₹ in million)
1) Claims against the Group not acknowledged as debts
i) Service tax
Cases pending before appellate authorities in respect of which the parent company has filed 0.47
appeals / show cause notices. (FY 2005-06 to 2007-08)
ii) Income Tax
Cases pending before appellate authorities in respect of which the parent company has filed 2.12
appeal (AY-2013-14)
Cases pending before appellate authorities in respect of which the parent company has filed 3.18
appeal (AY-2012-13)
Cases pending before appellate authorities in respect of which the parent company has filed 4.21
appeal (AY-2011-12)
Cases pending before the Commissioner of Income Tax in respect of which the Company has 69.63
filed appeal (AY 2017–18)
iii) Central Excise Act, 1944
Cases pending before Directorate General of Goods and Service Tax Intelligence in respect of 14.85
which the group has filed appeals / show cause notices. (FY 2014-15 to FY 2017-18)

For details, see “Restated Consolidated Financial Information – Note 43” beginning on page 296.

Summary of Related Party Transactions

(in ₹ million)
Particulars As at and for the As at and for the As at and for the As at and for the
nine months ended Financial Year Financial Year Financial Year
December 31, 2020 ended March 31, ended March 31, ended March 31,
2020 2019 2018
Transactions with related parties
(i) Individual/entity exercising control
Reimbursement of expenses - 0.80 0.30 -
Dividend paid 460.00 - - -
Director sitting fee - 0.17 0.28 0.17
Purchase of shares of Comstar
Automotive Technologies Private - 8,293.31 - -
Limited
Purchase of shares of Comstar
- 227.27 - -
Automotive Hongkong Limited
Sale of shares of Sona Holding B.V.,
- 1,399.50 - -
Netherlands
Sale of shares of Sona Skill
- - 7.51 -
Development Centre Limited
Loan received - 500.00 - -
Loan repaid - 500.00 - -
Interest on loan paid - 33.05 - -
Relinquishment of right of put
19.00 - - -
option
Relinquishment of right of call - - - -

22
 Particulars As at and for the As at and for the As at and for the As at and for the
nine months ended Financial Year Financial Year Financial Year
December 31, 2020 ended March 31, ended March 31, ended March 31,
2020 2019 2018
option
(ii) Key Management Personnel
Managerial remuneration 64.32 104.12 92.69 111.50
Director sitting fee (non-executive
1.84 1.95 1.42 0.17
director)
Commission 20.90 17.74 - -
(iii) Entities over which key management personnel are able to exercise significant influence and with whom transactions have taken
place during the year/previous year
Sale of goods 0.14 6.01 17.19 20.73
Purchase of goods - 0.16 1.01 9.08
Sales of scrap - 0.02 - -
Purchase of brands - - 650.00 -
Services received - 3.16 81.84 186.72
Lease rent income - - 0.13 -
CSR payment - 1.00 1.26 1.50
(iv) Associates
Purchase of capital goods - - - 3.12
Receiving of services - - - 0.46
Intra-group transactions eliminated upon consolidation
Sales of goods and services 780.63 1,068.33 6,844.66 5,324.13
Interest income 7.49 14.32 51.27 130.32
Corporate guarantee fees - 0.93 3.70 4.37
Loans given (net) - 182.42 188.73 188.46
Recovery of loans (net) 29.51 - 2,159.28 -
Investment in shares 0.10 - - 116.39
Dividend paid 584.47 34.45 - -
Purchase of Brand - 17.37 - -
Details of balances with related parties at year end
(i) Key Management Personnel
Payables 9.17 6.90 5.50 31.00
(ii) Entities over which key management personnel are able to exercise significant influence and with whom transactions have taken
place during the year/previous year
Payables - 0.18 593.92 50.91
Receivables - 1.69 0.93 0.56
(iii) Entity exercising control
Receivables - 0.30 0.30 -
Intra-group balances eliminated upon consolidation
Trade and other receivables 254.99 359.25 133.78 235.15
Loan balance receivable 756.82 818.06 667.27 2,637.82

For details of the related party transactions and as reported in the Restated Consolidated Financial Information, see “Restated
Consolidated Financial Information – Note 40” on page 284.

Issuances of Equity Shares made in the last one year for consideration other than cash

Except as disclosed below, our Company has not issued any Equity Shares through bonus issue or for consideration other than
cash in the one year preceding the date of this Draft Red Herring Prospectus:

Date of Number of Face Issue price Reason for allotment Benefit accrued to our
Allotment Equity Value per Equity Company
Shares (`) Share (`)
Allotted
February 10, 525,232,180 10 - Bonus issue in the ratio of 11:1(1) -
2021
(1)
Bonus issue of 177,108,162 Equity Shares to Sona Autocomp, 348,123,886 Equity Shares to Singapore VII Topco III Pte. Ltd., 66 Equity Shares to RK Family
Trust, 11 Equity Shares to Sharad Kapur (nominee of deceased shareholder, Jug Mohan Kapur), 11 Equity Shares to Kiran Manohar Deshmukh, 11 Equity
Shares to Ranganathan Balaji, 11 Equity Shares to Munish Sapra and 22 Equity Shares to Inder Khurana pursuant to resolutions of our Board dated January
27, 2021 and February 10, 2021 and resolution of our Shareholders dated January 30, 2021.

For details, see “Capital Structure – Share Capital History of our Company” on page 71.

Financing Arrangements

23
There have been no financing arrangements whereby the Promoters, members of their respective Promoter Groups, our Directors,
directors of our Corporate Promoters, and their relatives have financed the purchase by any other person of securities of our
Company (other than in the normal course of the business of the relevant financing entity) during a period of six months
immediately preceding the date of filing of this Draft Red Herring Prospectus.

Weighted average price at which the Equity Shares were acquired by the Promoters and the Selling Shareholder in the
one year preceding the date of this Draft Red Herring Prospectus

The weighted average price at which the Equity Shares were acquired by the Promoters including the Selling Shareholder in the
one year preceding the date of this Draft Red Herring Prospectus is:

S. No. Category of Shareholders Weighted average price per Equity Share

(in ₹)
1. Singapore VII Topco III Pte. Ltd.* 32.07**
* Also the Selling Shareholder.
** For calculation, the Equity Shares on conversion of Preference Shares and bonus shares on such Equity Shares have been considered.
In addition to above, our Company has issued bonus shares to Promoters on existing equity shares at nil value.

Average Cost of Acquisition for Promoters and Selling Shareholder

The average cost of acquisition per Equity Share acquired by the Promoters which includes the Selling Shareholder, as on the
date of this Draft Red Herring Prospectus is:

S. No. Category of Shareholders Number of Equity Shares Average cost of Acquisition

acquired per Equity Share
(in ₹)
Promoters
1. Sona Autocomp Holding Private Limited 193,208,904 5.81
2. Singapore VII Topco III Pte. Ltd.* 379,771,512 32.34
3. Sunjay Kapur NA NA
*Also the Selling Shareholder.

Details of pre-IPO placement

Our Company is not contemplating a pre-IPO placement.

Split or Consolidation of Equity Shares in the last one year

Our Company has not undertaken split or consolidation of the Equity Shares in the last one year preceding the date of this Draft
Red Herring Prospectus.

24
 SECTION II: RISK FACTORS

An investment in the Equity Shares involves a high degree of risk. You should carefully consider all the information in this Draft
Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in the Equity
Shares.

We have described the risks and uncertainties that our management believes are material, but these risks and uncertainties are
not the only risks relevant to us, or the Equity Shares or the industry and the segments in which we currently operate or propose
to operate. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or
other implication of any of the risks mentioned in this section. If any or a combination of the following risks actually occur, or if
any of the risks that are currently not known or deemed to be not relevant or material now actually occur or become material in
the future, our business, prospects, financial condition and results of operations could suffer, the trading price of the Equity
Shares could decline, and you may lose all or part of your investment. Further, some events may be material collectively rather
than individually. To obtain a more detailed understanding of our business and operations, please read this section in
conjunction with the sections titled “Industry Overview”, “Our Business”, “Key Regulations and Policies in India”,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Outstanding Litigation and
Material Developments” on pages 100, 159, 187, 351 and 392, respectively, as well as other financial and statistical information
contained in this Draft Red Herring Prospectus.

In making an investment decision, you must rely on your own examination of us and the terms of the Offer, including the merits
and risks involved, and you should consult your tax, financial and legal advisors about the particular consequences of investing
in the Offer.

Prospective investors should pay particular attention to the fact that our Company is incorporated under the laws of India and
is subject to a legal and regulatory environment which may differ in certain respects from that of other countries.

This Draft Red Herring Prospectus also contains forward-looking statements that involve risks, assumptions, estimates and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result
of certain factors, including but not limited to the considerations described below, “Our Business” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 159 and 351. For details, see
“Forward-Looking Statements” on page 18.

Data included in this section in relation to certain operating metrics, financial information not otherwise included in the Pro
Forma Consolidated Financial Information, and certain business information and data (such as income from sale of goods with
end-use in North America, Europe, India and China, income from sale of goods from our top ten customers and income from
sale of goods derived from the BEV market, among others) have been reviewed and verified by SCV & Co. LLP, Chartered
Accountants.

In Fiscal 2020 our Company completed the acquisition of Comstar Entities. We have included in this Draft Red Herring
Prospectus, the Pro Forma Consolidated Financial Information (to be read in conjunction with “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Basis of Preparation of the Pro Forma Consolidated Financial
Information” on page 372) as at and for the years ended March 31, 2018, 2019 and 2020 and the nine months ended December
31, 2020, to show the impact of the acquisition of Comstar Entities on our Company, including the results of operations and the
financial position that would have resulted had the acquisition of Comstar Entities been completed at a date prior to the first
period presented in the Pro Forma Consolidated Financial Information. Further, the erstwhile subsidiary, SONA BV, and its
subsidiaries, and the erstwhile associate, Sona Skill Development Centre Limited, have not been considered for consolidation in
the Pro Forma Consolidated Financial Information. For further details, see “Financial Information – Pro Forma Consolidated
Financial Information” on page 310; “History and Certain Corporate Matters – Material acquisitions or divestments of business
or undertakings, mergers, amalgamations or revaluation of assets in the last 10 years” on page 199; and see “Risk Factors -
The Pro Forma Consolidated Financial Information included in this DRHP to reflect the acquisition of Comstar Entities is not
indicative of our future financial condition or factual financial position or results of operations” on page 33.

Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived from our Pro
Forma Consolidated Financial Information included in this Draft Red Herring Prospectus on page 310.

Unless otherwise indicated, industry and market data used in this section has been derived from the report titled “Assessment of
Indian market potential for specific precision forged and electrical components” dated January 2021 prepared and released by
CRISIL (the “CRISIL Report”) and report titled “Global and Indian Automotive Market Overview” dated February 17, 2021
prepared and released by Ricardo (the “Ricardo Report” and together with the CRISIL Report, referred to as the “Industry
Reports”), which have been commissioned by us in connection with the Offer. Neither we, nor any of the BRLMs, nor any other
person connected with the Offer has verified any information in these Industry Reports. Unless otherwise indicated, all financial
information derived from the Pro Forma Consolidated Financial Information and operational, industry, and other related
information included in this section with respect to any particular year, refers to such information for the relevant financial year.
25
Risks Relating to Our Business and Industry

1. Our business is dependent on the performance of the automotive sector globally, including in our key markets such
as US, Europe, India and China. Any adverse changes in the conditions affecting these markets can adversely impact
our business, results of operations and financial condition.

Our business is dependent on the performance of the automotive sectors in US, Europe, India and China. We design, engineer,
manufacture and supply our systems and components for both electrified and non-electrified powertrain segments across all
vehicle categories such as PV, CV and OHV both in the Indian and overseas markets. For the nine months ended December 31,
2020, we derived 40.2%, 25.3%, 24.6%, and 5.3% of our income from sale of goods with end-use in North America, Europe,
India and China, respectively. We are therefore exposed to fluctuations in the performance of the automotive markets in US,
Europe, India, and China. According to the Ricardo Report, global light vehicle production has remained flat between calendar
years 2015 to 2019 and declined by approximately 18% in calendar year 2020 due to the COVID-19 pandemic. In particular, the
light vehicle market experienced decreased production volume in North America, Europe, India and China by 4.4%, 4.1%, 9.8%
and 8.6%, respectively, in calendar year 2019 and 20.5%, 22.4%, 24.3% and 7.7%, respectively, in calendar year 2020, according
to the Ricardo Report.

The automotive market in India may perform differently, and be subject to market and regulatory developments that are dissimilar
to the automotive markets in other parts of the world. We cannot assure you that the demand for our products in India will grow,
or will not decrease, in the future. According to the CRISIL Report, in Fiscal 2020, the CV, PV and tractor markets in India
experienced an aggregate decrease in sales volumes by 29%, 18% and 10%, respectively.

Further, our operations are cyclical because our sales are directly dependent on the level of automotive production globally and
affected by inventory levels of automotive manufacturers, which has been characterized historically by significant periodic
fluctuations in overall demand for vehicles to which we supply products, resulting in corresponding fluctuations in demand for
our products. The length and timing of any cycle in the vehicle industry cannot be predicted with certainty. We cannot predict
when manufacturers will decide to either build or reduce inventory levels or whether new inventory levels will approximate
historical inventory levels. Production and sales of the vehicles for which we supply products are affected by, among other things,
a variety of other factors that are beyond our control, including changes in government policies, changes in consumer demand,
product mix shifts favoring other types of vehicles, fuel prices, vehicle electrification, economic conditions, demographic trends,
employment and income levels and interest rates, disruptions in the automotive supply chain, vehicle age, labor relations,
regulatory requirements, credit availability and cost of credit, interest rates and general economic and industry conditions. In the
past, we have experienced sales declines during the manufacturers’ scheduled shutdowns or shutdowns resulting from unforeseen
events. Further, in Fiscal 2020 and the nine months ended December 31, 2020, our sales were negatively impacted by the sharp
slowdown in the Chinese and global automotive markets on account of the COVID-19 pandemic and other reasons. There is no
assurance that global automotive sales will continue to recover or not decrease further.

Reduced demand in the market segments we currently supply, deterioration in the automotive market, continued uncertainty and
other unexpected fluctuations or change in regulations, customs, taxes or other barriers or restrictions adversely affecting the
automotive market, particularly US, Europe, India and China, could have a material adverse impact on our business, results of
operations and financial condition.

2. Our business largely depends upon our top ten customers and the loss of such customers or a significant reduction in
purchases by such customers will have a significantly adverse impact on our business. The discontinuation or loss of
business with respect to, or a lack of commercial success of, a particular vehicle model for which we are a significant
supplier could adversely affect our business and results of operations.

We derive a significant portion of our revenue from our top ten customers. For Fiscal Years 2018, 2019 and 2020 and the nine
months ended December 31, 2020, income from sale of goods to our top 10 customers represented approximately 79.1%, 79.1%,
80.8% and 79.9%, respectively, of our total income from sale of goods, of which, income from sale of goods to our top three
customers, accounted for approximately 43.0%, 42.0%, 44.9% and 48.3% of our total income from sale of goods. Further, two
of our largest customers that together accounted for approximately 43.0%, 41.8%, 43.5% and 35.4% of our total income from
sale of goods for Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, form part of a single global
automotive group.

Loss of all or a substantial portion of sales to any of our top ten customers, in particular, our top two customers, for any reason
(including, due to loss of contracts or failure to negotiate acceptable terms in contract renewal negotiations, loss of market share
of these customers, lack of commercial success of key parts that we manufacture, disputes with customers, adverse change in the
financial condition of such customers, including due to possible bankruptcy or liquidation or other financial hardship, merger or
decline in their sales, reduced or delayed customer requirements, plant shutdowns, labor strikes or other work stoppages affecting
production by such customers) and/or, continued reduction of prices to these customers, could have an adverse impact on our
business, results of operations, financial condition and cash flows. These customers may demand price reductions, set-off any
payment obligations, require indemnification for themselves or their affiliates, change their outsourcing strategy by moving more
work in-house, replace us with our competitors, or replace their existing products with alternative products which we do not
26
supply. For risks related to contractual arrangements with our customers, see “– Our Company may not realize all of the revenue
expected from our new and incremental business backlog and does not have firm commitment agreements with customers.”
below. There can be no assurance that we will not lose all or a portion of sales to these customers, or that we will be able to
offset any reduction of prices to these customers with reductions in our costs or by obtaining new customers.

Further, under the engineering statement of work, our customers provide us with program specific sourcing confirmations,
including specific part numbers, volume projections of their requirements for the specific program, program life and supply
locations. As our orders are linked to specific vehicles/models and are not generally interchangeable with other models/vehicles,
the discontinuation of, loss of business with respect to, or a lack of commercial success of, a particular vehicle model, for which
we are a significant supplier could reduce our sales and affect our estimates of anticipated sales, which could in turn have an
adverse effect on our business and results of operations. We are also exposed to the risk of failure by our customers to successfully
launch new programs in a timely and cost efficient manner which could adversely affect our results of operations.

3. The COVID-19 pandemic, or a similar public health threat, could adversely affect our business, financial condition,
and results of operations.

An outbreak of the COVID-19 was recognized as a pandemic by the World Health Organization (“WHO”), on March 11, 2020.
In response to the COVID-19 pandemic, the governments of many countries, including India, US, Europe and China have taken
preventive or protective actions, such as imposing country-wide lockdowns, restrictions on travel and business operations and
advising or requiring individuals to limit their time outside of their homes. Individuals’ ability to travel both within and outside
of India have been curtailed through mandated travel restrictions and may be further limited. Since May 2020 some of these
measures have been lifted and partial travel has been permitted. These measures have impacted and may have a further impact
on our workforce and operations in India and overseas jurisdictions in which we operate, the business of our customers and
suppliers.

The COVID-19 pandemic has led to a significant downturn in the global economy and substantial curtailment of business
activities worldwide, which adversely affected, and may adversely affect in the future, our results of operations, financial
condition and cash flows. The resultant disruptions to the supply chain and reduced levels of orders, consumer spending and
industrial production in the affected countries has precipitated an economic slowdown in those economies which, if prolonged,
could cause a global recession. A significant portion of our income is derived from sale of goods with end-use in the overseas
markets, including North America, Europe and China. We also have assembly plants and warehouses across USA, China,
Mexico, Germany and Belgium and sell our products in various countries outside India. The COVID-19 pandemic and the related
preventive and protective actions had impacted our business through complete suspension of activities at our manufacturing and
assembly facilities in India and overseas jurisdictions.

The table below sets forth the periods during which our manufacturing and assembly facilities were shut down due to the COVID-
19 pandemic.

Period of shut down Duration of shutdown (in

number of working days)
China • December 30, 2019 until February 9, 2020 35
Mexico • April 1, 2020 until May 20, 2020; and 43
• December 24, 2020 until January 3, 2021
USA • March 20, 2020 until May 16, 2020 41
Chennai • March 23, 2020 until May 8, 2020; and 56
• June 8, 2020 until July 6, 2020
Three units in Gurugram • March 23, 2020 until May 3, 2020 29
Manesar • March 23, 2020 until April 23, 2020 23
Pune • March 23, 2020 until May 17, 2020 40

As a result, in Fiscal 2020 and the period thereafter during which our manufacturing facilities were shut down, we experienced
overall low consumer demand in the automotive markets, and consequently low orders from our customers for our systems and
components. Although lockdown was partially and gradually eased since May 2020, as a result of the movement restrictions in
India and globally to curb the spread of the COVID-19 pandemic, production in our manufacturing facilities was adversely
impacted due to manpower constraints, supply chain disruption, disruption in timely availability and transportation of raw
materials, unavailability of personnel, delays in obtaining local approvals and clearances and cash flow challenges of suppliers
and contractors. For example, four of our development programs which were due to commence production in Fiscal Year 2021
have been delayed. There is no assurance how long the lockdown restrictions and advisories may be in place or when commercial
and industrial activities will return to pre-pandemic levels even after such restrictions or advisories are lifted.

After commencement of operations at our manufacturing facilities due to easing of lockdown measures, production levels at our
manufacturing facilities returned to pre-COVID levels as set forth below.

China February, 2020

Mexico November, 2020
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 USA May, 2020
Chennai July, 2020
Three units in Gurugram July, 2020
Manesar July, 2020
Pune July, 2020

Due to the lockdown imposed during the COVID-19 pandemic and consequent breakdown of the supply chain, some of our
suppliers invoked force majeure clauses under their agreements with us, requesting for extension in delivery duration. Our
customers may also face financial difficulties due to the effects of the COVID-19 pandemic, which may lead to difficulties for
us to collect our accounts receivables and increased risks of incurring bad debt.

Our cash and liquidity needs are impacted by the level, variability and timing of our customers’ worldwide vehicle production
and other factors outside of our control. If the global economy experiences significant decline in the future, our results of
operations, financial condition and cash flow could be materially adversely affected. Given that there are fixed costs associated
with our business operations, it may be difficult to adjust our cost base to the extent necessary, to withstand a complete and
prolonged lockdown situation like COVID-19 and can result in non-cash impairment charges as the value of certain long-lived
assets is reduced. As a result, our financial condition and results of operations may be adversely affected during periods of
prolonged declining production and sales volumes in one or all of our product segments. The negative impact on our financial
condition and results of operations from continued volume declines could also have negative effects on our liquidity. If cash
flows are not available from our operations, we may be required to rely on the banking and credit markets to meet our financial
commitments and short-term liquidity needs. However, we cannot predict whether that funding will be available at all or on
commercially reasonable terms.

In response to the COVID-19 pandemic, we have taken active measures to promote health and safety and social distancing
efforts, including providing for PPEs, masks, hand sanitizers, and gloves to employees in our manufacturing facilities and in
affected areas, staggered working shifts at our manufacturing and assembly plants and working closely with health authorities
for obtaining approvals to commence operations at our plants and to enact and enforce safety guidelines. In addition, as part of
our risk management policy, we developed a mobile phone based application for our employees to report their health status on
a daily basis and also implemented a safety SOP applicable for our employees travelling between workplace and home, inside
shop safety management practices including vendor safety management and measures to check vehicles entering and leaving our
premises and employees returning to the workplace after easing of lockdown. However, our efforts may not be successful and
we may not have sufficient protection or recovery plans to continue to deal with the COVID-19 pandemic or similar public health
threats in the future, which may negatively affect our ability to meet demands of our customers and may increase the costs of
our production and sales. In connection with public health threats, we may also be required to temporarily close our
manufacturing facilities, R&D centers and warehouses, which may impact productivity and otherwise disrupts our business
operations. In addition, the current outbreak of the COVID-19 pandemic has resulted in a widespread global health crisis and
adversely affected global economies and financial markets, and similar public health threats could do so in the future as well.
Such events have impacted, and could in the future impact, demand for automobiles and consumer purchase patterns, which in
turn, could adversely affect our revenue and results of operations.

Even if a virus or other disease does not spread significantly and such measures are not implemented, the perceived risk of
infection or significant health risk may adversely affect our business. Manufacturing facilities may be perceived as unsafe during
such public health threats. If any of our workforce or our manufacturing plants, R&D centers and warehouses are identified as a
possible source of spreading COVID-19, or if there is a public perception that such risk exists, our facilities may have to be shut-
down and our business operations may be adversely affected. Any negative impact on consumers’ willingness or ability to
purchase automobiles or automobile components, consumers’ willingness or ability to make purchase orders, could adversely
affect our business, financial condition, and results of operations.

Due to the impact of the COVID-19 pandemic, consumer demand in the automotive sector was adversely affected during the
quarters ended March 31, 2020 and June 30, 2020 as a result of which, our restated consolidated income from sale of goods was
₹2,968.28 million and ₹1,355.06 million, respectively for these quarters. Our restated consolidated income from sale of goods
increased to ₹3,648.27 million during the quarter ended September 30, 2020 and further to ₹4,681.34 million in the quarter ended
December 31, 2020 which showed a year on year growth of 64.6% in our restated consolidated income from sale of goods of
₹2,844.00 million for the quarter ended December 31, 2019. It is not possible to accurately predict the full impact of the COVID-
19 pandemic on our business, financial condition and results of operations due to the evolving and varying nature of the COVID-
19 pandemic and the extent of its impact across industries and geographies and numerous other uncertainties, including the
duration and spread of the pandemic, additional actions that may be taken by governmental entities, the further impact on our
customers, suppliers and business partners, our ability to continue to manufacture and sell our systems and components, including
as a result of travel restrictions and people working from home, ability of our customers to pay in a timely manner, any closures
of our facilities and the facilities of our customers and suppliers and demand for our systems and components. In addition, there
can be no assurance that any efforts taken by us to address the adverse impacts of the COVID-19 pandemic or actions taken to
contain the COVID-19 pandemic or its impact will be effective or will not result in significant additional costs.

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4. Development of our technologically advanced systems and components involves a lengthy and expensive process with
uncertain timelines and uncertain outcomes. We are dependent on the success of our R&D and the failure to develop
new or improved products or process improvements or production techniques could subject us to write-offs or
otherwise adversely affect our business, financial condition and results of operations and have a negative impact on
our competitive position.

Our future growth depends on our ability to continue to develop and commercialize innovative, viable and sustainable new
automotive systems and components in a timely and cost-effective manner, improve our existing systems and components, or to
develop process improvements that can improve time, quality and cost efficiency. The development and commercialization of
new products is complex, time-consuming and costly, and its outcome is inherently uncertain. The automotive industry is
characterized by rapid and frequent advancements in technology and changes in market demand can often render existing
technologies and equipment obsolete and could require substantial new capital expenditures or subject us to write-offs. Due to
the long lead times associated with development for many of the technologically advanced automotive systems and components,
as well as the competitive advantage that can come from being the initial developer of a new product, it is important that we
maintain a sufficiently large portfolio of systems and components and a product pipeline and manage their development processes
so as to bring our systems and components to market on a timely basis. The launch of a new product is a complex process, the
success of which depends on a wide range of factors, including the production readiness of our manufacturing facilities and
manufacturing processes and those of our suppliers, as well as factors related to tooling, equipment, employees, initial product
quality and other factors. Production shortfalls or production delays, if any, or our inability to accurately estimate the cost to
design, develop and launch new products could result in our failure to effectively manage our manufacturing costs relating to
these product program launches. If we are unable to bring enough products to market, or if products are brought to market after
competing products are commercialized, our growth strategy may not be successful and our business would be adversely affected.

During Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, our total expenditure on R&D
amounted to ₹218.40 million, ₹244.04 million, ₹404.49 million and ₹699.54 million, respectively, representing 1.8%, 1.7%,
3.3% and 6.8%, respectively, of our total revenue from operations in those periods. As at December 31, 2020, we had 175 on-
roll employees engaged in R&D activities, representing approximately 15% of our total on-roll manpower, with 14 software
engineers focused on R&D. We have also established digital simulations, testing and validation facilities located at three R&D
centers in India. We cannot assure you that the investments we have made in R&D will yield satisfactory results in terms of
improved products, or will yield any results at all. Despite our investments in this area, our R&D efforts may not result in the
discovery or successful development of new and innovative systems and components. In addition, even where we successfully
develop any such new or improved products in a timely manner, there can be no assurance that the new or improved product will
be commercially successful and meet the price expectations of our customers. Further, if our competitors develop new processes
or production techniques, or improve existing processes or production techniques that may give them significant cost and
marketing advantages, we may be unable to retain our customers, which would adversely affect our revenues and profitability.
We also cannot guarantee that any investment we make in developing products will be recouped, even if we are successful in
commercializing those products.

5. We may not be successful in implementing our growth strategies, including our strategy to capture market opportunity
in the growing EV market.

The success of our business depends on our ability to effectively implement our business growth strategies. See “Our Business”
on page 159, for details on our growth strategies. 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 time and within the estimated budget, or that we will meet
the expectations of targeted customers.

As part of our growth strategy, we plan to increase our market share in both the Indian and overseas markets by catering
specifically to EV OEMs. As at December 31, 2020, we had 14 development programs for supply of our systems and components
to EV manufacturers across North America, Europe, China and India, of which, eight programs are currently under regular
production. We have been supplying differential gears in the global EV market since April 2016 and differential assemblies since
2018, and according to the Ricardo Report, our global market share of BEV differential assemblies in calendar year 2020 was
8.7%. While BEV sales as a percentage of total global vehicle sales was 3.3% in calendar year 2020, according to the Ricardo
Report, 13.7% of our income from sale of goods was derived from the BEV market for the nine months ended December 31,
2020. As a result, we are well-positioned to benefit from the global trend in the automotive industry towards electrification of
vehicles which continues to expand, driven by government regulations related to emissions, such as Corporate Average Fuel
Economy standards, as well as consumer demand. According to the Ricardo Report, among the available propulsion
technologies, BEV has been the fastest growing segment at a CAGR of approximately 46% between calendar years 2015 to 2020
and is expected to grow at a CAGR of approximately 36% between calendar years 2020 to 2025 with increased market
penetration. However, the market for electric vehicles is relatively new, rapidly evolving, characterized by rapidly changing
technologies, price competition, additional competitors, evolving government regulation and industry standards, frequent new
vehicle announcements and consumers’ willingness to adopt electric vehicles. A decline in the trend towards electrification
driven by changing consumer preference or any change in government policy, laws and regulations that reduces or eliminates
support for electrification of vehicles, resulting in lower demand for electrical vehicles and consequently a significant reduction
29
in production of electric vehicles could have an adverse effect on our sales to EV OEMs and lead to a decline in our earnings
from the EV market.

We also plan to increase our market share across our product verticals and diversify our offerings of systems and components,
customer base and geographical footprint, develop, engineer and bring to market new and innovative technologically advanced
products and solutions to meet the growing demands of our customers and continue to invest in our R&D and technological
capabilities.

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. We may not be successful in implementing our
growth strategies due to various factors, including failure to adapt to rapidly evolving technological changes, anticipate and
accurately assess potential growth opportunities and new markets and effectively allocate resources and capital investment in a
timely and cost-effective manner to capitalize on such opportunities, attract new customers, obtain sufficient financing for our
expected capital expenditures, control input costs, effectively manage our internal supply chain, manufacturing processes and
operations and costs related to R&D and maintain sufficient operational and financial controls. We may also not be successful
in implementing our goals due to factors beyond our control, including shift in customer preferences towards products that we
are unable to manufacture, change in business and spending plans of our customers with whom we have collaborated to produce
new and innovative systems and components or downturn in the global economic, financial and market conditions resulting in
decline in demand for our products.

Our inability to effectively manage the expansion of our business and execute our strategies effectively, could adversely affect
our business, results of operations and financial condition.

6. Our Company may not realize all of the revenue expected from our new and incremental business backlog and does
not have firm commitment agreements with customers.

The amount of our sales to the customers, including the realization of future sales from awarded business or obtaining new
business or customers, is inherently subject to a number of risks and uncertainties, including the accuracy of customer estimates
relating to the number of vehicles to be produced and sold and the timing of such production. Typically, we participate in a
lengthy and rigorous vendor selection process with our customers, which can take up to two to three years from the date of issue
of a request for information or request for quote for securing business. Upon winning a program, we expect to receive all or a
sizable portion of revenue from the development program. However, there is no assurance in relation to the sales volumes and
revenue that the program will eventually generate for us. Further, our customers may delay or cancel a development program
that has been awarded to us due to various reasons. For example, as a result of the COVID-19 pandemic, four of our development
programs which were due to commence production in Fiscal Year 2021 have been delayed. Since we do not have firm
commitment or long-term supply agreements with our customers, and instead rely on letters of intent, purchase orders, statements
of work and customer schedules to govern the volume and other terms of the development program and sales, which may be
amended or cancelled prior to finalization, we may not have any recourse in the event of an unexpected delay or cancellation of
a development program. We base our growth projections, in part, on volume projections given to us by our customers. Under
the letter of intent and statement of work, our customers provide us only with forecast volume for the program and there is no
commitment on the part of the customer to purchase the quantities specified in the volume projections. Such volume projections
are based on a number of economic and business factors, variables and assumption, some or all of which may change or may not
be accurate. Accordingly, our order book and growth projections are not necessarily an accurate indication of what our actual
sales and revenues from such orders will be, nor does it purport to project our results of operations, financial position or cash
flows for any future period or date.

Further, our purchase orders with customers are generally open-ended in terms of period and quantity to be supplied. Pursuant
to the purchase order, our customers provide program specific delivery schedules throughout the period of the program which
specify the details of delivery. The purchase orders are valid as long as the customers require the specific components from us.
Accordingly, there is no commitment on the part of the customer to continue to place new work orders with us and as a result,
our sales from period to period may fluctuate significantly as a result of changes in our customers’ vendor preferences or the
discontinuation of, loss of business with respect to, or a lack of commercial success of, a particular vehicle model or program or
platform. Our customers may terminate their arrangements with us for cause or otherwise with notice, including on account of
change of control of our Company, strikes or lock-outs at the premises of our suppliers and non-compliance with contractual
obligations such as stringent standards for product quality and quantity as well as delivery schedules, and in certain cases have
no liability to pay or reimburse for lost profits, unabsorbed overhead, capital investment made by us, product development and
engineering costs, facilities and equipment rental and other related costs such as penalties or administrative charges incurred
directly or indirectly by our Company in connection with cancelled orders. In addition, we do not have exclusive contracts with
some of our large customers, which entitles them to replace us with another supplier under certain circumstances. Accordingly,
we may not in fact realize all of the future sales represented by our awarded business. Any failure to realize substantially all the
revenue from these sales and our new and incremental business backlog, could have a material adverse impact on our business,
cash flows, financial condition and results of operations.

30
7. We rely on the skills and experience of our management team and other key personnel and the loss of any of these
team members or the inability to attract and retain qualified personnel could have a material adverse effect on our
business operations.

Our future success is significantly dependent upon the continued efforts and service of our management team as well as other
key personnel. In an event of their retirement or departure from the company, there is no assurance that we will be able to find
suitable replacements for such key management personnel in a timely manner or at all and implement a smooth transition of
responsibilities to any newly appointed management personnel. This could affect our operations resulting in a decline in the
performance of our business.

We are a technology driven company with significant focus and investment in our in-house R&D capabilities. The future success
of our investments in innovation will depend upon, among other factors, our ability to continue to attract and retain qualified
personnel, particularly engineers and other associates with critical expertise, know-how and skills that are capable of helping us
develop technologically advanced systems and components and support key customers and products. The scarcity of labor in
certain employment areas makes it difficult to hire the employees needed to increase production. If we lose the services of any
member of our key management or other skilled personnel, we may not be able to locate suitable or qualified replacements,
which could adversely affect our business and growth.

Our rapid growth also requires us to continue to attract, hire and retain a wide range of qualified, experienced and skilled
personnel at all levels of our business and operations who can adapt to a dynamic, competitive and challenging business
environment. Competition for skilled personnel in the automotive component manufacturing industry is intense, and we may
need to offer a more attractive compensation and other benefits package, including share-based compensation, to attract and
retain them. Even if we were to offer higher compensation and other benefits, there is no assurance that these individuals will
choose to join or continue to work for us. The loss of the services of our executive officers or other key associates, unexpected
turnover, or the failure to attract, retain or motivate key management and experienced, skilled and capable personnel could impact
the progress of our product innovation, development, launch and production operations and have a material adverse effect on
our results of operations and financial condition.

8. Pricing pressure from customers may affect our gross margin, profitability and ability to increase our prices, which in
turn may materially adversely affect our business, results of operations and financial condition.

Pursuing cost-cutting measures while maintaining rigorous quality standards may lead to an erosion of our margins, which may
have a material adverse effect on our business, results of operations and financial condition. In addition, estimating amounts of
such price reductions is subject to risk and uncertainties, as any price reduction is the result of negotiations and other factors.
Accordingly, suppliers must be able to reduce their operating costs in order to maintain profitability. Such price reductions may
affect our sales and profit margins. If we are unable to offset customer price reductions in the future through improved operating
efficiencies, new manufacturing processes, sourcing alternatives and other cost reduction initiatives, our business, results of
operations and financial condition may be materially adversely affected. Our customers also negotiate for larger discounts in
price as the volume of their orders increase. In addition, substantially all of our systems and components are customized to
specific customer requirements, which requires us to incur significant costs in setting up our capabilities to manufacture these
products, which may or may not be fully recovered from the customers. To maintain our profit margins, we focus on developing
new systems and components, the benefits of which support stable or increased prices. In addition, we seek price reductions from
our suppliers, improved production processes to increase manufacturing efficiency and streamlined product designs to reduce
costs.

There can be no assurance that we will be able to avoid future customer price reductions or offset the impact of any such price
reductions through continued technology improvements, improved operational efficiencies, cost-effective sourcing alternatives,
new manufacturing processes, cost reductions or other productivity initiatives, which may adversely affect our business, financial
condition and results of operations.

9. We are exposed to counterparty credit risk and any delay in receiving payments or non-receipt of payments may
adversely impact our results of operations.

Due to the nature of, and the inherent risks in, the agreements and arrangements with our customers, we are subject to
counterparty credit risk and a significant delay in receiving large payments or non-receipt of large payments may adversely
impact our results of operations. Our operations involve extending credit to our customers in respect of sale of our products and
consequently, we face the risk of the uncertainty regarding the receipt of these outstanding amounts. There is no assurance that
we will accurately assess the creditworthiness of our customers. Further, macroeconomic conditions, such as a potential credit
crisis in the global financial system, could also result in financial difficulties for our customers, including limited access to the
credit markets, insolvency or bankruptcy. Such conditions could cause our customers to delay payment, request modifications
of their payment terms, or default on their payment obligations to us, all of which could increase our receivables. Timely
collection of dues from customers also depends on our ability to complete our contractual commitments and subsequently bill
for and collect from our clients. If we are unable to meet our contractual obligations, we may experience delays in the collection
of, or be unable to collect, our customer balances, which could adversely affect our results of operations and cash flows. We are
31
also dependent upon the market for financing, and the inability for us, our customers or our suppliers to obtain and maintain
sufficient capital financing, including working capital lines, and credit insurance may adversely affect our, our customers’ and
our suppliers’ liquidity and financial condition.

Accordingly, we had and may continue to have high levels of outstanding receivables. As of Fiscal Years 2018, 2019 and 2020
and the nine months ended December 31, 2020, our trade receivables were ₹2,382.06 million, ₹2,732.98 million, ₹2,336.28
million and ₹3,938.98 million, respectively, which constituted 19.5%, 19.1%, 19.1% and 38.4% of our revenue from operations
for the respective periods. If our customers delay or default in making these payments, our profits margins and cash flows could
be adversely affected.

10. If we are unable to anticipate, identify, understand and respond timely to rapidly evolving technological and market
trends and preferences and develop new products to meet our customers’ demands and to adapt to major changes and
shifts in the automotive market, our business may be materially adversely affected.

The automotive markets in which we operate are undergoing significant technological changes, with increasing focus on, among
other things, electrification of vehicles, development of hybrid vehicles and advanced driver assistance technologies, power
storage capacity and technological changes in ICE engines. Our results of operations and financial condition are impacted, in
part, by our competitive advantage in developing, engineering and manufacturing innovative and/or improved products. Our
ability to anticipate changes in technology, successfully develop, engineer, and bring to market new and innovative and/or
improved products, or successfully respond to evolving business models (including electric vehicle advances), may have a
significant impact on our market competitiveness. Maintaining our competitive position is dependent on our ability to develop
commercially-viable products that support the future technologies adopted by our customers and meet our customers’ demands
in a timely manner.

According to the Ricardo Report, we are among the limited number of players who are well placed to combine our motor and
driveline capabilities to offer a compelling value proposition to our EV customer base. To meet our various customers’
requirements and maintain our technological leadership, we have incurred in the past and continue to incur capital expenditures
to develop new systems and components and adapt our range of systems and components based on collaboration with our key
customers and to meet customers’ demands. Accordingly, any change in our customers’ preferences, delay in product launches
by our customers or failure by our customers to successfully launch new programs, could render our current systems and
components obsolete or less attractive which could materially adversely affect our business, financial condition and results of
operations.

Further, unexpected advances in a given technology in the market or difficulties encountered in developing a new technology
internally, could prevent us from seizing opportunities relating to technological breakthroughs and as a result could impact our
competitive positioning, growth and profitability. We are also subject to the risks generally associated with new product
introductions and applications, including lack of market acceptance, delays in product development and failure of our systems
and components to operate properly. If we are unable to maintain our competitive advantage through innovation or if we do not
sustain our ability to meet customer requirements relative to technology, or acquire new and compelling products that capitalize
upon new technologies in response to OEM and consumer preferences, our business, financial condition and results of operations
could be materially adversely affected.

11. Our business is subject to costs, risks and uncertainties, including those associated with laws and regulations in
domestic and foreign jurisdictions in which we operate, tariffs and trade relations and international political
conditions. Breach of applicable laws and regulations, including those related to environmental, health and safety
regulations could adversely affect our business, operations and reputation.

The markets and customers we serve are subject to substantial government regulations, which often differ by state, region and
country. We have operations in multiple countries that can be impacted by expected and unexpected changes in the legal and
regulatory environments in which we operate. We have nine manufacturing and assembly facilities across India, China, Mexico
and USA, of which six are located in India. We also have eight warehouses, of which, five are located in India and three across
USA, Germany and Belgium and digital simulation, testing and validation facilities located at three R&D centers in India.

Our operations are subject to various domestic and foreign laws and regulations governing, among other things, noise control,
emissions to air, discharge to waters and the generation, handling, storage, transportation, treatment and disposal of waste and
other materials, environmental concerns (including concerns about global climate change and its impact such as greenhouse gas
emissions), fuel economy standards, health and safety of employees, labor and accounting laws, foreign trade and investment,
import and export license requirements and tariffs and taxes and intellectual property enforcement issues. We are also required
to obtain and comply with environmental permits for certain of our operations. For instance, we require approvals under the
Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, the Hazardous
and Other Waste (Management and Transboundary Movement) Rules, 2016 in order to establish and operate our manufacturing
facilities in India. For details on the regulations and policies applicable to our Company, please see “Key Regulations and Policies
in India” on page 187. These government regulatory requirements could also significantly affect our customers by altering their
global product development plans and substantially increasing their costs, which could result in limitations on the types of
32
vehicles they sell and the geographical markets they serve. Any of these outcomes could adversely affect our financial condition
and results of operations.

We believe that our operations and manufacturing facilities have been, and are being, operated in compliance, in all material
respects, with such laws and regulations. However, there can be no assurance that we will be in complete compliance at all times
with such laws, regulations and the terms and conditions of any consents or permits. If we violate or fail to comply adequately
with these requirements, we could be fined or otherwise sanctioned by the relevant regulators or our operations may be
temporarily shut-down pending such compliance. Occurrence of any such events could adversely affect our business, reputation,
financial condition or results of operations. In addition, these requirements may become more stringent over time and there can
be no assurance that we will not incur significant costs or liabilities in the future in order to comply with evolving laws and
regulations, including environmental, health and safety laws, regulations or other pertinent requirements that may be adopted or
imposed in the future by governmental authorities. We do not carry any insurance to cover environmental liabilities in India and
in the foreign jurisdictions where we operate.

Our overseas business and growth initiatives are also exposed to changes in international tariffs, trade relations and policies,
including renegotiated trade agreements, import and export license requirements, and imposition of tariffs that make unjustified,
unreasonable or discriminatory trade actions impacting the countries in which we have a presence. There is no assurance that
cost increases resulting from trade policies and tariffs will not adversely impact our profitability. Our sales may also be adversely
impacted if tariffs are assessed directly on the products we produce or on our customers’ products containing content sourced
from us. In addition, political activities within the countries where we conduct business, could also adversely impact our ability
to operate in those countries.

If we are unable to comply with any applicable domestic or foreign laws, our business, results of operations and financial
condition could be adversely affected. Further, changes in domestic and foreign laws, regulations and policies, including
restrictions on trade, import and export license requirements, and tariffs and taxes, intellectual property enforcement issues as
well as changes in policies relating to foreign trade and investment, may affect our ability to operate and the manner in which
we manage our business in the countries in which we operate.

12. Our Statutory Auditors have included an audit qualification in their examination report on Restated Consolidated
Financial Information in relation to our erstwhile subsidiary, Sona Holdings B.V., The Netherlands (“SONA BV)”
in the Restated Consolidated Financial Information.

Our Statutory Auditors have included an audit qualification in relation to our erstwhile subsidiary, SONA BV, in the Restated
Consolidated Financial Information. The qualification states that due to the unavailability of the consolidated financial statements
of SONA BV and its subsidiaries (“SONA BV Group”) for the period from April 1, 2019 to July 4, 2019, the consolidated
financial information of SONA BV Group for the period from April 1, 2019 to July 4, 2019 has not been included in our
consolidated financial statements for Fiscal Year 2020, and the assets and liabilities of SONA BV Group have been derecognized
at their respective carrying values as at March 31, 2019 instead of July 4, 2019. This is because 81% shareholding in SONA BV,
which was classified as a “discontinued operation” in the consolidated financial statements for Fiscal Year 2019, was sold to
Sona Autocomp on July 4, 2019, and consequently, our Company, did not exercise control over Sona BV from July 5, 2019. Our
Statutory Auditors have stated in their audit opinion that this accounting treatment is not in compliance with the requirements of
Ind AS 110 - Consolidated Financial Statements and had the consolidated financial statements of the Company been prepared
after considering the consolidated financial statements of SONA BV Group for the period April 1, 2019 to July 4, 2019, the
“Profit or Loss from discontinued operations” would have been higher and “Exceptional Item” would have been lower by the
same amount. However, it would have had no effect on our consolidated profit for the year ended March 31, 2020 and equity
attributable to our owners on that date. The qualification also states that in absence of necessary financial information, owing to
the insolvency proceedings and acquisition of the businesses by a third party, despite the best efforts of the management of the
Company, substantiated by multiple communications over electronic mail, our auditors were unable to quantify such impact on
the said items in the accompanying consolidated financial statements. Investors should carefully understand the qualification and
its implications while placing reliance on our Restated Consolidated Financial Information for Fiscal 2020.

For further details concerning the qualification noted in our audit report for the Restated Consolidated Financial Information,
please see “Restated Consolidated Financial Information” on page 230, “Management’s Discussion and Analysis Of Financial
Condition and Results of Operations – Qualification included by Auditors” on page 390 and “History and Certain Other
Corporate Matters” on page 199.

13. The Pro Forma Consolidated Financial Information included in this DRHP to reflect the acquisition of Comstar
Entities is not indicative of our future financial condition or factual financial position or results of operations.

In 2019, our Company completed the acquisition of the Comstar Entities, pursuant to which, Comstar Entities became
Subsidiaries of our Company with effect from July 5, 2019. For further details on the acquisition, see “History and Certain
Corporate Matters – Material acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation
of assets in the last 10 years” on page 199 and “Management’s Discussion And Analysis Of Financial Condition and Results of
Operations – Acquisition of the Comstar Entities and Divestment of Sona BV and its Subsidiaries” on page 353.
33
Our Pro Forma Consolidated Financial Information as at and for the Fiscal Years 2018, 2019 and 2020 and the nine months
ended December 31, 2020, present a theoretical situation to show the impact of the acquisition of Comstar Entities on our
Company, including the results of operations and the financial position that would have resulted, had the acquisition of the
Comstar Entities been completed at a date prior to the first period presented in the Pro Forma Consolidated Financial Information.
Further, the erstwhile subsidiary, SONA BV, and its subsidiaries, and the erstwhile associate, Sona Skill Development Centre
Limited, have not been considered for consolidation in the Pro Forma Consolidated Financial Information. Accordingly, our Pro
Forma Consolidated Financial Information may not necessarily be indicative of what our actual results of operations, financial
position and cash flows would have been for such periods or as of such dates, nor are these intended to be indicative of expected
results or operations in the future periods or our future financial position. For further details, see “Financial Information – Pro
Forma Consolidated Financial Information” on page 310. Our Pro Forma Consolidated Financial Information does not include
all of the information required for financial statements under Indian GAAP or Ind AS and should be read in conjunction with the
“Basis of Preparation of the Pro Forma Consolidated Financial Information” on page 372 and “Accounting policies” appearing
in the Restated Consolidated Financial Information and Pro Forma Consolidated Financial Information included in this Draft
Red Herring Prospectus. Further, our Pro Forma Consolidated Financial Information were not prepared in connection with an
offering registered with the SEC under the U.S. Securities Act and consequently do not comply with the SEC’s rules on
presentation of pro forma financial information. Accordingly, the degree of reliance placed by investors in other jurisdictions on
our Pro Forma Consolidated Financial Information should be limited.

14. Our business faces substantial competition.

We compete globally with a number of other automotive component manufacturers and distributors that produce and sell
products similar to ours. Technology, price, design, quality, delivery, engineering development and program launch support are
the primary elements of competition in our markets. Our competitors include manufacturing facilities controlled by OEMs, as
well as many other independent domestic and foreign suppliers. In some instances we also sell to and collaborate with our
competitors to develop automotive systems and components, which may adversely affect our competitive situation. In addition
to traditional competitors in the automotive sector, the trend towards advanced electronic integration and electrification has led
to an increase in the significance of technology to our current and future products and the amount of capital we need to invest to
develop these new technologies, as well as an increase in the amount of competition we face from technology focused new
market entrants. A number of our competitors are larger than we are, and some competitors have greater financial and other
resources than we do and other economic advantages as compared to our business, such as patents, existing underutilized
capacity, lower labor costs, lower health care costs, lower tax rates and, in some cases, export or raw materials subsidies. As a
result of these competitive pressures and other industry trends, OEMs and suppliers are developing strategies to reduce costs.
These strategies include supply base consolidation, OEM in-sourcing and global sourcing. Our OEM customers may change
their outsourcing strategy due to various reasons, resulting in change in our position from a single source supplier for certain
systems and components to some customers to becoming a dual source supplier for such customers. Some of our major OEM
customers also manufacture products for their own uses that directly compete with our products.

Increased competition could adversely affect our business. In addition, any of our competitors may foresee the course of market
development more accurately than we do, develop products that are superior to our products, produce similar products at a cost
that is lower than our cost, or adapt more quickly than we do to new technologies or evolving customer requirements. As a result,
our products may not be able to compete successfully with our competitors’ products, and we may not be able to meet the
growing demands of customers. If we misjudge the amount of capital to invest or are otherwise unable to continue providing
products that meet our customers’ needs in this environment of rapid technological change, our market competitiveness could
be adversely affected.

15. Our international operations are subject to a number of risks

We have manufacturing facilities and assembly plants and warehouses across US, Mexico, China, Germany and Belgium and
sell our products in various countries outside India. For the nine months ended December 31, 2020, we derived 75.4% of our
income from sale of goods with end-use in the overseas markets, including 40.2% in North America, 25.3% in Europe and 5.3%
in China. Our international operations are subject to a number of risks inherent in operating abroad. We have significant exposure
in foreign currencies like U.S. Dollar, Euro, British Pound and Japanese Yen on account of our export revenue, international
operations and imports of materials, capital goods and services. Accordingly, we are exposed to foreign currency risks that arise
from our business transactions denominated in foreign currencies and investments done in foreign jurisdictions. Since our local
reporting currency is Indian Rupees, we are also subject to currency translation risk as all foreign currency transactions including
sales, purchases and expenses are translated into Indian rupees for the purposes of our consolidated financial statements. We are
also required to translate the financial statements of our foreign subsidiaries in USA, Hongkong, Mexico and China to Indian
Rupees.

In accordance with “Accounting Standard 21 - Consolidated Financial Statements” issued by Institute of Chartered Accountants
of India, at the time of conversion of the financial statements of the foreign subsidiary during the consolidation process, line
items of the profit and loss account are converted using an average exchange rate for the period or year under consideration
except for opening and closing stock, which are converted at the opening and closing exchange rate respectively, whereas items
of the balance sheet are converted using the closing exchange rate for the period or calendar year under consideration.
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Fluctuations in foreign currency exchange rates against the Indian Rupee may have an adverse effect on our reported revenues
and financial results because of variations in the exchange rate prevailing in the previous comparative period and also affect the
value of our foreign assets and liabilities denominated in foreign currency and the relative prices at which we and our foreign
competitors sell products in the same markets.

While we hedge a significant part of our net foreign currency transaction exposure on a rolling 12 months’ basis to help mitigate
certain of these risks and reduce the effects of fluctuations in exchange rates on our results of operations, our efforts to manage
these risks may not be successful and we may still incur losses on account of fluctuations in exchange rates.

We also file income-tax returns in and are subject to tax laws in foreign jurisdictions in which we have a presence and are subject
to examinations of these income tax returns by the relevant tax authorities. Changes in tax laws and treaties or tax rates, the
resolution of tax assessments or audits by various tax authorities and our inability to fully utilize any tax loss carryforwards and
tax credits could adversely affect our results of operations. In addition, our international operations are exposed to risks related
to restrictive governmental actions and laws and policies of India and foreign governments affecting trade, foreign investment
and loans (such as restrictions on transfer and repatriation of funds and trade protection measures, including import and export
duties, licensing requirements, quotas, customs duties and tariffs) and compliance with local laws in foreign jurisdictions in
which we have a presence.

There can be no assurance that these risks and other adverse developments in the economic conditions of any of the markets in
which our Company and its customers are present, particularly US, Europe and China, will not have a material adverse impact
on our ability to increase or maintain our foreign sales or on our business, financial condition and/or results of operations.

16. The geographical concentration of our manufacturing facilities may restrict our operations and adversely affect our
business and financial conditions.

Six of our manufacturing and assembly facilities are located in India and three are located outside India. Due to the geographic
concentration of our manufacturing plants in India, our operations are susceptible to local and regional factors, such as accidents,
system failures, civil unrest as well as other adverse social, economic and political events in India, weather conditions, natural
disasters, regional conflicts and demographic and population changes, and other unforeseen events and circumstances. We have
a tool and die shop, which is only situated in Gurugram in India and caters to the production needs of all our manufacturing
facilities. Any damage or destruction of or interruption of activities or capacity constraints in our tool and die shop will result in
a temporary disruption of our manufacturing abilities for gears and differential assembly business resulting in delays in shipments
of such systems and components. In addition, our assembly plants in Mexico, China and USA mostly manufacture automotive
components for two of our top 10 customers. As a result, any disruption or damage or stoppage of work in our plants in Mexico,
China and USA may severely affect our ability to meet the demands of such customers and the loss of any of these top 10
customers or a significant reduction in demand from such customers could have an adverse effect on our business, financial
condition and results of operations.

17. We depend on third parties for the supply of raw material and delivery of certain products. A disruption in the supply
of components and raw materials or failure of our suppliers to meet their obligations could impact our production and
increase our costs.

We are dependent on third party suppliers for our raw materials and certain components used in the manufacture of our products.
Although we purchase most of the commodities used in our manufacturing process from more than one supplier, we typically
source components and assemblies for a particular part number from a single supplier. Accordingly, we are exposed to the risk
of inadequate capacity leading to temporary production allocation or disruption of supplies for such components and assemblies
which are procured for a single supplier. There is no assurance that if we experience a disruption of supplies, we will be able to
source such commodities from alternative suppliers on similar commercial terms and within a reasonable timeframe. For certain
key critical components such as drive assemblies, solenoid assemblies, machined steel components, carbon brushes assemblies
and magnets required for manufacturing of our starter motors, we are dependent primarily on a limited number of suppliers in
China, which cannot be replaced easily. If the available supply of such parts is insufficient to meet the needs of our business or
if there is an interruption in supply from our Chinese suppliers, including due to any unanticipated outage, shutdown and/or
suspension of production at their facilities, change in political relationship between India and China or implementation of laws
and policies impacting our relationship with our Chinese suppliers, our ability to manufacture and sell our starter motors could
be limited due to such sudden shortage of parts in the market which could result in order cancellations for our starter motors and
have an adverse effect on our business and results of operations.

We select suppliers based on total value (including total landed price, quality, delivery, and technology), taking into consideration
their production capacities and financial condition and expect that they will deliver in accordance with our quality standards and
comply with their contractual obligations with us. However, there can be no assurance that capacity limitations, industry
shortages, labor or social unrest, weather emergencies, commercial disputes, government actions, riots, wars, sabotage, cyber-
attacks, non-conforming parts, acts of terrorism, “Acts of God”, financial or operational instability of suppliers or other problems
that our suppliers experience will not result in occasional shortages or delays in their supply of components to us. We are
dependent upon the ability of our suppliers to meet performance and quality specifications and delivery schedules. The inability
35
of a supplier to meet these requirements, the loss of a significant supplier, or any labor issues or work stoppages at a significant
supplier could disrupt the supply of raw materials and parts to our facilities, preventing our Company from delivering to its
customers, or cause returns of products under warranty or product recalls. This would have a material adverse impact on our
customer relations, reputation and business and also generate additional costs for our Company such as exceptional transportation
costs and costs related to finding alternative suppliers within constrained timelines which could adversely impact our financial
condition.

If we were to experience a significant or prolonged shortage of critical components from any of our suppliers and could not
procure the raw materials or components from other sources, we would be unable to meet the production schedules for some of
our key products and could miss customer delivery expectations. We cannot assure you that our suppliers will continue to supply
the required components or raw materials to us or supply such raw materials and components at prices favorable to us, particularly
at a time that we face substantial pressure from OEMs to reduce the prices of our products. Any change in the supplying pattern
of our raw materials can adversely affect our business, financial conditions and results of operations.

We also use third parties for the deliveries of finished and unfinished products from our manufacturing facilities and warehouses
to our domestic and overseas customers as well as between production facilities. Transportation strikes have in the past and could
in the future have an adverse effect on our supplies and deliveries to and from particular plants on a timely and cost efficient
basis. An increase in freight costs or the unavailability of adequate port and shipping infrastructure for transportation of our
products to our markets may have an adverse effect on our business and results of operations. Further, we are also exposed to
risks associated with various modes of transportation. While delivery of components to customers within India is generally
shipped by road or rail, the majority of our shipments to China, Europe and USA are by sea and subject to risks, including
damage or loss of containers due to shipwreck, mishandling of our shipment at port or at sea, damage during transportation,
loading and unloading, damage due to moisture, accidental fires and bad weather conditions, theft at sea, delay in customs
clearance and other factors beyond our control. The occurrence of all or any of the above factors will result in delays in deliveries
to our customers which could further cause a shutdown in our customer’s production processes and adversely affect our
reputation, business and results of operations. While we have obtained insurance to cover such risks, which is in line with industry
practice, our insurance policies may not be adequate to cover fully all potential risks related to delivery and transportation of our
systems and components. Further, there no assurance that the amount of our insurance coverage will be sufficient to satisfy any
damages arising from the occurrence of all or any of the above risks. See “Risk Factors – Risks Relating to Our Business and
Industry – Our insurance may be insufficient to cover all losses associated with our business operations.” below.

18. Our business could be adversely affected by volatility in the price or availability of raw materials, components and
sub-assemblies, utilities and natural resources and transportation costs.

Our Company uses a variety of raw materials and commodities (including aluminum, copper, nickel, plastic resins, steel, other
raw materials and energy) and materials purchased in various forms such as peeled alloy steel bars, aluminum castings, steel
forgings, magnets, steel and brass stampings, and plastic components in the production of our components. We may experience
volatility in the cost or availability of such raw materials and commodities or in the cost or availability of utilities and natural
resources used in our operations, such as electricity, water and natural gas as well as increasing transportation costs.

We have historically passed the increase in costs of some of the raw materials on to our customers. However, our cash flows
may still be adversely affected because of any gap in time between the date of procurement of those primary raw materials and
date on which we can reset the component prices for our customers, to account for the increase in the prices of such raw materials.
Further, some customers may challenge such increased costs. The discontinuation or lessening of our ability to pass through
transportation or raw material costs or otherwise mitigate these cost increases or obtain adequate supply of raw materials, utilities
and natural resources could adversely affect our business. From time to time, commodity prices may also fall rapidly. If this
happens, suppliers may withdraw capacity from the market until prices improve which may cause periodic supply interruptions.
This may also be true of our transportation carriers and energy providers. If these supply interruptions occur, our business,
financial condition and results of operations could be adversely affected.

19. We have significant power, water and fuel requirements and any disruption to power or water sources could increase
our production costs and adversely affect our results of operations.

We require substantial power, water and fuel for our manufacturing facilities, and energy costs represent a significant portion of
the production costs for our operations. For Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020,
our power and fuel charges were ₹382.97 million, ₹444.15 million, ₹329.72 million and ₹262.70 million, constituting 3.1%,
3.1%, 2.7% and 2.6%, respectively, of our total income. If energy or water costs were to rise, or if electricity or water supplies
or supply arrangements were disrupted, our profitability could decline.

We purchase utilities for our operations in India and overseas from the local utility companies in the jurisdictions in which we
operate. In India, we also purchase utility from third party suppliers, where costs are less than purchasing directly from the state
electricity boards. The cost of electricity from state electricity boards could be significantly higher, thereby adversely affecting
our cost of production and profitability. Interruptions of electricity supply can result in production shutdowns, increased costs

36
associated with restarting production and the loss of production in progress. If energy or water costs were to rise, or if electricity
or water supplies or supply arrangements were disrupted, our profitability could decline.

20. We are subject to strict quality requirements and any failure by us or our component suppliers to comply with quality
standards may lead to cancellation of existing and future orders, product recalls, product liability, warranty claims,
litigation and other disputes and claims.

We are subject to strict quality standards imposed by our customers, applicable to our manufacturing processes. Failure by us or
one of our component suppliers to achieve or maintain compliance with these requirements or quality standards may disrupt our
ability to supply products sufficient to meet our customers’ demands until compliance is achieved. Our or our component
supplier’s failure to comply with applicable quality standards could also result in our products failing to perform as expected, or
alleged to result in bodily injury or property damage or both due to product failure, work accidents, fire or explosion, if our
products are defective or are used incorrectly by our customers (or by their customers, who are the end-users). The occurrence
of any such events could expose us to warranty, product recall or field action and product liability claims. Under the product
warranties provide by us to certain key customers, we may be required to bear costs and expenses for the repair or replacement
of these defective products. In addition, we may also be required to indemnify customers against losses occurring as a result of
defective products and reimburse our customers for administrative, labor, material and other such costs. Such warranties may be
enforced against us even in cases where the underlying sales contract has expired. In addition, costs and expenses associated
with warranties, field actions, product recalls and product liability claims could have a material adverse impact on our results of
operations and financial condition and may differ materially from the estimated liabilities that we have recorded in our
consolidated financial statements.

In addition to warranty claims relating directly to products we produce, potential product recalls for our customers and their other
suppliers, and the potential reputational harm that may result from such product recalls, could have a material adverse impact on
our results of operations and financial condition. A recall claim could require us to review our entire product portfolio to assess
whether similar issues are present in other product lines, which could result in significant disruption to our business and have an
adverse impact on our results of operations.

While we maintain insurance for product liability and recall, the amount of insurance may not be adequate to cover all insured
claims and liabilities. The incurring of significant liabilities for which there is no, or insufficient, insurance coverage could
adversely affect our business. Further, as a result of product liability legislation, civil claims may be brought against OEMs,
where damages may have been caused by any faulty products that we produced. As a result, our OEM customers are entitled to
claim indemnity from us under our agreements. We are currently, and may in the future become subject to legal proceedings and
commercial or contractual disputes incidental to our business. Although we believe that none of these matters are likely to have
a material adverse effect on our results of operations or financial condition, there can be no assurance as to the ultimate outcome
of any such legal proceeding or any future legal proceedings.

21. A failure of or disruption in our information technology infrastructure, including a disruption related to
cybersecurity or non-compliance with data protection, privacy or information security related Indian or foreign laws,
could adversely impact our business and operations.

We rely on the capacity, reliability and security of our IT systems and infrastructure in our operations. These include
procurement, production, distribution, billing, reporting and consolidation software, as well as new product design and
development. IT systems are vulnerable to disruptions, including those resulting from natural disasters, cyber-attacks or failures
in third-party-provided services. Cybersecurity risks can include breaches of confidentiality, loss of integrity and/or availability
of the data and/or transactions processed by the information systems (system malfunction, data theft, data destruction and loss
of data integrity). These may result from external (denial of service, hacking, malware) or internal (tampering, breach of data
confidentiality) threats. We are also exposed to other indirect social engineering related threats such as “fake chairman” or “fake
treasurer” fraud, blackmail and threats related to ransomware and data hostage. In addition, we face threats in relation to onboard
systems and products, in their design phase and also in their operational and service phases, as the case may be. These threats
are increasing with the rise of autonomous and connected cars.

A large-scale IT malfunction or interruption of one or more of our IT systems or cyber-attacks on our network could compromise
the security of our systems and our ability to protect our networks and the confidentiality of sensitive data which may lead to
tempering with or theft of our design drawings, proprietary design software, computer simulation software, testing software and
other trade secrets, information relating to our intellectual property or business strategy, and data of third parties, including our
employees and customers, resulting in production downtimes, lost revenues, inappropriate disbursement of funds and both
internal and external supply shortages. Some cyber-attacks depend on human error or manipulation, including phishing attacks
or schemes that use social engineering to gain access to systems or carry out disbursement of funds or other frauds, which raise
the risks from such events and the costs associated with protecting against such attacks. In addition, we may be required to incur
significant costs to protect against damage caused by such attacks or disruptions in the future or failure by us to comply with
Indian or foreign laws and regulations, including laws and regulations regulating privacy, data protection or information security.
These consequently could cause significant damage to our reputation, disruption of our operations, result in a loss or damage to
our data or an inappropriate disclosure of confidential information, affect our relationships with our customers, suppliers and
37
employees, lead to legal claims, proceedings or actions against our Company, liability or regulatory penalties under Indian or
foreign laws protecting the privacy of personal information and ultimately adversely affect our business.

Although we have implemented security policies, processes, and layers of defense designed to help identify and protect our
systems and data from current and emerging technology threats and damage from intentional and unintentional misappropriation
or corruption of our systems and information due to computer viruses, unauthorized access, cyber-attack and other similar
disruptions, we have been, and likely will continue to be, subjected to such attacks or disruptions. For instance, we have in the
past, been subject to a phishing attack by hackers pursuant to which we have been defrauded of ₹16.61 million. There is no
assurance that the security measures we have in place will be successful or sufficient to protect our IT systems and data. Further,
unavailability of, or failure to retain, well trained employees capable of constantly servicing our IT and/or ERP systems may
lead to inefficiency or disruption of IT system thereby adversely affecting our ability to operate efficiently.

22. We have undertaken and may continue to undertake strategic investments, acquisitions and collaborations
(including in overseas locations) in the future, which may be difficult to sustain, integrate and/or manage
successfully. These may expose us to uncertainties and risks, any of which could adversely affect our business,
financial conditions and result of operations.

We have invested and may continue to invest in business entities and even pursue acquisitions and strategic alliances in India,
as well as, overseas that may enable us to achieve our growth objectives or provide us with complementary technologies.
However, there are risks and uncertainties related to these investments and acquisitions, including the risk of failure of these
business entities, financial risks, risks related to integrating enterprise resource planning systems and failure to successfully
integrate and fully realize the expected benefits of such acquisitions and collaborations. The success and timing of any such
present or future investments will depend on a variety of factors, many of which are not within our control. If we engage in
investments or acquisitions, we may finance these transactions by borrowing or issuing additional debt or equity securities. The
agreements entered into under such acquisition transactions typically include reciprocal obligations as well as representations
and warranties, along with indemnity obligations of the transferor for any liabilities arising in connection with breaches of such
representations and warranties, which will cause us to pay for remedies if there is any breach. The additional debt from any such
investments or acquisitions, if consummated, could increase our debt to capitalization ratio. In addition, the ultimate benefit of
any such investment or acquisition would depend on our ability to successfully integrate the acquired entity or assets into our
existing business and to achieve any projected synergies, which is a significant challenge. There is also no assurance that the
total costs associated with any current or future restructuring will not exceed our estimates, or that we will be able to achieve the
intended benefits of these transactions. See “Risk Factors – Risks Relating to Our Business and Industry – We have assumed
existing liabilities in relation to the Comstar Entities, which liabilities if realized may impact our profitability, cash flows and
results of operations” for risks related to our acquisition of Comstar Entities on page 40.

Further, assessing a potential investment or growth opportunity involves extensive due diligence. However, the amount of
information we can obtain about a potential investment or growth opportunity can be limited, and we can give no assurance that
such future business ventures, acquisitions, and strategic alliances will not adversely affect our financial performance or will
perform as planned. In the past, we have in the interests of the Company and its stakeholders, had to take write-offs related to
our business entities in USA and Europe which had to file for insolvency proceedings. Our inability to successfully achieve the
levels of organic and inorganic growth from our strategic initiatives could adversely impact our results of operations and financial
condition.

23. Any misappropriation or infringement of intellectual property rights of others could harm our business.

While we take care to ensure that we comply with the intellectual property rights of others, we cannot determine with certainty
as to whether we are infringing on any existing third-party intellectual property rights, which may force us to alter our
technologies, obtain licenses or cease some of our operations. We may also be susceptible to claims from third parties asserting
infringement and other related claims. Certain trademarks applied for by us have been objected to. We cannot assure you that
we will be able to obtain the registrations in a timely manner or at all. If claims or actions are asserted against us, we may be
required to obtain a license, modify our existing technology or cease the use of such technology and design a new non-infringing
technology. Such licenses or design modifications can be extremely costly. Furthermore, necessary licenses may not be available
to us on satisfactory terms, if at all. In addition, we may decide to settle a claim or action against us, which settlement could be
costly. We may also be liable for any past infringement. Any of the foregoing could adversely affect our business, results of
operations and financial condition.

In addition, in certain cases, our customers share their intellectual property rights in the course of the product development
process that we carry out for them. If our customer’s intellectual property rights are misappropriated by our employees in
violation of any applicable confidentiality agreements, our customers may seek damages and compensation from us. This could
have an adverse effect on our business, results of operations and financial condition and damage our reputation and relationships
with our customers.

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24. Our continued operations are critical to our business and any shutdown of our manufacturing facilities or other
manufacturing or production problems caused by unforeseen events may reduce sales and adversely affect our
business, results of operations and financial condition.

Our manufacturing facilities are subject to operating risks and we may encounter manufacturing problems or experience
difficulties or delays in production as a result of occurrence of the following events or any other events beyond our control:

• forced or voluntary closure of manufacturing plants, including as a result of regulatory inspections.

• problems with supply chain continuity, including as a result of natural or man-made disasters at one of our facilities or at a
suppliers or vendors’ facility;
• manufacturing shutdowns, breakdown or failure of equipment, performance below expected levels of efficiency,
obsolescence of our equipment and production facilities, industrial accidents and the need to comply with the directives of
relevant government authorities;
• labor disputes, strikes, lock-outs that may result in temporary shutdowns or manufacturing disruptions;
• failure of a supplier to provide us with the critical raw materials or components for an extended period of time, which could
impact continuous supply.
• shortage of qualified personnel;
• changes in applicable local and international laws and regulations impacting our manufacturing facilities where we operate;
• changes in political relationships between India and the countries in which we have set-up manufacturing and assembly
plants, impacting our facilities where we operate;
• failure or bottlenecks in production processes, especially if we are unable to obtain adequate supply of utilities such as power
and water or inability to successfully implement debottlenecking measures to reduce idle time or improve operating
efficiency by reducing plant outages, wastage or yield losses or otherwise; and
• other problems including, limits to our manufacturing capacity due to failure of our customer to set-up their plants or
assembly lines properly resulting in loss of sale and revenue from such customer.

The assembly lines of our customers rely significantly on the timely delivery of our components and our ability to provide an
uninterrupted supply of our products is critical to our business. In addition, certain of our customers may impose significant
penalties on us for any stoppage in any assembly line, caused either by delayed delivery of a component or a defect in the
components delivered. Our business and financial results may be adversely affected by any disruption of operations at our
manufacturing facilities, including as a result of any of the factors mentioned above, resulting in reduced production and reduced
sales. This may also lead to loss of business and/or loss of customer which could impact our business adversely.

25. We regularly work with hazardous materials and activities in our operation can be dangerous, which could cause
injuries to people or property.

Our operations are subject to operating risks associated with auto-component manufacturing, including related to handling and
storage of raw materials used in our manufacturing processes. Our varnishing operations and heat treatment processes involve
handling of heated billets, gears and forging dies and hazardous materials such as methanol, acetylene and nitrogen, which can
cause accidents during the forging process resulting in serious injuries or death of employees or other persons, if improperly
handled, and cause damage to our properties and the properties of others. Despite compliance with requisite safety requirements
and standards, our operations are subject to significant hazards, including:

• explosions;
• fires;
• mechanical failures and other operational problems;
• inclement weather and natural disasters;
• discharges or releases of hazardous substances, chemicals or gases; and
• other environmental risks.

The occurrence of any of these hazards could result in a suspension of operations and the imposition of civil or criminal liabilities.
The loss or shutting down of our facilities could disrupt our business operations and adversely affect our results of operations,
financial condition and reputation. We may also face claims and litigation, in India or overseas, filed on behalf of persons alleging
injury predominantly as a result of occupational exposure to hazards at our facilities. If these claims and lawsuits, individually
or in the aggregate, are resolved against us, our business, results of operations and financial condition could be adversely affected.

26. Any disruption to the steady and regular supply of workforce for our operations, including due to strikes, work
stoppages or increased wage demands by our workforce or any other kind of disputes with our workforce or our
inability to control the composition and cost of our workforce could adversely affect our business, cash flows and
results of operations.

As of December 31, 2020, we had 1,167 on-roll and 1,870 off-roll employees, of which 316 employees are members of unions
and we may be subject to industrial unrest, slowdowns and increased wage costs, which may adversely affect our business and
39
results of operations. While we consider our relationship with our employees to be good, we could experience disruptions in
work due to disputes or other problems with our work force, which may adversely affect our ability to perform our business
operations.

Our Company also appoints independent contractors who in turn engage on-site contract labor for performance of certain of our
ancillary operations in India. Although we do not engage these laborers directly, it is possible under Indian law that we may be
held responsible for wage payments to laborers engaged by contractors should the contractors default on wage payments. Any
requirement to fund such payments may adversely affect our results of operations. Furthermore, pursuant to the provisions of the
Contract Labor (Regulation and Abolition) Act, 1970, we may be directed to absorb some of these contract laborers as our
employees. Any such order from a court or any other regulatory authority may adversely affect our business, cash flows and
results of operations.

Further, work stoppages due to strikes or other events could result in slowdowns or closures of our operations which could have
an adverse effect on our business, cash flows and results of operations. For example, in 2011, operators in our Chennai plant
went on strike for 54 days. During the period of the strike, the Chennai plant was accessible to rest of the employees and the
movement of materials and employees was not constrained. We hired temporary manpower and used them along with all the
professionals to assemble/manufacture our systems and components. There is no assurance that we may not experience any such
events in the future. Work stoppages or slow-downs experienced due to labor unrest or strike could have an adverse effect on
our business, results of operations and financial condition.

27. We have assumed existing liabilities in relation to the Comstar Entities, which liabilities if realized may impact our
profitability, cash flows and results of operations.

We have assumed existing liabilities of the Comstar Entities pursuant to their acquisition. Although we have conducted due
diligence on the Comstar Entities with the objective of identifying any material existing liabilities, we may not have been able
to identify all such liabilities prior to the consummation of the acquisition. The terms of the Comstar Acquisition Agreement
contain limited representations and warranties. There are also indemnities, which are limited to specified monetary limits, which
will limit our recourse under these agreements. For details, see “History and Certain Corporate Matters” on page 191. Any
losses or liabilities suffered by us in relation to the Comstar Entities for which we are unable to recover under these agreements
will materially adversely impact our results of operations, profitability, cash flows, the trading price of the Equity Shares.

28. Negative publicity about our brand, or our inability to protect any of our intellectual property, including
misappropriation, infringement or passing off of our intellectual property rights or failure to obtain our patents or
failure to keep our technical knowledge confidential could have impact on our business and in turn on results of
operation or financial condition and cash flows.

We keep investing in our intellectual properties, brands and obtain registration with the relevant authority thereof, from time to
time, and expect to continue doing the same. Our portfolio of brands, among others, comprise of “SONA Driving Tomorrow”,
“Comstar”, “Sona BLW” and “SONA Comstar”. Any negative publicity about our brand(s) could affect our brand value and, in
turn, our ability to attract and/or retain customers.

We have licensed use of our brand “SONA” to Sona Skill Development Centre Limited, Sona Autocomp Holding Private
Limited, Sona Management Services, Sona BV and its subsidiaries for a certain limited period. For further details see, “History
and Certain Corporate Matters – Key terms of other subsisting material agreements” on page 202. We have no control over the
operations of these entities. Any misadventure or adverse action by any of these entities could affects their reputation or harm
the brand value, which could also have an adverse impact on our reputation, and in turn on our business, results of operations,
financial condition and cash flows.

Some of our applications for registration of our device mark under Classes 7 and 12 and word mark ‘Sona Comstar’
under class 12 have been opposed by a third party. There can be no assurances that these applications will be successful or that
we will be able to register these marks. Any unauthorized use of our intellectual property rights by third parties could adversely
affect our reputation. Some unrelated third parties have registered mark “Sona’’ under various classes. We may be required to
resort to legal action to protect our intellectual property rights, which may strain our resources and divert the attention of our
management.

We have initiated legal proceedings before the High Court of Delhi against certain parties, for unauthorized use of the “SONA”
brand and have, among other things, sought for a permanent injunction restraining such persons from using the trademark/trade
name/logo “SONA”. The matter is still pending. For further details see, “Outstanding Litigation and Other Material
Developments” on page 392. Any adverse outcome in such legal proceedings or any other proceeding(s) that we may initiate in
future our failure to successfully enforce our intellectual property rights may have an adverse effect on our business, results of
operations and cash flows.

40
We also keep on filing application(s) for patents covering a variety of our products across various product lines globally. We
have been granted six patents in USA and one patent in China and await 17 patents approvals in India and one in the UK. Our
applications may be opposed, or our competitors may have filed similar patent application(s) or may own patents relating to
product(s) or process(s) that compete with those that we are developing or are seeking to protect. Our efforts in obtaining our
patents may be costly and, unsuccessful. We cannot assure you that we will be granted patent(s) that we apply for, in a timely
manner, or at all. Even if we are successful in obtaining patent(s) with respect to our pending application(s), third parties may
challenge, seek to invalidate or circumvent our patent(s) and patent application(s). Although we may defend our patent rights,
there can be no assurance that our action will be successful. Moreover, patent litigation may be costly and unpredictable.

As a technology and innovation driven company, with strong focus on R&D, we possess extensive technical knowledge about
our products which has been built up through our own experiences and significant investment in our in-house R&D capabilities.
Our R&D expenditures as a percentage of our revenue from operations were 1.8%, 1.7%, 3.3% and 6.8% for Fiscal Years 2018,
2019 and 2020 and the nine months ended December 31, 2020, respectively. As at December 31, 2020, we had 175 on-roll
employees engaged in R&D activities. We have also established digital simulations, testing and validation facilities in three
R&D centers located at Gurugram and Chennai in India.

Our technical knowledge is a significant independent asset, which may not be adequately protected by intellectual property rights
such as patent registration. Some of our technical knowledge is protected only by secrecy. As a result, we cannot be certain that
our technical knowledge will remain confidential in the long run. Certain proprietary knowledge may be leaked, either
inadvertently or willfully. A significant number of our employees have access to confidential design and product information
and there can be no assurance that this information will remain confidential. Moreover, certain of our employees may leave us
and join our various competitors or form a competing business. Although we may seek to enforce non-disclosure agreements in
respect of R&D and certain other key employees, we cannot guarantee that we will be able to successfully enforce such
agreements. We also enter into non-disclosure and non-solicitation agreements with a number of our customers and suppliers
but we cannot assure you that such agreements will be enforceable or successful in protecting our technical knowledge. The
potential damage from such disclosure is increased as many of our designs and products are not patented, and thus we may have
no recourse against copies of our products and designs that enter the market subsequent to such leakages. In the event that the
confidential technical information in respect of our products or business becomes available to third parties or to the general
public, any competitive advantage we may have over other companies in the automotive components sector could be harmed. If
a competitor is able to reproduce or otherwise capitalize on our technology, it may be difficult, expensive or impossible for us
to obtain necessary legal protection. Consequently, any leakage of confidential technical information could have an adverse
effect on our business, results of operations, financial condition and future prospects.

29. The availability of counterfeit products, such as products passed off as our systems and components by others, could
adversely affect our goodwill and results of operations.

Entities in India and abroad could pass off their own products as ours, including counterfeit or pirated products. Certain entities
could imitate our brand name, packaging materials or attempt to create look-alike products. As a result, our market share could
be reduced due to replacement of demand for our systems and components and deficiency in the quality of the counterfeit
products will adversely affect our goodwill. We have also invested in our systems and components to distinguish it and to prevent
counterfeit versions of our products from being distributed in the markets. The proliferation of counterfeit and pirated products,
and the time and attention lost to defending claims and complaints about counterfeit products could have an adverse effect on
our goodwill and our business, prospects, results of operations and financial condition could suffer.

30. Our Promoters and members of our Promoter Group will continue to hold a significant equity stake in our Company
after the Offer and their interests may differ from those of the other shareholders.

Upon completion of the Offer, our Promoters and members of our Promoter Group will hold [●]% of our paid-up Equity Share
capital. For details, see “Capital Structure” on page 71. Our Promoters and members of our Promoter Group will therefore have
the ability to influence our operations significantly. This will include the ability to appoint Directors to our Board and the right
to approve significant actions at Board and at shareholders’ meetings including issue of Equity Shares, payment of dividends,
determining business plans and mergers and acquisitions strategies. Further, if, in the future, our Promoters and members of our
Promoter Group are unwilling to dilute their equity stake in our Company and do not, or are unable to, fund us, our growth may
be affected. In addition, the trading price of the Equity Shares could be materially adversely affected if potential new investors
are disinclined to invest in us because they perceive disadvantages to a large shareholding being concentrated in the hands of our
Promoters. Certain of our Promoters and their affiliates engage in a broad spectrum of activities, including investments in the
auto components industry. In the ordinary course of their business activities, certain of our Promoters and their respective
affiliates may engage in activities where their interests conflict with our interests or the interests of our shareholders and Promoter
Group.

Singapore Topco has availed a loan from certain overseas lenders. As on February 15, 2021, an aggregate principal amount of
approximately USD 30 million remains outstanding under this loan. Security has been created over the entire share capital of
Singapore Topco by BCP Topco I Pte. Ltd., the holding company of Singapore Topco in favor of such overseas lenders in this

41
regard. While there are no events of default that are continuing on the date hereof under the overseas loan documents, to the
extent that any amount under the loan facility remains outstanding, any continuing event of default at any time during the term
of the overseas facility may lead to enforcement of the pledge, which could potentially lead to a change in control of our
Company.

31. Our Company and Subsidiaries are involved in certain legal proceedings and potential litigation. Any adverse
decision in such proceedings may render us/them liable to liabilities/penalties and may adversely affect our business
and results of operations.

Our Company and Subsidiaries are currently involved in certain legal proceedings. These legal proceedings are pending at
different levels of adjudication before various courts and tribunals. The summary of outstanding litigation in relation to our
Company and our Subsidiaries as on the date of this Draft Red Herring Prospectus have been provided below in accordance with
the materiality policy adopted by our Board. For details, see “Outstanding Litigation and Material Developments” on page 392.
Types of Proceedings Number of Cases Amount (in ₹ million)*
Litigation against our Company
Direct tax proceedings 4 84.56
Indirect tax proceedings 2 15.32
Litigation by our Company
Material civil proceedings 2 39.5
Litigation against Comstar Automotive
Direct tax proceedings 7 172.57
Indirect tax proceedings 1 281.97
Litigation involving Comstar Automotive Technology Services Private Limited
Direct tax proceedings 1 0.15
* To the extent quantifiable.

32. We are yet to receive approval for a write-off from the regulator in respect of our erstwhile overseas step-down
subsidiary.

In relation to one of our erstwhile step-down subsidiaries, Sona BLW Precision Forge Inc., USA, which had filed for insolvency
proceedings, we were required to take certain write-offs, as stated in the risk factor “We have undertaken and may continue to
undertake strategic investments, acquisitions and collaborations (including in overseas locations) in the future, which may be
difficult to sustain, integrate and/or manage successfully. These may expose us to uncertainties and risks, any of which could
adversely affect our business, financial conditions and result of operations” on page 38. As required under applicable law, we
had applied for approval to the RBI for write-off of an amount of USD 2.03 million paid by our Company against invocation of
a standby letter of credit issued by one of its banks in favour of a lender of our step down overseas subsidiary, among other
things, in our letter dated April 24, 2017 and subsequently in our letters dated December 13, 2018 and January 11, 2019. While
the RBI had approved the other matters for which we had applied for write-offs, we are yet to receive approval from the RBI for
the write-off of USD 2.03 million. If approval of the RBI is not received for such write off, and if it is considered as a violation
of FEMA ODI Regulations by RBI, a monetary penalty may be imposed on the Company by RBI, at its discretion, including for
an amount which may go up to thrice the above mentioned amount involved in the contravention.

33. We require certain licenses, permits and approvals in the ordinary course of business, and the failure to obtain or
retain them in a timely manner may materially adversely affect our operations.

We are required to obtain and maintain a number of statutory and regulatory licenses, permits and approvals in India and in US,
Europe and China, generally for carrying out our business and for each of our manufacturing facilities. For further details, see
“Government Approvals” on page 396. A majority of these approvals, including the consent to establish and operate under
environmental laws, are granted for a limited duration and require renewal from time to time. While we have applied for some
of these approvals, we cannot assure you that such approvals will be issued or granted to us in a timely manner, or at all. If we
do not receive such approvals or are not able to renew the approvals in a timely manner, our business and operations may be
materially adversely affected.

Further, the licenses, permits and approvals required by us are subject to several conditions and we cannot assure you that we
will be able to continuously meet such conditions, which may lead to cancellation, revocation or suspension of the relevant
licenses, permits and approvals. If there is any failure by us to comply with the applicable regulations or if the regulations
governing our business are amended, we may incur increased compliance costs, be subject to penalties, have our licenses,
approvals and permits revoked or suffer a disruption in our operations, any of which may materially adversely affect our business
and results of operations.

42
34. The agreements governing our indebtedness contain conditions and restrictions on our operations, additional
financing and capital structure.

As at January 31, 2021, our total indebtedness was ₹3,573.30 million. We have entered into several borrowing facilities of
varying terms and tenures. The financing agreements governing such facilities include conditions and restrictive covenants that
require us to obtain consents, no-objections or waivers from lenders prior to carrying out specified activities or entering into
certain transactions, including among other things, prepaying existing debt, declaring dividends, creating pledge over shares of
our Company, amending our constitutional documents, changing our capital structure, shareholding pattern or management and
selling, transferring, leasing or disposing our encumbered assets. Additionally, under such financing agreements, we are also
required to comply with certain financial covenants, such as maintaining prescribed financial ratios at all times.

Undertaking any of the above without the consent of our lenders or non-compliance with any of the covenants of our financing
agreements could trigger an event of default which will entitle the respective lenders to enforce remedies under the terms of the
financing agreements, that include, among other things, acceleration in repayment of the amounts outstanding under the financing
agreements, enforcement of any security interest created under the financing agreements and taking possession of the assets
given as security in respect of the financing agreements. Further, we cannot assure you that we will be able to obtain approvals
to undertake any of these activities as and when required or to comply with such covenants or other covenants in the future. A
default by us under the terms of any financing agreement may also trigger a cross-default under some of our other financing
agreements, or any other agreements or instruments of our containing cross-default provisions, which may individually or in
aggregate, have an adverse effect on our operations, financial position and credit rating. If the lenders of a material amount of
the outstanding loans declare an event of default simultaneously, we may be unable to pay its debts when they fall due. For
details of our borrowings, see “Financial Indebtedness” on page 349.

35. We have substantial capital expenditure and working capital requirements and may require additional capital and
financing in the future and our operations could be curtailed if we are unable to obtain required additional capital
and financing when needed.

Our business is capital intensive. In Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, our capital
expenditure (comprising of payments for acquisition of property, plant and equipment, intangibles and capital work in progress
including capital advances) amounted to ₹1,130.00 million, ₹1,163.88 million, ₹2,240.59 million and ₹1,520.04 million,
respectively. The actual amount and timing of our future capital requirements may differ from estimates as a result of, among
other factors, unforeseen events beyond our control such as the global lockdown due to the COVID-19 pandemic, unforeseen
delays or cost overruns, unanticipated expenses, regulatory changes, economic conditions, engineering design changes, weather
related delays, technological changes and additional market developments and new opportunities in the automotive components
industry.

In many cases, a significant amount of our working capital is required to finance the purchase of materials and the performance
of designing, manufacturing and other work before payment is received from customers. Our working capital requirements may
increase if the payment terms in our agreements include reduced advance payments or longer payment schedules. Continued
increases in our working capital requirements may have an adverse effect on our financial condition and results of operations.

We may need to raise additional capital from time to time, dependent on business requirements. While we do not anticipate
seeking additional financing in the immediate future, any additional equity financing may result in dilution to the holders of the
Equity Shares. Further, additional debt financing may impose affirmative and negative covenants that restrict our freedom to
operate our business, including covenants that:

• limit our ability to pay dividends or require us to seek consent for the payment of dividends;
• limit our flexibility in raising capital in the form of debt or equity;
• require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the
availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes;
• limit our flexibility in planning for, or reacting to, changes in our business and our industry;
• limit us from formulating any scheme of amalgamation or reconstruction, merger or demerger; and
• limit us from entering into borrowing arrangements with other banks or financial institutions.

We cannot guarantee that we will be able to obtain additional capital, including through financing on terms that are acceptable
to us, or any financing at all, and the failure to obtain sufficient financing could adversely affect our business operations.

36. Our insurance may be insufficient to cover all losses associated with our business operations.

We maintain insurance coverage for anticipated risks which are standard for our type of business and operations. Our insurance
policies currently cover breakdowns, failure or substandard performance of equipment, third party liability claims, labour
disturbances, accidents, employee fraud and infrastructure failure, as well as fire, theft, burglary, earthquake, flood, acts of
terrorism and other force majeure events. As of the date of this Draft Red Herring Prospectus we have an insurance coverage for

43
all of our assets. Notwithstanding the insurance coverage that we carry, we may not be fully insured against certain business
risks. There are many events that could significantly impact our operations, or expose us to third-party liabilities, for which we
may not be adequately insured. There can be no assurance that any claim under the insurance policies maintained by us will be
honored fully, in part, or on time. To the extent that we suffer any loss or damage that is not covered by insurance or exceeds
our insurance coverage, our business, financial condition and results of operations could be adversely affected. For further risks
relating to the impact on our business due to inadequacy of insurance coverage for product liability, see “Risk Factors – We are
subject to strict quality requirements and any failure by us or our component suppliers to comply with quality standards may
lead to cancellation of existing and future orders, product recalls, product liability, warranty claims, litigation and other disputes
and claims” above.

37. If we fail to maintain an effective system of internal controls, we may not be able to successfully manage, or
accurately report, our financial risks.

Effective internal controls are necessary for us to prepare reliable financial reports and effectively avoid fraud. Moreover, any
internal controls that we may implement, or our level of compliance with such controls, may deteriorate over time, due to
evolving business conditions. There can be no assurance that additional deficiencies in our internal controls will not arise in the
future, or that we will be able to implement, and continue to maintain, adequate measures to rectify or mitigate any such
deficiencies in our internal controls.

38. Certain sections of this Draft Red Herring Prospectus disclose information from industry reports commissioned by
us and any reliance on such information for making an investment decision in the Offer is subject to inherent risks.

Certain sections of this Draft Red Herring Prospectus include information based on, or derived from, the CRISIL Report and the
Ricardo Report (together, the “Industry Reports”) or extracts of the Industry Reports. We commissioned the Industry Reports
for the purposes of confirming our understanding of the industry in connection with the Offer. None of our Company (including
our Directors), the Selling Shareholder, the Book Running Lead Managers or any other person connected with the Offer, has
verified the information in the Industry Reports and cannot provide any assurance regarding the information in this Draft Red
Herring Prospectus derived from, or based on, the Industry Reports. Further, these reports are prepared based on information as
of specific dates and may no longer be current or reflect current trends. The Industry Reports may also base their information on
estimates, projections, forecasts and assumptions that may prove to be incorrect. While industry sources take due care and caution
while preparing their reports, they do not guarantee the accuracy, adequacy or completeness of the data. Accordingly, investors
should not place undue reliance on, or base their investment decision solely on this information.

In view of the foregoing, you may not be able to seek legal recourse for any losses resulting from undertaking any investment in
the Offer pursuant to reliance on the information in this Draft Red Herring Prospectus based on, or derived from, the Industry
Reports. You should consult your own advisors and undertake an independent assessment of information in this Draft Red
Herring Prospectus based on, or derived from, the Industry Reports before making any investment decision regarding the Offer.
See “Industry Overview” on page 100.

39. We have certain commercial relationships in the ordinary course of business with Ricardo, an industry consulting
firm, which has been commissioned by us to prepare the Ricardo Report referred to in this Draft Red Herring
Prospectus.

Certain sections of this Draft Red Herring Prospectus include information based on, or derived from the Ricardo Report which
was commissioned by us. We also have commercial relationships with Ricardo on an arms’ length basis and in the ordinary
course of our business. In Fiscal Years 2018, 2019 and 2020, Ricardo assisted us in the development of our 48V BSG hybrid
motor to meet our customer’s requirements, including assisting us with review of software for our motor designs, providing gap
analysis relating to software architecture, functionality, design standards, EMI/EMC capability and thermal management,
implementation of base software in accordance with global standards and development of our BSG motor in compliance with
our customer’s requirements of functional safety standards. In 2018, Ricardo also assisted us in conducting a market survey and
analysis for the hybrid and electrical vehicles market. As a percentage of Ricardo’s total revenue, approximately 0.2% and 1.2%
of Ricardo’s revenue (based on invoice amounts) was generated from business relationships with our Company for Ricardo’s
financial year ended June 30, 2019 and June 30, 2020, respectively. These engagements we have entered into and any such future
commercial relationships with Ricardo could potentially involve conflicts of interest.

40. We have contingent liabilities.

As of December 31, 2020, we had ₹94.46 million of contingent liabilities that had not been provided for. A summary table of
our contingent liabilities as of December 31, 2020 as provided for in the Restated Consolidated Financial Information is set forth
below:

44
 As of December 31,
2020
(₹ in millions)
1) Claims against the Group not acknowledged as debts ....................................................
i) Service tax
Cases pending before Appellate Authorities in respect of which the Company has filed appeals / show cause 0.47
notices. (FY 2005-06 to 2007-08) ............................................................................
ii) Income Tax*
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY-2013- 2.12
14) .........................................................................................................................
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY-2012- 3.18
13) .........................................................................................................................
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY-2011- 4.21
12) .........................................................................................................................
Cases pending before CIT in respect of which the Company has filed appeal (AY 2017–18)** 69.63
iii) Central Excise Act, 1944
Cases pending before Directorate General of Goods and Service Tax Intelligence in respect of which the 14.85
Group has filed appeals / show cause notices. (FY 2014-15 to FY 2017-18) .............

* Amount paid under protest of ₹23.71 million.

** Total disputed amount of the case is ₹77.54 million (including interest liability) out of which ₹7.91 million (including interest liability) has been provided
as a provision and balance amount of ₹69.63 million (including interest liability) is being disclosed as a contingent liability.

For details, see “Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Contingent Liabilities” on pages 230 and 387 for more information. Any or all of these contingent liabilities may
become actual liabilities. In the event that any of our contingent liabilities become non-contingent, our business, financial
condition and results of operations may be adversely affected. Furthermore, there can be no assurance that we will not incur
similar or increased levels of contingent liabilities in the current fiscal year or in the future.

41. We have issued Equity Shares during the last one year at a price that may be below the Offer Price.

During the last year we have issued the following Equity Shares at a price that may be lower than the Offer Price:

Date of Number of Face Issue Names of allottees Nature of Reason for allotment
Allotment Equity Value price consideration
Shares (₹) per
Allotted Equity
Share
(₹)
January 27, 594,436* 10 384.83 Singapore VII Topco III Pte. Ltd. Cash* Conversion of
2021 Preference Shares
*
Consideration for such Equity Shares was paid at the time of issuance of Preference Shares.
The price at which Equity Shares have been issued by our Company in the immediately preceding year is not indicative of the
price at which they will be issued or traded. For further information refer to the section “Capital Structure” on page 71.

42. Our funding requirements and proposed deployment of the Net Proceeds of the Offer have not been appraised by a
bank or a financial institution and if there are any delays or cost overruns, our business, financial condition and
results of operations may be adversely affected.

We intend to use the Net Proceeds of the Fresh Issue for the purposes described in “Objects of the Offer” on page 82. The objects
of the Fresh Issue have not been appraised by any bank or financial institution. Whilst a monitoring agency will be appointed for
monitoring utilization of the Net Proceeds, the proposed utilization of Net Proceeds is based on current conditions, internal
management estimates, contracts and are subject to changes in external circumstances or costs, or in other financial condition,
business or strategy, as discussed further below. Based on the competitive nature of our industry, we may have to revise our
business plan and/ or management estimates from time to time and consequently our funding requirements may also change. Our
internal management estimates may exceed fair market value or the value that would have been determined by third party
appraisals, which may require us to reschedule or reallocate our project and capital expenditure and may have an adverse impact
on our business, financial condition, results of operations and cash flows.

Our Company, in accordance with the policies established by the Board from time to time, will have flexibility to deploy the Net
Proceeds. Further, pending utilization of Net Proceeds towards the Objects of the Offer, our Company will have the flexibility
to deploy the Net Proceeds and to deposit the Net Proceeds them temporarily in deposits with one or more scheduled commercial
banks included in Second Schedule of Reserve Bank of India Act, 1939, as may be approved by our Board or IPO Committee.
Accordingly, prospective investors in the Offer will need to rely upon our management’s judgment with respect to the use of Net
Proceeds.

45
43. While our Company will receive proceeds from the Fresh Issue, it will not receive any proceeds from the Offer for
Sale.

In addition to the Fresh Issue from which our Company will receive proceeds, the Offer includes an Offer for Sale by the Selling
Shareholder. Our Selling Shareholder will receive the entire proceeds from the Offer for Sale (after deducting applicable Offer
Expenses) and our Company will not receive any part of such proceeds. For further details, see “Objects of the Offer” on page
82.

44. We have in the past entered into related party transactions and may continue to do so in the future.

We have entered into certain transactions with related parties, including with respect to the payment of remuneration of certain
of our Directors and our Key Managerial Personnel, reimbursement of expenses to our Promoters, receipt and repayment of loans
obtained from our Promoters and purchase and sale of goods from other related parties. While we believe that, except for the
relinquishment of our put option right in relation to shares of Sona Holding BV for a value of ₹19 million as set forth in Note 52
in our Restated Consolidated Financial Information, all such transactions have been conducted on an arm’s length basis and on
commercially reasonable terms, there can be no assurance that we could not have achieved more favorable terms had such
transactions not been entered into with related parties. Further, it is likely that we may enter into related party transactions in the
future. While in terms of the Companies Act, 2013 and the SEBI Listing Regulations, certain related party transactions require
Audit Committee and shareholders’ approval, there can be no assurance that such transactions, individually or in the aggregate,
will not have an adverse effect on our financial condition and results of operations or that we could not have achieved more
favorable terms if such transactions had not been entered into with related parties. Additionally, any future transactions with our
related parties could potentially involve conflicts of interest. For details of the related party transactions and as reported in the
Restated Consolidated Financial Information, see “Restated Consolidated Financial Information – Note 40” on page 284.

45. Information relating to our installed capacities and the historical capacity utilization of our manufacturing facilities
included in this Draft Red Herring Prospectus is based on various assumptions and estimates and future production
and capacity utilization may vary.

Information relating to our installed capacities and the historical capacity utilization of our manufacturing facilities included in
this Draft Red Herring Prospectus is based on various assumptions and estimates of our management, including proposed
operations, assumptions relating to availability and quality of raw materials and assumptions relating to potential utilization
levels and operational efficiencies. Actual utilization rates may differ significantly from the estimated installed capacities or
historical estimated capacity utilization information of our facilities. Undue reliance should therefore not be placed on our
installed capacity or historical estimated capacity utilization information for our existing facilities included in this Draft Red
Herring Prospectus.

46. Certain of our immovable properties, where some of our manufacturing units are located, are leased. If we are
unable to renew existing leases or relocate our operations on commercially reasonable terms, there may be an
adverse effect on our business, financial condition and operations.

Some of our business operations are being conducted on premises leased from third parties. The tenure of the leases is generally
agreed in the relevant lease agreements and in some cases are subject to renewal after the agreed period of time. While there are
currently no instances of non-compliance of the terms of our lease agreements, there can be no assurance that there will be no
such non-compliance leading to termination of such leases in the future. Any change in the terms and conditions of the lease
agreements and any premature termination of such lease agreements may have an adverse impact on our operations.

Any adverse impact on the title, ownership rights, development rights of the owners from whose premises we operate, breach of
the contractual terms of any lease, leave and license agreements, or any inability to renew such agreements on acceptable terms
may also affect our operations. In addition, the terms of certain of our leases require us to obtain the lessor’s prior consent for
certain actions, including making structural alterations to the leased premises, which may be required if we were to undertake an
expansion in the future. There can be no assurance that we will be able to renew these leasing arrangements at commercially
favorable terms, or at all. If we are unable to renew all or any of our leasing arrangements, it may cause disruptions in our
business and we may incur substantial costs associated with shifting to new premises, all of which may adversely affect our
business operations.

47. We are entitled to certain tax benefits in respect of certain of our manufacturing facilities and in-house R&D centers.
These tax benefits are available for a definite period of time, which, on expiry or if withdrawn prematurely, may
adversely affect our business, financial condition, results of operations and prospects.

We are entitled to certain benefits in respect of our manufacturing facilities in Chennai and Mexico. All components and capital
goods imported for our manufacturing unit in Chennai are exempt from payment of GST and customs duty as our Chennai
manufacturing unit enjoys the status of a 100% export oriented unit (“EOU”). If our Chennai unit loses the EOU status either by
way of a change in law or the business model (with domestic sales exceeding exports by more than 50%), we will be required to

46
pay customs duty and GST upfront relating to the import of our components and capital goods for our unit in Chennai. We may
be able to claim refund on the GST paid upfront against purchase of raw materials and components as input tax credit and the
refund on customs duty as ‘duty drawback’ only after exports. This will result in additional cash outflows which could impact
our cash flows, financial condition and results of operations. Our unit in Mexico is also entitled to certain tax benefits such as
duty exemption for import of goods, as it is set up as a ‘Maquiladora’ unit. If such tax benefits are withdrawn, our unit in Mexico
will be subject to additional tax payments on the import of components.

For further details, please see “Statement of Special Tax Benefits” on page 91.

Our profitability will be affected to the extent that such benefits will not be available beyond the periods currently contemplated.
Our profitability may be further affected in the future if any of such benefits are reduced or withdrawn prematurely or if we are
subject to any dispute with the tax authorities in relation to these benefits or in the event we are unable to comply with the
requisite conditions in order to avail ourselves of each of these benefits. In the event that any adverse development in the law or
the manner of its implementation affects our ability to benefit from these tax incentives, our business, financial condition, results
of operations and prospects may be materially adversely affected.

48. Discontinuance or non-availability of fiscal benefits enjoyed by us or our inability to comply with related
requirements may have an adverse effect on our business and results of operations.

Our Company currently enjoys certain fiscal benefits on account of policies of the GoI, including concessions under the Export
Promotion Capital Goods Scheme (the “EPCG Scheme”) of the GoI. The EPCG scheme allows import at zero custom duty and
requires the importer to export equivalent to six times of duty saved on capital goods. Such equivalent amount is required to be
fulfilled within six years from the date of issue of authorization. A 50% export obligation is required to be fulfilled within the
first four years with the remaining 50% within the next two years. Non-fulfilment of such obligations may result in confiscation
of capital goods imported under this scheme and other penalties as set out in this scheme. As of December 31, 2020, our export
obligation under EPCG scheme was ₹1,863.99 million. In the event of any default under the EPCG Scheme, our results of
operations may be adversely affected. As we seek to export a larger proportion of our systems and components outside India,
any changes in the policies of the GoI could have a material adverse effect on our results of operations and financial condition.

Prior to January 1, 2021, we were also eligible to avail the incentives under the Merchandise Exports from India Scheme
(“MEIS”), pursuant to which, we could use duty credit scrips for payment of import duty obligations or sell such duty credit
scrips in the open market to other importers. In the case of our export products, with our current product mix, the average rate of
MEIS was approximately 2.3% to 2.6% of free on board (“FOB”) value of exports. However, the Ministry of Finance, GoI has
discontinued MEIS with effect from January 1, 2021 and announced a scheme for remission of duties and taxes on export
products (“RODTEP Scheme”) for exporters. The GoI has also announced the Production Linked Incentive Scheme (“PLI
Scheme”) for various industries, including the automotive industry. Although the RODTEP Scheme and the PLI Scheme are
effective from January 1, 2021, the details of benefits available under these schemes are yet to be issued by the GoI. Since MEIS
is already discontinued and specific details of the new schemes are not available, it is difficult to ascertain whether the
discontinuation of the MEIS will have a positive or negative impact on our business.

External Risks

49. Changing regulations in India could lead to new compliance requirements that are uncertain.

The regulatory and policy environment in which we operate is evolving and is subject to change. The government of India
(“GoI”) may implement new laws or other regulations and policies that could affect the automobile or manufacturing industry,
which could lead to new compliance requirements, including requiring us to obtain approvals and licenses from the GoI and
other regulatory bodies, or impose onerous requirements. New compliance requirements could increase our costs or otherwise
adversely affect our business, financial condition and results of operations. Further, the manner in which new requirements will
be enforced or interpreted can lead to uncertainty in our operations and could adversely affect our operations. Any changes to
such laws, may adversely affect our business, financial condition, results of operations, cash flows and prospects:

For instance, the Taxation Laws (Amendment) Act, 2019, a tax legislation issued by India’s Ministry of Finance effective as of
September 20, 2019, prescribes certain changes to the income tax rate applicable to companies in India. According to this
legislation, companies can henceforth voluntarily opt in favour of a concessional tax regime (subject to no other special
benefits/exemptions being claimed), which reduces the rate of income tax payable to 22% subject to compliance with conditions
prescribed, from the erstwhile 25% or 30% depending upon the total turnover or gross receipt in the relevant period. Any such
future amendments may affect our other benefits such as exemption for income earned by way of dividend from investments in
other domestic companies and units of mutual funds, exemption for interest received in respect of tax free bonds, and long-term
capital gains on equity shares if withdrawn by the statute in the future, and the same may no longer be available to us. Any
adverse order passed by the appellate authorities/ tribunals/ courts would have an effect on our profitability.

47
The Finance Act, 2020 (“Finance Act”), has, amongst others things, provided a number of amendments to the direct and indirect
tax regime, including, without limitation, a simplified alternate direct tax regime and that dividend distribution tax (“DDT”),
will not be payable in respect of dividends declared, distributed or paid by a domestic company after March 31, 2020, and
accordingly, such dividends would not be exempt in the hands of the shareholders, both resident as well as non-resident and
likely be subject to tax deduction at source. The Company may or may not grant the benefit of a tax treaty (where applicable) to
a non-resident shareholder for the purposes of deducting tax at source from such dividend. Investors should consult their own
tax advisors about the consequences of investing or trading in the Equity Shares.

Further, the Government of India has announced the union budget for Fiscal 2021, pursuant to which the Finance Bill, 2021
(“Finance Bill”), has introduced various amendments. The Finance Bill is yet to receive assent from the President of India. We
have not fully determined the impact of these recent and proposed laws and regulations on our business. Uncertainty in the
applicability, interpretation or implementation of any amendment to, or change in, governing law, regulation or policy in the
jurisdictions in which we operate, including by reason of an absence, or a limited body, of administrative or judicial precedent
may be time consuming as well as costly for us to resolve and may impact the viability of our current business or restrict our
ability to grow our business in the future. Further, if we are affected, directly or indirectly, by the application or interpretation of
any provision of such laws and regulations or any related proceedings, or are required to bear any costs in order to comply with
such provisions or to defend such proceedings, our business and financial performance may be adversely affected.

50. A downgrade in credit ratings of India, may affect the trading price of the Equity Shares.

Our borrowing costs and our access to the debt capital markets depend significantly on the credit ratings of India. India’s
sovereign rating decreased from Baa2 with a “negative” outlook to Baa3 with a “negative” outlook by Moody’s and from BBB
with a “stable” outlook to BBB with a “negative” outlook (Fitch) in June 2020; and from BBB “stable” to BBB “negative” by
DBRS in May 2020. India’s sovereign ratings from S&P is BBB- with a “stable” outlook in September 2020. Any further adverse
revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our
ability to raise additional financing and the interest rates and other commercial terms at which such financing is available,
including raising any overseas additional financing. A downgrading of India’s credit ratings may occur, for reasons beyond our
control such as, upon a change of government tax or fiscal policy. This could have an adverse effect on our ability to fund our
growth on favorable terms or at all, and consequently adversely affect our business and financial performance and the price of
the Equity Shares.

51. Political changes, natural disasters and other macroeconomic factors could adversely affect economic conditions in
India

Our Company is incorporated in India and the majority of its assets are located in India. Consequently, our performance and the
market price of the Equity Shares may be affected by interest rates, government policies, taxation, social and ethnic instability
and other political and economic developments affecting India.

Factors that may adversely affect the Indian economy, and hence our results of operations, may include:

• the macroeconomic climate, including any increase in Indian interest rates or inflation;
• any exchange rate fluctuations, the imposition of currency controls and restrictions on the right to convert or repatriate
currency or export assets;
• any scarcity of credit or other financing in India, resulting in an adverse effect on economic conditions in India and
scarcity of financing for our expansions;
• prevailing income conditions among Indian consumers and Indian corporations;
• epidemic, pandemic or any other public health in India or in countries in the region or globally, including in India’s
various neighboring countries, such as the highly pathogenic H7N9, H5N1 and H1N1 strains of influenza in birds and
swine and more recently, the COVID-19 pandemic;
• volatility in, and actual or perceived trends in trading activity on, India’s principal stock exchanges;
• political instability, terrorism or military conflict in India or in countries in the region or globally, including in India’s
various neighboring countries;
• occurrence of natural or man-made disasters (such as typhoons, flooding, earthquakes and fires) which may cause us to
suspend our operations;
• prevailing regional or global economic conditions, including in India’s principal export markets;
• other significant regulatory or economic developments in or affecting India or its consumption sector;
• international business practices that may conflict with other customs or legal requirements to which we are subject,
including anti-bribery and anti-corruption laws;
• protectionist and other adverse public policies, including local content requirements, import/export tariffs, increased
regulations or capital investment requirements;
• logistical and communications challenges;
• downgrading of India’s sovereign debt rating by rating agencies;
48
• difficulty in developing any necessary partnerships with local businesses on commercially acceptable terms or on a
timely basis; and
• being subject to the jurisdiction of foreign courts, including uncertainty of judicial processes and difficulty enforcing
contractual agreements or judgments in foreign legal systems or incurring additional costs to do so.

Any slowdown or perceived slowdown in the Indian economy, or in specific sectors of the Indian economy, could adversely
affect our business, results of operations and financial condition and the price of the Equity Shares.

52. Financial instability in other countries may cause increased volatility in Indian financial markets.

The Indian market and the Indian economy are influenced by economic and market conditions in other countries, including
conditions in the United States, Europe, China and certain emerging economies in Asia. Although economic conditions vary
across markets, loss of investor confidence in one emerging economy may cause increased volatility across other economies,
including India. Financial instability in other parts of the world could have a global influence and thereby negatively affect the
Indian economy. Financial disruptions could materially and adversely affect our business, prospects, financial condition, results
of operations and cash flows.

Further, economic developments globally can have a significant impact on India. Concerns related to a trade war between large
economies may lead to increased risk aversion and volatility in global capital markets and consequently have an impact on the
Indian economy. Following the United Kingdom’s exit from the European Union (“Brexit”), the United Kingdom ratified a trade
and cooperation agreement governing its future relationship with the European Union, which is being applied provisionally from
January 1, 2021 until it is ratified by the European Parliament and the Council of the European Union. Significant political,
regulatory and economic uncertainty remains about how the precise terms of the relationship between the parties will differ from
the terms before withdrawal, and more generally, as to the impact of Brexit on the general economic conditions in the United
Kingdom and the European economies and any consequential impact on global financial markets. For example, Brexit could
give rise to increased volatility in foreign exchange rate movements and the value of equity and debt investments. In addition,
China is one of India’s major trading partners and there are rising concerns of a strained relationship with India, which could
have an adverse impact on the trade relations between the two countries. Risks resulting from a relapse in the Eurozone crisis
or any future debt crisis in Europe or any similar crisis could have a detrimental impact on consumer confidence levels and global
economic recovery. The sovereign rating downgrades for Brazil and Russia (and the imposition of sanctions on Russia) have
also added to the growth risks for these markets. These factors may also result in a slowdown in India’s export growth.

These developments, or the perception that any related developments could occur, have had and may continue to have a material
adverse effect on global economic conditions and financial markets, and may significantly reduce global market liquidity, restrict
the ability of key market participants to operate in certain financial markets or restrict our access to capital. This could have a
material adverse effect on our business, financial condition and results of operations and reduce the price of the Equity Shares.

53. If inflation rises in India, increased costs may result in a decline in profits.

Inflation rates in India have been volatile in recent years, and such volatility may continue. India has experienced high inflation
in the recent past. Increasing inflation in India could cause a rise in the costs of rent, wages, raw materials and other expenses.
High fluctuations in inflation rates may make it more difficult for us to accurately estimate or control our costs. Any increase in
inflation in India can increase our expenses, which we may not be able to adequately pass on to our clients, whether entirely or
in part, and may adversely affect our business and financial condition. If we are unable to increase our revenues sufficiently to
offset our increased costs due to inflation, it could have an adverse effect on our business, prospects, financial condition, results
of operations and cash flows. Further, the GoI has previously initiated economic measures to combat high inflation rates, and it
is unclear whether these measures will remain in effect. There can be no assurance that Indian inflation levels will not worsen in
the future.

54. Significant differences exist between Ind AS and other accounting principles, such as Indian GAAP, IFRS and U.S.
GAAP, which may be material to investors’ assessments of our financial condition, result of operations and cash
flows.

Our Restated Consolidated Financial Information for Fiscal Years 2018, 2019 and 2020 and the nine months ended December
31, 2020 included in this Draft Red Herring Prospectus are presented in conformity with Ind AS, in each case restated in
accordance with the requirements of Section 26 of part I of the Companies Act, 2013, the SEBI ICDR Regulations and the
Guidance Note on “Reports in Company Prospectus (Revised 2019)” issued by the ICAI. Ind AS differs from accounting
principles with which prospective investors may be familiar, such as Indian GAAP, IFRS and U.S. GAAP. We have not attempted
to quantify the impact of US GAAP or IFRS on the financial data included in this Draft Red Herring Prospectus, nor do we
provide a reconciliation of our financial statements to those of US GAAP or IFRS. US GAAP and IFRS differ in significant
respects from Ind AS and Indian GAAP. Accordingly, the degree to which the Ind AS and Indian GAAP financial statements,
which are restated as per the SEBI ICDR Regulations included in this Draft Red Herring Prospectus, will provide meaningful

49
information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons
not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should
be limited accordingly.

14. Our business and activities may be regulated by the Competition Act, 2002 and any breach thereof may invite
sanctions.

The Competition Act prohibits any anti competition agreement or arrangement, understanding or action in concert between
enterprises, whether formal or informal, which causes or is likely to cause an appreciable adverse effect on competition in India.

The Competition Act also prohibits abuse of a dominant position by any enterprise. The combination regulation (merger control)
provisions under the Competition Act require acquisitions of shares, voting rights, assets or control or mergers or amalgamations
that cross the prescribed asset and turnover based thresholds to be mandatorily notified to, and pre-approved by, the Competition
Commission of India, or CCI. Any breach of the provisions of Competition Act, may attract substantial monetary penalties.

The Competition Act aims to, among other things, prohibit all agreements and transactions, which may have an appreciable
adverse effect in India. Consequently, all agreements entered into by us could be within the purview of the Competition Act.
Further, the CCI has extra-territorial powers and can investigate any agreements, abusive conduct or combination occurring
outside of India if such agreement, conduct or combination has an appreciable adverse effect in India. We are not currently party
to any outstanding proceedings, nor have we ever received any notice in relation to non-compliance with the Competition Act.
Any enforcement proceedings initiated by the CCI in future, or any adverse publicity that may be generated due to scrutiny or
prosecution by the CCI may affect our business, financial condition and results of operations.

55. Our ability to raise foreign capital may be constrained by Indian law.

As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory
restrictions limit our financing sources and could constrain our ability to obtain financings on competitive terms and refinance
existing indebtedness. In addition, we cannot assure you that any required regulatory approvals for borrowing in foreign
currencies will be granted to us without onerous conditions, or at all. Limitations on foreign debt may have an adverse effect on
our business growth, financial condition and results of operations.

56. Under Indian law, foreign investors are subject to investment restrictions that limit our ability to attract foreign
investors, which may adversely affect the trading price of the Equity Shares.

Under foreign exchange regulations which are currently in force in India, transfer of shares between non-residents and residents
are freely permitted (subject to certain restrictions), if they comply with the valuation and reporting requirements specified under
applicable law. If a transfer of shares is not in compliance with such requirements and does not fall under any of the exceptions,
then prior approval of the relevant regulatory authority is required. Additionally, shareholders who seek to convert Rupee
proceeds from a sale of shares in India into foreign currency and repatriate that foreign currency from India require a no-objection
or a tax clearance certificate from the Indian income tax authorities. Further, this conversion is subject to the shares having been
held on a repatriation basis and, either the security having been sold in compliance with the pricing guidelines or, the relevant
regulatory approval having been obtained for the sale of shares and corresponding remittance of the sale proceeds. We cannot
assure you that any required approval from the RBI or any other governmental agency can be obtained with or without any
particular terms or conditions.

For further information, see “Restrictions on Foreign Ownership of Indian Securities” on page 435. Our ability to raise any
foreign capital under the FDI route is therefore constrained by Indian law, which may adversely affect our business, financial
condition, cash flows, results of operations and prospects.

Risks Related to the Offer

57. We cannot assure payment of dividends on the Equity Shares in the future.

While our declaration of dividends is at the discretion of our Board and subject to Shareholder approval as set out in the section
titled “Dividend Policy” on page 229, the amount of future dividend payments by our Company, if any, will depend upon our
future earnings, financial condition, cash flows, working capital requirements, capital expenditures, applicable Indian legal
restrictions and other factors. Our Company may decide to retain all of its earnings to finance the development and expansion of
its business and therefore, we may not declare dividends on the Equity Shares. Additionally, we may, in the future, be restricted
by the terms of our loan agreements to make any dividend payments unless otherwise agreed with our lenders.

50
58. Our Equity Shares have never been publicly traded, and after the Offer, the Equity Shares may experience price and
volume fluctuations, and an active trading market for the Equity Shares may not develop. Further, the Offer Price
may not be indicative of the market price of the Equity Shares after the Offer.

Prior to the Offer, there has been no public market for the Equity Shares, and an active trading market on the Stock Exchanges
may not develop or be sustained after the Offer. Listing and quotation does not guarantee that a market for the Equity Shares
will develop, or if developed, the liquidity of such market for the Equity Shares. The Offer Price of the Equity Shares is proposed
to be determined through a book-building process and may not be indicative of the market price of the Equity Shares at the time
of commencement of trading of the Equity Shares or at any time thereafter. The market price of the Equity Shares may be subject
to significant fluctuations in response to, among other factors, variations in our operating results, market conditions specific to
the industry we operate in, developments relating to India, volatility in securities markets in jurisdictions other than India,
variations in the growth rate of financial indicators, variations in revenue or earnings estimates by research publications, and
changes in economic, legal and other regulatory factors. Consequently, the price of our Equity Shares may be volatile, and you
may be unable to resell your Equity Shares at or above the Offer Price, or at all.

There has been significant volatility in the Indian stock markets in the recent past, and our Equity Share price could fluctuate
significantly because of market volatility. A decrease in the market price of our Equity Shares could cause investors to lose some
or all of their investment.

59. Investors may be subject to Indian taxes arising out of income arising on the sale of the Equity Shares.

Under current Indian tax laws and regulations, unless specifically exempted, capital gains arising from the sale of equity shares
in an Indian company are generally taxable in India. A securities transaction tax (“STT”) is levied on and collected by an Indian
stock exchange on which equity shares are sold. Any gain realized on the sale of equity shares held for more than 12 months,
which are sold using any other platform other than on a recognized stock exchange and on which no STT has been paid, are
subject to long-term capital gains tax in India. Until March 31, 2018, any gain realized on the sale of equity shares, listed on a
stock exchange and held for more than 12 months was not subject to capital gains tax in India if STT was paid on the transaction.
However, with the enactment of the Finance Act, 2018 the exemption previously granted in respect of payment of long-term
capital gains tax has been withdrawn and such taxes are now payable by the investors with effect from April 1, 2018. The Finance
Act, 2018 provides that existing investors are eligible for relief on such capital gains accrued until January 31, 2018 and any
long-term capital gains made after January 31, 2018 shall be subject to taxation.

The Finance Act, 2019 amended the Indian Stamp Act, 1899 with effect from July 1, 2020 clarified that, in the absence of a
specific provision under an agreement, the liability to pay stamp duty in case of sale of securities through stock exchanges will
be on the buyer, while in other cases of transfer for consideration through a depository, the onus will be on the transferor. The
stamp duty for transfer of securities other than debentures on a delivery basis is specified at 0.015% and on a non-delivery basis
is specified at 0.003% of the consideration amount. As such, there is no certainty on the impact that the Finance Act, 2019 may
have on our Company’s business and operations.

Further, any gain realized on the sale of listed equity shares held for a period of 12 months or less will be subject to short-term
capital gains tax in India. In cases where the seller is a non-resident, capital gains arising from the sale of the equity shares will
be partially or wholly exempt from taxation in India in cases where the exemption from taxation in India is provided under a
treaty between India and the country of which the seller is resident.

Historically, Indian tax treaties do not limit India’s ability to impose tax on capital gains. As a result, residents of other countries
may be liable for tax in India as well as in their own jurisdiction on a gain upon the sale of the equity shares.

Further, we cannot predict whether any tax laws or other regulations impacting it will be enacted, or predict the nature and impact
of any such laws or regulations or whether, if at all, any laws or regulations would have a material adverse effect on our business,
financial condition, results of operations and cash flows.

60. Investors will not be able to sell immediately on an Indian stock exchange any of the Equity Shares they purchase
in the Offer.

The Equity Shares will be listed on the Stock Exchanges. Pursuant to applicable Indian laws, certain actions must be completed
before the Equity Shares can be listed and trading in the Equity Shares may commence. Investors’ book entry, or ‘demat’ accounts
with depository participants in India, are expected to be credited within one working day of the date on which the Basis of
Allotment is approved by the Stock Exchanges. The Allotment of Equity Shares in this Offer and the credit of such Equity Shares
to the applicant’s demat account with depository participant could take approximately five Working Days from the Bid Closing
Date and trading in the Equity Shares upon receipt of final listing and trading approvals from the Stock Exchanges is expected
to commence within six Working Days of the Bid Closing Date. There could be a failure or delay in listing of the Equity Shares
on the Stock Exchanges. Any failure or delay in obtaining the approval or otherwise commence trading in the Equity Shares
would restrict investors’ ability to dispose of their Equity Shares. There can be no assurance that the Equity Shares will be
51
credited to investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified in
this risk factor. We could also be required to pay interest at the applicable rates if allotment is not made, refund orders are not
dispatched or demat credits are not made to investors within the prescribed time periods.

61. QIBs and Non-Institutional Investors are not permitted to withdraw or lower their Bids (in terms of quantity of
Equity Shares or the Bid Amount) at any stage after submitting a Bid, and Retail Individual Investors are not
permitted to withdraw their Bids after Bid/Offer Closing Date.

Pursuant to the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are required to pay the Bid Amount on submission
of the Bid and are not permitted to withdraw or lower their Bids (in terms of quantity of Equity Shares or the Bid Amount) at
any stage after submitting a Bid. Retail Individual Investors can revise their Bids during the Bid/Offer Period and withdraw their
Bids until Bid/Offer Closing Date. While our Company is required to complete all necessary formalities for listing and
commencement of trading of the Equity Shares on all Stock Exchanges where such Equity Shares are proposed to be listed
including Allotment pursuant to the Offer within six Working Days from the Bid/Offer Closing Date, events affecting the
Bidders’ decision to invest in the Equity Shares, including material adverse changes in international or national monetary policy,
financial, political or economic conditions, our business, results of operation or financial condition may arise between the date
of submission of the Bid and Allotment. Our Company may complete the Allotment of the Equity Shares even if such events
occur, and such events limit the Bidders’ ability to sell the Equity Shares Allotted pursuant to the Offer or cause the trading price
of the Equity Shares to decline on listing.

62. There is no guarantee that our Equity Shares will be listed on the BSE and NSE in a timely manner or at all.

In accordance with Indian law and practice, permission for listing and trading of our Equity Shares will not be granted until after
certain actions have been completed in relation to this Offer and until Allotment of Equity Shares pursuant to this Offer.

In accordance with current regulations and circulars issued by SEBI, our Equity Shares are required to be listed on the BSE and
NSE within such time as mandated under UPI Circulars, subject to any change in the prescribed timeline in this regard. However,
we cannot assure you that the trading in our Equity Shares will commence in a timely manner or at all. Any failure or delay in
obtaining final listing and trading approvals may restrict your ability to dispose of your Equity Shares.

63. Investors may have difficulty in enforcing foreign judgments against our Company or our management.

Our Company is a limited liability company incorporated under the laws of India. The majority of our directors and executive
officers are residents of India. A substantial portion of our Company’s assets and the assets of our Directors and executive
officers resident in India are located in India. As a result, it may be difficult for investors to effect service of process upon us or
such persons outside India or to enforce judgments obtained against our Company or such parties outside India.

India has reciprocal recognition and enforcement of judgments in civil and commercial matters with a limited number of
jurisdictions, which includes, the United Kingdom, Singapore, UAE, and Hong Kong. A judgment from certain specified courts
located in a jurisdiction with reciprocity must meet certain requirements of the Civil Code. The United States and India do not
currently have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters.
Therefore, a final judgment for the payment of money rendered by any federal or state court in a non-reciprocating territory,
such as the United States, for civil liability, whether or not predicated solely upon the general securities laws of the United States,
would not be enforceable in India under the Civil Code as a decree of an Indian court.

The United Kingdom, Singapore, UAE, and Hong Kong have been declared by the Government of India to be reciprocating
territories for purposes of Section 44A of the Civil Code. A judgment of a court of a country which is not a reciprocating territory
may be enforced in India only by a suit on the judgment under Section 13 of the Civil Code, and not by proceedings in execution.
Section 13 of the Civil Code provides that foreign judgments shall be conclusive regarding any matter directly adjudicated on
except (i) where the judgment has not been pronounced by a court of competent jurisdiction, (ii) where the judgment has not
been given on the merits of the case, (iii) where it appears on the face of the proceedings that the judgment is founded on an
incorrect view of international law or refusal to recognize the law of India in cases to which such law is applicable, (iv) where
the proceedings in which the judgment was obtained were opposed to natural justice, (v) where the judgment has been obtained
by fraud or (vi) where the judgment sustains a claim founded on a breach of any law then in force in India. Under the Civil Code,
a court in India shall, on the production of any document purporting to be a certified copy of a foreign judgment, presume that
the judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on record. The Civil Code only
permits the enforcement of monetary decrees, not being in the nature of any amounts payable in respect of taxes, other charges,
fines or penalties. Judgments or decrees from jurisdictions which do not have reciprocal recognition with India cannot be
enforced by proceedings in execution in India. Therefore, a final judgment for the payment of money rendered by any court in a
non-reciprocating territory for civil liability, whether or not predicated solely upon the general laws of the non-reciprocating
territory, would not be enforceable in India. Even if an investor obtained a judgment in such a jurisdiction against us, our officers
or directors, it may be required to institute a new proceeding in India and obtain a decree from an Indian court.

52
However, the party in whose favor such final judgment is rendered may bring a new suit in a competent court in India based on
a final judgment that has been obtained in the United States or other such jurisdiction within three years of obtaining such final
judgment. It is unlikely that an Indian court would award damages on the same basis as a foreign court if an action is brought in
India. Moreover, it is unlikely that an Indian court would award damages to the extent awarded in a final judgment rendered
outside India if it believes that the amount of damages awarded were excessive or inconsistent with Indian practice. In addition,
any person seeking to enforce a foreign judgment in India is required to obtain the prior approval of the RBI to repatriate any
amount recovered.

64. Holders of Equity Shares could be restricted in their ability to exercise pre-emptive rights under Indian law and
could thereby suffer future dilution of their ownership position.

Under the Companies Act, a company having share capital and incorporated in India is required to offer holders of its Equity
Shares pre-emptive rights to subscribe and pay for a proportionate number of Equity Shares to maintain their existing ownership
percentages prior to the issuance of any new equity shares, unless the pre-emptive rights have been waived by the adoption of a
special resolution by holders of three-fourths of the Equity Shares who have voted on such resolution. However, if the laws of
the jurisdiction that you are in does not permit the exercise of such pre-emptive rights without us filing an offering document or
registration statement with the applicable authority in such jurisdiction, you will be unable to exercise such pre-emptive rights
unless we make such a filing. We may elect not to file a registration statement in relation to pre-emptive rights otherwise available
by Indian law to you. To the extent that you are unable to exercise pre-emptive rights granted in respect of the Equity Shares,
you may suffer future dilution of your ownership position and your proportional interests in us would be reduced.

65. Any future issuance of Equity Shares or convertible securities or other equity linked securities by our Company may
dilute your shareholding and sales of the Equity Shares by our major shareholders may adversely affect the trading
price of the Equity Shares.

Any future issuance of the Equity Shares or securities linked to the Equity Shares by our Company, including issuance of Equity
Shares to employees or former employees upon exercise of vested options held by them under ESOP 2020, may dilute your
shareholding. Any such future issuance of the Equity Shares or future sales of the Equity Shares by any of our significant
shareholders may also adversely affect the trading price of the Equity Shares and impact our ability to raise funds through an
offering of our securities. Any perception by investors that such issuances or sales might occur could also affect the trading price
of the Equity Shares. Additionally, the disposal, pledge or encumbrance of the Equity Shares by any of our significant
shareholders, or the perception that such transactions may occur, may affect the trading price of the Equity Shares. There can be
no assurance that we will not issue further Equity Shares or that our existing Shareholders including our Promoters will not
dispose of further Equity Shares after the completion of the Offer (subject to compliance with the lock-in provisions under the
SEBI ICDR Regulations) or pledge or encumber their Equity Shares. Any future issuances could also dilute the value of
shareholder’s investment in the Equity Shares and adversely affect the trading price of our Equity Shares. Such securities may
also be issued at prices below the Offer Price. We may also issue convertible debt securities to finance our future growth or fund
our business activities. In addition, any perception by investors that such issuances or sales might occur may also affect the
market price of our Equity Shares.

66. A third party could be prevented from acquiring control of our Company because of anti-takeover provisions under
Indian law.

There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of our Company, even
if a change in control would result in the purchase of your Equity Shares at a premium to the market price or would otherwise
be beneficial to you. Such provisions may discourage or prevent certain types of transactions involving actual or threatened
change in control of our Company. Under the SEBI Takeover Regulations, an acquirer has been defined as any person who,
directly or indirectly, acquires or agrees to acquire shares or voting rights or control over a company, whether individually or
acting in concert with others. Although these provisions have been formulated to ensure that interests of investors/shareholders
are protected, these provisions may also discourage a third party from attempting to take control of our Company. Consequently,
even if a potential takeover of our Company would result in the purchase of the Equity Shares at a premium to their market price
or would otherwise be beneficial to its stakeholders, it is possible that such a takeover would not be attempted or consummated
because of the SEBI Takeover Regulations.

67. Rights of shareholders of companies under Indian law may be more limited than under the laws of other jurisdictions.

Our Articles of Association, composition of our Board, Indian laws governing our corporate affairs, the validity of corporate
procedures, directors’ fiduciary duties, responsibilities and liabilities, and shareholders’ rights may differ from those that would
apply to a company in another jurisdiction. Shareholders’ rights under Indian law may not be as extensive and widespread as
shareholders’ rights under the laws of other countries or jurisdictions. Investors may face challenges in asserting their rights as
shareholder in an Indian company than as a shareholder of an entity in another jurisdiction.

53
 SECTION III: INTRODUCTION

THE OFFER

The following table summarizes the Offer details:

Offer of Equity Shares of face value of ₹ 10 each(1)(2) Up to [●] Equity Shares aggregating up to ₹ 60,000 million

of which:
(i) Fresh Issue(1) Up to [●] Equity Shares aggregating up to ₹ 3,000 million
(ii) Offer for Sale(2) Up to [●] Equity Shares aggregating up to ₹ 57,000 million by the
Selling Shareholder

The Offer comprises:

A) QIB Portion(3)(4) Not less than [●] Equity Shares
of which:
(i) Anchor Investor Portion Up to [●] Equity Shares
of which:
Available for allocation to Mutual Funds only [●] Equity Shares
Balance for all QIBs including Mutual Funds [●] Equity Shares
(ii) Net QIB Portion (assuming Anchor Investor Portion is [●] Equity Shares
fully subscribed)
of which:
Available for allocation to Mutual Funds only (5% of the [●] Equity Shares
Net QIB Portion)(3)
Balance of QIB Portion for all QIBs including Mutual [●] Equity Shares
Funds
B) Non-Institutional Portion Not more than [●] Equity Shares
C) Retail Portion Not more than [●] Equity Shares

Pre-Offer and post-Offer Equity Shares

Equity Shares outstanding prior to the Offer (as on date of this Draft 572,980,560 Equity Shares
Red Herring Prospectus)
Equity Shares outstanding after the Offer [●] Equity Shares

Utilisation of Net Proceeds See “Objects of the Offer” beginning on page 82 for details regarding
the use of proceeds from the Net Proceeds. Our Company will not
receive any proceeds from the Offer for Sale.
(1)
The Fresh Issue has been authorized by resolutions of our Board of Directors at their meeting held on January 27, 2021 and February 22, 2021 and a
special resolution passed by our shareholders at their meeting held on January 30, 2021.
(2)
The Selling Shareholder has authorised and consented to participate in the Offer for Sale. For details on the authorisations and consents of the Selling
Shareholder in relation to their Offered Shares, see “Other Regulatory and Statutory Disclosures” beginning on page 399. The Equity Shares being offered
by the Selling Shareholder has been held for a period of at least one year immediately preceding the date of filing this Draft Red Herring Prospectus with
SEBI, or are otherwise eligible for being offered for sale pursuant to the Offer in terms of the SEBI ICDR Regulations.
(3)
Subject to valid Bids being received at or above the Offer Price, undersubscription, if any, in any category, except in the QIB Portion, would be allowed
to be met with spill-over from any other category or combination of categories of Bidders at the discretion of our Company and the Selling Shareholder,
in consultation with the Book Running Lead Managers, and the Designated Stock Exchange, subject to applicable laws. In case of under-subscription in
the Offer, Equity Shares shall be allocated in the manner specified in the section “Terms of the Offer” beginning on page 412.
(4)
Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, allocate up to 60% of the QIB Portion to Anchor
Investors on a discretionary basis in accordance with the SEBI ICDR Regulations. The QIB Portion will be accordingly reduced for the Equity Shares
allocated to Anchor Investors. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds only, subject to valid Bids being
received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription or non-Allotment in the Anchor
Investor Portion, the remaining Equity Shares shall be added to the Net QIB Portion. 5% of the QIB Portion (excluding Anchor Investor Portion) shall be
available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion (excluding Anchor Investor Portion) shall
be available for allocation on a proportionate basis to all QIB Bidders (other than Anchor Investors), including Mutual Funds, subject to valid Bids being
received at or above the Offer Price. In the event the aggregate demand from Mutual Funds is less than as specified above, the balance Equity Shares
available for Allotment in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to the QIB Bidders (other than Anchor
Investors) in proportion to their Bids. For details, see “Offer Procedure” beginning on page 419.

Allocation to Bidders in all categories except the Anchor Investor Portion and the Retail Portion, if any, shall be made on a
proportionate basis subject to valid Bids received at or above the Offer Price. The allocation to each RIB shall not be less than
the minimum Bid Lot, subject to availability of Equity Shares in the Retail Portion, and the remaining available Equity Shares,
if any, shall be allocated on a proportional basis. For further details, see “Offer Procedure” beginning on page 419.

For details of the terms of the Offer, see “Terms of the Offer” beginning on page 412.

54
 SUMMARY OF RESTATED CONSOLIDATED FINANCIAL INFORMATION

The following tables provide the summary of financial information of our Company derived from the Restated Consolidated
Financial Information as at and for the nine months ended December 31, 2020 and the Financial Years ended March 31, 2020,
March 31, 2019 and March 31, 2018.

The Restated Consolidated Financial Information referred to above is presented under “Financial Information” beginning on
page 230. The summary of financial information presented below should be read in conjunction with the Restated Consolidated
Financial Information, the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” beginning on page 351.

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55
 (₹ in millions)
Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

ASSETS
Non-current assets
Property, plant and equipment 3,218.88 2,845.07 1,783.52 5,270.25
Capital work-in-progress 820.67 581.37 131.67 179.60
Right-of-use assets 1,607.69 1,419.41 405.13 1,005.10
Goodwill on consolidation 1,758.09 1,758.09 - 1,552.45
Other intangible assets 4,450.99 4,629.18 723.91 105.07
Intangible assets under development 910.21 315.00 - -
Investments accounted for using the equity method - - - 5.34
Financial assets
(i) Investments - 19.00 - -
(ii) Loans 54.02 50.79 23.14 16.64
(iii) Other financial assets - 0.87 38.11 26.79
Income tax assets (net) 243.09 291.42 11.24 13.66
Other non-current assets 209.57 278.49 84.19 91.50
Deferred tax asset (net) - - - 171.86
Total non-current assets 13,273.21 12,188.69 3,200.91 8,438.26

Current assets
Inventories 2,838.40 1,962.36 677.84 2,838.97
Financial assets
(i) Trade receivables 3,938.98 2,336.28 1,520.98 2,809.88
(ii) Cash and cash equivalents 333.38 1,049.85 1.94 264.01
(iii) Bank balances other than (ii) above 2.57 623.08 254.12 -
(iv) Loans 1.52 4.92 0.19 149.29
(v) Other financial assets 159.90 5.30 32.26 37.60
Income tax assets (net) - - - 9.63
Other current assets 572.46 336.34 130.40 290.13
Total current assets 7,847.21 6,318.13 2,617.73 6,399.51

Assets of disposal group classified as held for sale - - 10,506.93 -

Total assets 21,120.42 18,506.82 16,325.57 14,837.77

EQUITY AND LIABILITIES

Equity
Equity share capital 471.54 471.54 277.18 277.18
Instruments entirely equity in nature 5.94 5.94 - -
Other equity 12,408.03 11,301.93 1,460.59 (275.41)
Equity attributable to the owners 12,885.51 11,779.41 1,737.77 1.77
Non-controlling interest - - 24.23 25.40

Total equity 12,885.51 11,779.41 1,762.00 27.17

LIABILITIES
Non-current liabilities
Financial liabilities
(i) Borrowings 1,698.15 1,768.22 733.07 3,944.23
(ii) Lease liabilities 733.17 532.33 156.84 928.46
(iii) Other financial liabilities 1.24 1.24 1.24 1.24
Provisions 103.93 66.78 23.82 3,941.26
Deferred tax liabilities (net) 1,195.05 1,076.71 110.55 -
Total non-current liabilities 3,731.54 3,445.28 1,025.52 8,815.19

Current liabilities
Financial liabilities
(i) Borrowings 603.74 846.09 389.10 349.51
(ii) Trade payables
-Total outstanding dues of micro enterprises and small enterprises 504.81 166.99 76.77 0.62

-Total outstanding dues of creditors other than micro enterprises 1,916.64 995.26 615.44 3,297.39
and small enterprises
(iii) Lease liabilities 98.63 71.73 24.06 335.88
(iv) Other financial liabilities 938.79 922.65 1,027.44 1,284.49
Other current liabilities 159.01 110.35 120.93 296.05
Provisions 71.26 51.06 15.76 376.67
Current tax liabilities (net) 210.49 118.00 0.71 54.80
Total current liabilities 4,503.37 3,282.13 2,270.21 5,995.41
Liabilities of disposal group classified as held for sale - - 11,267.84 -

Total liabilities 8,234.91 6,727.41 14,563.57 14,810.60

Total equity and liabilities 21,120.42 18,506.82 16,325.57 14,837.77

56
 (₹ in millions)
Particulars For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Income
Revenue from operations 10,269.56 10,379.82 6,992.20 6,231.20
Other income 26.72 57.83 32.81 28.03
Total income 10,296.28 10,437.65 7,025.01 6,259.23
Expenses
Cost of materials consumed 4,707.39 4,424.22 1,928.41 1,759.38
Changes in inventories of finished goods and work-in-progress (566.68) 31.78 122.19 (84.72)
Excise duty - - - 111.17
Employee benefits expense 1,015.53 1,027.30 490.04 417.74
Finance costs 230.85 259.75 177.63 190.64
Depreciation and amortisation expense 688.62 671.20 309.57 233.26
Other expenses 2,110.06 2,473.75 2,451.71 2,320.62
Total expenses 8,185.77 8,888.00 5,479.55 4,948.09
Profit before profit/(loss) in associates, tax and exceptional items 2,110.51 1,549.65 1,545.46 1,311.14
Share of profit/(loss) in associate - - 2.17 (2.17)
Profit before exceptional items and tax 2,110.51 1,549.65 1,547.63 1,308.97
Exceptional item - 2,320.53 - -
Profit before tax 2,110.51 3,870.18 1,547.63 1,308.97

Tax expense
- Current tax 435.08 365.04 471.52 423.16
- Deferred tax (credit)/charge 120.74 (98.29) 74.97 24.51
Total tax expense 555.82 266.75 546.49 447.67

Profit for the year from continuing operations 1,554.69 3,603.43 1,001.14 861.30
Discontinued operations:
Profit for the period / year from discontinued operation before tax - - 1,127.32 236.10
Tax expense of discontinued operations - - (396.66) (321.68)
Profit for the period / year 1,554.69 3,603.43 1,731.80 775.72

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obligations (8.62) 12.28 (1.02) (17.06)
Income tax relating to above mentioned item 2.41 (3.57) 0.36 5.96
Changes in fair values of equity instruments carried at fair value through other (19.00) (309.28) - -
comprehensive income
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign subsidiaries 13.80 14.00 - -
Other comprehensive income for the year, net of tax from continuing (11.41) (286.57) (0.66) (11.10)
operations
Other comprehensive income for the year, net of tax from discontinued - - 6.46 (212.13)
operations
Total comprehensive income for the year 1,543.28 3,316.86 1,737.60 552.49

Profit attributable to:

Owners 1,554.69 3,603.43 1,729.71 774.24
Non-controlling interests - - 2.09 1.48

Profit attributable to owners arising from:

Continuing operations 1,554.69 3,603.43 1,001.14 861.30
Discontinued operations - - 728.57 (87.06)

Profit attributable to non-controlling interests arising from:

Continuing operations - - - -
Discontinued operations - - 2.09 1.48

Other comprehensive income/(loss) attributable to:

Owners (11.41) (286.57) 6.29 (223.22)
Non-controlling interests - - (0.49) -

Other comprehensive income attributable to owners arising from:

Continuing operations (11.41) (286.57) (0.66) (11.09)
Discontinued operations - - 6.95 (212.13)

Other comprehensive income attributable to non-controlling interests

arising from:
Continuing operations - - - -
Discontinued operations - - (0.49) -

Total comprehensive income/(loss) attributable to:

Owners 1,543.28 3,316.86 1,736.00 551.02
Non-controlling interests - - 1.60 1.48

Total comprehensive income/(loss) attributable to owners arises from:

Continuing operations 1,543.28 3,316.86 1,000.48 850.21
Discontinued operations - - 735.52 (299.19)

Total comprehensive income/(loss) attributable to non-controlling interests

arises from:
Continuing operations - - - -
Discontinued operations - - 1.60 1.48
Earnings per equity share of face value of ₹ 10 each
Earnings per share from continuing operations (Basic) (in ₹) 2.71 7.06 3.01 2.59
Earnings per share from discontinued operations (Basic) (in ₹) - - 2.19 (0.26)

Earnings per share from continuing operations (Diluted) (in ₹) 2.71 7.06 3.01 2.59
Earnings per share from discontinued operations (Diluted) (in ₹) - - 2.19 (0.26)

57
 (₹ in millions)
Sr. Particulars For the period ended For the year ended For the year ended For the year ended
No. 31 December 2020 31 March 2020 31 March 2019 31 March 2018
A. Cash flows from operating activities
Profit before income tax 2,110.51 3,870.18 1,547.63 1,311.14
Adjustments for:
Depreciation and amortisation expense 688.62 671.20 309.57 233.26
(Profit)/loss on sale of property plant and equipment (net) (6.02) 5.25 3.67 1.41
Allowance for doubtful receivables and advances - 3.52 2.01 1.07
Share based payments 22.81 - - -
Unwinding of discount on fair valuation of security deposits (0.67) (0.84) 0.10 0.08
Amortisation of transaction cost based on effective interest rate (0.91) (0.68) (2.90) 1.96
Unwinding of discount on deferred payment liabilities 0.36 4.02 3.72 0.62
Gain on loss of control over a subsidiary company - (2,320.53) - -
Provision for slow moving inventory 25.49 0.80 7.92 -
Liabilities/ provisions no longer required written back - (15.00) (4.62) -
Fair value loss/(gain) on derivatives (159.84) 266.62 (6.47) 2.17
Profit on sale of investments - (18.00) - -
Share of (profit)/loss in associate - - (2.17) 2.17
Finance costs 230.85 259.75 177.63 190.64
Interest income (26.11) (19.91) (27.33) (23.70)
Unrealised foreign exchange (gain) (158.80) (58.64) 0.09 7.12
Operating profit before working capital changes 2,726.29 2,647.74 2,008.85 1,727.94
Changes in working capital
Movement in inventories (901.53) 208.68 37.99 (178.87)
Movement in trade receivables (1,450.42) 46.13 (101.45) (222.95)
Movement in other financial asset (46.62) (108.60) 315.05 (176.20)
Movement in other assets (211.17) 118.01 (151.63) 165.20
Movement in trade payable 1,178.01 (40.29) (246.94) 212.05
Movement in financial liabilities (157.12) 20.78 554.63 56.80
Movement in provision 109.82 1.56 (16.51) 10.52
Movement in other current liabilities 111.74 (82.51) 45.68 33.72
Cash generated from operations 1,359.00 2,811.50 2,445.67 1,628.21
Direct taxes paid (280.93) (278.09) (494.07) (411.61)
Net cash flow generated from operating activities (Continuing operations) 1,078.07 2,533.41 1,951.60 1,216.60
Net cash flow generated from operating activities (Discontinued operations) - - (405.55) 272.12
Net cash flow generated from operating activities - Total (A) 1,078.07 2,533.41 1,546.05 1,488.72
B. Cash flows from investing activities
Payments for acquisition of property, plant and equipment, intangibles and capital work in progress (1,520.04) (2,120.60) (1,417.69) (878.00)
including capital advances
Proceeds from sale of property, plant and equipment 8.33 1.19 3.67 1.64
Movement in bank deposits (net) 621.38 (331.72) (254.12) 0.13
Amount received on losing of control over subsidiary (net of cash and cash equivalents in the books - 1,011.12 - -
of subsidiary)
Sale of current investment investments - 80.00 7.51 -
Purchase of long term investments (0.10) - - (162.95)
Acquisition of subsidiaries (net of cash and cash equivalents in the books of subsidiaries) - (8,218.00) - -
Interest received 21.27 35.91 27.33 23.70
Net cash (used in)/generated from investing activities (Continuing operations) (869.16) (9,542.10) (1,633.30) (1,015.48)
Net cash (used in)/generated from investing activities (Discontinued operations) - - 3,674.77 (363.85)
Net cash (used in)/generated from investment activities - Total (B) (869.16) (9,542.10) 2,041.47 (1,379.33)
C. Cash flows from financing activities
Proceeds from short term borrowings, net (242.32) 256.99 39.59 (35.19)
Proceeds from long term borrowings 323.39 1,607.55 343.18 319.16
Repayment of long term borrowings (290.74) (373.66) (534.76) (338.23)
Repayment of deferred payment liabilities (11.61) (86.42) (1.57) 80.40
Repayment of lease liabilities (69.26) (56.88) (23.31) (14.59)
Dividend paid (460.70) (968.09) - -
Dividend tax paid - (197.99) - -
Proceeds from issue of equity shares - 8,477.30 - -
Proceeds from issue of compulsorily convertible preference shares - 228.76 - -
Buyback of shares - (814.21) - -
Tax paid on buy back of shares - (183.64) - -
Fees paid for increase in authorised share capital - (8.72) - -
Interest paid (174.14) (212.75) (160.19) (179.29)
Net cash (used in)/generated from financing activities - (Continuing operations) (925.38) 7,668.24 (337.06) (167.74)
Net cash (used in)/generated from financing activities - (Discontinued operations) - - (3,124.17) 39.30
Net cash (used in)/generated from financing activities - Total (C) (925.38) 7,668.24 (3,461.23) (128.44)
D. Net (decrease)/increase in cash and cash equivalents (A)+(B)+(C) (716.47) 659.55 126.29 (19.05)
E. Cash and cash equivalents at the beginning of the period/year 1,049.85 390.30 264.01 283.06

F. Cash and cash equivalents at the end of the period/year (D)+(E) 333.38 1,049.85 390.30 264.01

Reconciliation of cash and cash equivalents as per the cash flow statement
Cash and cash equivalents as per above comprise of the following
Balances in current accounts 310.46 445.43 1.84 261.91
Cash on hand 0.12 0.14 0.10 2.10
Bank deposits with original maturity of less than three months 22.80 604.28 - -
Balances of cash and cash equivalents of disposal group classified as held for sale - - 388.36 -
Balances per statement of cash flows 333.38 1,049.85 390.30 264.01

Cash and cash equivalents of discontinued operations, classified as held for sale - - 388.36 -
Cash and cash equivalents of continuing operations 333.38 1,049.85 1.94 264.01

58
 SUMMARY OF PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

The following tables provide the summary of the Pro Forma Consolidated Financial Information (to be read in conjunction with
the “Management’s Discussion and Analysis of Financial Conditional and Results of Operations – Basis of Preparation of the
Pro Forma Consolidated Financial Information” on page 372) as at and for the years ended March 31, 2018, 2019 and 2020
and for the nine months ended December 31, 2020, to show the impact of the acquisition of Comstar Entities on our Company,
as if the acquisition had been completed at a date prior to the first period presented therein. Further, the erstwhile subsidiary
SONA BV and its subsidiaries, and the erstwhile associate, Sona Skill Development Centre Limited, have not been considered
for consolidation in the Pro Forma Consolidated Financial Information. For further details, see “Financial Information – Pro
Forma Consolidated Financial Information” on page 310; “History and Certain Corporate Matters – Material acquisitions or
divestments of business or undertakings, mergers, amalgamations or revaluation of assets in the last 10 years” on page 199;
and “Risk Factors - The Pro Forma Consolidated Financial Information included in this DRHP to reflect the acquisition of
Comstar Entities is not indicative of our future financial condition or factual financial position or results” on page 33.

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59
 (₹ in millions)
Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
ASSETS
Non-current assets
Property, plant and equipment 3,218.88 2,845.07 2,459.42 2,170.73
Capital work-in-progress 820.67 581.37 180.67 194.00
Right-of-use assets 1,607.69 1,419.41 1,049.20 837.39
Goodwill on consolidation 1,758.09 1,758.09 1,758.09 1,758.09
Intangible assets 4,450.99 4,629.18 4,814.43 4,416.66
Intangible assets under development 910.21 315.00 85.00 -
Financial assets
Investments - 19.00 328.27 1,217.56
Loans 54.02 50.79 30.14 23.64
Other financial assets - 0.87 38.11 26.79
Income tax assets (net) 243.09 291.42 280.24 275.66
Other non-current assets 209.57 278.49 159.41 23.10
Total non-current assets 13,273.21 12,188.69 11,182.98 10,943.62

Current assets
Inventories 2,838.40 1,962.36 1,838.11 1,884.76
Financial assets
Investments - - 129.00 202.00
Trade receivables 3,938.98 2,336.28 2,732.98 2,382.06
Cash and cash equivalents 333.38 1,049.85 360.94 434.70
Bank balances other than cash and cash equivalents 2.57 623.08 254.12 -
Loans 1.52 4.92 1.19 301.17
Other financial assets 159.90 5.30 157.01 188.77
Income tax assets (net) - - - 16.00
Other current assets 572.46 336.34 349.78 316.41
Total current assets 7,847.21 6,318.13 5,823.13 5,725.87

Assets held for sale (Investment in Sona BV) - - 1,399.48 -

Total assets 21,120.42 18,506.82 18,405.59 16,669.49

EQUITY AND LIABILITIES

Equity
Equity share capital 471.54 471.54 277.18 277.18
Instruments entirely equity in nature 5.94 5.94 - -
Equity and preference shares to be issued - - 8,706.06 8,706.06
Other equity 12,408.03 11,301.93 3,616.06 1,960.26
Total equity 12,885.51 11,779.41 12,599.30 10,943.50

LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 1,698.15 1,768.22 733.07 680.56
Lease liabilities 733.17 532.33 180.61 178.35
Other financial liabilities 1.24 1.24 1.24 1.24
Provisions 103.93 66.78 56.82 46.38
Deferred tax liabilities (net) 1,195.05 1,076.71 1,523.24 1,543.94

Total non-current liabilities 3,731.54 3,445.28 2,494.98 2,450.47

Current liabilities
Financial liabilities
Borrowings 603.74 846.09 620.10 650.51
Trade payables
-Total outstanding dues of micro enterprises and small 504.81 166.99 269.77 0.62
enterprises
-Total outstanding dues of creditors other than micro 1,916.64 995.26 1,123.44 1,613.59
enterprises and small enterprises
Lease liabilities 98.63 71.73 26.15 23.06
Other financial liabilities 938.79 922.65 1,056.44 757.11
Other current liabilities 159.01 110.35 143.94 114.25
Provisions 71.26 51.06 70.76 90.70
Current tax liabilities (net) 210.49 118.00 0.71 25.68

Total current liabilities 4,503.37 3,282.13 3,311.31 3,275.52

Total liabilities 8,234.91 6,727.41 5,806.29 5,725.99
Total equity and liabilities 21,120.42 18,506.82 18,405.59 16,669.49

60
 (₹ in millions)
Particulars For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Income
Revenue from operations 10,269.56 12,200.91 14,277.20 12,241.05
Other income 26.72 75.83 57.81 91.03
Total income 10,296.28 12,276.74 14,335.01 12,332.08

Expenses
Cost of materials consumed 4,707.39 5,117.30 5,616.41 5,059.38
Changes in inventories of finished goods and work-in-progress (566.68) 22.05 168.92 (330.72)
Employee benefits expense 1,015.53 1,222.30 1,238.04 1,120.74
Finance costs 230.85 268.75 197.86 214.02
Depreciation and amortisation expense 688.62 781.85 722.45 612.08
Other expenses 2,110.06 2,585.71 3,131.40 2,936.66
Total expenses 8,185.77 9,997.96 11,075.08 9,612.16
Profit before tax 2,110.51 2,278.78 3,259.93 2,719.92

Tax expense
- Current tax 435.08 506.08 1,145.35 1,035.90
- Tax related to previous years - 5.97 5.17 14.26
- Deferred tax charge 120.74 (450.49) (19.34) (45.14)
Total tax expense 555.82 61.56 1,131.18 1,005.02

Profit for the period / year 1,554.69 2,217.22 2,128.75 1,714.90

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obligations (8.62) 6.28 1.98 (19.06)
Income tax relating to above mentioned item 2.41 (1.57) (0.64) 6.96
Changes in fair values of equity instruments carried at fair value through other (19.00) (309.28) 517.71 347.39
comprehensive income
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign subsidiaries 13.80 5.00 40.00 (6.00)

Other comprehensive income/(loss) for the period / year, net of tax (11.41) (299.57) 559.05 329.29

Total comprehensive income for the period / year 1,543.28 1,917.65 2,687.80 2,044.19

Pro-forma Earnings per equity share of face value of ₹ 10 each

Basic earnings per share (in ₹) 2.71 3.87 3.72 2.99
Diluted earnings per share (in ₹) 2.71 3.87 3.72 2.99

61
 (₹ in millions)
Sr. Particulars For the period ended For the year ended For the year ended For the year ended
No. 31 December 2020 31 March 2020 31 March 2019 31 March 2018

A. Cash flows from operating activities

Profit before income tax 2,110.51 2,278.78 3,259.93 2,719.92
Adjustments for:
Depreciation and amortisation expense 688.62 781.85 722.45 612.08
(Profit) / Loss on sale of property plant and equipment (net) (6.02) 5.25 3.67 1.41
Allowance for doubtful receivables and advances - 3.52 2.01 1.07
Unwinding of discount on fair valuation of security deposits (0.67) (0.84) 0.10 0.08
Amortisation of transaction cost based on effective interest rate (0.91) (0.68) 0.61 1.96
Unwinding of discount on deferred payment liabilities 0.36 4.02 4.76 0.62
Provision for slow moving inventory 25.49 0.80 7.92 -
Provision for warranty - (10.00) 6.00 5.00
Liabilities/ provisions no longer required written back - - (4.62) -
Fair value (gain)/loss on derivatives (159.84) 254.62 (16.47) 28.17
Profit on sale of investments - (24.00) (13.00) (59.00)
Finance costs 230.85 268.75 197.86 214.02
Interest income (26.11) (30.91) (30.33) (23.70)
Unrealised foreign exchange (gain) (158.80) (44.25) (39.91) (23.11)
Share based payments 22.81 - - -
Operating profit before working capital changes 2,726.29 3,486.91 4,100.98 3,478.52

Changes in operating assets and liabilities

Movement in inventories (901.53) (100.44) 59.72 (487.87)
Movement in trade receivables (1,450.42) 611.55 (345.92) (312.95)
Movement in other financial asset (46.62) (58.61) 352.84 (301.18)
Movement in other assets (211.17) 3.02 (66.74) 173.38
Movement in trade payable 1,178.01 (390.72) (233.94) 285.05
Movement in financial liabilities (157.12) (26.16) (32.60) 66.80
Movement in provision 109.82 12.54 (13.52) 19.51
Movement in other liabilities 111.74 (47.58) 32.68 53.72

Cash generated from operations 1,359.00 3,490.51 3,853.50 2,974.98

Direct taxes paid (280.93) (398.09) (1,164.07) (1,052.61)
Net cash flow generated from operating activities - Total (A) 1,078.07 3,092.42 2,689.43 1,922.37

B. Cash flows from investing activities

Payments for acquisition of property, plant and equipment, intangibles and (1,520.04) (2,240.59) (1,163.88) (1,130.00)
capital work in progress including capital advances
Proceeds from sale of property, plant and equipment 8.33 1.19 3.67 1.64
Movement in bank deposits (net) 621.38 (331.72) (265.45) 9.13
Amount received on sale of investment in subsidiary - 1,399.48 - -
Purchase of current investments (net) - 163.00 85.51 392.05
Purchase of long term investments (0.10) - - -
Acquisition of subsidiaries (Comstar Group) - (8,517.00) - -
Interest received 21.27 38.91 33.33 24.70
Net cash used in investing activities - Total (B) (869.16) (9,486.73) (1,306.82) (702.48)
C. Cash flows from financing activities
Proceeds from short term borrowings, net (242.32) 225.99 39.59 (35.19)
Proceeds from long term borrowings 323.39 1,607.55 693.18 578.16
Repayment of long term borrowings (290.74) (373.66) (954.76) (417.23)
Repayment of deferred payment liabilities (11.61) (86.44) (1.57) 80.40
Repayment of Lease liabilities (69.26) (53.88) (25.62) (19.59)
Dividends (460.70) (1,532.09) (1,032.00) (1,257.00)
Dividend Tax - (198.99) - -
Proceeds from issue of equity shares - 8,477.30 - -
Proceeds from issue of compulsorily convertible preference shares - 228.76 - -
Buyback of shares - (814.21) - -
Fees paid for increase in authorised share capital - (8.72) - -
Tax paid on buy back of shares - (183.64) - -
Interest paid (174.14) (204.75) (175.19) (198.30)
Net cash generated from/(used in) financing activities - Total (C) (925.38) 7,083.22 (1,456.37) (1,268.75)
D. Net increase/(decrease) in cash and cash equivalents (A)+(B)+(C) (716.47) 688.91 (73.76) (48.86)
E. Cash and cash equivalents at the beginning of the period / year 1,049.85 360.94 434.70 483.56
F. Cash and cash equivalents at the end of the period / year (D)+(E) 333.38 1,049.85 360.94 434.70

Reconciliation of cash and cash equivalents as per the cash flow

statement
Cash and cash equivalents as per above comprise of the following:
Balances in current accounts 310.46 445.43 360.84 434.62
Cash on hand 0.12 0.14 0.10 0.08
Bank deposits with original maturity of less than three months 22.80 604.28 - -
Balances per statement of cash flows 333.38 1,049.85 360.94 434.70

62
 GENERAL INFORMATION

Our Company was originally incorporated as “Sona Okegawa Precision Forgings Limited” at New Delhi as a public limited
company under the Companies Act, 1956, pursuant to a certificate of incorporation dated October 27, 1995, issued by the RoC
and commenced operations pursuant to the certificate of commencement of business dated November 16, 1995 issued by the
RoC. The name of our Company was changed to “Sona BLW Precision Forgings Limited” as approved by our shareholders by
way of a resolution dated June 28, 2013 and a fresh certificate of incorporation dated July 23, 2013, consequent upon change of
name was issued by the RoC.

For details in relation to changes in our Registered and Corporate Office, see “History and Certain Corporate Matters” beginning
on page 191. For details of the business of our Company, see “Our Business” beginning on page 159.

Registered and Corporate Office of our Company

Sona Enclave Village

Begumpur Khatola
Sector 35, Gurugram
Haryana – 122004, India

Corporate Identity Number: U27300HR1995PLC083037

Company Registration Number: 083037

Filing of this Draft Red Herring Prospectus

A copy of this Draft Red Herring Prospectus will be filed electronically on the platform provided by SEBI and at
[email protected], in accordance with the instructions issued by the SEBI on March 27, 2020, in relation to “Easing of
Operational Procedure – Division of Issues and Listing – CFD” and will also be filed with the Securities and Exchange Board of
India at:

Securities and Exchange Board of India

Corporation Finance Department
Division of Issues and Listing
SEBI Bhavan, Plot No. C4 A, ‘G’ Block
Bandra Kurla Complex
Bandra (E)
Mumbai, Maharashtra – 400051, India

Our Company is registered with the Registrar of Companies, NCT of Delhi and Haryana at New Delhi. The Red Herring
Prospectus and Prospectus will be filed in accordance with section 32 read with section 26 of the Companies Act, along with the
material contracts and documents referred to in the Red Herring Prospectus and the Prospectus with the RoC at:

Registrar of Companies
4th Floor
IFCI Tower, 61, Nehru Place
New Delhi – 110 019, India

Board of Directors of our Company

Details regarding our Board as on the date of this Draft Red Herring Prospectus are set forth below:

Name Designation DIN Address

Sunjay Kapur Chairman and Non- 00145529 11, The Green, Rajokri, New Delhi– 110038, India
Executive Director

Vivek Vikram Managing Director and 07698495 House No. 14/907, Heritage City, DLF Phase -2, Gurugram
Singh Group Chief Executive – 122002, India
Officer
Amit Dixit Non-Executive Director 01798942 The Imperial, Flat no. 2102, South Tower, B.B. Nakashe
(Nominee) Marg, Tardeo, Mumbai – 400034, Maharashtra, India
Ganesh Mani Non- Executive Director 08385423 4/149, Shobha, Major Parameshwaran Road, Wadala,
(Nominee) Mumbai – 400031, Maharashtra, India
Jeff M. Overly Independent Director 09041143 103, College Drive, Davidson, North Carolina, United
States 28036

63
 Name Designation DIN Address
Prasan Independent Director 00029664 Sanmitra,132-B Ganeshkhind, Road, Pune – 411007,
Abhaykumar Maharashtra, India
Firodia
Shradha Suri Independent Director 00176902 N-101, Panchsheel Park, New Delhi– 110017, India
Venkata Rama Subbu Independent Director 00289721 House-23, Road-1, Shanti Niketan Chanakya Puri, New
Behara (B V R Subbu) Delhi – 110021, India

For further details of our Directors, see “Our Management” beginning on page 204.

Company Secretary and Compliance Officer

Ajay Pratap Singh is our Vice President (Legal), Company Secretary and Compliance Officer. His contact details are as follows:

Sona Enclave Village

Begumpur Khatola,
Sector 35, Gurgaon
Haryana- 122004, India
Tel: +91 0124 4768200
E-mail: [email protected]

Statutory Auditors to our Company

Walker Chandiok & Co LLP, Chartered Accountants

21st Floor, DLF Square
Jacaranda Marg, DLF Phase II
Gurugram
Haryana- 122002, India
Tel: +91 124 462 8000
E-mail: [email protected]
Firm Registration Number: 001076N/N500013
Peer Review Number: 011707

There has been no change in the Statutory Auditors during the three years immediately preceding the date of this Draft Red
Herring Prospectus.

Book Running Lead Managers

Kotak Mahindra Capital Company Limited JM Financial Limited

1st Floor, 27 BKC, Plot No. 27 7th Floor, Cnergy
G Block, Bandra Kurla Complex Appasaheb Marathe Marg
Bandra (East), Mumbai Prabhadevi
Maharashtra- 400051, India Mumbai, Maharashtra - 400 025, India
Tel: +91 22 4336 0000 Tel: +91 22 6630 3030
E-mail: [email protected] E-mail: [email protected]
Investor grievance e-mail: Investor grievance e-mail: [email protected]
[email protected] Website: www.jmfl.com
Website: www.investmentbank.kotak.com Contact Person: Prachee Dhuri
Contact Person: Ganesh Rane SEBI Registration No: INM000010361
SEBI Registration No: INM000008704

64
 Credit Suisse Securities (India) Private Limited J.P. Morgan India Private Limited
9th Floor, Ceejay House J.P. Morgan Tower
Dr. Annie Besant Road, Worli Off. C.S.T. Road
Mumbai, Maharashtra- 400 018, India Kalina, Santacruz (East)
Tel: ++91 22 6777 3885 Mumbai – 400 098
E-mail: [email protected] Maharashtra, India
Investor grievance e-mail: list.igcellmer- Tel: +91 22 6157 3000
[email protected] E-mail: [email protected]
Website: www.credit-suisse.com/in/en/investment- Investor grievance e-mail:
banking-apac/investment-banking-in-india/ipo.html [email protected]
Contact Person: Abhishek Joshi Website: www.jpmipl.com
SEBI Registration No.: INM00001116 Contact Person: Saarthak K Soni
SEBI Registration No.: INM000002970

Nomura Financial Advisory and Securities (India)

Private Limited
Ceejay House, Level 11 Plot F, Shivsagar
Estate, Dr. Annie Besant Road, Worli
Mumbai – 400 018
Maharashtra, India
Tel: +91 22 4037 4037
E-mail: [email protected]
Investor grievance e-mail:
[email protected]
Website:
www.nomuraholdings.com/company/group/asia/india/i
ndex.html
Contact Person: Vishal Kanjani / Prithvi Ghag
SEBI Registration No.: INM000011419

Legal Advisors to the Offer

Indian Legal Counsel to our Company Indian Legal Counsel to the Book Running Lead Managers

Cyril Amarchand Mangaldas Trilegal

4th Floor, Prius Platinum Peninsula Business Park
D-3, District Centre 17th Floor, Tower B
Saket, New Delhi - 110017, India Ganpat Rao Kadam Marg
Tel: +91 11 6622 9000 Lower Parel (West)
Mumbai- 400013, India
Tel: +91 22 4079 1000

International Legal Counsel to the Book Running Lead

Managers

Latham & Watkins LLP

9 Raffles Place
#42-02 Republic Plaza
Singapore, 048619
Tel: +65 6536 1161

Registrar to the Offer

Kfin Technologies Private Limited

Selenium Tower-B, Plot 31 & 32
Gachibowli, Financial District
Nanakramguda, Serilingampally
Hyderabad, Telangana – 500032, India
Tel: +91 40 6716 2222
E-mail: [email protected]
Investor grievance E-mail: [email protected]
Website: www.kfintech.com
Contact Person: M Murali Krishna
65
SEBI Registration No.: INR000000221

Bankers to the Offer

Escrow Collection Bank(s)

[●]

Refund Bank(s)

[●]

Public Offer Bank(s)

[●]

Sponsor Bank

[●]

Bankers to our Company

State Bank of India

14th, Jawahar Vyapar Bhawan
Tolstoy Marg
New Delhi – 110 001, India
Tel: +91 85274 16767
E-mail: [email protected]
Website: bank.sbi
Contact Person: Sandeep Singh

IndusInd Bank Limited

3rd Floor, Tower B,
Building No. 10, DLF Cyber City
Phase II
Gurugram, Haryana – 122 002, India
Tel: +91 9818744226
E-mail: [email protected]
Website: www.indusind.com
Contact Person: Vishal Sikri

HDFC Bank
HDFC Bank House,
Vatika Atrium, Sector 53
Gurgaon, Haryana – 122 002, India
Tel: +91 91114 60596 / +91 90151 88108
E-mail: [email protected]/[email protected]
Website: www.hdfcbank.com
Contact Person: Sheryl Gover/Kamala Prasad

YES Bank Limited

YES Bank Tower
One International Center
Tower II, 15th Floor
Senapati Bapat Marg
Elphinstone (W), Mumbai – 400 013
Maharashtra, India
Tel: +91 (22) 33669000
E-mail: [email protected]
Website: www.yesbank.in
Contact Person: Mohit Gupta

Citibank N.A.
9th floor, DLF Square

66
Jacranda Marg
Gurugram – 122002, Haryana, India
Tel: +91 0124-4186900
E-mail: [email protected]
Website: www.citibank.co.in
Contact Person: Shrey Agarwal

Syndicate Members

[●]

Designated Intermediaries

Self-Certified Syndicate Banks

The list of SCSBs notified by SEBI for the ASBA process is available at
http://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognised=yes, or at such other website as may be prescribed by
SEBI from time to time. A list of the Designated SCSB Branches with which an ASBA Bidder (other than a RIB using the UPI
Mechanism), not bidding through Syndicate/Sub Syndicate or through a Registered Broker, RTA or CDP may submit the Bid
cum Application Forms, is available at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=34, or at such other websites as may be
prescribed by SEBI from time to time.

SCSBs and mobile applications enabled for UPI Mechanism

In accordance with SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019 and SEBI Circular No.
SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019, Retail Individual Investors Bidding using the UPI Mechanism may
apply through the SCSBs and mobile applications whose names appears on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=40) and
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=43) respectively, as updated from time
to time.

Syndicate SCSB Branches

In relation to Bids (other than Bids by Anchor Investor) submitted to a member of the Syndicate, the list of branches of the
SCSBs at the Specified Locations named by the respective SCSBs to receive deposits of Bid cum Application Forms from the
members of the Syndicate is available on the website of the SEBI
(https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35) and updated from time to time. For
more information on such branches collecting Bid cum Application Forms from the Syndicate at Specified Locations, see the
website of the SEBI at https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecognisedFpi=yes&intmId=35 as updated
from time to time.

Registered Brokers

Bidders can submit ASBA Forms in the Offer using the stock broker network of the stock exchange, i.e. through the Registered
Brokers at the Broker Centres. The list of the Registered Brokers, including details such as postal address, telephone number and
e-mail address, is provided on the websites of the Stock Exchanges at https://www.bseindia.com/ and https://www.nseindia.com,
as updated from time to time.

Registrar and Share Transfer Agents

The list of the RTAs eligible to accept ASBA Forms at the Designated RTA Locations, including details such as address,
telephone number and e-mail address, is provided on the websites of the Stock Exchanges at
https://www.bseindia.com/Static/PublicIssues/RtaDp.aspx and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time to time.

Collecting Depository Participants

The list of the CDPs eligible to accept ASBA Forms at the Designated CDP Locations, including details such as name and contact
details, is provided on the websites of the Stock Exchanges at https://www.bseindia.com/Static/PublicIssues/RtaDp.aspx and
http://www.nseindia.com/products/content/equities/ipos/asba_procedures.htm, respectively, as updated from time to time.

67
Expert to the Offer

Except as disclosed below, our Company has not obtained any expert opinions:

Our Company has received written consent dated February 22, 2021, from our Statutory Auditors, Walker Chandiok & Co LLP,
Chartered Accountants, to include their names in this Draft Red Herring Prospectus as required under Section 26(1) of the
Companies Act read with SEBI ICDR Regulations and as “expert” as defined under Section 2(38) and 26(5) of the Companies
Act to the extent and in their capacity as an auditor and in respect of the examination report on Restated Consolidated Financial
Information dated February 12, 2021, Pro Forma Consolidated Financial Information dated February 12, 2021 and the statement
of special tax benefits dated February 22, 2021 in this Draft Red Herring Prospectus and such consents have not been withdrawn
as on the date of this Draft Red Herring Prospectus.

Our Company has received written consent dated February 17, 2021, from SCV & Co. LLP, Chartered Accountants, to include
their name in this Draft Red Herring Prospectus and as an “expert” as defined under Section 2(38) and 26(5) of the Companies
Act in their capacity as the independent chartered accountants and in respect of the reports and certificates issued by them
included in this Draft Red Herring Prospectus and such consent has not been withdrawn as on the date of this Draft Red Herring
Prospectus.

Our Company has received written consents dated February 6, 2021 and February 4, 2021, from Vinay Kumar Wadhwan,
Chartered Engineers and ELBI Consultancy (India) Private Limited, Chartered Engineers, to include their respective names in
this Draft Red Herring Prospectus, and as an “expert” as defined under section 2(38) and 26(5) of the Companies Act in their
capacity as the independent chartered engineers and in respect of the certificates issued by them included in this Draft Red
Herring Prospectus and such consents have not been withdrawn as on the date of this Draft Red Herring Prospectus.

Our Company has also received written consent dated February 15, 2021 from Ricardo, to include their name in this Draft Red
Herring Prospectus and as an “expert” as defined under section 2(38) and 26(5) of the Companies Act, in relation to the Ricardo
Industry Report issued by them with respect to our Company included in this Draft Red Herring Prospectus and such consent
has not been withdrawn as on the date of this Draft Red Herring Prospectus.

The term “expert” shall not be construed to mean an “expert” as defined under the U. S. Securities Act.

Monitoring Agency

Our Company will appoint a monitoring agency prior to the filing of the Red Herring Prospectus in accordance with Regulation
41 of the SEBI ICDR Regulations. For details, see “Objects of the Offer - Monitoring Agency” on page 68.

Appraising Entity

None of the objects for which the Net Proceeds will be utilised have been appraised by any agency.

Inter-se Allocation of Responsibilities among the Book Running Lead Managers

The following table sets forth the inter-se allocation of responsibilities for various activities among the Book Running Lead
Managers:

S. No. Activity Responsibility Co-

ordination
1. Capital structuring with the relative components and formalities such as type of Kotak, Credit Suisse, JM Kotak
instruments, composition of debt and equity, size of the Offer, etc. Financial, JP Morgan,
Nomura
2. Due diligence of the Company including its operations/management/business Kotak, Credit Suisse, JM Kotak
plans/legal etc. Drafting and design of the Draft Red Herring Prospectus, Red Financial, JP Morgan,
Herring Prospectus, Prospectus, abridged prospectus and application form. The Nomura
BRLMs shall ensure compliance with stipulated requirements and completion of
prescribed formalities with the Stock Exchanges, RoC and SEBI including
finalization of Prospectus and RoC filing.
3. Drafting and approval of statutory advertisements Kotak, Credit Suisse, JM Kotak
Financial, JP Morgan,
Nomura
4. Drafting and approval of all publicity material other than statutory advertisement as Kotak, Credit Suisse, JM Nomura
mentioned above including corporate advertising, brochure, etc. and filing of media Financial, JP Morgan,
compliance report. Nomura
5. Appointment of intermediaries viz., Registrar's, Printers, Advertising Agency, Kotak, Credit Suisse, JM Credit Suisse
Syndicate, Sponsor Bank, Bankers to the Issue and other intermediaries, including Financial, JP Morgan,
coordination of all agreements to be entered into with such intermediaries Nomura

68
S. No. Activity Responsibility Co-
ordination
6. Preparation of road show marketing presentation and frequently asked questions Kotak, Credit Suisse, JM Nomura
Financial, JP Morgan,
Nomura
7. International Institutional marketing of the Offer, which will cover, inter alia: Kotak, Credit Suisse, JM Credit Suisse
• Institutional marketing strategy; Financial, JP Morgan,
• Finalizing the list and division of international investors for one-to-one Nomura
meetings; and
• Finalizing international road show and investor meeting schedule
8. Domestic Institutional marketing of the Offer, which will cover, inter alia: Kotak, Credit Suisse, JM JM Financial
• Institutional marketing strategy; Financial, JP Morgan,
• Finalizing the list and division of domestic investors for one-to-one meetings; Nomura
and
• Finalizing domestic road show and investor meeting schedule
9. Retail and Non-Institutional marketing of the Offer, which will cover, inter alia: Kotak, Credit Suisse, JM JM Financial
• Formulating marketing strategies, preparation of publicity budget; Financial, JP Morgan,
• Finalizing media, marketing and public relations strategy; Nomura
• Finalizing centres for holding conferences for brokers, etc.;
• Finalizing collection centres; and
• Deciding on the quantum of the offer material and follow-up on distribution of
publicity and offer material

10. Managing the book and finalization of pricing in consultation with the Company Kotak, Credit Suisse, JM JP Morgan
and the Selling Shareholder. Financial, JP Morgan,
Nomura
11. Coordination with Stock-Exchanges for book building software, bidding terminals, Kotak, Credit Suisse, JM JP Morgan
mock trading, payment of 1% security deposit and release of the security deposit Financial, JP Morgan,
post closure of the issue, anchor co-ordination and intimation of anchor allocation. Nomura
12. Post- Issue activities, which shall involve essential follow-up with bankers to the Kotak, Credit Suisse, JM JM Financial
Issue and SCSBs to get quick estimates of collection and advising our Company Financial, JP Morgan,
about the closure of the Issue, based on correct figures, finalization of the basis of Nomura
allotment or weeding out of multiple applications, listing of instruments, dispatch
of certificates or demat credit and refunds, payment of STT on behalf of the Selling
Shareholder and coordination with various agencies connected with the post-Issue
activity such as Registrar to the Issue, Bankers to the Issue, SCSBs including
responsibility for underwriting arrangements, as applicable. Co-ordination with
SEBI and Stock Exchanges for refund of 1% security deposit and submission of all
post Offer reports including the final post Offer report to SEBI

Credit Rating

As this is an Offer of Equity Shares, credit rating is not required.

IPO Grading

No credit rating agency registered with SEBI has been appointed for grading the Offer.

Trustees

As this is an Offer of Equity Shares, the appointment of trustees is not required.

Book Building Process

Book building, in the context of the Offer, refers to the process of collection of Bids from bidders on the basis of the Red Herring
Prospectus and the Bid Cum Application Forms and the Revision Forms within the Price Band and the minimum Bid Lot, which
will be decided by our Company and the Selling Shareholder in consultation with the Book Running Lead Managers, and which
will either be included in the Red Herring Prospectus or will be advertised in all editions of [●] and all editions of [●] (which are
widely circulated English daily newspapers and Hindi daily newspapers, Hindi also being the regional language of Haryana,
where our Registered and Corporate Office is located), at least two Working Days prior to the Bid/Offer Opening Date and shall
be made available to the Stock Exchanges for the purpose of uploading on their respective websites. The Offer Price shall be
determined by our Company and the Selling Shareholder in consultation with the Book Running Lead Managers after the
Bid/Offer Closing Date. For details, see “Offer Procedure” beginning on page 419.

All Bidders (other than Anchor Investors) shall participate in this Offer mandatorily through the ASBA process by
providing the details of their respective bank accounts in which the corresponding Bid Amount will be blocked by the
SCSBs. In addition to this, the RIBs may participate through the ASBA process by either (a) providing the details of their
69
respective ASBA Account in which the corresponding Bid Amount will be blocked by the SCSBs; or (b) through the UPI
Mechanism. Anchor Investors are not permitted to participate in the Offer through the ASBA process.

In terms of the SEBI ICDR Regulations, QIBs and Non-Institutional Investors are not permitted to withdraw their Bids
or lower the size of their Bids (in terms of quantity of Equity Shares or the Bid Amount) at any stage. RIBs can revise
their Bids during the Bid/ Offer Period and withdraw their Bids until the Bid/ Offer Closing Date. Anchor Investors are
not allowed to revise or withdraw their Bids after the Anchor Investor Bidding Date. Except for Allocation to RIBs and
the Anchor Investors, allocation in the Offer will be on a proportionate basis.

For further details, see “Terms of the Offer” “Offer Structure” and “Offer Procedure” on pages 412, 417 and 419, respectively.

The process of Book Building under the SEBI ICDR Regulations and the Bidding Process are subject to change from
time to time and the investors are advised to make their own judgment about investment through this process prior to
submitting a Bid in the Offer.

Bidder should note that, the Offer is also subject to obtaining (i) the final approval of the RoC after the Prospectus is filed with
the RoC; and (ii) final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment.

Underwriting Agreement

After the determination of the Offer Price and allocation of Equity Shares, but prior to the filing of the Prospectus with the RoC,
our Company and the Selling Shareholder intend to enter into an Underwriting Agreement with the Underwriters for the Equity
Shares proposed to be offered through the Offer. Subject to the applicable laws and pursuant to the terms of the Underwriting
Agreement, the BRLMs will be responsible for bringing in the amount devolved in the event that the Syndicate Members do not
fulfil their underwriting obligations. The Underwriting Agreement is dated [●]. Pursuant to the terms of the Underwriting
Agreement, the obligations of each of the Underwriters will be several and will be subject to certain conditions specified therein.

The Underwriters have indicated their intention to underwrite the following number of Equity Shares:

(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC.)

Name, address, telephone number and e-mail Indicative number of Equity Amount underwritten
address of the Underwriters Shares to be underwritten (in ₹ million)
[●] [●] [●]
[●] [●] [●]
[●] [●] [●]
[●] [●] [●]

The aforementioned underwriting commitments are indicative and will be finalised after pricing of the Offer and actual allocation
in accordance with provisions of the SEBI ICDR Regulations.

In the opinion of our Board of Directors (based on the representation made to our Company by the Underwriters), the resources
of the Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The Underwriters
are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. Our Board of
Directors/IPO Committee, at its meeting held on [●], approved the acceptance and entering into the Underwriting Agreement
mentioned above on behalf of our Company.

Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitment set forth in the table
above.

Notwithstanding the above table, the Underwriters shall be severally responsible for ensuring payment with respect to the Equity
Shares allocated to investors respectively procured by them in accordance with the Underwriting Agreement. In the event of any
default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also
be required to procure purchasers for or purchase the Equity Shares to the extent of the defaulted amount in accordance with the
Underwriting Agreement. The Underwriting Agreement has not been executed as on the date of this Draft Red Herring
Prospectus and will be executed after determination of the Offer Price and allocation of Equity Shares, but prior to the filing of
the Prospectus with the RoC.

70
 CAPITAL STRUCTURE

The share capital of our Company as at the date of this Draft Red Herring Prospectus is set forth below:
(in ₹, except share data)
Sr. No. Particulars Aggregate value at face Aggregate value at
value Offer Price*
A. AUTHORISED SHARE CAPITAL(1)
998,500,000 Equity Shares (having face value of ₹ 10 each) 9,985,000,000 -
1,500,000 preference shares (having face value of ₹ 10 each) 15,000,000 -

B. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL BEFORE

THE OFFER
572,980,560 Equity Shares (having face value of ₹ 10 each) 5,729,805,600 -

C. PRESENT OFFER IN TERMS OF THIS DRAFT RED HERRING

PROSPECTUS(2)
Offer of up to [●] Equity Shares(2) (3) [●] [●]
of which
Fresh Issue of up to [●] Equity Shares aggregating up to ₹ 3,000 million(2) [●] [●]
Offer for Sale of up to [●] Equity Shares aggregating up to ₹ 57,000 million(3) [●] [●]

D. ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL AFTER

THE OFFER*
[●] Equity Shares (having face value of ₹ 10 each) [●] [●]

E. SECURITIES PREMIUM ACCOUNT

Before the Offer 2,629,010,000
After the Offer [●]
*
Subject to finalisation of Basis of Allotment
(1)
For details in relation to the changes in the authorised share capital of our Company, see “History and Certain Corporate Matters – Amendments to our
Memorandum of Association” on page 192.
(2)
The Fresh Issue has been authorized by resolutions of our Board of Directors at their meeting held on January 27, 2021 and February 22, 2021 and a
special resolution passed by our Shareholders at their meeting held on January 30, 2021. The Selling Shareholder has confirmed and authorized their
participation in the Offer for Sale. For further details, see “Other Regulatory and Statutory Disclosures” on page 399.
(3)
The Equity Shares being offered by the Selling Shareholder has been held by them for a period of at least one year prior to the date of filing of this Draft
Red Herring Prospectus in accordance with the SEBI ICDR Regulations and accordingly, are eligible for the Offer in accordance with the provisions of
the SEBI ICDR Regulations. For details of authorisations for the Offer for Sale, see “Other Regulatory and Statutory Disclosures” on page 399.

Notes to the Capital Structure

(1) Share Capital History of our Company

(a) Equity Share capital

The history of the Equity Share capital of our Company is set forth below:

Date of Number of Face Issue Nature of Nature of Cumulative Cumulative paid-

Allotment Equity Shares value Price / Allotment/ consideration number of up Equity Share
allotted / per buy-back corporate Equity Shares capital (in ₹)
bought back Equity price per action
Share Equity
(in ₹) Share (in
₹)
October 27, 7 10 10 Initial Cash 7 70
1995 subscription to
the
Memorandum
of
Association(1)
June 19, 11,249,993 10 10 Further Cash 11,250,000 112,500,000
1998 allotment(2)
June 19, 3,750,000 10 15 Further Cash 15,000,000 150,000,000
1998 allotment(3)

September 269,000 10 30 Further Cash 15,269,000 152,690,000

13, 1999 allotment(4)

71
 Date of Number of Face Issue Nature of Nature of Cumulative Cumulative paid-
Allotment Equity Shares value Price / Allotment/ consideration number of up Equity Share
allotted / per buy-back corporate Equity Shares capital (in ₹)
bought back Equity price per action
Share Equity
(in ₹) Share (in
₹)
March 7, (3,750,000) 10 NA Reduction of NA 11,519,000 115,190,000
2005 Equity Share
capital(5)
February 16, 16,199,376 10 32.10 Further Cash 27,718,376 277,183,760
2007 allotment(6)
July 5, 2019 22,028,503 10 384.83 Further Cash 49,746,879 497,468,790
allotment(7)
July 9, 2019 (2,592,935) 10 314.01# Buyback of Cash 47,153,944 471,539,440
Equity Shares
by our
Company(8)
January 27, 594,436* 10 384.83 Conversion of Cash* 47,748,380 477,483,800
2021 Preference
Shares into
Equity Shares(9)
February 10, 525,232,180 10 NA Bonus issue(10) NA 572,980,560 5,729,805,600
2021
Total 572,980,560 5,729,805,600
*
Consideration for such Equity Shares was paid at the time of issuance of Preference Shares.
#
Excludes buyback distribution tax of ₹ 70.82 per Equity Share paid by our Company.
(1)
Allotment of one Equity Share each to Dr. Surinder Kapur, Jug Mohan Kapur, Tapash Kumar Pal, S.C. Saigal, Ghanshyam Dass, Somendra
Upadhyay and Sudhir Chopra pursuant to subscription to the Memorandum of Association.
(2)
Allotment of 6,749,993 Equity Shares to Sona Steering Systems Limited, allotment of 3,937,500 Equity Shares to Mitsubishi Materials
Corporation and allotment of 562,500 Equity Shares to Mitsubishi Corporation.
(3)
Allotment of 3,525,000 Equity Shares to Indus East Holding Limited and allotment of 225,000 Equity Shares to Sutter Hill Investments Mauritius
Limited.
(4)
Allotment of 269,000 Equity Shares to Owari Precise Products Company Limited.
(5)
Pursuant to the order dated March 7, 2005 passed by the High Court of Delhi and the resolution dated December 14, 2004 passed by our
Shareholders, the paid-up Equity Share capital of our Company was reduced from ₹ 152,690,000 divided into 15,269,000 Equity Shares each
to ₹ 115,190,000 divided into 11,519,000 Equity Shares by cancelling and extinguishing 3,525,000 Equity Shares held by Indus East Holding
Limited, Mauritius and 225,000 Equity Shares held by Sutter Hill Investment Mauritius Limited at a price of ₹ 32 per Equity Share.
(6)
Allotment of 13,769,470 Equity Shares to Sona Autocomp (formerly known as Mandira Investment & Finance Company Private Limited) and
allotment of 2,429,906 Equity Shares to Mitsubishi Materials Corporation.
(7)
Allotment of 22,028,503 Equity Shares to Singapore Topco.
(8)
Buyback of 2,592,935 Equity Shares held by Sona Autocomp.
(9)
Allotment of 594,436 Equity Shares to Singapore Topco pursuant to the conversion of Preference Shares held by Singapore Topco.
(10)
Bonus issue of 177,108,162 Equity Shares to Sona Autocomp, 348,123,886 Equity Shares to Singapore Topco, 66 Equity Shares to RK Family
Trust, 11 Equity Shares to Sharad Kapur (nominee of deceased shareholder, Jug Mohan Kapur), 11 Equity Shares to Kiran Manohar Deshmukh,
11 Equity Shares to Ranganathan Balaji, 11 Equity Shares to Munish Sapra and 22 Equity Shares to Inder Khurana in the ratio of 11:1.

(b) Preference share capital

The history of the preference share capital of our Company is set forth in the table below.

Date of No. of preference Face value per Issue price per Nature of allotment Nature of
allotment shares allotted preference share Preference Share consideration
(₹) (₹)
July 5, 2019 594,436 10 384.83 Preferential allotment of Cash
Preference Shares(1)
January 27, (594,436) 10 384.83 Conversion of 594,436 Cash*
2021 Preference Shares into Equity
Shares(2)
* Consideration of such Equity Shares was paid at the time of issuance of Preference Shares.
(1)
Allotment of 594,436 Preference Shares to Singapore Topco.
(2)
Allotment of 594,436 Equity Shares to Singapore Topco pursuant to the conversion of 594,436 Preference Shares held by Singapore Topco.

(2) Equity Shares issued for consideration other than cash or out of revaluation reserves

Except as disclosed below, our Company has not issued any Equity Shares through bonus issue or for consideration
other than cash in the one year preceding the date of this Draft Red Herring Prospectus:

72
 Date of Number of Face Issue price Reason for allotment Benefit accrued to
Allotment Equity Value per Equity our Company
Shares (₹) Share (₹)
Allotted

February 10, 525,232,180 10 NA Bonus issue in the ratio of 11:1(1) -

2021
(1)Bonus issue of 177,108,162 Equity Shares to Sona Autocomp, 348,123,886 Equity Shares to Singapore VII Topco III Pte. Ltd., 66 Equity Shares
to RK Family Trust, 11 Equity Shares to Sharad Kapur (nominee of deceased shareholder, Jug Mohan Kapur), 11 Equity Shares to Kiran Manohar
Deshmukh, 11 Equity Shares to Ranganathan Balaji, 11 Equity Shares to Munish Sapra and 22 Equity Shares to Inder Khurana vide resolution of
our Board dated January 27, 2021 and February 10, 2021 and resolution of our Shareholders dated January 30, 2021.

(3) Issue of Equity Shares under Sections 391 to 394 of the Companies Act, 1956 or Sections 230 to 234 of the
Companies Act

Our Company has not allotted any Equity Shares pursuant to any scheme approved under Sections 391 to 394 of the
Companies Act, 1956 or Sections 230 to 234 of the Companies Act.

(4) Issue of Equity Shares under employee stock option schemes

Our Company has not issued any Equity Shares under any employee stock option schemes.

(5) Equity Shares issued in the preceding one year below the Offer Price

Except as disclosed below, our Company has not issued any Equity Shares which may be at a price lower than the Offer
Price during a period of one year preceding the date of this Draft Red Herring Prospectus:

Date of Number of Face Issue price per Names of allottees Nature of Reason for
Allotment Equity Value Equity Share (`) consideration allotment
Shares (`)
Allotted

January 594,436* 10 384.83 Singapore VII Topco III Cash* Conversion of

27, 2021 Pte. Ltd. Preference Shares

* Consideration of such Equity Shares was paid at the time of issuance of Preference Shares.

73
(6) Shareholding Pattern of our Company

The table below presents the shareholding pattern of our Company as on the date of filing of this Draft Red Herring Prospectus:

Categor Category of Number Number of Numb Number Total Sharehold Number of voting rights held in each class of Numbe Shareholding, Number of Number of Number of
y shareholde of fully paid up er of of shares number of ing as a securities r of as a % Locked in Shares pledged Equity
(I) r sharehol Equity Partly underlyin Equity % of total (IX) shares assuming full shares or otherwise Shares held
(II) ders (III) Shares held paid- g Shares held number Underl conversion of (XII) encumbered in
(IV) up Depositor (VII) of shares ying convertible (XIII) demateriali
Equit y Receipts =(IV)+(V)+ (calculate Number of voting rights Total as a Outsta securities (as a Numb As a Numb As a % zed form
y (VI) (VI) d as per Class e.g.: Class Total % of nding percentage of er (a) % of er (a) of total (XIV)
Share SCRR, Equity e.g.: (A+B+ C) convert diluted share total shares
s held 1957) Shares Others ible capital) shares held
(V) (VIII) As securiti (XI)= (VII)+(X) held (b)
a % of es As a % of (b)
(A+B+C2) (includ (A+B+C2)
ing
Warra
nts)
(X)
(A) Promoters 3 572,980,488 - - 572,980,488 100 572,980,488 - 572,980,488 100% - - - - 572,980,488
and
Promoter
Group
(B) Public 5 72 - - 72 Negligible 72 - 72 Negligible - - - - 72
(C) Non - - - - - - - - - - - - - - -
Promoter-
Non Public
(C1) Shares - - - - - - - - - - - - - - -
underlying
depository
receipts
(C2) Shares held - - - - - - - - - - - - - - -
by
employee
trusts
Total 8 572,980,560 - - 572,980,560 100 572,980,560 - 572,980,560 100 - - - - 572,980,560

74
(7) Details of shareholding of the major shareholders of our Company

a) Set forth below is a list of shareholders holding 1% or more of the paid-up share capital of our Company, as
on the date of this Draft Red Herring Prospectus:

S. Name of the shareholder Pre-Offer

No. Number of Equity Shares Percentage of the Equity
on a fully diluted basis Share capital (%) on a fully
diluted basis
1. Sona Autocomp Holding Private Limited 193,208,904 33.72
2. Singapore VII Topco III Pte. Ltd. 379,771,512 66.28
Total 572,980,416 100.00

b) Set forth below is a list of shareholders holding 1% or more of the paid-up share capital of our Company, as
of 10 days prior to the date of this Draft Red Herring Prospectus:

S. Name of the shareholder Pre-Offer

No. Number of Equity Shares Percentage of the Equity
on a fully diluted basis Share capital (%) on a fully
diluted basis
1. Sona Autocomp Holding Private Limited 193,208,904 33.72
2. Singapore VII Topco III Pte. Ltd. 379,771,512 66.28
Total 572,980,416 100.00

c) Set forth below is a list of shareholders holding 1% or more of the paid-up share capital of our Company, as
of one year prior to the date of this Draft Red Herring Prospectus:

S. Name of the shareholder Pre-Offer

No. Number of Equity Shares Percentage of the Equity
on a fully diluted basis Share capital (%) on a fully
diluted basis
1. Sona Autocomp Holding Private Limited 16,100,742 33.72
2. Singapore VII Topco III Pte. Ltd. 31,647,626 66.28
Total 47,748,368 100.00

d) Set forth below is a list of shareholders holding 1% or more of the paid-up share capital of our Company, as
of two years prior to the date of this Draft Red Herring Prospectus:

Name of the Shareholder Pre-Offer

Number of Equity Shares on Percentage of the Equity
a fully diluted basis Share capital (%) on a fully
diluted basis
1. Sona Autocomp Holding Private Limited 18,693,677 67.44
2. JM Financial Trustee Company Private Limited 9,024,687 32.56
– JM Financial India Fund
Total 27,718,364 100.00

(8) History of the share capital held by our Promoters

While Sunjay Kapur does not directly hold any Equity Shares in our Company as on the date of this Draft Red
Herring Prospectus, Sona Autocomp presently holds 193,208,904 Equity Shares, aggregating to 33.72% of the
pre-Offer issued, subscribed and paid-up Equity Share capital of our Company and Singapore Topco presently
holds 379,771,512 Equity Shares, aggregating to 66.28% of the pre-Offer issued, subscribed and paid-up Equity
Share capital of our Company. The details regarding our Promoters’ shareholding is set forth below.

Build-up of Promoters’ shareholding in our Company

A. Sona Promoters

(i) Sona Autocomp

The build-up of the equity shareholding of Sona Autocomp since incorporation of our Company is set forth below:

75
 Date of Nature of Number of Nature of Face Issue Price/ Percentage Percentage
Allotment/ Transaction Equity Shares Consideration Value Transfer of the Pre- of the Post-
Transfer Allotted/ per Price per Offer Offer Capital
Transferred Equity Equity Capital (%)
Share Share (₹) (%)
(₹)
January 17, Transfer from Dr. 269,000 Cash 10 13.30 0.05 [●]
2007 Surinder Kapur
Transfer from DRSK 6,749,993 Cash 10 13.30 1.18 [●]
Management
Services Private
Limited
February 16, Allotment of Equity 13,769,470 Cash 10 32.10 2.40
2007 Shares
March 16, Transfer from 6,367,406 Cash 10 94.59 1.11 [●]
2017 Mitsubishi Materials
Corporation
Transfer from Metal 562,500 Cash 10 94.59 0.10 [●]
One Corporation
March 27, Transfer to JM (2,094,781) Cash 10 82.07 (0.37) [●]
2017 Financial Trustee
Company Private
Limited – JM
Financial India Fund
Transfer to JM (6,929,906) Cash 10 82.07 (1.21) [●]
Financial Trustee
Company Private
Limited - JM
Financial India Fund
August 30, Transfer to Inder (5) Cash 10 87.00 0.00 [●]
2017 Khurana, Munish
Sapra, Kiran
Manohar Deshmukh,
Ranganathan Balaji
and Raajesh Kumar
Gupta
July 9, 2019 Sale of Equity Shares (2,592,935) Cash 10 314.01 (0.45) [●]
pursuant to the
buyback
February 10, Bonus issue of 177,108,162 NA 10 NA 30.91 [●]
2021 Equity Shares

Total 193,208,904 33.72

(ii) Sunjay Kapur

Sunjay Kapur, does not hold any Equity Shares as on the date of this Draft Red Herring Prospectus and has
never directly held any Equity Shares in our Company since its incorporation.

B. Singapore Topco

Date of Nature of Number of Nature of Face Issue Price/ Percentage of Percentage of

Allotment/ Transaction Equity Shares Consideration value per Transfer the Pre- Offer the Post- Offer
Transfer Allotted/ equity Price per Capital Capital (%)
Transferred share (₹) equity share (%)
(₹)
July 5, 2019 Allotment of 22,028,503 Cash 10 384.83 3.84 [●]
Equity Shares
July 10, 2019 Transfer from 75,92,295 Cash 10 396.24 1.32 [●]
JM Financial
India Fund –
Scheme B
July 10, 2019 Transfer from 14,32,392 Cash 10 396.24 0.25 [●]
JM Financial
India Fund –
Scheme A

76
 Date of Nature of Number of Nature of Face Issue Price/ Percentage of Percentage of
Allotment/ Transaction Equity Shares Consideration value per Transfer the Pre- Offer the Post- Offer
Transfer Allotted/ equity Price per Capital Capital (%)
Transferred share (₹) equity share (%)
(₹)
January 27, Conversion of 594,436* Cash 10 384.83* 0.10 [●]
2021 Preference
Shares
February 10, Bonus issue 348,123,886 NA 10 NA 60.75 [●]
2021 of Equity
Shares
Total 379,771,512 66.28
*
Consideration for such Equity Shares was paid at the time of issuance of Preference Shares.

All the Equity Shares held by our Corporate Promoters were fully paid-up on the respective dates of allotment of
such Equity Shares. As of the date of this Draft Red Herring Prospectus, none of the Equity Shares held by our
Promoters are subject to any pledge.

a) Shareholding of our Promoters and Promoter Group

The details of shareholding of our Promoters and Promoter Group as on the date of this Draft Red Herring
Prospectus are set forth below:

S. No. Category of Shareholders No. of Equity Shares % of total pre-Offer paid up

Equity Share capital
Promoters
1. Sona Autocomp Holding Private 193,208,904 33.72
Limited
2. Singapore VII Topco III Pte. Ltd.* 379,771,512 66.28
3. Sunjay Kapur Nil Nil
Sub Total (A) 572,980,416 100.00
Promoter Group
1. Rani Kapur – RK Family Trust 72 0.00
Sub Total (B) 72 0.00
Total (A) + (B) 572,980,488 100.00
* Also the Selling Shareholder

b) Details of Promoters’ Contribution and Lock-in

In accordance with Regulation 14 and Regulation 16(a) of the SEBI ICDR Regulations, an aggregate of
20% of the fully diluted post-Offer Equity Share capital of our Company held by Sona Autocomp, shall be
locked in for a period of three years from the date of Allotment and our Promoters’ shareholding in excess
of 20% shall be locked in for a period of one year from the date of Allotment.

The details of the Equity Shares held by Sona Autocomp, which shall be locked-in for a period of three
years from the date of Allotment are set forth below.

Name of Number Number Date of Nature of Face Issue/ Percentage Percentage

Promoter of of Allotment/ Transaction Value Acquisition of pre- of post-
Equity Equity Transfer* (₹) Price per Offer paid- Offer paid-
Shares Shares Equity up Equity up Equity
held Locked- Share (₹) Share Share
pre- in(1)(2) Capital Capital
Offer
Sona [●] [●] [●] [●] 10 [●] [●] [●]
Autocomp
* Subject to finalisation of Basis of Allotment
(1)
For a period of three years from the date of Allotment
(2)
All Equity Shares were fully paid-up at the time of allotment

Our Company undertakes that the Equity Shares that are being locked-in are not ineligible for computation
of Promoters’ contribution in terms of Regulation 15 of the SEBI ICDR Regulations. For details of the
build-up of the share capital held by our Promoters, see “Capital Structure - History of the Share Capital
held by our Promoters”.

77
 In this connection, we confirm the following:

(i) The Equity Shares offered for Promoters’ contribution do not include (a) Equity Shares acquired in
the three immediately preceding years for consideration other than cash or out of revaluation of assets
or capitalisation of intangible assets; (b) Equity Shares that have resulted from bonus issue by
utilisation of revaluation reserves or unrealised profits of our Company or resulted from bonus issue
against Equity Shares which are otherwise ineligible for computation of Promoters’ contribution;

(ii) The Promoters’ contribution does not include any Equity Shares acquired during the immediately
preceding year at a price lower than the price at which the Equity Shares are being offered to the
public in the Offer;

(iii) Our Company has not been formed by the conversion of a partnership firm or a limited liability
partnership firm into a Company;

(iv) The Equity Shares held by Sona Autocomp and offered for Promoters’ contribution are not subject to
any pledge; and

(v) All the Equity Shares held by the Promoters are held in dematerialised form.

c) Details of Equity Shares locked-in for one year:

In addition to 20% of the fully diluted post-Offer shareholding of our Company held by Sona Autocomp
and locked-in for three years as specified above, in terms of Regulation 16(1)(b) of the SEBI ICDR
Regulations, the entire pre-Offer Equity Share capital of our Company will be locked-in for a period of
one year from the date of Allotment, except for the Equity Shares sold pursuant to the Offer for Sale, any
Equity Shares allotted to the employees (whether or not they are current employees) of our Company under
the ESOP 2020, and any other categories of shareholders exempt under Regulation 17 of the SEBI ICDR
Regulations, as applicable.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by each of our Promoters,
which are locked-in may be transferred to and amongst the members of the Promoter Groups or to any new
promoter or persons in control of our Company, subject to continuation of the lock-in in the hands of the
transferees for the remaining period and compliance with the SEBI Takeover Regulations, as applicable.

The Equity Shares held by each of our Promoters which are locked-in for a period of three years from the
date of Allotment may be pledged only with scheduled commercial banks or public financial institutions
or Systemically Important NBFCs or housing finance companies, as collateral security for loans granted
by such banks or public financial institutions or Systemically Important NBFCs or housing finance
companies in terms of Regulation 21(a) of the SEBI ICDR Regulations, provided that such loans have
been granted for the purpose of financing one or more of the objects of the Offer and pledge of the Equity
Shares is a term of sanction of such loans.

The Equity Shares held by the Promoters which are locked-in for a period of one year from the date of
Allotment may be pledged only with scheduled commercial banks or public financial institutions or
Systemically Important NBFCs or housing finance companies, as collateral security for loans granted by
such banks or public financial institutions or Systemically Important NBFCs or housing finance companies
in terms of Regulation 21(b) of the SEBI ICDR Regulations, provided that pledge of the Equity Shares is
one of the terms of the sanction of loans. The lock-in may continue pursuant to the invocation of pledge;
however, the transferee shall not be eligible to transfer the Equity Shares until the expiry of the lock-in
period.

In terms of Regulation 22 of the SEBI ICDR Regulations, the Equity Shares held by persons other than the
Promoters and locked-in for a period of one year from the date of Allotment in the Offer may be transferred
to any other person holding the Equity Shares which are locked-in, subject to continuation of the lock-in
in the hands of transferees for the remaining period and compliance with the SEBI Takeover Regulations.

Any unsubscribed portion of the Offered Shares would also be locked-in as required under the SEBI ICDR
Regulations.

d) Lock-in of the Equity Shares to be Allotted, if any, to the Anchor Investors

78
 Any Equity Shares allotted to Anchor Investors under the Anchor Investor Portion shall be locked-in for a
period of 30 days from the date of Allotment.

(9) Except for the allotment of Equity Shares pursuant to the Fresh Issue and any grants of options and allotment of
Equity Shares that may be made under the ESOP 2020, our Company presently does not intend or propose to alter
its capital structure for a period of six months from the Bid/Offer Opening Date, by way of split or consolidation
of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible
into or exchangeable, directly or indirectly for Equity Shares) whether on a preferential basis or by way of issue
of bonus shares or on a rights basis or by way of further public issue of Equity Shares or otherwise.

(10) As on the date of filing of this Draft Red Herring Prospectus, the total number of shareholders of our Company is
eight.

(11) None of the directors of our Corporate Promoters hold any Equity Shares in our Company as on the date of this
Draft Red Herring Prospectus.

(12) Our Promoters, any members of their respective Promoter Groups, the directors of our Corporate Promoters, any
of the Directors of our Company or any of their relatives have not purchased or sold any securities of our Company
during the period of six months immediately preceding the date of this Draft Red Herring Prospectus.

(13) There have been no financing arrangements whereby our Promoters, members of their respective Promoter
Groups, directors of our Corporate Promoters, our Directors and their relatives have financed the purchase by any
other person of securities of our Company (other than in the normal course of the business of the relevant financing
entity) during a period of six months immediately preceding the date of filing of this Draft Red Herring Prospectus.

(14) Except as disclosed in this section under “Share Capital History of our Company” on page 71, neither our
Company, nor any of our Directors have entered into any buy-back arrangements for purchase of Equity Shares
from any person. Further, the Book Running Lead Managers have not made any buy-back arrangements for
purchase of Equity Shares from any person.

(15) As on the date of this Draft Red Herring Prospectus, the Book Running Lead Managers and their respective
associates (as defined under the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992)
do not hold any Equity Shares.

(16) All Equity Shares issued pursuant to the Offer will be fully paid-up at the time of Allotment and there are no partly
paid-up Equity Shares as on the date of this Draft Red Herring Prospectus.

(17) Except the options granted pursuant to ESOP 2020, there are no outstanding warrants, options or rights to convert
debentures, loans or other instruments into, or which would entitle any person any option to receive Equity Shares
as on the date of this Draft Red Herring Prospectus.

(18) Our Promoters and their respective Promoter Groups shall not participate in the Offer, except to the extent of the
Offer for Sale by Singapore Topco.

(19) Except for the allotment of Equity Shares pursuant to the Fresh Issue and any grants of options and allotment of
Equity Shares that may be made under the ESOP 2020, there will be no further issue of Equity Shares whether by
way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period
commencing from filing of this Draft Red Herring Prospectus with SEBI until the Equity Shares have been listed
on the Stock Exchanges, or all application monies have been refunded, as the case may be.

(20) Our Company shall ensure that there shall be only one denomination of the Equity Shares, unless otherwise
permitted by law.

(21) No person connected with the Offer, including, but not limited to, the members of the Syndicate, our Company,
the Directors, Promoters, members of their respective Promoter Group, shall offer or make payment of any
incentive, direct or indirect, in the nature of discount, commission and allowance, except for fees or commission
for services rendered in relation to the Offer, in any manner, whether in cash or kind or services or otherwise, to
any Bidder for making a Bid.

(22) Our Company shall ensure that transactions in the Equity Shares by our Promoters and their respective Promoter
Group between the date of filing of this Draft Red Herring Prospectus and the date of closure of the Offer shall
be intimated to the Stock Exchanges within 24 hours of such transaction.

79
(23) Our Company, pursuant to the resolutions passed by our Board on August 14, 2020 and our Shareholders on
September 30, 2020, adopted the Employee Stock Option Scheme 2020 (“ESOP 2020”).

The objective of ESOP 2020 is to incentivise, induce, reward and motivate the employees of our Company in
order to enable them to contribute effectively towards the growth and profitability of our Company, align the
employees towards a common objective of creating value for our Company as well as to induce them to remain
in the service of our Company.

The details of the ESOP 2020, as certified by SCV & Co. LLP, Chartered Accountants, through a certificate dated
February 22, 2021, are as follows:

Particulars Details
Financial From April 1, 2020 until the date of filing of
Year 2020 this Draft Red Herring Prospectus
Total options outstanding as at the beginning of the period NA Nil
Total options granted NA 3,263,220*

*Includes 2,991,285 additional bonus options

granted to the eligible employees pursuant to the
bonus issue undertaken by our Company
Exercise price of options in ₹ (as on the date of grant NA ₹ 38.34 per option*
options)
*
The exercise price of the options granted under
ESOP 2020 has been adjusted to ₹ 38.34 per
option, pursuant to the bonus issue undertaken by
our Company
Options forfeited/ lapsed/ cancelled NA Nil
Variation of terms of options NA Nil
Money realized by exercise of options NA Nil
Total number of options outstanding in force NA 3,263,220
Total options vested (excluding the options that have been NA Nil
exercised)
Options exercised (since implementation of the ESOP NA Nil
Scheme)
The total number of Equity Shares arising as a result of NA Nil
exercise of granted options (including options that have
been exercised)
Number of employees to whom options were granted 62
Employee wise details of options granted to:
(a) Key managerial personnel
Vivek Vikram Singh (Managing Director & Group NA 662,088
CEO)
Rohit Nanda (Group Chief Financial Officer) NA 357,900
Kiran Manohar Deshmukh (Chief Technology NA 83,508
Officer)
Sat Mohan Gupta (Director and CEO of Comstar NA 477,180
Automotive)
Vadapalli Vikram Verma (Chief Executive Officer NA 477,180
– Driveline Business)
Ajay Pratap Singh (Vice President (Legal) & NA 119,304
Company Secretary and compliance officer)
(b) Any other employee who receives a grant in any NA Nil
one year of options amounting to 5% or more of the
options granted during the year
(c) Identified employees who were granted options NA Nil
during any one year equal to or exceeding 1% of the
issued capital (excluding outstanding warrants and
conversions) of the Company at the time of grant
Diluted earnings per share pursuant to the issue of Equity NA Basic Earnings per share of ₹ 2.71 for the period
Shares on exercise of options in accordance with IND AS from April 1, 2020 to December 31, 2020, after
33 ‘Earnings Per Share’ taking impact of bonus issue
Diluted Earnings per share of ₹ 2.71 for the period
from April 1, 2020 to December 31, 2020, after
taking impact of bonus issue

80
 Particulars Details
Financial From April 1, 2020 until the date of filing of
Year 2020 this Draft Red Herring Prospectus
Where the Company has calculated the employee NA Company has calculated the employee
compensation cost using the intrinsic value of the stock compensation cost using fair value of the stock
options, the difference, if any, between employee options
compensation cost so computed and the employee
compensation calculated on the basis of fair value of the
stock options and the impact of this difference, on the
profits of the Company and on the earnings per share of
the Company
Description of the pricing formula and method and NA Valuation of Options
significant assumptions used to estimate the fair value of Black-Scholes-Merton Model has been used for
options granted during the year including, weighted the valuation of Options
average information, namely, risk-free interest rate,
expected life, expected volatility, expected dividends, and Significant assumptions:
the price of the underlying share in the market at the time
of grant of option Term of expiry:
2.5 years for options vesting in first year
3.5 years for options vesting in second year
4.5 years for options vesting in third year

Risk free rate:

4.64% for options vesting in first year
5.04% for options vesting in second year
5.23% for options vesting in third year

Volatility:
46.19% for options vesting in first year
46.63% for options vesting in second year
46.51% for options vesting in third year

Dividend Yield:
1.6%

Price of the underlying share in the market at

the time of grant of option of Rs. 950/- per
share has been used and calculated using
Comparable Companies Method (Market
Approach)

Significant assumptions:
NFY +1 EBITDA multiple of 7.3
Impact on the profits and on the Earnings Per Share of the NA No impact since as per Regulation 15 of Securities
last three years if the accounting policies specified in the and Exchange Board of India (Share Based
Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014,
Employee Benefits) Regulations, 2014 had been “any company implementing any of the share
followed, in respect of options granted in the last three based schemes shall follow the requirements of
Years. the 'Guidance Note on Accounting for employee
share-based Payments' (Guidance Note) or
Accounting Standards as may be prescribed by
the Institute of Chartered Accountants of India
(ICAI) from time to time, including the disclosure
requirements prescribed therein,” and the
Company has followed Ind AS 102 “Share Based
Payments”.
Intention of key managerial personnel and whole-time NA NA
directors who are holders of Equity Shares allotted on
exercise of options to sell their shares within three months
after the listing of Equity Shares pursuant to the Offer.
Intention to sell Equity Shares arising out of the ESOP NA NA
Scheme or allotted under an ESOP Scheme within three
months after the listing of Equity Shares by directors,
senior managerial personnel and employees having
Equity Shares arising out of the ESOP Scheme,
amounting to more than 1% of the issued capital
(excluding outstanding warrants and conversions).

81
 OBJECTS OF THE OFFER

The Offer comprises of the Fresh Issue and the Offer for Sale.

Offer for Sale

The Selling Shareholder will be entitled to the proceeds from the Offer for Sale. Our Company will not receive
any proceeds from the Offer for Sale. All fees and expenses in relation to the Offer other than the listing fees
(which shall be borne by our Company) shall be shared amongst our Company and the Selling Shareholder,
pursuant to the Offer and in accordance with applicable laws. However, for ease of operations, expenses of the
Selling Shareholder may, at the outset, be borne by our Company on behalf of the Selling Shareholder, and the
Selling Shareholder agrees that it will reimburse our Company for all such expenses, upon successful completion
of the Offer, in accordance with applicable laws.

Objects of the Fresh Issue

Our Company proposes to utilise the Net Proceeds from the Fresh Issue towards funding the following objects:

1. Repayment/pre-payment, in full or part, of certain borrowings availed by our Company; and

2. General corporate purposes.

The main objects and objects incidental and ancillary to the main objects set out in the Memorandum of
Association enable us (i) to undertake our existing business activities (ii) to undertake the activities proposed to
be funded from the Net Proceeds, as well as the activities towards which the loans proposed to be repaid from the
Net Proceeds were utilised. Further, our Company expects that the listing of the Equity Shares will enhance our
visibility and our brand image among our existing and potential customers.

Net Proceeds

The details of the proceeds from the Fresh Issue are summarized in the following table:

Particulars Estimated amount

(₹ in million)
Gross proceeds of the Fresh Issue(1) 3,000
(Less) Fresh Issue expenses(1) [●]
Net Proceeds of the Fresh Issue (the “Net Proceeds”) [●]
(1) To be finalised upon determination of the Offer Price and updated in the Prospectus prior to filing with the RoC.

Utilization of Net Proceeds

The Net Proceeds are proposed to be utilised in accordance with the details provided in the following table:

Particulars Amount (₹ in million)

Repayment/ pre-payment, in full or part, of certain borrowings availed by our Company 2,250
General corporate purposes(1) [●]
Total [●]
(1) To be finalised upon determination of the Offer Price and updated in the Prospectus prior to filing with the RoC. The amount utilised
for general corporate purposes shall not exceed 25% of the gross proceeds of the Fresh Issue.

82
Proposed schedule of implementation and deployment of Net Proceeds

We propose to deploy the Net Proceeds for the aforesaid purposes in accordance with the estimated schedule of
implementation and deployment of funds set forth in the table below:
(₹ in million)
Particulars Estimated Estimated schedule of
utilisation from deployment of Net Proceeds in
Net Proceeds(1) Fiscal 2021 Fiscal 2022
Repayment/pre-payment, in full or part, of certain borrowings 2,250 - 2,250
availed by our Company
General corporate purposes(1) [●] [●] [●]
Total [●] [●] [●]
(1)
To be finalised upon determination of the Offer Price and updated in the Prospectus prior to filing with the RoC. The amount utilised
for general corporate purposes shall not exceed 25% of the Net Proceeds.

In the event of the estimated utilisation of the Net Proceeds in a scheduled Fiscal being not undertaken in its
entirety, the remaining Net Proceeds shall be utilised in subsequent Fiscals, as may be decided by our Company,
in accordance with applicable laws. Further, if the Net Proceeds are not completely utilised for the objects during
the respective periods stated above due to factors such as (i) economic and business conditions; (ii) timely
completion of the Offer; (iii) market conditions outside the control of our Company; and (iv) any other commercial
considerations, the remaining Net Proceeds shall be utilised (in part or full) in subsequent periods as may be
determined by our Company, in accordance with applicable laws.

The deployment of funds indicated above is based on management estimates, current circumstances of our
business and prevailing market conditions, which are subject to change. The deployment of funds described herein
has not been appraised by any bank or financial institution or any other independent agency. We may have to
revise our funding requirements and deployment from time to time on account of various factors, such as financial
and market conditions, competition, business and strategy and interest/exchange rate fluctuations and other
external factors, which may not be within the control of our management. This may entail rescheduling the
proposed utilisation of the Net Proceeds and changing the allocation of funds from its planned allocation at the
discretion of our management, subject to compliance with applicable law. For further details, see “Risk Factors –
Our funding requirements and proposed deployment of the Net Proceeds of the Offer have not been appraised by
a bank or a financial institution and if there are any delays or cost overruns, our business, financial condition
and results of operations may be adversely affected” on page 45.

Subject to applicable laws, in the event of any increase in the actual utilisation of funds earmarked for the purposes
set forth above, such additional funds for a particular activity will be met by way of means available to us,
including from internal accruals and any additional equity and/or debt arrangements from existing and future
lenders. We believe that such alternate arrangements would be available to fund any such shortfalls.

Details of the objects of the Offer

1. Repayment/ pre-payment of certain borrowings, in full or part, availed by our Company

Our Company has entered into various financial arrangements with banks, financial institutions and other
entities. The loan facilities availed by our Company includes borrowing in the form of, inter alia, term loans
and working capital facilities. For further details, see “Financial Indebtedness” on page 349. As at January
31, 2021 the amount outstanding under our fund based and non-fund based working capital and term loan
facilities was ₹ 3,573.30 million. Our Company proposes to utilize an estimated amount of ₹ 2,250 million
from the Net Proceeds towards full or partial repayment or pre-payment of certain borrowings availed by
our Company.

Given the nature of these borrowings and the terms of repayment, the aggregate outstanding amounts under
these borrowings may vary from time to time and our Company may, in accordance with the relevant
repayment schedule, repay or refinance some of its existing borrowings prior to Allotment. Our Company
may avail further loans after the date of this Draft Red Herring Prospectus and/or draw down further funds
under existing loans. Accordingly, in case any of the below loans are pre-paid or further drawn-down prior
to the completion of the Offer, we may utilize the Net Proceeds towards repayment/pre-payment of such
additional indebtedness. However, the aggregate amount to be utilised from the Net Proceeds towards
prepayment or repayment of borrowings (including refinanced or additional facilities availed, if any), in full
or part, would not exceed ₹ 2,250 million. We believe that such repayment/ pre-payment will help reduce

83
our outstanding indebtedness, debt servicing costs and enable utilization of our accruals for further
investment in our business growth and expansion. Additionally, we believe that the leverage capacity of our
Company will improve our ability to raise further resources in the future to fund our potential business
development opportunities and plans to grow and expand our business.

The selection of borrowings proposed to be prepaid or repaid amongst our borrowing arrangements availed
will be based on various factors, including (i) cost of the borrowing, including applicable interest rates, (ii)
any conditions attached to the borrowings restricting our ability to prepay/ repay the borrowings and time
taken to fulfil, or obtain waivers for fulfilment of such conditions, (iii) receipt of consents for prepayment
from the respective lenders, (iv) terms and conditions of such consents and waivers, (v) levy of any
prepayment penalties and the quantum thereof, (vi) provisions of any laws, rules and regulations governing
such borrowings, and (vii) other commercial considerations including, among others, the amount of the loan
outstanding and the remaining tenor of the loan. In this regard, HDFC Bank Limited has issued a letter dated
February 19, 2021 to our Company waiving the pre-payment penalty on the term loans sanctioned to our
Company.

The following table provides details of borrowings availed by our Company, which are currently proposed
to be fully or partially repaid or pre-paid up to the extent of ₹ 2,250 million from the Net Proceeds:

S. Name Nature of Purpose(1) Amount Amount Interest Repayment Pre-

No. of the borrowing sanctioned(2) outstanding rate(2) date/ payment
lender and date of as at schedule(2) penalty(2)
the January 31,
sanction 2021(2)
letter/ (₹ in million)
document
1. HDFC Term loan Procurement of plant 400.00 213.50 1 year Quarterly Prepayment
Bank and machinery and MCLR + instalmentspenalty of
Limited miscellaneous fixed 50 bps ending 1.5% of the
assets March 31, loan
2023 amount to
be pre-paid
by the
Company
2. HDFC Term loan Capex/reimbursement 1,040.00 771.60 1 year Quarterly Prepayment
Bank of capex MCLR + instalments penalty of
Limited 50 bps ending 1.5% of the
October 30, amount
2023 outstanding
and
applicable
taxes
3. HDFC Term loan Capex/reimbursement 850.00 651.75 1 year Quarterly Prepayment
Bank of capex MCLR + instalments penalty of
Limited 85 bps ending 0.5 % on
January 1, the
2026 principal
amount of
the loan
being
prepaid

4. HDFC Term loan Capex-towards 960.00 246.75 6 month Quarterly Prepayment

Bank expansion of MCLR + instalments penalty of
Limited differential assembly 20 bps ending 0.5 % on
manufacturing December the
capacity of the 23, 2026 principal
Company amount of
the loan
being
prepaid

84
 S. Name Nature of Purpose(1) Amount Amount Interest Repayment Pre-
No. of the borrowing sanctioned(2) outstanding rate(2) date/ payment
lender and date of as at schedule(2) penalty(2)
the January 31,
sanction 2021(2)
letter/ (₹ in million)
document
5. Citibank Term loan Refinancing of inter- 500.00 406.25 3 month T Quarterly Prepayment
NA corporate deposits Bill instalments penalty of
+3.67% ending 2% on the
March 24, principal
2024 amount of
the loan
being
prepaid
Total 3,750.00 2,289.85
(1)
Our Statutory Auditors and SCV & Co. LLP, Chartered Accountants have confirmed that the above borrowings have been utilised
for the purpose for which they were availed pursuant to certificates dated February 22, 2021 each.
(2)
As certified by SCV & Co. LLP, Chartered Accountants pursuant to certificate dated February 22, 2021.

Our Company may consider the following factors for identifying the loans that will be repaid out of the
Net Proceeds:

(i) Costs, expenses and charges relating to the facility including interest rates involved;

(ii) Presence of onerous terms and conditions under the facility;

(iii) Ease of operation of the facility;

(iv) Levy of any prepayment penalties and the quantum thereof;

(v) Provisions of any law, rules, regulations governing such borrowings;

(vi) Terms of pre-payment to lenders, if any;

(vii) Mix of credit facilities provided by lenders; and

(viii) Other commercial considerations including, among others, the interest rate on the loan facility,
the amount of the loan outstanding and the remaining tenor of the loan.

Given the nature of these borrowings and the terms of prepayment, the aggregate outstanding loan
amounts may vary from time to time. In the event that there are any prepayment penalties required to be
paid under the terms of the relevant financing agreements, such prepayment penalties shall be paid by
our Company out of its internal accruals. We will take such provisions also into consideration while
deciding repayment and/ or pre-payment of loans from the Net Proceeds.

2. General corporate purposes

Our Company proposes to deploy the balance Net Proceeds aggregating to ₹ [●] million towards general
corporate purposes, subject to such utilisation not exceeding 25% of the gross proceeds of the Fresh
Issue, in compliance with Regulation 7(2) of the SEBI ICDR Regulations. The general corporate
purposes for which our Company proposes to utilise the Net Proceeds include capital expenditure,
meeting our working capital requirements, marketing and business development expenses, expansion of
facilities and meeting exigencies and expenses incurred by our Company in the ordinary course of
business. In addition to the above, our Company may utilise the Net Proceeds towards other expenditure
(in the ordinary course of business) considered expedient and as approved periodically by the Board or
a duly constituted committee thereof, subject to compliance with necessary provisions of the Companies
Act or other applicable laws.

The quantum of utilisation of funds towards each of the above purposes will be determined by our Board, based
on the amount actually available under this head and the business requirements of our Company, from time to
time. Our Company’s management, in accordance with the policies of the Board, shall have flexibility in utilising
surplus amounts, if any. In the event that we are unable to utilise the entire amount that we have currently estimated
for use out of Net Proceeds in a Fiscal, we will utilise such unutilised amount in the next Fiscal.

85
Offer related expenses

The total expenses of the Offer are estimated to be approximately ₹[●] million. The Offer related expenses include
fees payable to the BRLMs and legal counsel, fees payable to the auditors, brokerage and selling commission,
commission payable to Registered Brokers, SCSBs’ fees, Registrar’s fees, printing and stationery expenses,
advertising and marketing expenses and all other incidental and miscellaneous expenses for listing the Equity
Shares on the Stock Exchanges.The break-up of the Offer expenses is as follows:

Activity Estimated As a % of the total As a % of the total

expenses(1)(5) estimated Offer Offer size(1)
(₹ in million) expenses(1)
BRLMs fees and commissions (including [●] [●] [●]
underwriting commission, brokerage and selling
commission)
Commission/processing fee for SCSBs and Bankers to [●] [●] [●]
the Offer and fees payable to the Sponsor Bank for
Bids made by RIBs using the UPI Mechanism (2)
Brokerage and selling commission for members of [●] [●] [●]
Syndicate, and Registered Brokers, RTAs and CDPs(3)
Fees payable to the Registrar to the Offer [●] [●] [●]
Fees payable to the other advisors to the Offer [●] [●] [●]
Others
- Listing fees, SEBI filing fees, BSE and NSE [●] [●] [●]
processing fees, book building software fees
- Printing and stationery [●] [●] [●]
- Advertising and marketing expenses [●] [●] [●]
- Miscellaneous [●] [●] [●]
Total estimated Offer expenses [●] [●] [●]
(1) To be incorporated in the Prospectus post finalization of the Offer Price.
(2) Selling commission payable to the SCSBs on the portion for Retail Individual Bidders and Non-Institutional Bidders which are directly
procured by the SCSBs, would be as follows:

Portion for Retail Individual Bidders* [●]% of the Amount Allotted (plus applicable taxes)
Portion for Non-Institutional Bidders* [●]% of the Amount Allotted (plus applicable taxes)
*Amount Allotted is the product of the number of Equity Shares Allotted and the Offer Price.
Sponsor Bank will be entitled to processing fee of ₹ [●] for every valid ASBA Form for Bids made by RIBs using UPI Mechanism. The
Sponsor Bank shall be responsible for making payments to third parties such as the remitter bank, NPCI and such other parties as
required in connection with the performance of its duties under applicable SEBI circulars, amendments and applicable laws.
(3) Registered Brokers will be entitled to a commission of ₹ [●] per every valid ASBA Form submitted to them and uploaded on the electronic
bidding system of the Stock Exchanges.
(4) Members of syndicate, RTAs, CDPs and SCSBs (for the forms directly procured by them) will be entitled to selling commission as below:
• Portion for Retail Individual Bidders: [●]% of the Amount Allotted*
• Portion for Non-Institutional Bidders: [●]% of the Amount Allotted*
* Amount Allotted is the product of the number of Equity Shares Allotted and the Offer Price.
Note: All of the above are exclusive of applicable taxes
(5) The commissions and processing fees shall be payable within 30 Working Days post the date of the receipt of the final invoices of the
respective intermediaries by the Company.

Means of finance

The fund requirements set out for the aforesaid objects of the Offer are proposed to be met entirely from the Net
Proceeds. Accordingly, our Company confirms that there is no requirement to make firm arrangements of finance
through verifiable means towards at least 75% of the stated means of finance, excluding the amount to be raised
from the Fresh Issue and existing identifiable accruals as required under the SEBI ICDR Regulations.

Interim use of Net Proceeds

Our Company, in accordance with the policies established by the Board from time to time, will have flexibility to
deploy the Net Proceeds. Pending utilisation for the purposes described above, our Company will deposit the Net
Proceeds only with one or more scheduled commercial banks included in Second Schedule of Reserve Bank of
India Act, 1934 as may be approved by our Board or IPO Committee. In accordance with Section 27 of the
Companies Act, 2013, our Company confirms that it shall not use the Net Proceeds for buying, trading or
otherwise dealing in the shares of any other listed company.

Bridge Financing Facilities

86
Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Draft
Red Herring Prospectus, which are proposed to be repaid from the Net Proceeds.

Appraising Entity

None of the objects for which the Net Proceeds will be utilised have been appraised by any agency.

Monitoring of utilization of funds

Our Company has appointed [●] as the monitoring agency in accordance with Regulation 41 of the SEBI ICDR
Regulations. Our Board and the monitoring agency will monitor the utilisation of the Net Proceeds, and submit
the report required under Regulation 41(2) of the SEBI ICDR Regulations.

Our Company will disclose the utilisation of the Net Proceeds under a separate head in our balance sheet along
with the relevant details, for all such amounts that have not been utilised.

Pursuant to Regulation 32(3) of the SEBI Listing Regulations, our Company shall, on a quarterly basis, disclose
to the Audit Committee the uses and applications of the Net Proceeds. The Audit Committee shall make
recommendations to our Board for further action, if appropriate. On an annual basis, our Company shall prepare
a statement of funds utilized for purposes other than those stated in this Draft Red Herring Prospectus and place
it before the Audit Committee and make other disclosures as may be required until such time as the Net Proceeds
remain unutilized. Such disclosure shall be made only until such time that all the Net Proceeds have been utilized
in full. The statement shall be certified by the statutory auditor of our Company. Furthermore, in accordance with
Regulation 32(1) of the SEBI Listing Regulations, our Company shall furnish to the Stock Exchanges on a
quarterly basis, a statement indicating (i) deviations, if any, in the actual utilization of the proceeds of the Fresh
Issue from the objects of the Fresh Issue as stated above; and (ii) details of category wise variations in the actual
utilization of the proceeds of the Fresh Issue from the objects of the Fresh Issue as stated above. This information
will also be published in newspapers simultaneously with the interim or annual financial results and explanation
for such variation (if any) will be included in our Director’s report, after placing the same before the Audit
Committee.

Variation in objects

In accordance with Sections 13(8) and 27 of the Companies Act and applicable rules, our Company shall not vary
the objects of the Offer without our Company being authorised to do so by the Shareholders by way of a special
resolution through postal ballot. In addition, the notice issued to the Shareholders in relation to the passing of such
special resolution (“Postal Ballot Notice”) shall specify the prescribed details as required under the Companies
Act and applicable rules. The Postal Ballot Notice shall simultaneously be published in the newspapers, one in
English and one in Hindi, being the regional language of Haryana, where our Registered and Corporate Office is
situated in accordance with the Companies Act and applicable rules. Our Promoters or controlling shareholders
will be required to provide an exit opportunity to such Shareholders who do not agree to the proposal to vary the
objects, at such price, and in such manner, in accordance with our AoA, and the SEBI ICDR Regulations.

Other confirmations

Except to the extent of the proceeds received pursuant to the Offer for Sale portion, none of our Promoters, their
respective Promoter Groups, Directors, Key Managerial Personnel, or Group Companies will receive any portion
of the Offer Proceeds.

Further, except in the ordinary course of business, there is no existing or anticipated interest of such individuals
and entities in the objects of the Fresh Issue as set out above.

87
 BASIS FOR OFFER PRICE

The Offer Price will be determined by our Company and the Selling Shareholder, in consultation with the Book
Running Lead Managers, on the basis of assessment of market demand for the Equity Shares offered through the
Book Building Process and on the basis of quantitative and qualitative factors as described below. The face value
of the Equity Shares is ₹ 10 each and the Offer Price is [●] times the face value at the lower end of the Price Band
and [●] times the face value at the higher end of the Price Band.

Bidders should read “Risk Factors”, “Our Business”, “Restated Consolidated Financial Information” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages
25, 159, 230 and 351, respectively, to have an informed view before making an investment decision.

Information in this section has been derived from Restated Consolidated Financial Information which also
includes results from discontinued operations.

Qualitative Factors

We believe that some of the qualitative factors which form the basis for computing the Offer Price are as follows:

(a) One of the leading manufacturers and suppliers to global EV markets;

(b) One of the leading global companies and gaining market share, diversified across key automotive
geographies, products, vehicle segments and customers;

(c) Strong research and development and technological capabilities in both hardware and software
development;

(d) Strong business development with customer centric approach;

(e) Consistent financial performance with industry leading metrics; and

(f) Highly experienced board of directors and management team.

For further details, see “Our Business – Our Competitive Strengths” on page 161.

Quantitative Factors

Certain information presented below, relating to our Company, is based on the Restated Consolidated Financial
Information. For details, see “Restated Consolidated Financial Information” beginning on page 230.

Some of the quantitative factors which may form the basis for computing the Offer Price are as follows:

1. Basic and Diluted Earnings Per Share (“EPS”), as adjusted for changes in capital

As per the Restated Consolidated Financial Information of our Company:

Financial Period Basic EPS (in ₹) Diluted EPS (in ₹) Weight

Nine months ended December 31, 2.71 2.71
2020 (not annualised)
Financial Year 2020 7.06 7.06 3
Financial Year 2019 5.20 5.20 2
Financial Year 2018 2.33 2.33 1
Weighted Average 5.65 5.65
Notes:
(1)
Weighted average = Aggregate of year-wise weighted EPS divided by the aggregate of weights i.e. (EPS x Weight) for each
year/Total of weights.
(2)
The face value of each Equity Share is ₹ 10.
(3)
The above statement should be read with Significant Accounting Policies and the Notes to the Restated Consolidated
Financial Information as appearing in “Restated Consolidated Financial Information” beginning on page 230.

88
2. Price/Earning (“P/E”) ratio in relation to Price Band of ₹ [●] to ₹ [●] per Equity Share

As per the Restated Consolidated Financial Information of our Company:

Particulars P/E at the lower end of P/E at the higher end of

Price Band (no. of times) Price Band (no. of times)
Based on Basic EPS for Financial Year 2020 [●] [●]
Based on Diluted EPS for Financial Year 2020 [●] [●]
Notes:
(1)
Price/ earning (P/E) ratio is computed by dividing the price per share by earnings per share.

Industry P/E ratio

P/E Ratio
Highest 41,000.00
Lowest 21.00
Industry Composite 4,150.66
Notes:
(1)
The industry high and low has been considered from the industry peer set provided later in this chapter. The industry
composite has been calculated as the arithmetic average P/E of the industry peer set disclosed in this section. For further
details, see “– Comparison of Accounting Ratios with Listed Industry Peers” on page 89.
(2)
P/E figures for the peer are computed based on closing market price as on February 5, 2021 at NSE, divided by Diluted EPS
(on consolidated basis) based on the annual report of the company for the Financial Year 2020.

3. Return on Net Worth (“RoNW”)

As per the Restated Consolidated Financial Information of our Company:

Particulars RoNW % Weight

Nine months ended December 31, 2020 (not annualised) 12.1%
Financial Year 2020 30.6% 3
Financial Year 2019 99.5% 2
Financial Year 2018 43,742.4% 1
Weighted Average 7,338.9%
Notes:
(1)
Return on net worth (%) = Net profit attributable to equity shareholders / net worth (total equity net of minority interest)

4. Net Asset Value per Equity Share of face value of ₹ 10 each

As per the Restated Consolidated Financial Information of our Company:

Net Asset Value per Equity Share (₹)

As on March 31, 2020 23.07
As on December 31, 2020 22.49
After the Offer [●]
Notes:
(1)
Net asset value per equity share (Rs.) = Total equity (net of minority interest)/ weighted average number of equity shares
outstanding during the period/year.

5. Comparison of Accounting Ratios with Listed Industry Peers

Name of Face Closing price Revenue, for EPS (₹) NAV(4) P/E(2) RoNW(3)
Company Value on February Financial Basic Diluted (1) (₹ per (%)
(₹ Per 18, 2021 (₹) Year 2020 share)
Share) (in ₹ million)
Motherson Sumi 1 220.70 635,368 3.71 3.71 46.95 59.49 8.7%
Systems Limited
Sundaram- 5 3,586.00 198,587 166.63 166.63 1,967.01 21.52 15.7%
Clayton Limited
Varroc 1 410.00 111,219 0.01 0.01 224.72 41,000.00 0.1%
Engineering
Limited
Bosch Limited 10 15,820.60 98,416 220 220 3,139.90 71.91 7.0%
Bharat Forge 2 633.05 80,558 7.51 7.51 112.80 84.29 6.7%
Limited
Mahindra CIE 10 195.90 79,078 9.34 9.33 122.26 21.00 7.6%

89
 Name of Face Closing price Revenue, for EPS (₹) NAV(4) P/E(2) RoNW(3)
Company Value on February Financial Basic Diluted(1) (₹ per (%)
(₹ Per 18, 2021 (₹) Year 2020 share)
Share) (in ₹ million)
Automotive
Limited
Endurance 10 1,406.40 69,177 40.2 40.2 213.71 34.99 18.8%
Technologies
Limited
Minda Industries 2 573.20 54,651 5.91 5.91 80.03 96.99 8.9%
Limited
Sundram 1 692.30 37,232 15.46 15.46 95.39 44.78 16.3%
Fasteners
Limited
WABCO India 5 5,997.15 19,296 83.73 83.73 998.83 71.62 8.4%
Limited
Notes:
(1)
Diluted EPS refers to the Diluted EPS sourced from the annual report of the peers for the year ended March 31, 2020
(2)
P/E Ratio has been computed based on the closing market price of equity shares on NSE on February 18, 2021, divided by
the Diluted EPS provided under Note 1 above.
(3)
RoNW is computed as net profit after tax (including profit attributable to non-controlling interest) divided by closing net
worth. Net worth has been computed as sum of paid-up share capital and other equity
(4)
NAV is computed as the closing net worth divided by the closing outstanding number of equity shares
(5)
Mahindra CIE Automotive Limited financials are as of December 31, 2019, for other companies financials are as of March
31, 2020.

The Offer Price of ₹ [●] has been determined by our Company and the Selling Shareholder, in
consultation with the Book Running Lead Managers, on the basis of assessment of market demand from
investors for Equity Shares through the Book Building Process, and is justified in view of the above
qualitative and quantitative parameters. Bidders should read the above mentioned information along with
“Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and “Restated Consolidated Financial Information” beginning on pages 25, 159,
351 and 230, respectively, to have a more informed view. The trading price of Equity Shares could
decline due to factors mentioned in “Risk Factors” beginning on page 25 and you may lose all or part of
your investments.

90
 STATEMENT OF SPECIAL TAX BENEFITS

I. DIRECT TAX

To,
The Board of Directors
Sona BLW Precision Forgings Limited
Sona Enclave, Village Begum Khatola,
Sector 35, Gurgaon – 122004

Proposed Offering of Equity Shares (“Offer”) in India by Sona BLW Precision Forgings Limited (the
“Issuer” /“Company”)

1. This report is issued in accordance with the terms of our engagement letter dated 16 January 2021.

2. The accompanying Statement of Possible Special Tax Benefits available to the Company, its Shareholders
and its material subsidiaries (hereinafter referred to as “the Statement”) under the Income-tax Act, 1961 (read
with Income-tax Rules, circulars, notifications) as amended by the Finance Act, 2020 (hereinafter referred to
as the “Income-tax Regulations”) and the Income-tax regulations in the respective countries where the
material subsidiaries are located has been prepared by the management of the Company in connection with
the proposed offer, which we have initialed for identification purposes.

Management’s Responsibility

3. The preparation of this Statement as of the date of our report which is to be included in the Draft Red Herring
Prospectus is the responsibility of the management of the Company and has been approved by the Board of
Directors of the Company at its meeting held on 22nd February 2021 for the purpose set out in paragraph 10
below. The management’s responsibility includes designing, implementing and maintaining internal control
relevant to the preparation and presentation of the Statement, and applying an appropriate basis of
preparation; and making estimates that are reasonable in the circumstances. The Management is also
responsible for identifying and ensuring that the Company complies with the laws and regulations applicable
to its activities.

Auditor’s Responsibility

4. Our work has been carried out in accordance with Standards on Auditing, the ‘Guidance Note on Reports or
Certificates for Special Purposes (Revised 2016)’ and other applicable authoritative pronouncements issued
by the Institute of Chartered Accountants of India.

5. Pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations 2018, as amended (the ‘ICDR Regulations’) and the Companies Act 2013 (‘Act’), it is our
responsibility to report whether the Statement prepared by the Company, presents, in all material respects,
the possible special tax benefits as of 22 February 2021 available to the Company, the shareholders and
material subsidiaries of the Company, in accordance with the Indian Income-tax Regulations and the Income-
tax regulations of the respective countries where material subsidiaries are located as at the date of our report.

6. It is imperative to note that we have relied upon a representation from the Management of the Company and
confirmation received from the auditor of the respective overseas material subsidiary of the Company with
respect to the special tax benefits in their respective overseas jurisdiction.

List of material subsidiaries as identified by the Company on the date of signing of this report:

Sr. No Name of Subsidiary Country

1 Comstar India Automotive Technologies Private Limited India
2 Comstar Automotive USA LLC USA

7. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance
with the Act and the ICDR Regulations in connection with the proposed Offer.

91
Inherent Limitations

8. We draw attention to the fact that the Statement includes certain inherent limitations that can influence the
reliability of the information.

Several of the benefits mentioned in the accompanying statement are dependent on the Company or its
shareholders or its material subsidiaries fulfilling the conditions prescribed under the relevant provisions of
the tax laws. Hence, the ability of the Company or its shareholders or its material subsidiaries to derive the tax
benefits is dependent upon fulfilling such conditions, which may or may not be fulfilled. The benefits
discussed in the accompanying statement are not exhaustive.

The Statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences
and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the
specific tax implications arising out of their participation in the Issue.

Further, we give no assurance that the Revenue Authorities / Courts will concur with our views expressed
herein. Our views are based on the existing provisions of law and its interpretation, which are subject to change
from time to time. We do not assume responsibility to update the views consequent to such changes.

Opinion

9. In our opinion, the Statement prepared by the Company presents, in all material respects, the possible special
tax benefits available as of 22 February 2021 to the Company, its shareholders and its material subsidiaries,
under the Indian Income-tax Regulations and the Income-tax regulations of the respective jurisdictions where
the material subsidiaries are located.

Considering the matter referred to in paragraph 5 above, we are unable to express any opinion or provide any
assurance as to whether:

(i) The Company or its shareholders will continue to obtain the benefits per the Statement in future; or

(ii) The conditions prescribed for availing the benefits per the Statement have been / would be met with.

Restriction on Use

10. This report is addressed to and is provided to enable the Board of Directors of the Company to include this
report in the Draft Red Herring Prospectus, prepared in connection with the Offering to be filed by the
Company with the Securities and Exchange Board of India and the concerned stock exchanges.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No. 001076N/N500013

Sujay Paul
Partner
Membership No.: 096314

UDIN: 21096314AAAAAY6693

Date: 22/02/2021
Place: Noida

92
STATEMENT OF POSSIBLE SPECIAL TAX BENEFITS AVAILABLE TO SONA BLW PRECISION
FORGINGS LIMITED (THE “COMPANY”), ITS SHAREHOLDERS AND MATERIAL
SUBSIDIARIES

Outlined below are the possible special tax benefits available to the Company, material subsidiaries and its
shareholders under the Tax Laws within and outside India. These possible special tax benefits are dependent on
the Company or its shareholders fulfilling the conditions prescribed under the Direct Tax Laws.

A. Special tax benefits available to the Company and its Material Subsidiaries in India under the
Income-tax Act, 1961 (hereinafter referred to as ‘the Act’), as amended by the Finance Act 2020,
applicable for Financial Year 2020-21 relevant to Assessment Year 2021-22

1. Lower corporate tax rates on income of domestic companies - Section 115BAA of the Act

The Taxation Laws (Amendment) Act, 2019 introduced section 115BAA wherein domestic companies are
entitled to avail a concessional tax rate of 22% (plus applicable surcharge and cess) on fulfillment of certain
conditions. The option to apply this tax rate is available from FY 2019-20 relevant to AY 2020-21 and the
option once exercised shall apply to subsequent assessment years. The concessional rate of 22% is subject
to the company not availing any of the following specified tax exemptions/incentives under the Act:

• Deduction u/s 10AA: Tax holiday available to units in a Special Economic Zone;
• Deductions available under the Chapter VI-A except under section 80JJAA and section 80M;
• Deduction u/s 32(1)(iia): Additional Depreciation;
• Deduction u/s 32AD: Investment allowance;
• Deduction u/s 35AD: Deduction for capital expenditure incurred on specified businesses;
• Deduction under certain sub-sections/clauses of Section 35: Expenditure on scientific research.

The total income of a company availing the concessional rate of 22% is required to be computed without
set-off of any carried forward loss and depreciation attributable to any of the aforesaid deductions/incentives.
A company can exercise the option to apply for the concessional tax rate in its return of income filed under
section 139(1) of the Act. Further, provisions of Minimum Alternate Tax (‘MAT’) under section 115JB of
the Act shall not be applicable to companies availing this reduced tax rate, thus, any carried forward MAT
credit also cannot be claimed.

The provisions do not specify any limitation/condition on account of turnover, nature of business or date of
incorporation for opting for the concessional tax rate. Accordingly, all existing as well as new domestic
companies are eligible to avail this concessional rate of tax.

Note: The company and its material subsidiaries in India have opted the lower rate benefit for the financial
year 2019-20 relevant to the assessment year 2020-21 as mentioned in the Section 115BAA for which
declaration for the same has already been filed with the tax authority.

2. Deductions in respect of employment of new employees - Section 80JJAA of the Act.

As per section 80JJAA, where a company is subject to tax audit under section 44AB of the Act and derives
income from business, shall be allowed deduction of an amount equal to 30% of additional employee cost
incurred in the course of business in a previous year, for 3 consecutive assessment years including the
assessment year relevant to the previous year in which such additional employment cost is incurred.

Additional employee cost means the total emoluments paid or payable to additional employees employed in
the previous year through an account payee cheque or account payee bank draft or by use of electronic
clearing system through a bank account or through such other electronic mode as may be prescribed. These
employees should also have total salary not more than Rs. 25,000/- per month and should also be member
of a recognised provident fund.

93
 The deduction under section 80JJAA would continue to be available to the company even where the company
opts for the lower tax rate of 22% under the provisions of section 115BAA of the Act (as discussed above).

3. Deduction in respect of inter-corporate dividends – Section 80M of the Act

The Dividend Distribution Tax (‘DDT’) applicable on companies on declaration of dividend has been deleted
by the Finance Act 2020 with effect from 1st April 2020. Dividend income shall be taxable in the hands of
shareholders with effect from AY 2021-22.

The Finance Act, 2020 has inserted section 80M effective 1st April 2020 to eliminate the cascading tax effect
in case of inter-corporate dividends by providing a deduction in respect of dividends received by a domestic
company, to the extent such dividend is distributed by it on or before the due date. In this case, due date
means one month prior to the date for furnishing the return of income under sub-section (1) of section 139
of the Act.

B. Special tax benefits available to Material Subsidiary, namely Comstar Automotive USA LLC of
the company situated in USA

Comstar Automotive USA, LLC(Comstar US) is a US based company and is a material subsidiary of Sona
BLW Precision Forgings Limited.

As per the USA registered CPA, Comstar US is not receiving any special tax benefits in USA.

C. Special tax benefits available to the shareholders under the Act

There are no special tax benefits available to the shareholders of the Company.

As per the USA registered CPA, the only tax benefit for shareholder of Comstar Automotive USA, LLC is
receiving lower withholding tax rate as allowed under the India-USA Income tax treaty for distribution made
by Comstar Automotive USA LLC to the shareholder or interest paid on loans.

Notes:

The above statement covers only above-mentioned tax laws benefits as per the current income tax law and does
not cover any benefit under any other law.

This statement is intended only to provide general information to the investors and is neither designed nor intended
to be a substitute for professional tax advice. The shareholders / investors in India or any country outside India
are advised to consult their own professional advisors regarding possible income tax consequences that apply to
them under the laws of such jurisdiction.

No assurance is given that the revenue authorities/courts will concur with the views expressed by us. Our views
are purely based on the existing provisions of law and its interpretation and available rulings, which are subject
to changes from time to time. We do not assume responsibility to update the views consequent to such changes.

For and on behalf of Sona BLW Precision Forgings Limited

(Group Chief Financial Officer)

Place: Gurugram
Date: 22 February 2021

94
II. INDIRECT TAX

To,
The Board of Directors,
Sona BLW Precision Forgings Limited
Sona Enclave Village Begumpur Khatola,
Sector 35, Gurugram, Haryana - 122004, India

Re: Proposed offering of securities (“offer”) in India by Sona BLW Precision Forgings Limited (“the Issuer/
Company”)

1. This report is issued in accordance with the terms of our engagement letter dated 16 January 2021.

2. The accompanying Statement of Possible Special Tax Benefits summarizes the special tax benefits
available to the Company, its Shareholders and its material subsidiaries (hereinafter referred to as “the
Statement”), under the Central Goods and Services Tax Act, 2017 (read with Central Goods and Services
Tax Rules, circulars, notifications), respective State Goods and Services Tax Act, 2017 (read with
respective State Goods and Services Tax Rules, circulars, notifications), Integrated Goods and Services
Tax Act, 2017 (read with Integrated Goods and Services Tax Rules, circulars, notifications), The Foreign
Trade (Development and Regulation) Act, 1992 (read with Foreign Trade Policy 2015-20), Customs Act,
1962 (read with Custom Rules, circulars, notifications), Customs Tariff Act, 1975 (read with Custom
Tariff Rules, circulars, notifications), (together referred to as “Indirect Tax Regulations”) has been
prepared by the management of the Company in connection with the proposed offer, which we have
initialed for identification purposes.

Management’s Responsibility

3. The preparation of this Statement as of the date of our report which is to be included in the Draft Red
Herring Prospectus is the responsibility of the Management of the Company and has been approved by
the Board of Directors of the Company at its meeting held on 22 February 2021. The Management’s
responsibility includes designing, implementing and maintaining internal control relevant to the
preparation and presentation of the Statement, and applying an appropriate basis of preparation; and
making estimates that are reasonable in the circumstances. The Management is also responsible for
identifying and ensuring that the Company complies with the laws and regulations applicable to its
activities.

Auditor's Responsibility

4. Our work has been carried out in accordance with Standards on Auditing, the 'Guidance Note on Reports
or Certificates for Special Purposes (Revised 2016)' and other applicable authoritative pronouncements
issued by the Institute of Chartered Accountants of India.

5. Pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement)
Regulations 2018, as amended (the ‘ICDR Regulations’) and the Companies Act 2013 (‘Act’), it is our
responsibility to report whether the Statement prepared by the Company, presents, in all material
respects, the possible special tax benefits available as of 22 February 2021 to the Company, the
shareholders and material subsidiaries of the Company, in accordance with Indirect Tax Regulations as at
the date of our report.

6. It is imperative to note that we have relied upon a representation from the Management of the Company
and confirmation received from the tax advisors of the respective overseas material subsidiaries of the
Company with respect to the special tax benefits in their respective overseas jurisdictions.

List of material subsidiaries as identified by the Company on the date of signing of this report:

S. No. Name of the subsidiary Country

1 Comstar Automotive Technologies Private Limited India
2 Comstar Automotive USA LLC USA

95
7. Our work was performed solely to assist you in meeting your responsibilities in relation to your
compliance with the Act and the ICDR Regulations in connection with the proposed Offer.

Inherent Limitations

8. We draw attention to the fact that the Statement includes certain inherent limitations that can influence
the reliability of the information.

Several of the benefits mentioned in the accompanying statement are dependent on the Company or its
shareholders or its material subsidiaries fulfilling the conditions prescribed under the relevant provisions
of the tax laws. Hence, the ability of the Company or its material subsidiaries or its shareholders to derive
the tax benefits is dependent upon fulfilling such conditions, which may or may not be fulfilled. The
benefits discussed in the accompanying Statement are not exhaustive.

The Statement is only intended to provide general information to the investors and is neither designed nor
intended to be a substitute for professional tax advice. In view of the individual nature of the tax
consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant
with respect to the specific tax implications arising out of their participation in the Issue.

Further, we give no assurance that the Revenue Authorities / Courts will concur with our views expressed
herein. Our views are based on the existing provisions of law and its interpretation, which are subject to
change from time to time. We do not assume responsibility to update the views consequent to such changes.

Opinion

9. In our opinion, the Statement prepared by the Company presents, in all material respects, the possible
special tax benefits available as of 22 February 2021, to the Company, its shareholders and its material
subsidiaries, in accordance with the Indirect Tax Regulations.

Considering the matter referred to in paragraph 5 above, we are unable to express any opinion or provide
any assurance as to whether:

(iii) The Company or its shareholders or material subsidiaries will continue to obtain the benefits per the
Statement in future; or

(iv) The conditions prescribed for availing the benefits per the Statement have been/ would be met with.

Restriction on Use

10. This report is addressed to and is provided to enable the Board of Directors of the Company to include
this report in the Draft Red Herring Prospectus, prepared in connection with the Offering to be filed by
the Company with the Securities and Exchange Board of India and the concerned stock exchanges.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No. 001076N/N500013

Sujay Paul
Partner
Membership No. 096314

UDIN: 21096314AAAAAZ3586

Place: Noida
Date: 22/02/2021

96
Statement of possible special tax benefits available to Sona BLW Precision Forgings Limited (including its
material subsidiaries Comstar Automotive Technologies Private Limited and Comstar Automotive USA,
LLC) and its Shareholders

Special tax benefits available to Sona BLW Precision Forgings Limited under the Indirect Tax Regulations

1. Benefits under The Foreign Trade (Development and Regulation) Act, 1992 (read with Foreign
Trade Policy 2015-20)

Remission of Duties and Taxes on Exported Products (RoDTEP)

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was announced by
Government of India (GOI) on 14 September 2019 to boost exports by allowing reimbursement of taxes and
duties, which are not exempted or refunded under any other scheme in accordance with World Trade
Organization (WTO) norms.

RoDTEP is a combination of the current Merchandise Export from India Scheme (MEIS) and Rebate of
State and Central Taxes and Levies (RoSCTL) and will replace all these schemes once come in operations.
At present, embedded duties and taxes, which are not refunded under any other scheme, range from 1-3%.
Under the scheme, rebate of these taxes will be given in the form of duty credit/electronic scrip.

RoDTEP scheme was initially proposed to be notified from April 2020. However, GOI decided to continue
to allow the benefits under MEIS up to 31 December 2020, until the same is merged with RoDTEP scheme.
The scheme has been now notified from 1 January 2021. However, the applicable rates of this benefit are
yet to be notified. Further, the incentives under the said scheme may be available subject to eligibility
conditions which would be prescribed vide press release, advisories, notifications etc. in due course of time.

Export Promotion Capital Goods (EPCG)

The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and
services and enhancing India’s manufacturing competitiveness. EPCG Scheme facilitates import of capital
goods for producing quality goods and services at zero customs duty.

Import under EPCG Scheme shall be subject to a specific export obligation equivalent to 6 times of duties,
taxes and cess saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of authorization.

EPCG license holder is exempted from payment of whole of Basic Customs Duty, Additional Customs Duty
and Special Additional Duty In lieu of Value Added Tax/local taxes (non-GST goods), Integrated Goods
and Services Tax and Compensation Cess, wherever applicable, subject to certain conditions.

2. Benefits of Duty Drawback scheme under Section 74 and 75 of the Customs Act, 1962

Section 74 of the Act grants duty drawback up to 98% of the import duty paid on goods, if the goods are re-
exported by the importer. The importer is entitled to drawback subject to the fulfilment of the certain
conditions. Presently the rate of Duty Drawback ranges from 0% to 95%.

As per section 75, Central Government is empowered to allow duty drawback on export of goods, where the
imported materials are used in the manufacture of such goods. Unlike drawback of a portion of the customs
duty paid on imported goods, here the main principle is that the Government fixes a rate per unit of final
article to be exported out of the country as the amount of drawback payable on such goods.

3. Benefits under the Central Goods and Services Act, 2017, respective State Goods and Services Tax
Act, 2017, Integrated Goods and Services Tax Act, 2017 (read with relevant Rules prescribed
thereunder)

Under the GST regime, all supplies of goods and services which qualify as export of goods or services are
zero-rated, that is, these transactions attract a GST rate of zero per cent.

There are two mechanism for claiming refund of accumulated ITC against export. Either person can export
under Bond/ Letter of Undertaking (LUT) as zero-rated supply and claim refund of accumulated Input Tax
Credit or person may export on payment of integrated Goods and Services Tax and claim refund thereof as
per the provisions of Section 54 of Central Goods and Services Tax Act, 2017.

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 Thus, the GST law allows the flexibility to the exporter (which will include the supplier making supplies to
SEZ) to claim refund upfront as integrated tax (by making supplies on payment of tax using ITC) or export
without payment of tax by executing a Bond/LUT and claim refund of related ITC of taxes paid on inputs
and input services used in making zero rated supplies.

Possible special benefits for shareholders of Sona BLW Precision Forgings Limited
Shareholders of the Company are not eligible to special tax benefits under the provisions of the the Central Goods
and Services Act 2017 (read with Central Goods and Services Tax Rules, circulars, notifications), respective State
Goods and Services Tax Act, 2017 (read with respective State Goods and Services Tax Rules, circulars,
notifications), Integrated Goods and Services Tax Act, 2017 (read with Integrated Goods and Services Tax Rules,
circulars, notifications), The Foreign Trade (Development and Regulation) Act, 1992 (read with Foreign Trade
Policy 2015-20), Customs Act, 1962 (read with Custom Rules, circulars, notifications), Customs Tariff Act, 1975
(read with Custom Tariff Rules, circulars, notifications).

Possible special tax benefits for Comstar Automotive Technologies Private Limited (material subsidiary of
Sona BLW Precision Forgings Limited)

1. Remission of Duties and Taxes on Exported Products (RoDTEP)

The Remission of Duties and Taxes on Exported Products (RoDTEP) scheme was announced by
Government of India (GOI) on 14 September 2019 to boost exports by allowing reimbursement of taxes and
duties, which are not exempted or refunded under any other scheme in accordance with World Trade
Organization (WTO) norms.

RoDTEP is a combination of the current Merchandise Export from India Scheme (MEIS) and Rebate of
State and Central Taxes and Levies (RoSCTL) and will replace all these schemes once come in operations.
At present, embedded duties and taxes, which are not refunded under any other scheme, range from 1-3%.
Under the scheme, rebate of these taxes will be given in the form of duty credit/electronic scrip.

RoDTEP scheme was initially proposed to be notified from April 2020. However, GOI decided to continue
to allow the benefits under MEIS up to 31 December 2020, until the same is merged with RoDTEP scheme.
The scheme has been now notified from 1 January 2021. However, the applicable rates of this benefit are
yet to be notified. Further, the incentives under the said scheme may be available subject to eligibility
conditions which would be prescribed vide press release, advisories, notifications etc. in due course of time.

2. Exemption and benefits available under Export Oriented Unit scheme

Exemption of all goods as specified in the Annexure – I to Notification 52/2003 – Customs, when imported
or procured from a Public Warehouse or a Private Warehouse appointed or licensed, under section 57 or
section 58 of the said Customs Act or from international exhibition held in India for the purpose of
manufacture of articles for export or for being used in connection with the production or packaging or job
work for export of goods or services by Export Oriented Undertaking or Unit;

Exemption from additional duties of Customs, if any, under section 3(1), section 3(3) and section 3(5) of the
Customs Tariff Act, 1975;

Exemption from the levy of Goods and Services Tax under Central Goods and Services Act 2017 (read with
Central Goods and Services Tax Rules, circulars, notifications), respective State Goods and Services Tax
Act, 2017 (read with respective State Goods and Services Tax Rules, circulars, notifications), Integrated
Goods and Services Tax Act, 2017 (read with Integrated Goods and Services Tax Rules, circulars,
notifications) on physical export of notified goods and/or services or supplies goods and/or services to
Special Economic Zone developer or unit.

3. Benefits under the Central Goods and Services Act, 2017, respective State Goods and Services Tax
Act, 2017, Integrated Goods and Services Tax Act, 2017 (read with relevant Rules prescribed
thereunder)

Under the GST regime, all supplies of goods and services which qualify as export of goods or services are
zero-rated, that is, these transactions attract a GST rate of zero per cent.

98
 On account of zero rating of supplies, the supplier will be entitled to claim input tax credit in respect of goods
or services used for such supplies and can seek refund of accumulated/ unutilized Input Tax Credit (ITC).

There are two mechanism for claiming refund of accumulated ITC against export. Either person can export
under Bond/ Letter of Undertaking (LUT) as zero-rated supply and claim refund of accumulated Input Tax
Credit or person may export on payment of integrated Goods and Services Tax and claim refund thereof as
per the provisions of Section 54 of Central Goods and Services Tax Act, 2017.

Thus, the GST law allows the flexibility to the exporter (which will include the supplier making supplies to
SEZ) to claim refund upfront as integrated tax (by making supplies on payment of tax using ITC) or export
without payment of tax by executing a Bond/LUT and claim refund of related ITC of taxes paid on inputs
and input services used in making zero rated supplies.

Possible special tax benefits for Comstar Automotive USA, LLC (material subsidiary of Sona BLW
Precision Forgings Limited)

There are no special tax benefits available to Material Subsidiary situated in USA.

Notes:

1. These special tax benefits are dependent on the Company or its material subsidiaries fulfilling the
conditions prescribed under the relevant provisions of the Indirect Tax Regulations. Hence, the ability of
the Company or its material subsidiary to derive the tax benefits is dependent upon fulfilling such
conditions, which based on the business imperatives, the Company or its material subsidiaries may or may
not choose to fulfil.

2. The special tax benefits discussed in the Statement are not exhaustive and is only intended to provide
general information to the investors and hence, is neither designed nor intended to be a substitute for a
professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws,
each investor is advised to consult his or her own tax consultant with respect to the specific tax
implications.

3. The Statement has been prepared on the basis that the shares of the Company are listed on a recognized
stock exchange in India and the Company will be issuing equity shares.

4. The Statement is prepared on the basis of information available with the Management of the Company and
there is no assurance that:
i. The Company or its material subsidiaries will continue to obtain these benefits in future;
ii. The conditions prescribed for availing the benefits have been/ would be met with; and
iii. The revenue authorities / courts will concur with the view expressed herein.

5. The above views are basis the provisions of law, their interpretation and applicability as on date, which may
be subject to change from time to time.

6. We have relied on the certification from the US Registered CPA on the special indirect tax benefits
available to the Company’s material subsidiary in USA.

For and on behalf of Sona BLW Precision Forgings Limited

(Group Chief Financial Officer)

Place: Gurugram
Date: 22 February 2021

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 SECTION IV: ABOUT OUR COMPANY

INDUSTRY OVERVIEW

The information in this section is derived from the report titled “Assessment of Indian market potential for specific
precision forged and electrical components” dated January 2021 (the “CRISIL Report”), prepared by CRISIL
Research, a division of CRISIL Limited (“CRISIL”) and report titled “Global and Indian Automotive Market
Overview” dated February 17, 2021 prepared by Ricardo (“Ricardo Report” and together with the CRISIL
Report, “Industry Reports”). We commissioned the Industry Reports for the purpose of confirming our
understanding of the industry in connection with the Offer. Neither we, nor any of the Book Running Lead
Managers, nor any other person connected with the Offer has verified the information in the Industry Reports.
Further, the Industry Reports were prepared based on publicly available information, data and statistics as of
specific dates and may no longer be current or reflect current trends. The Industry Reports may also be based on
sources that base their information on estimates, projections, forecasts and assumptions that may prove to be
incorrect. CRISIL has advised that, while it has taken due care and caution in preparing the CRISIL Report based
on the information obtained by CRISIL from sources which it considers reliable (“Data”), it does not guarantee
the accuracy, adequacy or completeness of the Data/CRISIL Report and is not responsible for any errors or
omissions or for the results obtained from the use of Data / CRISIL Report. Further, the CRISIL Report is not a
recommendation to invest or disinvest in any entity covered in the CRISIL Report and no part of the CRISIL
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 or distributors of the CRISIL Report. Without limiting the generality of the
foregoing, nothing in the CRISIL Report is to be construed as CRISIL providing or intending to provide any
services in jurisdictions where CRISIL does not have the necessary permission and/or registration to carry out
its business activities in this regard. Our Company will be responsible for ensuring compliances and consequences
of non-compliances for use of the CRISIL Report or part thereof outside India. CRISIL Research operates
independently of, and does not have access to information obtained by CRISIL’s Ratings Division or CRISIL Risk
and Infrastructure Solutions Ltd. (“CRIS”), which may, in their regular operations, obtain information of a
confidential nature. The views expressed in the CRISIL Report are that of CRISIL Research and not of CRISIL’s
Ratings Division or CRIS. No part of the CRISIL Report may be published/reproduced in any form without
CRISIL’s prior written approval.

Ricardo has advised that, the Ricardo Report was commissioned by the Company on terms specifically limiting
Ricardo’s liability. Ricardo’s conclusions are the results of the exercise of their best professional judgment based
upon Ricardo internal analysis and relevant market analysis. The Ricardo Report may be shared by the Company
with the Book Running Lead Managers and legal counsel in relation to the Offer. Any use which a third party,
other than the Book Running Lead Managers, makes of the Ricardo Report, or any reliance on it, or decisions to
be made based on it, are the responsibility of such third party. Ricardo UK Limited accepts no duty of care or
liability of any kind whatsoever to any such third party, and no responsibility for damages, if any, suffered by any
third party as a result of decisions made, or not made, or actions taken, or not taken, based on the Ricardo Report.
Further, in preparing the Ricardo Report, Ricardo may have relied on data, information or statements supplied
to them by third parties or available on public sources on or prior to the Ricardo Report’s date (the “Public
Data”), in which case, Ricardo has not independently verified the Public Data unless expressly stated in the
Ricardo Report, and such Public Data has been sourced from third parties that Ricardo considers reliable. The
Public Data is assumed to be accurate, complete, reliable and current as of the date of such information and no
responsibility for any error or omission in the Ricardo Report arising from errors or omissions in such Public
Data is accepted. No representation or warranty, express or implied, is or will be made in relation to the accuracy
or completeness of the Public Data and no responsibility or liability is or will be accepted by Ricardo in relation
to the Public Data. Any forecasts presented in the Ricardo Report were prepared using Public Data and the
Ricardo Report is dependent on it. Some of the assumptions used to develop any forecasts may not be realized
and unanticipated events and circumstances may occur. Consequently, Ricardo does not warrant the conclusions
contained in the Ricardo Report as there may be material differences between forecasts and actual results. While
Ricardo has taken due care and caution in preparing the Ricardo Report, it shall not be responsible for any errors
or omissions in or for the results obtained from the use of or the decisions made based on, the Ricardo Report.

MACROECONOMIC OVERVIEW OF THE GLOBAL ECONOMY

The global economy is seeing gradual signs of recovery, but the resurgence of COVID-19 cases in some countries
has prompted authorities to re-impose lockdowns to contain its spread. However, multiple vaccine approvals in
December, commencement of vaccination is some countries and better than expected data on economic activity

100
from various parts of the world has resulted in IMF raising its estimates of world economic growth yet again in
the recent January 2021 update of the World Economic Outlook.

The IMF raised its forecast slightly following better-than-expected Gross Domestic Product (GDP) data from
countries such as Australia, Euro area, India, Japan, Korea, New Zealand, Turkey, and United States in the third
quarter The global economic growth estimated by the IMF for calendar year 2020 was -3.5%, while that for
calendar year 2021 is better at 5.5% and 4.2% in calendar year 2022. The IMF expects the vaccination and
containment efforts to strengthen recovery in contact intensive sectors further improving economic activity
momentum however, progress is expected to be staggered, as some countries, especially developed countries, get
vaccination programs off the ground faster and see earlier recoveries compared to developing countries.

Finally, additional policy measures announced at the end of 2020—notably in the United States and Japan—are
expected to provide further support in 2021–22 to the global economy. These developments indicate a stronger
starting point for the 2021 to 2022 global outlook than envisaged in the previous forecast.

IMF estimates of GDP growth for key economies

GDP growth for key economies

(%) 2019 2020 2021 2022

10.0 8.1
8.0 5.5 6.0 5.6
5.1
6.0 4.2 4.23.6 3.9 3.6
2.8 2.5 3.12.4 2.3 3.0 2.6 2.8
4.0 2.2 1.3 1.4 1.4
1.3
2.0 0.3 0.2
0.0
-2.0
-4.0
-6.0 -3.5 -3.4 -3.6
-5.1 -4.5
-8.0
-10.0 -7.2 -7.5
World Output United States EU Area* Japan China Russia Brazil South Africa
Advanced Economies Emerging Market and Developing Economies

Note: *EU Area includes Germany, France, Italy, Spain

Source: IMF, CRISIL Research

MACROECONOMIC OVERVIEW OF THE INDIAN ECONOMY

Impact of COVID-19 pandemic on the global and Indian economies

Fiscal 2020 was volatile for the global economy. The first three quarters were ensnared by trade protectionist
policies and disputes among major trading partners, volatile commodity and energy prices, and economic
uncertainty arising from the Brexit. Hopes for broad-based recovery in the fourth quarter were dashed by the
COVID-19 pandemic, which has infected more than 74.9 million people in more than 200 countries (as of
December 17, 2020) and counting, leading to considerable human suffering and economic disruption.

Growing restrictions on the movement of people and lockdowns in the affected countries led to demand, supply
and liquidity shocks. While the lockdowns in India have been gradually lifted and economic activity seems to be
reviving globally, a second wave of cases is emerging especially in Europe.

CRISIL estimates that the Indian economy will shrink 7.7% in Fiscal 2021 because of the pandemic. After sluggish
growth in first half of Fiscal 2021, due to the rising number of COVID-19 cases, GDP growth could move into a
positive territory towards the end of Fiscal 2021, with economic activity picking up gradually. Over the coming
months, manufacturing is expected to revive faster compared with services. CRISIL expects agricultural GDP to
grow 2.5% on-year in Fiscal 2021, given the normal and a largely well-distributed monsoon, and a healthy sowing
and ground-water situation. While agriculture does not have the heft to offset the sharp contraction in the non-
agricultural sector (accounting for 85% of GDP), it punches more than its weight in GDP – its share in employment
remains the highest at 44% and is a critical supplier of much-needed nutrition during the pandemic. Despite some
support from the rural economy, consumption is expected to sink in Fiscal 2021. Consumption of some services,
especially contact-based ones such as travel, sports and entertainment, will remain muted. The pandemic has come

101
at the most inopportune time since India was showing signs of recovery following a slew of fiscal/monetary
measures. Having said that, CRISIL foresees growth rebounding to 11% in Fiscal 2022, on the back of a very
weak base and some benefit from a ‘rising global tide lifting all boats’ effect.

GDP growth outlook for India

Rs trillion CAGR FY15-20: 6.7% CAGR FY21-26: 7.0%

15.0%
11.0%
189
200 8.0% 8.3%
7.4% 7.0% 10.0%
6.1% 146 148
132 140 135
150 123
114 6.40% 6.3% 5.0%
105
100 4.2%
0.0%

50 -7.6% -5.0%

0 -10.0%
FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22P FY26P

GDP (Constant 2011-12 prices) GDP growth

Note: E - Estimated and P - Projected

Source: National Statistics Office (NSO), International Monetary Fund (IMF) and CRISIL Research estimates

Macroeconomic outlook for Fiscal 2021

The economy saw a faster-than-expected revival in economic activity as lockdown measures were eased starting
from June 1. Several high frequency indicators starting with IIP, PMI manufacturing followed by e-way bill
generation and GST collection started showing strong and sustained recovery. Even the auto sales showed sharp
recovery led by passenger vehicles. Passenger vehicles sales showed greater rebound supported by pent up
demand, festive season and gradual resumption in work from office. All these factors led to better economic
performance in comparison to economic growth anticipated for Fiscal 2021 during the initial months of the
pandemic.

GDP to bounce back over the medium term

This growth will be supported by the following factors:

• Over the medium term, growth is expected to lean more on technology and efficiency parameters.

• Reforms undertaken over the past few years, such as:

– The production linked incentive scheme (“PLI scheme”), which aims to incentivize local manufacturing
by giving volume-linked incentives to manufacturers in specified sectors.

– Key structural reforms, such as the implementation of Goods and Services Tax (GST) and Insolvency
and Bankruptcy Code (IBC), will begin to show their impact over the longer term.

• Reform measures aimed at enhancing financial inclusion will broaden the base of the banking ecosystem,
leading to higher lending and investment.

• A raft of reform measures by the government, along with a more expansionary stance of monetary policy,
leading to a steady pick-up in consumption demand.

• Policies aimed towards greater formalization of the economy are bound to lead to an acceleration in per-
capita income growth.

According to Ricardo, COVID-19 had impacted global trade and supply chain at unprecedented speed and scale.
COVID-19 has exposed key issues within the global supply chain that was built on lean manufacturing principles

102
and reliance on China. There is now an increasing need for de-risking supply chains and geographic diversification
is one of the main lessons from the COVID-19 crisis.

Increasing labor costs and trade regulations, supply chain issues during COVID-19 has accelerated OEMs efforts
to diversify their supply chains outside China. Ricardo expects countries with lower operational costs such as
Vietnam, Thailand, India and Mexico to be the key beneficiaries.

PLI scheme to boost manufacturing in the long run

The government has budgeted approximately Rs. 2 trillion to give incentives to the local manufacturing units to
13 key sectors. The key sectors likely to get benefit from the scheme include automobiles, pharma, telecom,
electronics, food, textiles, steel and energy.

Broad Sector Segment Budgeted (Rs. Billion)*

Advance Chemistry Cell (ACC) Battery 181.00

Automobiles 751.42
Automobiles & auto components 570.42

Mobile manufacturing and specified electronic components 409.51

Electronics Electronic/technology products 50.00 521.89

White goods (ACs & LED) 62.38

Critical key starting materials/drug intermediaries and active

69.40
pharmaceutical ingredients
Pharma and
253.60
medical equipment Manufacturing of medical devices. 34.20

Pharmaceuticals drugs 150.00

Telecom Telecom & networking products 121.95 121.95

Food Food products 109.00 109.00

Textile Textile products: MMF segment and technical textiles 106.83 106.83

Steel Speciality steel 63.22 63.22

Energy High efficiency solar PV modules 45.00 45.00

Total 1,972.91
*Approved financial outlay over a five-year period
Source: Government websites; CRISIL Research

Under the PLI scheme for automotive sector, the government has planned four sub schemes, namely, Global
sourcing scheme, Vehicle Champion Scheme, Component Champion Scheme, and Production-Linked Incentive
Scheme. Further the government has laid out a stringent eligibility criteria in terms of minimum turnover, export
revenue and investments in fixed asset in order to ensure that implementation of scheme offers desired results.
Auto OEMs need to showcase minimum turnover of Rs. 100 billion, minimum exports of Rs. 10 billion and
minimum investment in fixed asset of Rs. 35 billion in order to be eligible for this scheme. Whereas auto
component manufacturers need to showcase minimum turnover of Rs. 10 billion, minimum exports of Rs. 2
billion and minimum investment in fixed asset of Rs. 3.5 billion.

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GLOBAL LIGHT VEHICLE MARKET

Global Light Vehicle Production

Source: OICA – International Organisation of Motor Vehicle Manufacturers, Ricardo Analysis

Global Light Vehicle (Passenger Vehicles GVW <=3.5T) production has remained flat between 2015-19.
However, vehicle production declined by approximately 18% in calendar year 2020 due to COVID-19.

Given USA and most parts of Europe are still severely impacted by COVID-19, Ricardo does not expect a V-
shaped recovery for the passenger vehicle market, but a more gradual recovery coming out of COVID-19.
Calendar year 2021 growth will primarily be driven by the Chinese market. Growth in Japan will continue to be
stable, while India is expected to reach its previous peak only beyond calendar year 2025.

Ricardo expects overall global volumes to reach approximately 92 million in calendar year 2025 with China,
Europe and North America accounting for approximately 70% of the global production volumes.

According to the IEA Global EV Outlook 20201, passenger vehicles to lead electrification adoption (by volumes),
followed by light commercial vehicle, busses and trucks through to 2030.

OEM Market Share – 2020 (based on production volumes)

Source: Ricardo Analysis, Public domain, Company presentations

The 10 OEMs represented in the above graph account for approximately 71% of the total production in
calendar year 2020.

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https://www.iea.org/reports/global-ev-outlook-2020

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As of calendar year 2020, Toyota leads the light vehicle market with 12.6% share followed closely by VW at
12.3% and Renault Nissan Mitsubishi alliance at 9.6%. Over the years, Toyota and VW have been battling to be
the number one OEM in passenger vehicle production. Post-merger of FCA and PSA, Stellantis is now among the
top five global OEMs in terms of production volumes displacing Honda and General Motors. Geely with a share
of 2.6% is the only Chinese brand with significant share.

Sona Comstar supplies components to six of the top 10 global PV OEMs mentioned in the above graph. For three
of the above OEMs, Sona Comstar acts as a tier-1 supplier while for 3 of them they are a tier-2 supplier.

ELECTRIC VEHICLE IN GLOBAL MARKET SHARE

Passenger Vehicle – Electric Vehicle Market Share

Source: Ricardo Analysis, Public domain

In calendar year 2020, global production of BEVs (Battery Electric Vehicle) stood at approximately 2.3 million
units. Tesla accounted for approximately 21% of the share while Renault Nissan & VW accounted for
approximately 12% and approximately 10% respectively. SAIC-GM-Wuiling & Hyundai rounded off the top five
BEV producers globally for calendar year 2020. The top five BEV models produced in calendar year 2020 were
Tesla Model 3 & Y, Renault Zoe, Hyundai KONA & Hongguang Mini. VWs ID.3 and Nissan leaf were among
the top 10 BEVs produced in calendar year 2020. For the next five years, automakers have announced plans to
release more than 200 new electric car models.

Many OEMs have announced plans to for significant investment in electrification and introduction of several BEV
models in the next three to five years. VW plans to be a carbon neutral company by 2050. VW plans to reduce
their total life cycle Greenhouse Gas Emissions of passenger cars and light duty vehicles by 30% compared to
2015. VW plans to have at least approximately 30% of their portfolio to be BEVs in 2030. In 2020, VW sold
approximately 230,000 units of BEV across the globe. GM has committed $27B to EVs & AVs till 2025. GM
plans to launch more than 30 BEVs till 2025 with more than half being available in North America and targeting
100% EVs by 2035. Hyundai plans to increase green car line-up from 31 models in 2020 to 44 models in 2025.
Hyundai aims to be the second largest OEM in green car market. Between Hyundai and Kia they plan to invest
approximately $50 billion into electrification and new advanced technologies. Renault and Dacia brands plan to
launch six new vehicles and two face lifts in 2021-22 across BEV, PHEVs & HEV technologies. Nissan plans to
introduce more than 8 BEVs by 2023. Nissan intends to have 60% of its portfolio in Japan to be BEVs, 23% in
China and 50% in Europe by 2023. Nissan plans to have more than 1 million BEV sales by 2023. Ford has
indicated that it will invest $11.5 billion through 2022 mainly oriented towards BEVs. Ford has outlined an electric
vehicle strategy that encompasses mild hybrid, self-charging hybrid, plug-in hybrid (PHEV) and battery electric
(BEV) solutions across its cars and light commercial vehicles. Ford plans to offer their LCV Transit as a BEV in
2021.

To support electrification of the portfolio, FCA is investing over $11 billion in the design, development and
production of electrified vehicles. PSA aims to have all its models electrified by 2025 – with an electrified variant
available for every model range. At present, it offers ten electrified models (four fully electric vehicles and six

105
plug-in hybrids). Finally, JLR plans to electrify 12 of 13 nameplates in FY21. Majority of the models to be either
plug-in hybrids or Mild hybrids.

Key Drivers of Vehicle Electrification

Climate Change and Public Awareness: While deterioration in air quality across the planet is evident, it is also
badly affecting the public health and economies. Emissions from transportation sector is one of the key reasons
for climate change as they account for approximately 14% of annual emissions including non-CO2 gases and
approximately 25% of CO2 emissions from fossil fuels.

To counter the climate change, 196 countries have come together to establish Paris agreement to reduce
greenhouse gas emissions including from the transportation sector.

– India has committed to reduce its greenhouse gas emissions by 33-35%2 by 2030 compared to 2005
levels.
– European Union has committed to reduce greenhouse gas emissions by at least 55%3 by 2030
compared to 1990.
– China, which is the world's biggest source of CO2 with approximately 28% of global emissions, aims to
reach CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.

Ban on fossil fuel vehicles by countries: To battle the air pollution and climate change, multiple countries have
come up with an aggressive plan to ban sales of vehicles that run on engines.
– 2030 targets for India indicate that 70% of all commercial passenger vehicles, 30% of private passenger
vehicles, 40% of buses, 80% of two-wheeler and 80% of three-wheeler sales would be electric.
– In Europe, Norway is leading the way with an aggressive plan of phasing out sale of ICE passenger
vehicles by 2025. The UK is expected to ban sales of Gasoline and Diesel Passenger Vehicles by 2030.
– Recent executive order from California Government mandate that all new passenger vehicles and
passenger trucks sold in the state be zero emissions vehicles by 2035.
– Recently, China has also announced that by 2035, all the new passenger vehicles being sold in the country
to be alternate fuel vehicles such as EVs/hybrids.

Government Support and Fiscal Incentives: To motivate consumers and support manufacturers, multiple
Governments across the world have introduced fiscal incentives. Some of the incentives include tax exemptions
for Hybrids and EVs, deductions in purchase price, exemptions from road tax, toll, parking etc. Besides demand
incentives, numerous supply side incentives are being introduced to help develop EV eco-system. For example,
India has introduced incentives for Li-ion battery makers.
– European nations are at the forefront of providing incentives. Germany provides subsidies as much as
€9,000 on purchase of EVs while France provides as much as €7,000.
– The federal government of the US offers up to $7,500 in tax credits to consumers purchasing electric
plug-in vehicles.
– China has extended the EV incentive program till 2023, which was supposed to end in 2020. Incentives
include exemption from purchase tax, demand incentive that is calculated based battery energy density,
energy consumption etc.
– India has established FAME II scheme with a budget of Rs. 100 billion for a period of three years, which
is being used for demand incentives (86%) and creation of charging infrastructure. Besides the scheme,
tax benefits have been announced to encourage EV purchases.

Emission Regulations: Several countries have been introducing stringent emission norms to battle climate change
and encourage alternate cleaner fuels. Complying to these standards include significant investment while
electrified vehicles continue to proliferate. Examples include:
– Europe conforms to Euro 6 standards, which has implemented RDE (Real Driving Emissions) and stricter
conformance factors. Future legislation may venture beyond the tailpipe.

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https://www.carbonbrief.org/the-carbon-brief-profile-india
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 – Currently, China emissions legislation GB 6a is equivalent to Euro 6 and exceeds them with
implementation of GB 6b in 2023.

– India switched to Bharat Stage VI (equivalent to Euro 6) standards in April 2020.

Fuel Economy/CO2 Norms: Besides emission norms, fuel economy and CO2 norms are also being implemented
to encounter climate change. Financial penalties might be applicable if the standards are not being met. Like
emission norms, manufacturers require significant investments on development of technology while electrified
vehicle continue to proliferate.
– Fuel consumption standards have been established for passenger vehicle segment in India in 2017 with
a manufacturer vehicle fleet target of 130 g/km CO2 and will be reduced to 113 g/km CO2 in 2023.
– Currently, China’s CAFC/CO2 regulations are in phase 4, which requires the manufacturers to meet a
fleet average of 5.0 L/100km for new vehicles and phase 5, which was published at the end of 2019
targets 4.6 L/100 km by 2025.
– Europe had established a CO2 fleet average targets of 130 g/km in 2012 for passenger vehicle segment
and it has become stringent in 2020 with a target of 95 gm/km; they are expected to become more severe
from 2025 with a goal of -15% from 2021 levels.

In the last five years several countries have announced stringent fuel economy regulations leading up to 2025. For
example, Europe needs to see an approximately 37% improvement between 2018-25 while China would require
approximately 46% improvement between 2018 to 2025. The US on the other hand must improve by only 20%
between 2018 to 2025.

Investments on Charging Infrastructure: Availability of charging infrastructure is a potential issue for uptake
of EVs and efforts are being made to boost charging infrastructure
– France has allocated €1.3 billion to fund incentives that include grants and subsidies such as tax credit
up to €300 and a grant of up to 50% of the purchasing and installation costs of charging infrastructure
for individuals
– UK is providing a grant of up to 75% to private individuals for purchase and installation of a charging
station
– The Indian Government has announced de-licensing of charging station provided the stations meet
standards of the power ministry. Rs. 10 billion has been allocated under FAME II scheme to support
installations of charging infrastructure.

Decline in Battery price: High acquisition cost is one of the prime challenges in the adoption of EVs and battery
is a major contributor (approximately 40%) to the cost of an EV. As the technology evolves and economies of
scale achieved, the cost of battery is expected to drop enabling BEV prices to decline to the level of ICE vehicles.
The battery prices were at approximately $1,000/kWh in 2010 and in the last decade, prices have dropped to $120-
$200/kWh depending on scale, location and type of cell and cell chemistry. The prices are expected to further
drop in the next five years allowing BEVs to have price parity with ICE vehicles.

Total Cost of Ownership: Total cost of ownership is a function of capital cost (includes interest payment on
vehicle financed), fuel cost & maintenance cost.

Currently, the capital cost of a BEV is much higher compared to an ICE vehicle as battery prices are still very
high. For example, the capital cost for a compact BEV sedan is approximately 90% higher compared to ICE
compact sedan while mid-sized BEV SUVs are approximately 30% higher compared to mid-sized ICE SUVs. As
battery prices decline over the next three to five years, Ricardo expects capital cost for a BEV to attain parity with
the ICE vehicle.

With regards to fuel cost, there is a significant fuel cost savings between an ICE and BEV. For example, a BEV
compact sedan offers approximately 60% fuel cost saving compared to an ICE compact sedan (same platform)
over a five-year period. Similarly, a BEV compact SUV offers an approximately 60% fuel cost savings compared
to a BEV compact SUV (Diesel) and approximately 70% savings compared to a BEV compact SUV (Gasoline)
over a five-year period. Finally, a BEV mid-sized SUV offers approximately 80% fuel cost savings compared to
an equivalent mid-sized SUV Diesel or Petrol version.

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TCO for BEVs will be favourable vis-à-vis. ICE vehicles when capital costs for BEVs attain parity with ICE
vehicles.

Global Propulsion Split – Passenger Vehicles Production Volumes

2010 2015 2020 2023E 2025E

73 million 85.7 million 70.3 million 84.2 million 91.5 million

Micro Hybrid Mild Hybrid Battery Electric Vehicle

Source: Ricardo Analysis, Public domain

Driven by stringent emission and fuel economy (CAFE) regulations across the globe, pure ICE vehicles will no
longer be a viable propulsion choice for passenger vehicles. Hence, pure ICE will continue to decline leading up
to calendar year 2025. Ricardo expects the share of pure ICE vehicles in calendar year 2025 to be approximately
18% of the total global production.

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Depending of the severity of CAFE norms across the regions, OEMs have a choice of micro (12v start-stop),
mild/full hybrids, BEVs (Battery Electric Vehicles) and FCEVs (Fuel Cell Electric Vehicles) to meet corporate
average fuel economy.

Ricardo expects that Micro hybrid (12v Start-Stop) to be a standard offering across passenger vehicles and hence
will account for significant share (approximately 38%) of the propulsion split in calendar year 2025. China and
Europe will see a decline in Micro Hybrids in 2025 as the technology will not offer enough benefit to meet stricter
FE. Currently, the US expected to increase in volume terms as this technology is enough to meet US FE
regulations; however, the scenario may change with new administration.

Mild and Full hybrids account for approximately 32% of the propulsion split in calendar year 2025 with mild
hybrids being the dominant technology. Mild hybrids offer the quickest route to electrification with limited
complexity (compared to full hybrid) and substantial fuel economy benefit. approximately 80% of Mild Hybrid
volumes in calendar year 2025 will be in Europe and China. P0 Mild Hybrid technology is expected to account
for approximately 70% of the mild hybrid volumes. VW, PSA, Renault Nissan are expected to account for
significant P0 volumes in Europe. Geely, FAW, Changan, GWM in China are key players implementing P0
technology.

As fuel economy norms get more stringent over time and countries introduce legislation to ban fossil fuel vehicles,
the proportion of BEVs will increase over time. In calendar year 2025 Ricardo expects BEVs to account for
approximately 12% (approximately 11 million units) of the global production. Ricardo expects FCEV to have
limited volumes in calendar year 2025. approximately 75% of BEV volumes are expected to be in China and
Europe. In the US, Tesla, GM & Ford are expected to drive BEV volumes. The current China battery capacity is
approximately 350GWh and expected to reach 800GWh in 2030.

Among the available propulsion technologies BEV has been the fastest growing at CAGR of approximately 46%
between calendar years 2015 to 2020. BEV are expected to see an increased penetration growing at approximately
36% CAGR between calendar years 2020 to 2025.

North America – Passenger Vehicle Propulsion Split

Million units

Source: Ricardo Analysis, Public domain

Given that the US accounts for approximately 65% of vehicles produced in North America, propulsion splits in
North America are primarily dictated by the US market. Between 2015 to 2020 micro-hybrid (12v start-stop)
technology has become a standard offering across the passenger vehicle segment in North America. Driven by
regulation, OEMs must improve fuel economy by approximately 20% between 2018 to 2025. Given the fuel
economy targets are less stringent, OEMs can potentially achieve this target by mainly implementing micro-hybrid
(12v start-stop) technology across segments. Hence, in calendar year 2025, Ricardo expects North America to
have a significant share (approximately 65%) of micro-hybrid (12v start-stop) vehicles.

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BEV (Battery electric vehicles) will account for approximately 8% of total vehicles production in calendar year
2025 primarily dominated by Tesla, General Motors & Ford. However, as the Biden administration takes charge
it is expected that fuel economy regulations could be revisited and revised to make them more stringent. This
would potentially drive increased penetration of mild hybrids/full hybrids and BEVs (battery electric vehicles).

Europe – Passenger Vehicle Propulsion Split

Million units

Source: Ricardo Analysis, Public domain

Between calendar years 2015 to 2020 micro-hybrid (12v start-stop) technology has become a standard offering
across the passenger vehicle segment in Europe. Driven by regulation, OEMs must improve fuel economy by
approximately 37% between calendar years 2018 to 25. Given the fuel economy targets are quite stringent, OEMs
can no longer meet targets using micro-hybrid (12v start-stop) technology and hence its share decreases from 77%
in calendar year 2018 to 28% in calendar year 2025. OEMs must focus on higher degree of electrification to meet
the fuel economy targets which results in mild hybrids growing from approximately 3% in 2018 to 37% in 2025.
Given current trends in battery prices, BEVs (Battery Electric Vehicle) currently lend themselves only to certain
segments and is expected to further grow and attain approximately 16% market share in calendar year 2025.

China – Passenger Vehicle Propulsion Split

Million units

Source: Ricardo Analysis, Public domain

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Between calendar years 2015 to 2020 micro-hybrid (12v start-stop) technology has become a standard offering
across the passenger vehicle segment in China. Driven by regulation, OEMs must improve fuel economy by
approximately 46% between calendar years 2018 to 2025. Given the fuel economy targets are quite stringent,
OEMs can no longer meet targets using micro-hybrid (12v start-stop) technology and hence its share decreases
from 41% in calendar year 2018 to 31% in calendar year 2025.

As absolute fuel economy targets are approximately 9% less than Europe for calendar year 2025, the degree of
electrification will be more towards mild hybridization rather than BEVs. Proportion of BEVs is also dictated by
NEV credit regime in the China market and China’s ambition to lead the global automotive electrification. Ricardo
expects the share of mild hybrids to grow from an insignificant share to approximately 25% in calendar year 2025.
BEV will account for approximately 19% in calendar year 2025.

Passenger Electric Vehicle – Drive Type

Source: Ricardo Analysis

In EVs, majority of the products are presently single axle and in the 60-110kW power range. The power range is
expected to shift to 110-200kW for the next generation of EVs with the premium and high-performance segment
coming in twin e-Axle variants.

Global Commercial Vehicle (>6T GVW) market share

Source: 2019 Market Share, Automotive World Report, Ricardo Analysis

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Commercial vehicles with GVW of >6T had a market size of approximately 3.2 million units in 2019. The market
is fragmented with 10 players holding approximately 70% markets share. However, Daimler led with
approximately 12% market share followed by the Chinese players, FAW and Dongfeng. Asia was the biggest CV
market with sales of approximately 1.8 million units in 2019. Europe sold approximately 456,000 units across the
>6T segment. NAFTA market sales (the US, Canada & Mexico) accounted for approximately 623,000 units in
2019 while rest of the world accounted for approximately 350,000 units. Off the approximately 3.2 million units
sold in 2019, approximately 2.4 million units were in the >16T segment. The >16T segment is a HD segment with
includes commercial vehicles with multi-axle. Globally HD multi-axle vehicles have a bigger share of the CV
sales pie and this trend is expected to continue for the foreseeable future. In 2020, the European CV market (>6T)
declined by approximately 28% YOY to approximately 328,000 units. The NAFTA CV market (>6T) declined
by approximately 30% YOY to approximately 436,000 units. Sona Comstar supplier components to three of the
top 10 global commercial vehicle OEMs.

Global Agriculture Tractor market

Global Tractor Market

Source: Ricardo Analysis, Public domain information

In terms of units, India dominates the global tractor market with approximately 802,000 while US leads in terms
of value with approximately $14 billion. In India and the US more than 95% of the tractors sold are 2WD. 4WD
is currently niche volumes and used for specialty applications. In Europe majority of the tractors sold are 4WD.
While the trends in the US and Europe with respect to 2WD and 4WD tractors are not expected to change, Ricardo
expects the penetration of 4WD tractors to increase in India going forward.

Global Tractor Market Share (based on volumes across US, Europe and China)

Source: Ricardo Analysis, Public domain information

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Top-8 OEMs account for approximately 93% of the global markets. Mahindra leads the global (China, the US,
Germany, UK, France and Italy) tractor market with approximately 29% followed by John Deere, TAFE with
approximately 13% & approximately 12% respectively.

Sona Comstar supplies components to seven of the top eight Global Tractor OEMs shown in the chart above.

INDIA AUTOMOTIVE MARKET

Review Of The Indian Passenger Vehicle Industry (Fiscals 2016- 2021)

Historical production development (Fiscals 2016- 2021)

Production of passenger vehicles (PVs) in India recorded a healthy growth of 5.2% CAGR between Fiscals 2016
and 2019 due to a spurt in domestic and exports demand. Domestic demand was driven by expansion in the
addressable market, development of infrastructure, and stable cost of vehicle ownership, as crude oil prices
remained low except in the few months when output was reduced due to sanctions imposed on Iran.

Review of PV production

5.3 CAGR: 5.2% CAGR: (12.2)-(11.8)%

4.3

3.3
in million units

2.3
3.8 4.0 4.0
3.5 3.4 3.1
1.3

0.3

FY16 FY17 FY18 FY19 FY20 FY21E

-0.7

Note: E - Estimated
Source: SIAM- Society of Indian Automobile Manufacturers, CRISIL Research

Demonetization and implementation of the Goods and Services Tax (GST) resulted in the weakening of the
economy. Further coupled with emission and safety norms introduced by the government of India resulted in very
sluggish growth in the PV industry after Fiscal 2018. Production in Fiscal 2019 remained flat, with India producing
4.03 million PVs, of which 3.38 million vehicles were sold in the domestic market and 0.68 million were exported.

In Fiscal 2020, lower private consumption and inventory adjustment because of a change in emission norms from
BS IV to BS VI, liquidity crisis, and the onset of COVID-19 resulted in a decline of 15% in production. Domestic
sales fell 18%, whereas exports remained flat.

As COVID-19 spreads through close contact, the use of public transportation and shared mobility services
expected to be impacted currently. This has given a boost to personal mobility. Despite real GDP likely to contract
7.5% in Fiscal 2021, PV production is expected to decline 3-5%—domestic sales is expected to decline 3-5% and
exports 30-35%.

113
Review of PV sales

4.5 CAGR: 8.6% CAGR: (7.2)-(7)%

4.0

3.5

3.0
in milllion units

2.5

2.0
3.3 3.4
1.5 3.0
2.8 2.8 2.6
1.0

0.5

0.0
FY16 FY17 FY18 FY19 FY20 FY21E

Note: E - Estimated
Source: SIAM- Society of Indian Automobile Manufacturers, CRISIL Research

Split by domestic sales and exports

The Indian PV market is focused on the domestic market, with over 85% demand stemming from the domestic
market in Fiscal 2021. The ratio of exports-to-production for the industry has been declining from 19% in Fiscal
2016 to 15% in Fiscal 2021. This can be attributed to muted exports due to a slowdown in the global automobile
industry as well as major OEMs focusing on serving fast-growing domestic markets over foreign markets. In
Fiscal 2020, this share had gone up to approximately 20% as OEMs enhance their focus on export
markets. Stagnating domestic traction in the past three years has resulted in foreign automobile manufacturers
such as Ford, General Motors (GM), and Volkswagen (VW) increasing their focus on exports, thereby
improving utilization by using spare capacity and boosting revenue. These players are developing India as an
export hub, as evidenced by the consistent increase in the proportion of exports to their total production.

PV industry split by domestic sales and exports

19% 20% 19% 17% 20% 15%

81% 80% 81% 83% 80% 85%

FY16 FY17 FY18 FY19 FY20 FY21E

Domestic sales Exports

Note: E - Estimated
Source: SIAM, CRISIL Research

The domestic PV industry grew 6.6% between Fiscals 2016 and 2019, led by strong growth in utility vehicles
(UVs), which rose 14.9% versus cars, which grew 3.1% during the same period. Improving economic scenario,
higher affordability, and new model launches drove demand during this period.

Domestic demand fell 18% year on year in Fiscal 2020 because of lower consumer sentiments due to slowing
down of economy and inventory correction due to a change in emission norms. Moreover, acquisition costs
increased due to implementation of safety norms such as mandatory anti-lock braking system (ABS), airbags, etc.
and due to change in emission norms. Further, in Fiscal 2021, domestic sales is likely to decline 4-6%. The shift
towards personal mobility to maintain social distancing has aided PV sales. The pandemic and subsequent
lockdown has impacted supply chain; the issue still persists in the system.

PV exports from India remained flat at 1.2% CAGR between Fiscals 2016 and 2019, supported by UV exports,
which grew at a CAGR of 10.5%, while car exports fell 1.2% during this period. In Fiscal 2021, exports are

114
estimated to reduce 30-35% due to the pandemic, supply constraints, and higher focus of OEMs on the domestic
market.

Split of industry production volume by PV segments

Small cars have a major share in total PV domestic volumes, as their lower ticket size makes them affordable to
the average Indian consumer and ideal for first-time car buyers. The UV segment, which traditionally appealed to
customers who valued larger seating capacity and ability to drive on rough rural roads, witnessed a major shift in
customer preference with the launch of compact UVs.

In Fiscal 2020, new model launches and entry of new players such as Korea's Kia Motors and China's MG Motors
(part of SAIC) further increased the number of players and models and intensified competition.

PV production by vehicle segments

5.3 CAGR: (12.2)-(11.8)%

CAGR: 5.2%

4.3 4.0 4.0

3.8
3.5 3.4
1.3 3.1
in million units

3.3 1.1 1.3

0.9
1.3
2.3 1.3

1.3 2.6 2.7 2.7 2.7

2.2 1.8
0.3

FY16 FY17 FY18 FY19 FY20 FY21E

-0.7

Cars Vans and UVs

Note: E – Estimated; Source: SIAM, CRISIL Research

Historical growth drivers for the domestic PV sales

Macroeconomic scenario

Growth in real GDP has a direct bearing on the affordability of PV buyers. Between Fiscals 2016 and 2019, India
recorded modest GDP growth. During this period, the PV industry recorded positive growth. In Fiscal 2020, as
the economy weakened amid the pandemic, consumer sentiments remained subdued, impacting sales. However,
the fear of contracting the virus has turned people towards personal mobility, aiding PV sales.

Finance availability

Given the industry's higher ticket sizes, finance penetration is higher in this industry compared with other
automobile segments. CRISIL Research estimates finance penetration levels to reach 79% in Fiscal 2021 from
74% in Fiscal 2016.

Stringent credit norms and availability of credit information through the Credit Information Bureau (India) Ltd
(CIBIL) have helped players widen their customer bases. The industry has witnessed strong competition with new
players in the form of non-banking financial companies (NBFCs) targeting those markets that banks exited, and
captive NBFCs (operated by two-wheeler manufacturers) largely focusing on non-metros.

Investments in infrastructure

Rural infrastructure has a pronounced impact on rural incomes and, in turn, on PV sales. Under the Pradhan Mantri
Gram Sadak Yojana (PMGSY) launched in 2000, the government aims to build all-weather roads in rural
India. The scheme involves the construction/upgrade of over 800,000 km of rural roads. Execution under the
PMGSY reached an all-time high of 48,746 km in Fiscal 2018, which was marginally higher than Fiscal 2017 and
considerably higher than earlier Fiscals. In Fiscal 2019, the scheme achieved 85-90% of its target.

The budgetary allocation to the PMGSY has been maintained at Rs. 190 billion in the past three budgets, including
Fiscal 2020. The expenditure in Fiscal 2019 exceeded the allocated budget.

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The favorable impact of improving rural infrastructure on demand works in two ways:

• Directly – By generating employment, wages, and as an income multiplier in the rural economy during
the construction of roads

• Indirectly – By enabling mobility and accessibility through connectivity

Model launches

Apart from rising sales of existing models, sales of new models have supported overall industry growth in the past
few years. Majority of the models are in the UV segment leading to its growth.

New models launched in Fiscal 2019 contributed to a mere approximately 3% of domestic sales that Fiscal.
However, they gained significant traction in Fiscal 2020, leading to approximately 16% market share. Though
launches planned in the first half of Fiscal 2021 were deferred due to the pandemic, those within the small car
segment, such as S-Presso, Altroz and Aura are expected to gain market share this Fiscal. Upcoming models such
as Nissan Magnite, Renault HBC and Tata HBX are also expected to gain traction.

Share of newly launched models in total passenger vehicle sales

KUV 100, Venue, Venue, Sonet

Jazz, Baleno, ,Seltos,
Brezza, Baleno, Seltos,
8 Creta, Elite S-Presso, Triber, 20%
Tiago, Creta S-Presso,
i20, Ciaz Aura, Altroz
Triber, 18%
7 XUV 300
18% 16%
6 17% 17%
16% 14%
WR-V, Brezza, Ignis
5 12%
4 10%
9% Nexon 8%
3
6%
2
4%
1 2%
5 5 3 3%
1 5 7
0 0%
FY16 FY17 FY18 FY19 FY20 FY21 (Apr-Nov)

Model launches Market share (RHS)

Note: A vehicle is considered a new launch for a year and a half past its launch. A new launch winning at least 1% share in fiscal year is
considered a major launch
Source: SIAM, CRISIL Research

Historical growth drivers for Indian PV exports

While predominantly a small car exporter, India has emerged as a strong exporter of mid-size sedans and UVs
with a growing acceptance of vehicles manufactured in India. The share of cars segment reduced from 82% in
Fiscal 2016 to 65-70% in Fiscal 2021 as a percentage of overall exports. Consequently, the share of UVs increased
from 18% to 30-35%.

Latin America occupies the highest proportion in PV exports from India, followed by Africa. Indian OEMs have
diversified their exports by exploring newer geographies. New markets like Saudi Arabia, the UAE and South
Africa have shown significant demand growth. The US, which had nil share until Fiscal 2018, garnered
approximately 10% volume share as of Fiscal 2020, mainly driven by export of the Ford Ecosport. Exports to
South Africa, Italy, the UAE, Saudi Arabia, Peru and Bolivia also witnessed growth in Fiscal 2020, with the
launch of new models such as the Hyundai Venue, Maruti S-Presso, Renault Triber and Kia Seltos.

However, the pandemic has severely impacted exports across the globe in the current Fiscal. Also, a second wave,
as seen in some countries, will continue to affect demand.

116
Key trends and growth drivers

Future growth drivers for the domestic market

• Underpenetrated market huge potential for cars & UVs

India’s car market is highly underpenetrated compared with most developed economies and some developing
nations. As of Fiscal 2020, India had approximately 24 passenger vehicles per 1,000 people. This is
significantly lower than both developed nations and even other nations in the BRIC block (Brazil, Russia,
and China), based on per-capita GDP. Brazil, Russia and China has 173, 307 and 99 passenger vehicles per
1,000 people respectively in 2015. Thus, the country holds tremendous potential for automobile
manufacturers. Also, comparing on the basis the penetration of cars and UVs with per-capita GDP across
countries, India still lags behind most countries and, as such, CRISIL Research expects the gap to reduce
gradually after a decline in Fiscal 2021.

Country-wise passenger vehicle penetration

700.0
Italy (615)
No. of vehicles per 1000 population

600.0 Germany (552)

500.0 Japan (480)

UK
(515)
400.0
USA
300.0 Brazil (173) S Korea (325) (381)
Thailand
200.0 (119)
Mexico (221)

100.0 China (99)

India (24)
0.0
0 10000 20000 30000 40000 50000 60000
GDP per capita (USD), 2015

Note: Figures except India, are as of calendar year 2015, Dotted line indicates median; Figures in the bracket indicate passe nger vehicles
per 1,000 people
Source: OICA, World Bank, CRISIL Research

• Expected improvement in macroeconomic factors after subdued growth in Fiscal 2020 and a decline in
Fiscal 2021

– CRISIL Research expects India’s GDP to grow approximately 6.3% on average, annually, between Fiscals
2022 and 2026, after an estimated de-growth of 7.7% in Fiscal 2021 due to the pandemic and lockdowns.

– GDP growth will continue to be consumption-led, assuming normal monsoons, softer interest rates and
inflation, and implementation of Pay Commission hikes by states, which will push up purchasing power.

• Anticipated improvement in rural demand

– Rise in finance penetration in the long term, as banks and NBFCs continue to focus on semi-rural and rural
areas, will contribute to this.

– Rural infrastructure growth is expected to have a pronounced impact on rural incomes. Strong investments
under infrastructure schemes will further boost rural infrastructure, with multiplier effects.

• Enhanced product offering

– New models launched by manufacturers.

– Increase in offerings because of new entrants such as Kia Motors, MG Motors, etc.

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• Cars on subscription

– Cars have always been an aspirational purchase for Indian consumers. However, new startup business models
based on ‘cars on subscription’ are gaining traction because of convenience, low upfront costs as well as
involvement of young, dynamic population in the customer base, which prefers an asset-light lifestyle.

– In the case of fixed-cost subscription, the consumer pays a periodic sum of money for the use of a vehicle
for the subscribed period. Subscriptions can be for any length of time and can be cancelled at any point
of time. It also allows the customer to upgrade or change cars after the subscription period. Associated
costs of the car, such as insurance, taxes, service and maintenance, repairs and roadside assistance, are
borne by the subscription provider. This reduces the burden of down-payment for the consumer, along
with the additional costs associated with car ownership.

– The subscription-based car ownership increases the affordability of consumers substantially.

– Subscribing for a vehicle entails a lower initial cost compared with buying a new car, which requires a
hefty down-payment. Thus, it can have a positive impact on the industry and increase the penetration of
cars in the country.

– However, considering the fact that most customers are first-time car buyers, the aspirational value of
ownership can hinder the success of the subscription-based model.

– Currently, retail leasing is still in a nascent stage in India and, thus, remains to be monitored in the long
term for impact on the industry.

• Future growth drivers for the exports market

– Capacity expansion by top players.

– Stable crude oil prices to aid demand from African and Latin American geographies.

– Continued expansion undertaken by players into newer markets.

– Production-linked incentive (PLI) scheme, expected to provide further boost to the exports.

Outlook On The Indian PV Industry (Fiscals 2021-2026)

Production outlook (Fiscals 2021- 2026)

CRISIL Research estimates overall PV production to grow at a robust pace of 8% to 10% CAGR in the next five
Fiscals and reach 4.9 million units by Fiscal 2026.

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PV production outlook
CAGR: 8-10%
in million units

4.6 4.9
4.1 4.4
3.8
3.1

FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P - Projected

Source: SIAM, CRISIL Research

After a consecutive drop in production in Fiscals 2020 and 2021, PV production is expected to increase at a robust
pace over the next five Fiscals because of a spurt in domestic as well as exports demand. Domestic demand will
be driven by an expansion in the addressable market, fast-paced infrastructure development and relatively stable
cost of vehicle ownership, as crude oil prices are expected to stabilize at lower levels.

The long-term outlook remains bright with regard to exports as efforts to penetrate newer geographies bear fruit
and schemes such as PLI incentivize players to tap exports. CRISIL forecasts exports to clock 8% to 10% CAGR
between Fiscals 2021 and 2026. Rising competition in Europe amid sluggish demand growth, though, will prevent
further increase in growth. Moreover, penetration of electric and hybrid vehicles will be a key market to monitor.

Domestic sales outlook (Fiscals 2016- 2021)

Domestic CV sales are expected to increase 9-10% CAGR over Fiscals 2021 and 2026. The growth is expected
to be better (post- Fiscal 2021), as consecutive years of double-digit declines would lead to a very low base in
Fiscal 2021. Healthy growth is expected after Fiscal 2021, due to moderate macroeconomic growth, increasing
disposable income, relatively stable cost of vehicle ownership, and lower fuel prices. Other factors that would aid
demand are increasing urbanization, government support to farm incomes, and improved availability of finance.
However, increasing congestion in metro cities and rising popularity of shared mobility services are likely to
restrict car sales in the long term.

PV sales outlook
CAGR: 9-10%
in million units

3.9 4.1
3.5 3.7
3.2
2.6

FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P - Projected

Source: SIAM, CRISIL Research

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Split by domestic and export sales

Domestic sales, which is estimated to form approximately 85% of total production in Fiscal 2021, is also estimated
to grow at 8% to 10% between Fiscals 2021 and 2026. Exports are estimated to grow at a similar range.

Segment-wise growth outlook

CRISIL Research projects production of cars to grow at 7% to 9% CAGR and that of UVs and vans, at 10% to
12%, between Fiscals 2021 and 2026. Growth will be driven by the improving macroeconomic situation,
increasing disposable incomes and the relatively stable cost of vehicle ownership owing to steady fuel oil prices.

Other factors aiding demand will be: increased urbanization, Finance Commission payouts and easy availability
of finance. With global automakers flooding India with new models to capitalize on the growth opportunity,
buyers will be spoilt for choice. The proportion of replacement demand will rise as car owners opt for newer
models due to higher affordability, competitively-priced launches, and easy availability of finance.

PV production outlook by segment

CAGR: 8-10%

4.9
4.6
4.4
in million units

4.1
3.8
3.1 2.0 2.1
1.7 1.9
1.6
1.3

2.3 2.4 2.5 2.6 2.8

1.8

FY21E FY22P FY23P FY24P FY25P FY26P

Cars Vans and UVs

Note: E - Estimated; P - Projected

Source: SIAM, CRISIL Research

Review And Outlook On The Indian Commercial Vehicle Industry

Review of Indian commercial vehicle industry (Fiscals 2016-2021E)

Historic production development (Fiscals 2016-2021E)

Production of commercial vehicles (CV) in India registered a decline of 1.1% compound annual growth rate
(CAGR) from Fiscals 2016-2020. Domestic sales posted marginal growth of CAGR 1.1%, whereas exports
declined by CAGR 12.4% between Fiscals 2016 and 2020. In Fiscal 2021, production is expected to further
decline by 17% over Fiscal 2020 as the COVID-19 pandemic and ensuing lockdown measures by the government
posed severe demand as well as supply-side challenges for industry.

Review of CV production

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 CAGR FY16-19: 12.3%
Thousand vehicles

1112
895
786 810 752
623

FY16 FY17 FY18 FY19 FY20 FY21E

Note: E – Estimated, Domestic production is exclusive of Bharat Benz production volume, as the same is not reported by SIAM
Source: Society of Indian Automobile Manufacturers (SIAM) and CRISIL Research

Over Fiscals 2016 to 2019, industry production, in fact, grew at CAGR 12%, driven by a pick-up in domestic rural
industrial activity growth and the government focus on infrastructure investment post Fiscal 2015. A large portion
of this production jump was led by robust demand for goods carriers which clocked a CAGR of 14.1%, whereas
passenger carrier production declined by CAGR 1.7% over Fiscals 2016 and 2019.

The production drop in Fiscal 2020 was on account of inventory correction as the industry transitioned from BS
IV to BS VI emission norms and a tepid demand for CVs due to a general slowdown in the economy and slower
government infra spending post the general election. In addition, policy changes in Sri Lanka, one of the major
industry export markets, proved to be a major blow to industry exports.

Historic domestic sales development (Fiscals 2016-2021E)

Between Fiscals 2016 and 2020, domestic CV sales logged 1.1% CAGR. In fact, over Fiscals 2016 to 2019,
domestic sales clocked a CAGR of 14% on the back of robust 17% CAGR sales growth in light commercial
vehicle (LCVs) and 14% in medium and heavy commercial vehicles (M&HCVs). Over Fiscals 2016 to 2019,
goods vehicles sales clocked a CAGR of 16%, even as bus demand remained flat.

Review of CV domestic sales

CAGR FY16-19: 13.7%

Thousand vehicles

1007
857
686 714 718
568

FY16 FY17 FY18 FY19 FY20 FY21E

Note: E – Estimated, Domestic sales are exclusive of Bharat Benz sales as the same are not reported by SIAM
Source: SIAM and CRISIL Research

In Fiscal 2017, CV sales saw a 7% on-year rise over April-October. However, after demonetization (November
2016), a cash crunch in the economy negatively impacted industrial output and slowed sales growth. However,
Fiscals 2018 and 2019 witnessed strong recovery and a healthy 17% to 20% growth, supported by the
government’s focus on road and housing infrastructure development. In Fiscal 2020, the industry witnessed a
sharp de-growth on a high base due to inventory adjustment on account of the transition to BS-VI.

Normal monsoons from Fiscals 2017 to 2019, minimum support price (MSP) support from the government and a
pick-up in rural construction activity supported demand from the rural side supporting growth for LCVs. Over

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Fiscals 2016 to 2020, the rise of e-commerce was among the major factors for a pick-up in demand for LCVs and
intermediate commercial vehicles (ICVs).

Over the last five years, the industry weathered major challenges on account of events like demonetization, NBFC
crisis, implementation of axle load norms, changes to insurance norms and the transition to BS VI emission norms.
A culminations of multiple factors like the NBFC crisis, the implementation of axle load norms, changes to
insurance norms and the transition to BS VI emission norms, particularly post the second of half Fiscal 2019,
resulted in a dampening of demand for CVs.

Recently, the pandemic brought the entire economy to a grinding halt, affecting profitability and sustainability of
transporters due to lack of availability of freight demand. The industry is, however, now witnessing a gradual
pick-up in quarterly sales as consumption demand and industry activity have started gaining pace.

Split by domestic sales and exports

CV industry split into domestic sales & exports

8% 6.0%
10% 9%
13% 13%

92% 94%
90% 91%
87% 87%

FY16 FY17 FY18 FY19 FY20 FY21E

Domestic sales Exports

Note: E - Estimated
Source: SIAM and CRISIL Research

The Indian commercial vehicle market is primarily focused on the domestic market, with more than 90% demand
from the domestic market in Fiscal 2020. Contribution of exports to production, however, declined sharply in
Fiscal 2018 as demand from domestic market grew at a robust pace. Over Fiscals 2019 and 2020, the share of
exports continued declined as domestic manufacturers faced challenges in neighboring Sri Lanka on account of
restrictions on financing norms for automobiles and a hike in import duties. The Indian CV industry exports have
been largely concentrated in neighboring countries like Sri Lanka, Nepal and Bangladesh. In Fiscal 2021, CV are
exports are likely to be lower as domestic OEMs will focus on the domestic market amidst supply chain constraints
for critical components.

Split of industry production volume by CV segments

Overall CV production is projected to decline over Fiscals 2016 to 2021; MHCV production is expected to decline
by CAGR of 17% and the LCV segment is expected show marginal growth over Fiscal 2016 production. However,
if we look at Fiscals 2016 to 2019, industry production in fact grew at CAGR 12% due to a sharp 15% CAGR
growth in LCV segment and 9% growth in M&HCV.

Faster growth in LCV production was on account of strong domestic demand, supported by higher replacement
demand over Fiscals 2018 to 2020, improved rural sentiments and growing e-commerce penetration. Even during
the pandemic, improved rural sentiment and a lesser impact of the pandemic on rural areas resulted in LCVs
outperforming M&HCVs.

CV production by vehicle segments

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 1200 CAGR FY16-19: 12.3% 1112

1000 895
786 810 444 752
800
344 623
600 341 343 234
160
400
668
467 551 518
200 445 463

0
FY16 FY17 FY18 FY19 FY20 FY21E

LCV M&HCV

Note: E – Estimated, Domestic production is exclusive of Bharat Benz production volume, as the same is not reported by SIAM
Source: SIAM and CRISIL Research

Over Fiscals 2016 to 2019, bus production declined by CAGR -5.8%, accentuated by a restriction on sales Sri
Lanka. Even on the domestic front, bus sales declined by approximately -2% over Fiscals 2016 to 2019. Both
LCV and MHCV buses saw a comparable decline.

Demand for buses in Fiscal 2020 was impacted due to safety regulations (emergency exit doors, fire detection and
suppression, escape hatches and emergency lighting) that led to an increase in cost of ownership of approximately
Rs. 50,000. This was after a price hike of approximately Rs. 15,000 due to mandatory installation of vehicle
tracking system and panic buttons in January 2019.

After the price rise, demand for buses in Fiscal 2020 was also hit by weakening private consumption, hampering
demand from tourist bus operators and inter-city travel operators. Weak corporate hiring and production cuts in
manufacturing also impacted demand for corporate staff buses. However, schools and route permit buses have
shown some resilience in Fiscal 2020. Demand from state transport undertakings (STU) ramped up in the second
half of Fiscal 2020 as STUs look to replace much of their older fleet before the BS-VI price rise.

Key trends and growth drivers

Source: Ministry of Agriculture, CRISIL Research

Fillip in industrial output

The Indian industry's GVA had been growing tepidly, averaging 5% between Fiscals 2015 and 2020. After a weak
Fiscal 2021 due to the pandemic, CRISIL expects industrial GVA to bounce back rapidly in Fiscal 2022 and later
stabilize at around 6.3% CAGR over Fiscals 2022 to 2026, driven by the government's focus on 'Make in India'
and growth of consumption, particularly led by growth rural incomes . Moreover, improvement in infrastructure
and higher expected corporate expenditure is likely to revitalize the capex cycle going forward, post Fiscal 2021.

CRISIL Research expects coal production to expand at approximately 6% CAGR between Fiscals 2019 and 2024,
driven by rising demand for electricity and the onset of commercial mining, while iron ore mining will also likely
grow at a healthy pace during this period, aiding tipper demand.

Government’s focus on infrastructure

The National Infrastructure Pipeline (NIP) for Fiscals 2019 to 2025 is a first-of-its-kind, whole-of-government
exercise to provide world-class infrastructure to citizens and improve their quality of life.

Infrastructure investment in India from Fiscals 2013 to 2019 was Rs. 57 trillion. Power, roads and bridges, urban,
digital infrastructure and railways together constituted more than 85% of the total infrastructure investment.

The total capital expenditure in infrastructure sectors in India during Fiscals 2020 to 2025 is projected at Rs. 111
trillion.

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The National Infrastructure plan aims to double infrastructure investment per year from the current average of Rs.
10 trillion per year to Rs. 22 trillion per year. Of the total NIP of Rs. 111 trillion, Rs. 44 trillion (40%) worth of
projects are under implementation, Rs. 34 trillion (30%) worth of projects are at the conceptualisation stage, and
Rs. 22 trillion (20%) worth of projects are under development.

Almost 83% of project allocation indirectly benefits the commercial vehicle sector in India, and this push for
infrastructure is a major driver of growth.

Scrappage policy

Recent regulations such as the axle norm, bus body code, mandatory anti-lock braking system, speed governors,
enforcement of BS-VI norms, and mandatory cabin ventilation system on new commercial vehicles (CVs) have
already impacted the industry. CRISIL expects the effects of newer fuel-efficiency norms, the proposed BS-VI
norms, the truck body code, and the new scrappage policy, to play out in the long run.

The Ministry of Road Transport and Highways, in August 2018, considered incentivizing the scrapping of vehicles
sold before April 2005 (15 years old). After deliberations on the modalities regarding the implementation of the
norm, the government currently aims to promote vehicle scrapping by exempting registration charges for truck
purchases made after scrapping older trucks. As the current registration charges are low (below approximately
Rs. 5,000), the government simultaneously aims to increase renewal of registration for older vehicles (to Rs.
40,000). To make it difficult to hold onto an older truck, trucks older than 15 years are also expected to get a
fitness certificate every six month vs. every twelve months currently. However, we believe approximately Rs.
40,000 benefit on scrappage of 15 year and older trucks will not be enough to promote the scrapping of such
trucks as the current resale value of a 15-year-old truck is higher than the current scrap value and the registration
benefit. The move can only aid in scrapping of vehicles which are around 20 years and above since their resale
value will be near the scrap value of the truck; the number of such trucks will however be limited to 10,000-
20,000.

As seen above, resale value of trucks tends to be above the sum of scrappage value and the registration benefit.
Thus, the scrappage norm at the current level of benefits will lead to scrappage of trucks only older than 20 years.
Through higher incentives from the government and OEMs, if transporters are able to be incentivized for
scrapping of vehicles older than 15 years, CRISIL expects 600,000- 650,000 MHCVs to be available for
scrapping. CRISIL estimates that incentive of more than Rs. 90,000 for 16T MCV and incentive of more than
Rs. 100,000 would be needed to scrap for trucks older than 15 years. At a similar quantum of scrappage incentives,
additional demand of 10,0000-130,000 can be expected from buses.

Commissioning of DFCs to put brakes on road freight and hence CV sales

The dedicated freight corridors (DFCs) will help the Indian Railways regain lost freight share, by cutting
turnaround times between importing and consuming destinations. Not only will the DFC bring about faster freight
movement, but it will also allow for faster evacuation of cargo from the ports, thereby improving efficiency. In
fact, the DFCs and the associated logistics parks will be able to help industries significantly reduce plant-level
inventory as well, thereby enabling savings in working capital. And the shifting of freight to rail will aid the
economy by decongesting major highways.

Thus, the roads segment, which has outperformed rail over the past decade, will lose some share once the DFCs
are commissioned in Fiscal 2023.

Within the CV space, Tractor trailers will be the most vulnerable to competition from the railways, following
completion of the eastern and western DFCs. These routes account for more than 20% of pan-India primary freight
in billion tonne kilometer (BTKM) terms. Container traffic (approximately 65% share in the western corridor)
and bulk commodities (approximately 89% in the eastern corridor), which dominate the freight carried on the two
routes, are expected to shift to railways, thus affecting the sales of MHCVs, especially tractor trailers.

Gradual shift towards higher tonnage trucks

Within the CV space, over the years, rising domestic consumption demand has resulted in incremental availability
of freight for movement. This has subsequently resulted in a shift in preference towards higher payload capacity
trucks by transporters.

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To be sure, for MHCV cargo as well as tipper segments, tonnage (payload) sales growth has been higher vis-à-
vis sales volume. This clearly indicates that the industry has shifted towards higher tonnage vehicles over the
years.

Outlook On Indian CV Industry (Fiscals 2021-2026)

Production outlook (Fiscals 2016- 2021)

Production of CVs in India is expected to increase at 12% to 14% CAGR over Fiscals 2021 to 2026 over a low
base. Buses, in particular, are expected to rebound sharply, growing at 31% to 35% CAGR till Fiscal 2026. In
Fiscal 2021, though, the production of buses has sharply declined because of low people mobility due to the
pandemic. But Fiscal 2022 onwards, production of buses is projected to rise exponentially as sales recover on a
low base of Fiscal 2021 on account of availability of vaccine. Also, production for goods vehicles is estimated to
grow at 11% to 13% CAGR over the forecast period.

CV production outlook
CAGR
CAGR FY21-26P:
FY21-26:12-14%
14:16%
Thousand vehicles

1072 1142
932 1002
862
623

FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P – Projected, Domestic production is exclusive of Bharat Benz production volume, as the same is not reported by SIAM
Source: SIAM, CRISIL Research

Domestic sales outlook (Fiscals 2016- 2021)

Domestic CV sales are expected to increase 12% to 14% CAGR over Fiscals 2021 to 2026. In Fiscal 2022, sales
will be driven over a low base of Fiscal 2021, with gradual pick-up in industrial activity and people mobility as
administering of the COVID-19 vaccination gains pace. Also steering growth between Fiscals 2022 and 2026 will
be rising domestic consumption, improving rural incomes, increasing exports with the realigning of global supply
chains and the government’s production-linked-incentive scheme, the government’s focus on infrastructure
investments through the NIP, and commencement of commercial mining in India. Roll out of the scrappage policy
would further aid demand for CVs.

A further increase in CVs sales will, however, be cut short because of efficiencies achieved with the introduction
of the Goods and Services Tax (GST), better road infrastructure, and commissioning of the DFCs.

Domestic sales of M&HCV will be supported by growth in key sectors like coal, steel, cement. Growth of tippers
will be driven by 8% to 10% increase in investments in road projects. E-commerce boom is likely to support
demand for intermediate commercial vehicles and small commercial vehicle. Rising per capita income, buoyancy
in the rural markets to drive sales for pick-ups.

CV domestic sales outlook

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 CAGR FY21-26P: 13-15%
1082
1008
933
859
784 363
Thousand vehicles

329
296
262
568 228

148

637 678 719

556 597
421

FY21E FY22P FY23P FY24P FY25P FY26P

LCV M&HCV

Note: E - Estimated; P – Projected, Domestic sales are exclusive of Bharat Benz sales as the same are not reported by SIAM
Source: SIAM, CRISIL Research

Split between domestic sales and exports

The Indian CV industry is expected remain domestic-focused, with domestic sales comprising approximately 94%
share of production even in Fiscal 2026. However, with exports projected to grow at 15% to 16% CAGR over
Fiscals 2021 to 2026, its contribution in overall production is likely to marginally rise over Fiscal 2021.

Segment-wise split of CV industry production volume

CV production outlook by segment

1300 CAGR FY21-26: 12:14%

1142
1072
1100 1002
932
862 383
Thousand vehicles

900 350
316
282
700 623 248

500 160

687 723 759

300 615 651
463
100

-100 FY21E FY22P FY23P FY24P FY25P FY26P

LCV M&HCV

Note: E - Estimated; P - Projected

Source: SIAM, CRISIL Research

MHCV segment to log high growth up to Fiscal 2026

MHCV sales are projected to rise 19-21% CAGR from Fiscals 2021 to 2026 vis-à-vis approximately 17% CAGR
posted between Fiscals 2016 to 2021. The rise in sale will be despite a shift to lower tonnage vehicles due to the
axle norm. The tonnage addition will be because of a better product mix, i.e. higher growth in MAV and T-Trailer
demand. A note here: The long-term growth forecast is over a low base, with sales skidding approximately 43%
CAGR over Fiscals 2019 to 2021 on account of economic slowdown and the pandemic.

Factors driving long-term MHCV sales will be improving industrial activity, steady agricultural output, and the
government’s focus on infrastructure. However, further volume growth will be limited due to efficiencies achieved
post introduction of the GST regime, better road infrastructure, along with commissioning of the DFCs.

LCV sales to grow at modest pace in long run

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LCV demand is expected to rise between 10% to 12% CAGR from Fiscals 2021 to 2026 over a low base of Fiscal
2021, owing to higher private consumption, low penetration levels providing headroom for growth, greater
availability of redistribution freight, and improved finance availability post Fiscal 2021.

Within LCVs, the shift towards pick-ups (which carry higher loads) from sub-one tonne vehicles, though, will
curb a sharper increase in sales volume, as fewer trucks will now be required to transport the same quantity. Also,
upper-end light commercial vehicles (ULCVs) offer the transporter lower returns, as compared with ICVs, and
are most suited for captive use. Entry restriction within city limits on ICV trucks and higher tonnage MHCVs is
expected to keep demand from this segment buoyant.

Bus demand to grow moderately in long run

CRISIL Research projects domestic bus sales to expand at 46-48% CAGR till Fiscal 2026 on a very low base of
Fiscal 2021 (decline expected in Fiscal 2021 at 34% to 35% over Fiscal 2020) due to increasing demand for inter-
city/-state travel, aided by better road infrastructure, and higher personal disposable incomes. The unregulated
segment, which primarily caters to demand from schools, companies and inter-city travel by private operators,
will remain the largest end-user. A large part of the demand will be from replacement of Jawaharlal Nehru
National Urban Renewal Mission buses, which were sold during Fiscals 2011 and 2012, once funds are released
by the Centre and state governments for the purchase of buses. This replacement is expected to gain pace post
Fiscal 2021, aiding long-term MCV bus growth. However, further expansion in bus sales would be affected by
the commissioning of metro rails and monorails in several cities.

Review And Outlook For The Indian Tractor Industry

Review of the Indian tractor industry (Fiscals 2016-2021E)

Historic production development (Fiscals 2016-2021E)

Tractor production clocked a compounded annual growth rate (CAGR) of approximately 15.8% over Fiscals 2016
to 2019 driven by high tractor demand on the back of higher crop profitability and greater government support.
Major players such as ITL, Escorts and TAFE have increased production capacity over the years to widen market
reach and meet increasing demand.

A nationwide lockdown amid the COVID-19 pandemic halted production in Fiscal 2021. Although production
resumed in May 2020, rules for social distancing and safety of employees posed challenges to original equipment
manufacturers (OEMs). Further, lower production of components and logistics constraints disrupted the supply
chain. Production declined 5% year-on-year in the first half of Fiscal 2021. However, it rebounded in the third
quarter, growing 16% year-on-year YTD (April-December 2020). Production is expected to rise between 19% to
21% on-year in Fiscal 2021 backed by robust demand.

Review of tractor production

CAGR: 15.8% CAGR: (2.2)-(2)%
887
850
791
714
667
Thousand vehicles

571

FY16 FY17 FY18 FY19 FY20 FY21E

Note: E - Estimated
Source: Tractor Manufacturer’s Association (TMA), CRISIL Research

Historic domestic sales development (Fiscals 2016-2021E)

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Domestic tractor demand is expected to rise between 20% to 22% year-on-year in Fiscal 2021 due to positive
farm sentiment on account of better crop profitability, and greater government support in the form of income-
support schemes, higher procurement of field crops and increased rural expenditure (agriculture expenditure is
estimated to have risen approximately 52% year-on-year in the first half of Fiscal 2021).

Tractor sales clocked a CAGR of 5% over the past 10 years, tracking growth in farm income (except in Fiscal
2010, when sales were driven by the government’s debt relief and debt waiver schemes).

Tractor sales logged a CAGR of approximately 10% over Fiscals 2016 to 2020, and fell approximately 10% on-
year in Fiscal 2020 after three years of robust growth: 19%, 22% and 8% in Fiscals 2017, 2018 and 2019,
respectively. Weak commercial demand and uneven spread of rainfall across the country affected sales in Fiscal
2020.

The past decade saw a significant rise in the use of higher horsepower (hp) tractors and implements. In Fiscal
2010, 31-40 and 41-50 hp tractors accounted for approximately 48% and approximately 24% of overall domestic
demand, respectively. In Fiscal 2020, 41-50 hp tractors represented approximately 49% share driven by higher
farm income and greater government support. This share rose to approximately 53% YTD (April-December 2020)
due to increased use of implements (require higher hp tractors to operate) and increased affordability of farmers.

Review of tractor domestic sales

CAGR: 16.9% CAGR: 4.3-4.5%

856
786
711 709
Thousand vehicles

583
491

FY16 FY17 FY18 FY19 FY20 FY21E

Note: E - Estimated
Source: TMA, CRISIL Research

Factors propelling tractor demand in Fiscal 2021 are as follows:

• High investment by farmers on agriculture activities amid absence of any other investment opportunities
due to the pandemic
• Year on year increase in farm income of approximately 8% and 3-5% for rabi (in Fiscal 2020) and kharif
(in Fiscal 2021) crops, respectively
• Rise in agriculture spend of 52% year-on-year (as of mid-September 2020)
• Relatively low impact of the pandemic on farming activity in rural areas, given lower population density
However, commercial demand is muted despite sand hoarding (pickup in sand mining activities in Madhya
Pradesh, Bihar, Uttar Pradesh and parts of the southern region) and construction under the Mahatma Gandhi
National Rural Employment Guarantee Act (MGNREGA) being in full swing

Split by domestic sales and exports

A major proportion of tractor exports from India is to Asia (mainly Malaysia, Nepal, Sri Lanka and Bangladesh),
North America (mainly the United States or US) and Africa.

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Tractor exports logged a CAGR of approximately 6% over Fiscals 2016 to 2019, supported by higher demand
from Asia and Africa (prices of select crops had boomed in Africa). Exports declined in Fiscal 2020 due to strict
emission norms in North America, political tension in some African countries, and economic slowdown in Europe.
Export sales dipped 17% year-on-year in Fiscal 2020.

Tractor industry split into domestic sales & exports

11% 10% 10% 8%

14% 12%

89% 90% 90% 92%

86% 88%

FY16 FY17 FY18 FY19 FY20 FY21E

Domestic sales

Note: E - Estimated
Source: TMA, CRISIL Research

Key trends and growth drivers

Higher procurement and minimum support price (MSP) to aid cash flow of farmers

Record high procurement of wheat for rabi crop sown in Fiscal 2020 benefitted farmers in the first half of Fiscal
2021. Procurement improved due to uptake of food grains by state governments under the Pradhan Mantri Garib
Kalyan Ann Yojana, under which food grain was distributed free of cost for three months to about 800 million
beneficiaries across the country during the lockdown period. The government's target for kharif paddy
procurement is also high, and early procurement has been initiated in northern states. In states such as Punjab,
Haryana, Uttar Pradesh and Telangana, the central government bought 41.105 million metric tonne (LMT) of
paddy by mid-December 2020, up 23% from 333.59 LMT during the same period previous year.

MSP for some major crops such as paddy and wheat has increased 3% on-year in Fiscal 2021. Thus, a robust
increase in crop procurement and higher MSP would boost farm income.

Nearly 13 million tractors required to till India's entire arable area

Assuming a requirement of 50 tractor-hours per hectare per year, 7.86 billion tractor-hours per year would be
required to till India's entire arable land of 159.2 million ha. Industry interactions indicate tractors are typically
used for 700 to 1,000 hours a year. While approximately 30% of the usage is in non-farm activities between
cropping seasons, a tractor is used for approximately 600 hours a year on farms for two cropping seasons. To meet
the requirement of 7.86 billion tractor-hours, 13 million tractors (excluding tractors purchased purely for
commercial purposes) would be required compared with the tractor population of 6.3 million in Fiscal 2020.

Rental models and low-cost tractors key to penetrating fragmented land holdings in India

Despite the huge potential that India’s vast stretch of arable land offers, the fragmented land-holding pattern
remains a hurdle. With over 80% of land holdings being small and marginal (less than 2 ha), most farmers find it
difficult to afford tractors. They rent tractors or buy small tractors to improve productivity, a trend that is rapidly
gaining hold.

Non-farm usage of tractors on the rise

Tractors are also used in mining, construction and haulage activities. Currently, non-farm usage accounts for
approximately 30% of demand for tractors.

Tractor usage in non-farm activities has been increasing, with the government's focus on improving rural
infrastructure. Tractors are also used for carrying construction materials such as bricks, cement and pipes. Tractors

129
are being looked at as an alternative to commercial vehicles, as tractors are more economical, can carry heavy
weight, and can be maneuvered easily on rough, rural roads.

Outlook On Indian Tractor Industry (Fiscals 2021-2026)

Production outlook (Fiscals 2021-2026)

CRISIL Research projects production and domestic sales of tractors to expand at 0-4% CAGR during Fiscals 2021
to 2026, after factoring in one to two years of below-normal monsoon during the period along with a 10% decline
in investment in Pradhan Mantri Gram Sadak Yojana (PMGSY) over the next five years, due to lower targets
impacting commercial demand.

Tractor is a cyclical industry, and it generally takes four to five quarters for the industry to recover after a
downturn. Thus, assuming that the tractor industry will be impacted by poor monsoon for one to two years between
Fiscals 2022 and 2026 with the industry taking four to five quarters to recover, CRISIL arrives at a CAGR of 4%
to 6%. Growth will be supported by the low tractor penetration in India and government focus on improving farm
incomes through various schemes, promoting farm mechanization, and investments to improve rural
infrastructure.

Tractor production outlook

CAGR: 1-3%
945
924
904
883
Thousand vehicles

850 862

FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P - Projected

Source: CRISIL Research

Domestic sales outlook (Fiscals 2021-2026)

Tractor domestic sales growth in the next five years to be lower than previous five years

Apart from cyclical factors such as farm incomes, which depend on the monsoon and crop prices (MSPs and
mandi prices), structural factors drive tractor sales:

• Rising cost of farm labour due to employment schemes such as MGNREGA

• Increasing substitution of non-mechanised modes of farming such as animal labour

• Credit availability and affordable rates of finance, increasing budgetary allocation towards the rural
sector, and government support for farm mechanisation also encourage growth.

Tractor domestic sales outlook

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 CAGR: 1-3%
936
919
901
883
Thousand vehicles

856 865

FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P - Projected

Source: CRISIL Research

Split by domestic sales and exports

Contribution of exports to production increase gradually as international players set up India as export base to
cater to the US and Europe markets. In addition, domestic manufacturers are also expanding their presence in
export market. Share of exports is also likely to gain over Fiscals 2021 to 2026 period as domestic sales are likely
to be tepid after posting robust volume growth over Fiscals 2016 to 2021.

ELECTRIFICATION

Regulatory roadmap key for rise of electric mobility in India

The US and China have seen an acceleration of sales of electric/hybrid cars, as most major global original
equipment manufacturers (OEMs) have one or more models in their portfolios in these countries. With more
model launches by OEMs, issues of range anxiety being addressed, and declining battery prices, CRISIL expects
electric vehicle (EV) volume to grow at a faster pace globally.

Currently, in India, the charging infrastructure required for EVs is not in place. With the Indian automobile
industry seeing a slew of regulations and norms in the past few years, OEMs are skeptical about investing in EV
manufacturing here.

The implementation of the National Electric Mobility Mission Plan, 2020 and other policy initiatives by the
government to address infrastructure-related issues are key parameters to be monitored for the sector over the next
five years. The government has announced Rs. 100 billion for Phase 2 of Faster Adoption and Manufacturing of
Hybrid and Electric Vehicles (FAME). The policy aims to provide a subsidy of Rs. 10,000 per KWh to four
wheelers (BEV (battery electric vehicle), PHEV, strong hybrid) for commercial purpose and public transport. It
also mandates minimum range to be approximately 140 km and maximum ex-factory price to be approximately
Rs. 1.5 million. It envisions creation of infrastructure for charging of EVs. CRISIL Research expects initial
adoption rate to be high among cab aggregators.

Delhi has announced an EV policy that would provide purchase incentives of up to Rs. 0.15 million for the first
1,000 electric cars. The benefit would be provided in addition to FAME-2 policy benefits. The Telangana
government is also providing 100% exemption of road tax and registration fee on purchase of the first 5,000
electric cars. The Tamil Nadu government is providing 100% exemption for battery-operated vehicles (BOVs).
Such regional push will further enable adoption of EVs. Further individual tax payers are allowed to take a
deduction on interest payments up to Rs. 150,000 towards electric vehicles under Section 80EEB. The benefit is
available on EV loans sanctioned over April 1, 2019 till March 31, 2023 period. Such favorable tax laws are
expected to encourage electric vehicle adoption for personal mobility.

The government is also considering the establishment of a 40 gigawatt (GW) battery manufacturing plant to boost
EVs and renewable energy initiatives. However, for any path-breaking changes to happen in the EV market, OEMs
need to make more investments and the government should devise clear policies. Among the challenges,
infrastructure shortage needs to be resolved urgently.

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Electric PVs to contribute to approximately 4% of domestic sales by Fiscal 2026

As it stands, FAME-II subsidy is incentivized only towards commercial use. No benefits are provided to personal
car owners. Following are the findings of CRISIL analysis on the cost of ownership of an electric passenger car
versus petrol, diesel and CNG variants for cab aggregators. CRISIL Research has also compared the cost of
ownership of an electric passenger car with the petrol variant of a passenger car.

In case of commercial application like cab aggregators, Total Cost of Acquisition (COA) for EVs is almost 50%
higher for diesel and CNG vehicle. However due to heavy running of the vehicles the Total Cost of Ownership
(TCO) of EVs for cab aggregators is lower compared with diesel alternatives by approximately 6% and higher by
approximately 6% than CNG alternatives even in Fiscal 2021. By Fiscal 2026 TCO for EVs is likely to be lower
by 11% in with diesel alternatives and marginally lower for CNG alternatives. The lower battery cost is expected
to offset the lack of FAME subsidy and will help maintain competitiveness of BEVs against diesel and CNG
variants for cab aggregators.

Currently, charging infrastructure, range anxiety and lack of large OEM presence is hindering EV adoption. The
taxi segment accounts for 10-15% of sales within passenger cars, and within the taxi segment, cab aggregators are
expected to lead adoption of EVs. This should result in an estimated approximately 25% adoption of EVs within
cab aggregator segment by Fiscal 2025 (assuming adequate infrastructure is available by then).

TCO and COA of electric personal cars are still higher (approximately 33% and approximately 78%,
respectively) compared with the petrol alternative and higher by (approximately 39% and approximately 53%,
respectively) due to their lower running. Therefore, EVs are currently not a viable use-case. In addition,
availability of charging infrastructure and range especially for intercity travels are likely to be key bottlenecks for
adoption of EVs in the personal car segment.

Hence, CRISIL Research expects the share of EVs in total passenger car sales to remain low (approximately 4%)
in Fiscal 2026. Penetration in Fiscal 2019 was approximately 0.1%. EV penetration can be higher if government
adopts stricter policies on OEMs for not meeting CAFÉ norms. The exact quantum of EV penetration in an
aggressive case depends on incentives given for adoption and setting up of charging infrastructure.

Key regulatory changes

Impact of corporate average fuel efficiency (CAFE) norms

The Paris Agreement, enforced from November 2016 onwards, and ratified by India, set the objective of limiting
the global temperature rise this century well below 2 degree Celsius over pre-industrial levels and to pursue efforts
to limit the temperature increase even further to 1.5 degrees Celsius. The greenhouse gases emissions reduction
that would be compatible with this target would require a significant increase in the share of zero or low emission
vehicles over the coming years. These regulations, combined with growing environmental and sustainability
consciousness of the population, will lead to a major transformation of the global auto industry from internal
combustion engine to green mobility technologies (such as hybrid vehicles, BEVs, fuel cell vehicles and
alternative-fuel vehicles).

Fuel consumption standards for Indian vehicles came into force in India in April 2017 for petrol, diesel, liquefied
petroleum gas (LPG) and compressed natural gas (CNG) passenger vehicles. These standards are based on the
CAFE system and targets to bring about improvement in fuel consumption of passenger vehicles by 2022. The
policy supports a continuous reduction in CO2 emissions through CAFE regulations.

These regulations were first implemented on April 1, 2017 with the introduction of BS-IV emission norms. It was
decided the highest permissible carbon footprint would be 130 gm per km till 2022. Thereafter, it would be further
reduced to 113 gm per km. This is expected to incentivize the shift towards greener technology such as hybrids
and EVs.

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REVIEW AND OUTLOOK FOR THE INDIAN EV TWO-WHEELERS INDUSTRY

Review of Indian two-wheeler electric vehicles industry (Fiscals 2018-2021E)

Historic domestic sales development (Fiscal 2016-2021E)

The Indian two-wheeler electric vehicles (2W EV) story started in 2012 with the launch of the National Electric
Mobility Mission Plan (NEMMP) 2020 that provides the vision and roadmap for faster adoption of EVs and their
manufacturing in the country. 2Ws account for more than three-fourths of vehicles on Indian roads. Clearly, 2Ws
would drive faster adoption of EVs in India. Over 2012-2015, the Indian 2W EV market was dominated by
imports, mostly of lead-acid and low-speed electric scooters.

The Government of India launched the first phase of the Faster Adoption and Manufacturing of Hybrid and
Electric Vehicles (FAME) India Scheme on April 1, 2015, to support the development of the hybrid and EV
market. Under this scheme, demand incentives were provided to buyers (end-users/consumers) of 2W EVs –
ranging from Rs. 7,000 for lead-acid vehicles to Rs. 26,000 for high-speed lithium-ion models. This provided a
significant fillip to the 2W EV industry in India and resulted in several original equipment manufacturers (OEMs)
foraying into the market.

Adoption of EV is contingent upon cost of acquisition and total cost of ownership of EVs over ICE alternatives.
Among automobile segments, electrification in India will be led by three-wheelers and two-wheelers, while it will
take longer for commercial vehicles and passenger vehicles to gain traction. Electrification in 2W will be led by
lower total cost of ownership compared to ICE vehicles and suitable operating dynamics (running in shorter leads)
compared to other vehicle segments. Whereas passenger vehicle to see slower electrification on account of higher
cost of ownership and lack of availability of sufficient charging infrastructure.

Review of 2W EV sales in India

CAGR: ~67%

152
141
123
Thousand vehicles

55

FY18 FY19 FY20 FY21E

Note: E - estimated
Source: Society of Manufacturers of Electric Vehicles (SMEV) and CRISIL Research

In India, 2W EV adoption has been slow because of the absence of large organized OEMs, low product
specifications of majority of the models available in the market and customer perception of low quality of EVs.
Among 2W EVs, scooters have emerged as the most preferred choice, accounting for almost 100% of sales.

Type/Year FY18 FY19 FY20 FY21E

Scooter sales (‘000) 6,774 6,824 5,717 4,592

All 2W sales (‘000) 20,253 21,302 17,568 15,229

2W EV sales (‘000) 54.8 121.8 152 140-142

2W EV scooter sales (‘000) 54.8 121.8 151 138-139

Adoption rate of 2W EV 0.3% 0.6% 0.9% 0.9%

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Adoption rate of scooters 0.8% 1.8% 2.7% 3%
Note: E - estimated
Source: SMEV, Society of Indian Automobile Manufacturers (SIAM), and CRISIL Research
Split of 2W EV sales by segments

The 2W EV industry has been divided into the following sub-segments based on speed and battery composition:

Based on speed

• Low-speed vehicles (<45 kmph)

• High-speed vehicles (>45 kmph)

2W EV sales in India by speed categories

89% 82% 90% 88%

11% 18% 10% 12%

FY18 FY19 FY20E FY21E
High speed Low speed

Note: E - estimated
Source: SMEV, and CRISIL Research

Key trends and growth drivers

Government intervention in regulations and policies

The Government of India, through various ministries, has formulated policies for the development of the EV
sector in India. The Ministry of Power has revised guidelines for the distribution and sale of power. The following
table lists some of the policies and their expected outcomes:

Policy Policy details Expected outcome

Reduction in the GST -From 12% to 5% for EVs, and 18% to 5% -EV acquisition cost came down. Fast-
rate for EVs and chargers for chargers, effective from August 1, 2019 charging infrastructure cost also reduced

Union Budget 2019-20 -Income tax deduction of Rs. 0.15 million on -TCO decreased, especially for salaried
EV loans professionals

Warranty condition for -Warranty condition revised to three years -Customer perception of low quality of EVs
eligibility of vehicle subject to 20,000 km; earlier warranty on will change
under FAME II (May 15, vehicles was provided for one year only
2019)

FAME II subsidy -1 million e2W to be given subsidy at Rs. - e2W acquisition cost came down, with
(March 22, 2019) 10,000 / kwh or 20% of ex-factory price subsidy ranging up to 20% of ex-factory price
(limited to Rs. 0.15 million) for current models
valid till FY22

State EV policies -Eight states have finalised their EV policies -Maharashtra and Delhi are offering
and eight others have draft policies incentives, further decreasing acquisition cost

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Policy Policy details Expected outcome

-Policy entails supply and demand-side -Demand-side incentives include reduced tariff
incentives for EV charging, rebates on road tax, interest-
free loans for auto component manufacturer,
and cost split for skill development
Supply-side incentives include interest
subvention on investments made and stamp
duty exemption

PMP norms -Increase in import duty on EV auto -OEMs not meeting localisation norms will not
(April 29, 2019) component parts from 10% to 15% from be eligible for the demand incentives
April 2021 -Moreover, the cost of importing parts is also
set to increase from April 2021, if a
sustainable and cost-effective domestic
alternative is not found
-This will increase acquisition cost of e2W
-Our recent interactions with e2W OEM’s
suggest vehicle control units, battery packs,
and lithium-ion cells are still being considered
for substitution

EV charging ecosystem -16 state policies in final and draft stages -Under FAME I, the government had
offer incentives for setting up charging sanctioned 520 chargers
stations -Under FAME II, the government has
- As per the Ministry of Power’s notification sanctioned 2,636 charging stations across 62
issued on December 14, 2018, resale or cities
commercial activity in electricity has been -Fast and accessible charging will help reduce
allowed for utilities/ service providers range anxiety and drive faster adoption of e2W
providing public charging infrastructure
-OMC (Oil marketing companies) retail
pumps will be given priority for installation
of public EV charging stations
-Nine cities with a population of 4 million
and above are the focus of phase I of the EV
charging policy
-There must be at least one charging station
in a grid of 3 km x 3 km in cities
Source: SMEV, FAME, DHI, and CRISIL Research

Regulators play an important role in driving faster adoption of EVs. The FAME II scheme has an outlay of Rs.
100 billion, with a major proportion dedicated to demand incentives; Rs. 10 billion is earmarked for the
development of charging infrastructure. Demand-side incentives under the FAME scheme will last until Fiscal
2022, and state EV policies (mostly of five-year tenure) will last until Fiscal 2023. Continuation of policies after
Fiscal 2023 will play an important role in driving adoption of hybrid and EVs. Execution of the schemes will also
be a key factor considering that only Rs. 4.40 billion of the Rs. 8.93 billion allocated to FAME I has been utilized.
All the policies and regulations focus on decreasing the acquisition cost and building capabilities through the PMP
scheme and the recently announced production-linked incentive (PLI) scheme.

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Total cost of ownership and affordability

TCO depends on many factors such as acquisition cost, registration and finance charges, maintenance and running
cost and finally resale value. Acquisition cost is a major component. High acquisition cost hinders adoption.

Acquisition cost delta comparison

Percentages denote quantum by which cost of e2W is higher than equivalent ICE (Internal combustion engine)
model in the respective periods.

Delta with ICE FY19 FY21 FY23 FY25

e2W-equivalent with subsidy 49% 30% 18% 11%

E2W-equivalent without subsidy 82% 56% 41% 33%

Source: CRISIL Research

FAME II subsidy will remain in force until Fiscal 2022. The table above reflects the importance of demand-led
incentives in making e2Ws more affordable. The aim should be to bring the affordability quotient as close to ICE
as possible. Cost here includes RTO and insurance. The battery component accounts for 26% to 35% of the cost
of an e2W in Fiscal 2021. The price of ICE vehicles will increase every year due to the increasing input costs,
emission and safety norms whereas price of EVs will remain constant or may decrease owing to decreasing lithium
prices and economies of scale.

TCO

In a base scenario, for comparing TCO of EVs with that of ICE vehicles, CRISIL Research has considered battery
prices dropping to $150 per kWh by Fiscal 2025. Petrol price is assumed to remain at Rs. 83.69 per liter, with no
further increase over current prices. EV resale value as a proportion of initial cost has been assumed to remain at
the same level in Fiscal 2025 as in Fiscal 2021, which will probably improve over a period with better product
availability in the market. Therefore, alternative scenarios developed will only show an upside for EVs.
Continuation of FAME subsidies until Fiscal 2025 is the only major assumption made in favor of 2W EVs.

TCO in 2021 for four-year ownership

Annual running 6,000 km 8,000 km 10,000 km

ICE-equivalent 2W EV 4% higher cost than ICE 5% lower cost than ICE 13% lower cost than ICE

TCO in 2025 for four-year ownership

Annual running 6,000 km 8,000 km 10,000 km

ICE-equivalent 2W EV 5% lower cost than ICE 13% lower cost than ICE 20% lower cost than ICE

In personal use case, average annual running of 7,000 to 9,000 km is observed for 2W’s in India. As evident from
the tables above, at annual running of 6,000-km, TCO of e2W’s is 4% higher than that of ICE for Fiscal 2021.
The lack of parity for e2W’s is due to 30% higher acquisition cost. A majority of the 2Ws are financed; hence, a
30% cost differential for an e2W acts a deterrent for EV adoption. However, as annual running increases, EV
becomes more cost-effective than ICE. This is one of the major reasons for the proliferation of many ride-sharing
businesses having 2W EVs at their core, such as Bounce and Vogo.

In Fiscal 2025, with subsidies keeping the acquisition cost in control, TCO of e2W is positive even at lower annual
running of 6,000 km as compared with equivalent ICE, thus paving way for rapid adoption.

A sequential increase in petrol prices, impending BS VI part B emission norms (due for implementation in Fiscal
2023), constant electrical energy cost (due to an increase of renewable energy in the country’s power mix), and
improving customer trust in electrification will lead to faster adoption of EVs.

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Growing awareness regarding environmental issues

Alarming levels of air pollution among metro cities in India and actions taken by the local governments is resulting
in increased awareness levels among masses especially youth regarding environmental issues and advantages of
electrical vehicles in addressing some of these issues. Growing awareness levels and concern regarding
environmental issues are therefore likely to be some of the drivers for electrification in India.

Outlook On Indian 2W EV Sales (Fiscal 2021-2026)

A snapshot of factors affecting 2W EV adoption in India

Factor FY22E FY26P

TCO Medium to high High
Industry action Low High
Government action High High
Product characteristics Medium High
Charging ecosystem Low Medium

Regulatory developments and player actions in the industry indicate that the share of large OEMs will continue
to grow in the future, with adequate investments in capability building and a high degree of localization.

Product characteristics imply that the industry is moving rapidly from lead-acid-based low-speed vehicles to
lithium-ion-based high-speed vehicles, and providing features on par with equivalent ICE vehicles.

Even though 90% to 95% of personal-use e2W are likely to be home-charged, the presence of public charging
and fast-charging systems will allay range anxiety, help overcome the current trust deficit and drive faster
adoption.

2W EV sales outlook in India (Fiscal 2021-2026)

CRISIL Research expects 2W EV sales to expand to between 2,120 to 2,140 thousand vehicles by Fiscal 2026
from 140 thousand to 142 thousand vehicles in Fiscal 2021, at a CAGR of 70% to 74% over Fiscals 2021 to 2026.

2W EV sales outlook
CAGR: 70-74%
2130
1880
Thousand vehicles

1090

590
280
141

FY21E FY22P FY23P FY24P FY25P FY26P

Source: SMEV, SIAM, and CRISIL Research

Type/Year FY21E FY22P FY26P

Scooter sales (‘000) 4,592 5,613 8,143

All 2W sales (‘000) 15,227 17,618 23,811

2W EV sales (‘000) 140-142 ~280 ~2,130

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2W EV scooter sales (‘000) 138-139 ~270 ~2010

Adoption rate of 2W EV ~0.9% ~1.5% ~8.9%

Adoption rate of scooters ~3% ~4.8% ~26.2%

Note: E - estimated; P - projected
Source: CRISIL Research

Three-wheeler electrification in India

Current Market size and share

Source: Ricardo analysis, Vahan portal (Note: The numbers represent registered e-3Ws)

The current market size of e-3Ws is approximately 87,000 units based on registrations in Road Transport Offices
(RTOs). However, it is worth noting that the actual size of the market may be much higher as majority of the e-
3W segment is highly unorganised.

There are three product categories in the e-3W segment namely e-auto (L5M), e-rickshaw and e-rickshaw with
cart (L3/L5N). E-rickshaw with cart is the goods carrier while e-auto and e-rickshaw are passenger carriers. E-
3W segment is dominated by passenger carriers with approximately 93% share while the cargo carriers are limited
to approximately 7%.

E-3W Outlook

The e-3W segment is expected to grow at CAGR of approximately 46% between 2021 to 25 to reach 400,000
units in sales. The projected sales are the registered vehicles and the actual sales is likely to be much higher (>1
million units) as large portion of e-3W segment is unorganized. Passenger carriers are expected to dominate with
approximately 80% market share.

The growth in e-3W sales can be attributed to:

• E-3Ws have very low running cost comparison to its ICE peers, which will offset the higher acquisition
cost. The benefits are maximized as the mileage is higher due to commercial use. Typically, 3Ws run for
100-200kms/day depending on application.
• Government is expected to continue the subsidy program, FAME II, as they could not achieve the target
sales of 0.5M 3Ws by 2022 under the program; cumulative sales of e-3Ws bought under the program are
approximately 10,000 units.
• Emergence of new business models to address key issues such as high upfront costs, range anxiety, slow
charging etc.; Piaggio has partnered with Sun Mobility and Kinetic has partnered with Bharat Petroleum
to offer battery swapping option.

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 • Demand for cargo e-3Ws is likely to be sustainable as e-commerce is projected to grow (from $38.5
billion in 2017 to $200 billion in 2026), thereby increased need for the last mile delivery. E-commerce
and hyper delivery firms have announced their intentions to add EVs to their fleet.

If not for the following reasons, the growth would have been much higher:

• COVID-19 has affected the 3W segment, especially the passenger carriers, heavily due to lockdowns
and resultant office/ school shutdowns. The impact of COVID-19 is not completely over and passenger
carriers are expected to decline YoY in 2021 by approximately 10% besides approximately 35% in 2020.
• The lockdowns have affected the income of 3W drivers, which turned the banks and NBFCs very
cautious about lending to the segment.

MARKET SIZING AND OUTLOOK FOR RELEVANT AUTO COMPONENT SEGMENTS IN INDIA

Differential gears and assemblies

A differential gear is a critical component of a vehicle’s power transmission system. Differential gears are
mounted as an assembly of high-precision bevel gears on the drive axle. A differential assembly plays an integral
role in how a vehicle turns. It is designed to drive a pair of wheels while allowing them to rotate at different
speeds. This function provides proportional RPMs between the left and right wheels. For example, when a vehicle
goes around a corner, the wheel on the outside must travel faster than the wheel on the inside. The differential
distributes equal amounts of torque to both wheels. This permits the wheels to react to resistance, or provide
traction, to give the wheel more resistance to rotate less. The wheel with less resistance rotates faster.

Differential gears/assemblies find application in passenger vehicles (PV), commercial vehicles (CV), tractors,
and construction equipment.

Differential gears are mounted on the rear and/or front axle, depending on the power transmission system design.
For example, in the case of two-wheel rear-axle-drive cars, one differential gear assembly is installed on the rear
axle and vice versa. In the case of four-wheel drive cars, two differential gear assemblies are installed. On the
similar principal differential gears find applications in commercial vehicle, tractors and construction equipment.

The intensity of differential gears in vehicles depends on vehicle type and configuration. Accordingly, two-wheel-
drive passenger vehicles (PV) have a set of four differential gears. In certain vehicle models, depending upon
design a two-wheel-drive, PV can have six differential gears. Whereas, a four-wheel-drive PV has two sets of four
differential gears mounted on each of the axle (rear and front) along with an inter axle differential. Inter axle
differential performs the function of distributing power between the two axles. A differential gear manufacturer
realizes more revenue in a four wheel-drive versus a two-wheel drive PV. Bigger vehicles like sedans, SUVs have
better price realization per gear as compared to small cars.

Similarly in CVs, an LCV has six differential gears in a two-wheel-drive configuration, whereas a M&HCV has
two sets of six differential gears each along with an inter- axle differential consisting of nine gears in a four-wheel-
drive configuration to support the torque requirement of respective vehicle segments. Therefore, in a four-wheel-
drive configuration M&HCV truck has total 20 differential gears. A higher payload vehicle requires higher torque.

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Vehicles with higher torque requirement not only have a higher number of gears, but also a more complex gear
design compared with vehicles with lower torque requirement. CV applications such as construction, mining and
defense require four-wheel-drive trucks that have a higher number of differential gears and require more complex
gear designs to support operations in strenuous conditions. Like in PV, price realization for a differential gear
manufacturer is higher in four-wheel-drive truck compared to a two-wheel-drive truck. In addition, price
realization per gear also improve with increase in truck payloads.

Electric vehicle (EV) drivetrains are more complicated than conventional powertrains. Very high revolutions per
minute (RPM) in electric drives cause noise, vibration and harshness (NVH) issues in EVs. This results in higher
technological complexity in differential gears and assembly design. This in turn results in higher price realization
for differential gear assembly in EVs than conventional powertrains.

In tractors, two-wheel drive tractors have six differential gears whereas in a four-wheel-drive configuration a total
of 18-20 gears of deployed in a tractor. Even in case of tractors, price realization for a differential gear
manufacturer is higher in four-wheel-drive tractors versus a two-wheel-drive tractors. Price realizations are also
better in higher hp tractors versus lower hp tractors.

Review of differential gears and differential gear assemblies market in India

According to CRISIL Research, the differential gears market in India – catering to original equipment
manufacturers (OEMs) – is estimated at approximately 23.0 million units in Fiscal 2020 (in terms of volume).
The market is estimated to be valued at Rs. 3.3–3.5 billion. Currently, most vehicle manufacturers procure
differential gears as individual components from component manufacturers and perform the differential gear
assembly operation in-house. In a scenario where component manufacturers supply all differential gears as
assemblies to vehicle manufacturers, CRISIL Research expects the market for differential gear assembly to be
worth between Rs. 4.5 billion to Rs. 4.6 billion in Fiscal 2020.

PVs are estimated to have accounted for 60% to 62% of the Indian differential gears market (by volume) in
Fiscal 2020, followed by CVs (16% to 18%) and tractors (21% to 23% ). By value, PVs are estimated to have
accounted for 40% to 42%, followed by CVs (30% to 32%) and tractors (27% to 29%).

Differential gears market in India, by vehicle Differential gears market in India, by vehicle
segment segment
FY20: 23.0 million units FY20: Rs. 3.4 billion

21-23%
27-29%
40-42%

16-18% 60-62%

30-32%

Passenger vehicles Commercial vehicles Tractors

Note: Gears market is exclusive of gear demand from Bharat Benz as the Bharat Benz production volume is not reported by SIAM
Source: SIAM and CRISIL Research

Key growth drivers

PVs

• As per CRISIL Research’s assessment, demand for PVs is expected to increase at a CAGR of 9-10% over
Fiscals 2021 to 2026.

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• The production-linked incentive (PLI) scheme for the automobile industry is likely to propel exports, thereby
supporting demand for differential gears in India.

• Improvement in differential gear price realisation on account of a shift in consumer preference towards high-
performance, larger and better-build-quality vehicles, such as compact cars and utility vehicles.

• A gradual shift in demand towards four-wheel-drive vehicles, particularly in the utility vehicle segment, will
likely result in higher per-vehicle differential gear content.

CVs

• As per CRISIL Research’s assessment, demand for CVs is expected to increase at a CAGR of 13% to 14%
over Fiscals 2021 to 2026 as the Indian economy grows approximately 7.0% CAGR over the medium term,
resulting in a rise in domestic consumption and higher freight availability. The government’s PLI scheme is
also expected to aid freight availability as exports pick up over the medium to long term.

• The PLI scheme is likely to boost exports across vehicle segments, thereby driving demand for CVs for
transportation of auto components and automobiles.

• Implementation of the Goods and Services Tax (GST) has led to an increased demand for higher-tonnage,
multi-axle vehicles (MAVs) between hubs and intermediate commercial vehicles (ICVs) on spokes. Price
realisation per differential gear is greater in higher-tonnage vehicles.

• The Indian government plans to invest Rs. 111 trillion in infrastructure under the National Infrastructure
Pipeline over Fiscals 2020 to 2025. This is expected to drive demand for tippers and ready-mix concrete
(RMC) trucks, which have a higher number of differential gears than other trucks.

• Commercial mining in India is expected to garner investments of Rs. 330 billion over Fiscals 2021 to 2028.
These investments are also likely to drive purchase of mining tippers. Mining tippers have relatively high
volume and value intensity of differential gears than other trucks.

• It has been observed that as the economy grows and more freight becomes available for movement in the
system. In such a scenario transporter replace their older trucks with higher ton payload capacity trucks. This
manifests into increasing price realisation per truck for a component supplier.

• Transporters preference is likely to increasingly shift towards four-wheel-drive trucks for long haul
movement with the improvement in road infrastructure. Four-wheel-drive trucks will allow transporters to
ply at higher speeds and therefore complete more trips in a month. Increase in sales of four-wheel-drive trucks
will ultimately aid differential gears demand in terms of both volume and price realisation.

Tractors

• As per CRISIL Research’s assessment, demand Domestic tractor sales are expected to increase at a CAGR
of 1.6% to 2% over Fiscals 2021 to 2026.

• Demand for high-horsepower (hp) tractors has been rising because of growing need for greater precision in
farm operations, especially in areas where intensive multi-crop farming is popular. Higher-hp tractors also
help farmers in mechanisation with equipment such as rotavators, rotary tillers, and cultivators. Demand for
higher hp tractors and four-wheel-drive vehicles is expected to support volume demand and price realisation
for differential gears going forward. Farm mechanisation is expected to further pick up in the future, led by
increasing farm labour scarcity.

• Farm mechanisation is also leading to growth in sales of tractor power take-off (PTO)-operated farm
implements. Differential gear components also find application in manufacturing of these farm implements.

• International tractor manufacturers such as John Deere, New Holland and Yanmar are looking at developing
India as a base to export to North America and Europe, which primarily use higher hp tractors. Higher hp
tractors have relatively higher differential gear price realisation.

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Key other growth drivers

• Indian government has also allocated Rs. 570 billion under PLI scheme to auto sector to boost automobile
and auto component exports from India. Therefore, auto component manufacturers with export focus are
likely to benefit from this scheme in future.

• Trade liberalisation in western markets led to emergence of Asia as export hub for Europe, North and South
America region over the past decade. While major economies like China, Malaysia, Thailand, India and
Indonesia saw increase in export to west, China gained a greater prominence as an export hub among Asian
economies. However, as COVID-19 pandemic hit the globe, global supply chains got severely impacted due
to high dependence on China for several raw materials and intermediates including auto components.
Therefore as global economies revive from the pandemic shock, there is a greater focus by global OEMs and
tier I auto component suppliers on diversifying their supplier base in order to de-risk their supply chains.
Supply chain realignment takes place in future, several countries including India are likely to benefit in terms
of greater opportunity in export markets. Therefore, auto component companies in India especially the ones
with greater focus on export markets stand to gain on this account in the near future.

Indian differential gears market outlook

According to CRISIL Research, the differential gears market in India is expected to expand at a CAGR of 8.5%
to 9.5% to Rs. 33 to 35 million units by Fiscal 2026. The market is estimated to be worth Rs. 6.0 to 6.5 billion in
Fiscal 2026. In a scenario where component manufacturers supply all differential gears as assemblies to vehicle
manufacturers, CRISIL Research expects the market to be worth Rs. 8 to 8.5 billion by Fiscal 2026. Vehicle
manufacturers are likely to outsource differential gear assembly to component suppliers gradually going forward.

Indian differential gears market (million units), Fiscals 2020-2026

CAGR: 8.5-9.5%

34.0
32.0
(1.7)-(2.2)% 30.0
28.2
26.5
Million units

23.0 22.0

FY20 FY21E FY22P FY23P FY24P FY25P FY26P

Note: Gears market is exclusive of gear demand from Bharat Benz as the Bharat Benz production volume is not reported by SIAM
Source: SIAM and CRISIL Research

Indian differential gears market (Rs. billion), Fiscals 2020-2026

CAGR: 13-15%

6.2
5.6
-2.2% 5.1
4.6
Rs billion

4.1
3.4 3.2

FY20 FY21E FY22P FY23P FY24P FY25P FY26P

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Note: Gears market is exclusive of gear demand from Bharat Benz as the Bharat Benz production volume is not reported by SIAM
Source: SIAM and CRISIL Research

PVs are expected to account for 60% to 62% of the Indian differential gears market (by volume) by Fiscal 2026,
followed by CVs (approximately 18% to 20%) and tractors (approximately 19% to 21%). By value, PVs are
expected to account for 40% to 42% of the market in Fiscal 2020, followed by CVs (33% to 35%) and tractors
(24% to 26%). PV EV differential gears market is estimated to garner 2.5% to 3% value share in overall PV
differential gears market by Fiscal 2026 from approximately 0.1% in Fiscal 2020.
Differential gears market in India, by vehicle Differential gears market in India, by vehicle
segment segment
FY26: 34.0 million units FY26: Rs. 6.2 billion

19-21% 24-26%
40-42%

18-20%
60-62%
33-35%

Passenger vehicles Commercial vehicles Tractors

Note: Gears market is exclusive of gear demand from Bharat Benz as the Bharat Benz production volume is not reported by SIAM
Source: SIAM and CRISIL Research

Competitive Scenario

In the PV segment, a few OEMs such as Hyundai Motors, Honda Cars, and Toyota Kirloskar Motor have supply
tie-ups with auto component suppliers, which are subsidiaries or affiliates of respective vehicle manufactures.
Differential gear requirement of these OEMs is largely met through imports. Sona Comstar, Sundram Fasteners,
and India Pistons are the key manufacturers of differential gears in India. Sona Comstar is the largest manufacturer
of differential gears for PVs, with an estimated market share of 55% to 60%.

Sona Comstar, American Axle, Meritor and Dana are the leading suppliers of differential gears for CV
manufacturers in India. Sona Comstar is the largest manufacturer of the CV segment differential gears with
estimated 80-90% market share.

Sona Comstar is also the largest supplier of differential gears for tractor manufacturers in India, with an estimated
market share of 75% to 85%. Rest of the tractor OEM demand for differential gears is met through in-house
manufacturing by tractor OEMs or through players like New Allenbery, Punjab Bevel Gears, GNA, Bharat Gears
etc. Sona Comstar is the largest manufacturer of differential gears in India for PV, CV and tractor OEMs.

Brushless DC motors (BLDC) market for electric two wheelers in India

Electric motors convert electrical energy into mechanical energy. BLDC is one such type of electric motor.

There are two basic types of BLDC motors

a. Out runner, where stator is fixed and outside, and the inner rotor rotates and provides motion
b. In runner, where stator is fixed and inside, and the outer rotor rotates attached with the wheel and provides
motion
Standard out runner type BLDC motor consist of:

a. Rotor
b. Stator

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c. Position or Hall sensors
In BLDC, permanent magnets are attached to the
rotor. Depending on the application, the number of poles
can vary between two to eight with north and south poles
being placed alternately.

Stator is made of stacked steel laminations with

axially cut slots for winding. Generally, most BLDC
motors consist of three stator windings.

Since there are no brushes in brushless DC

motors, the commutation is electronically controlled. In
order to rotate the motor, windings of the stator must be
energized in a sequence and the position of the rotor
(North/South) must be known precisely to energize a particular set of windings. During operation of a BLDC
motor, controller using position sensors excites pattern of windings in a particular order. Current passes through
the coil; it generates a magnetic field, which attracts the rotor magnet. Immediately after the next winding is
excited, and it begins attracting the rotor magnet. Rotational motion is achieved through the shaft attached with
the rotor.

Review of BLDC motors and other electric motors industry in India

Primarily in India, two types of electric motors are used in electric two wheelers:

a. BLDC motors.
b. PMSM (Permanent magnet synchronous motion) motors.
Construction wise PMSM is similar to BLDC motors. Major difference, is that BLDC motors is used with direct
current (DC), whereas PMSM is used with Alternating current (AC). Normally electric motors are coupled with
motor controllers and are mostly sold in tandem. Major advantages of PMSM motors is that they are more compact
in size, have higher power efficiency, but require a more complex motor controller. Electric two-wheeler model,
which are exclusively in the performance space, may shift to this medium in the long term. As per CRISIL
Research assessment, PMSM type of electric motors are not expected to gain meaningful traction in India over
Fiscals 2021 to 2026 due to cost competitiveness of BLDC motors.

BLDC motors in use in electric two wheelers can be broadly classified into three peak power ratings:

a. < 3 kW
b. > 3 kW & < 6kW
c. > 6kW
Large OEM’s are contributing 16% of the electric two-wheeler industry. Smaller players having annual sales less
than 800 units dominate remaining share. Large OEM’s have introduced motors in the market in the 3-6 kW power
rating. Smaller players have units with ratings less than 3 kW, since most of them are low powered lead acid based
platforms. PMSM motors are also starting to make an introduction in the Indian market.

Market skew relative to peak power (kW) of BLDC motor for Fiscal 2021

>3 kW & <6

Motor type < 3 kW > 10 kW Total
kW

Market Share ~80-84% ~15-20% ~0-1% 100%

Source: CRISIL Research

CRISIL Research estimates the size of the BLDC market in India catering to original equipment manufacturers
(OEMs) at 139-141 thousand units in Fiscal 2021. BLDC market in value terms is estimated at Rs. 360–370
Million in Fiscal 2021.

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Key growth drivers for BLDC motors in India for electric two wheelers

• Demand for electric two wheelers is expected to grow at CAGR 72-74% over Fiscals 2021 to 2026.

• Improvement in BLDC realisations on account of shift in consumer preferences towards high performance,
bigger and better powerful quality vehicles.

• FAME II amendments and PMP scheme.

• Production Linked Incentive (PLI) scheme for automobile industry is likely to benefit export focused auto
component manufacturers.

Demand for electric two wheelers is expected to grow at CAGR 72-74% over Fiscals 2021-2026

Electric two-wheeler market is set to continue its exponential growth rate to reach 2.1 million to 2.2 million units
in Fiscal 2026. Major reasons for the growth would be the decreasing battery prices, which would make e2W
more affordable and make it cost ownership positive over equivalent ICE variant. Primary traction motor to be
used would be of BLDC type because of easy construction, domestic capability.

Improvement in BLDC realizations because of shift in consumer preferences towards high performance,
improved powerful quality vehicles

CRISIL Research estimates that there would be significant shift from low speed electric vehicle to high-speed
electric vehicles. Currently 90% electric two-wheeler market is dominated by low speed variants; this is expected
to decline to 54% of the market in Fiscal 2026. Improvement in power ratings would increase price realization
per vehicle for BLDC motor suppliers.

FAME II amendments and PMP scheme

FAME II demand incentives for lithium battery electric vehicles are necessary to lower the acquisition cost of
electric two-wheeler. Continuation of demand subsidy is a major factor for increasing adoption. Government of
India has also made amendments to clauses pertaining to qualification criterion of OEMs who can claim demand
incentive. These amendments include localization of parts, failing which FAME II linked demand incentives will
not be provided to the model. Another major amendment of increasing basic custom duties on BLDC motors will
also deter cheap imports. FAME II amendment and PMP scheme are likely to benefit domestic EV auto
component manufacturers actively working on localizing critical EV components. The policies will benefit
component manufacturers to quickly achieve scale and to cater to the export markets.

Production Linked Incentive (PLI) scheme for automobile industry is likely to propel exports, thereby
supporting demand for BLDC motors in India

Indian government has also allocated Rs. 570 Billion under PLI scheme to auto sector to boost automobile and
auto component exports from India. Therefore, auto component manufacturers with export focus are likely to
benefit from this scheme in future.

Outlook of BLDC motors market in India

CRISIL Research estimates the size of the BLDC market in India to grow at 70% to 74% CAGR to between Rs.
2.0 million to 2.2 million units by Fiscal 2026. BLDC market for electric two wheelers in value terms is estimated
at between Rs. 4.0 billion to 4.4 billion in Fiscal 2026.

Indian BLDC motor market for electric two wheelers (million units), Fiscals 2020-2026

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 2.5 70-74%
CAGR: 70-74%

2.1

2.0
1.8

(9)-(7)%
Million units

1.5 (8.5)-(7.5)%

1.1
1.0

0.6
0.5
0.3
0.2 0.1

0.0
FY20 FY21E FY22P FY23P FY24P FY25P FY26P
Note: E - Estimated; P - Projected
Source: SMEV, CRISIL Research

Indian BLDC motor market for electric two wheelers (Rs. billion), Fiscals 2020-2026

CAGR: 61-65%
4.2
3.9

(7)-(6)%
Rs billion

2.5

1.4

0.7
0.4 0.4

FY20 FY21E FY22P FY23P FY24P FY25P FY26P

Note: E - Estimated; P - Projected
Source: CRISIL Research

Competitive scenario

Before the introduction of revised amendments in FAME II scheme, majority of electric vehicle auto components
including electric motors used to be imported from markets, which are ahead of India in technological adoption.

DHI through FAME amendments made major amendments mandated localization norms as precursor for availing
subsidy. As of April 1, 2020, amongst other clauses, vehicles, which have electric motor made locally, would be
eligible to receive demand incentive. Due to the impact of coronavirus pandemic on the EV industry, deadline for
local manufacturing to be eligible for incentives under FAME II scheme has been extended until April 1, 2021.
Second major amendment was on import duty on BLDC motor, it would increase from April 2021 onwards from
current 0% to 15%. Third amendment was to specify warranty norms for parts on electric two wheelers to 3 years
/ 20,000 kms from the existing one year.

All the three amendments meant that OEM’s now have to source domestically. COVID-19 and other geopolitical
risks to the supply chains also emerged as a key issue in Fiscal 2021. All these reasons combined to give a much-
needed fillip to the domestic capability building in electric vehicle auto component space.

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As per CRISIL’s interactions, 30-40% of the < 3kW electric motors are still being imported in the country. These
motors are typically used by smaller e2W manufacturers who are not covered under FAME scheme. Major
organized suppliers for BLDC motors in India include the likes of:

• Mahle Auto Electrical drives

• SEG Automotive
• Sona Comstar
• Lucas TVS

According to Ricardo, BLDC motor market in India is largely driven by 2/3Ws in the next 5 years as the extent
of electrification is expected to be high in both the segments. Within the e-2W segment, BLDC motors will be
predominantly used in an estimated approximately 90% of the units sold primarily due to its low cost and
availability of technology. Similarly, in the e-3W segment, e-rickshaws (Passenger and cargo) will employ BLDC
motors with an estimation of approximately 95%.

BLDC type motor dominates the e-2W segment while very few players like Ather use PMSM type motor. In terms
of the transmission type, frame mounted along with belt drive is employed in Ather 450x, Revolt RV400, Bajaj
Chetak while other vehicles feature hub motors.

Leading BLDC suppliers for 2W/3W segment include Lucas TVS, Sona Comstar, Virya Mobility, EMF
Innovations, Compageauto etc. Also, several E-2W/3W OEMs in India are importing BLDC machines from
Chinese suppliers which is a highly fragmented market.

On PMSM Motors, the current supplier available in India is only Mahle Electric Drives.

GLOBAL MARKET SIZING AND OUTLOOK FOR RELEVANT AUTO COMPONENT SEGMENTS

Starter Motor Market

Source: Ricardo analysis, Public Domain

A traditional ICE vehicle or and ICE vehicle with start-stop feature will require a
12v starter motor in-order to crank the ICE. Mild Hybrids, other than a P1 configuration are expected to require a
12v starter motor. Full hybrids will continue to need a 12v starter motor to crank the ICE. Given there is no ICE
engine in BEVs, the need for a 12v starter motor is eliminated.

In 2015, global passenger vehicle production stood at approximately 86 million units. During calendar year 2015,
the proportion of pure ICE and micro hybrid (12v start-stop) vehicles produced accounted for approximately 97%
of total passenger vehicles. The penetration of BEV in C calendar year Y 2015 was very limited and mild-hybrid
(mainly P0) and full hybrids accounted for approximately 2.5% of the overall propulsion split.

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Hence, the overall volume of starter motors produced in 2015 was approximately 85.6 million units.
Of the total volumes, the volume of starter motor associated with pure ICE (non-EV related) in calendar year 2015
was approximately 58.9 million units. The volume of starter motor associated with EV related products (micro
hybrids, full hybrids and plug-in hybrids) in 2015 was approximately 26.7 million units

However, between calendar year 2020 to 2025 the population of pure ICE passenger vehicles and micro hybrid
(12v start-stop) is expected to decline from 86% to approximately 55%. While there is a decline, there is still
significant volumes (approximately 50 million unit of passenger vehicles) that would require a starter motor in
calendar year 2025.

Between calendar years 2020 to 2025, proportion of mild hybrids and full hybrids is estimated to increase from
approximately 10% to approximately 33%. In mild hybrid applications, Ricardo expects P0, P4 to be dominant
configuration with very limited volumes of P1. Post 2025, there is a potential for BSG (Belt Starter Generator)
systems to act as a starter motor and hence replace the traditional 12v starter motors in mild hybrids with P0
configuration. However, this will primarily be driven by advancements in the belt technology.

The proportion of BEVs is expected to increase from approximately 3% in calendar year 2020 to approximately
12% in calendar year 2025. Given there is no ICE engine in BEVs, the need for a 12v starter motor is eliminated.

In calendar year 2020 the total volumes of starter motor produced globally is estimated to be approximately 68
million units. Of the total volumes in calendar year 2020, the volume of starter motor associated with pure ICE
(non-EV related) in calendar year 2020 was approximately 24.9 million units. The volume of starter motor
associated with EV related products (micro hybrids, full hybrids and plug-in hybrids) in calendar year 2020 was
approximately 43 million units.

Assuming the price of a standard 12v starter motor to be $38 per unit and a start-stop starter motor to be $44 per
unit Ricardo estimates that in calendar year 2020, the total market for starter motors (in value terms) was
approximately $2.8 billion.

Ricardo expects the market to grow by approximately 3% CAGR between calendar years 2020-2025 and reach
production volumes of approximately 80 million units. Of the total volumes in calendar year 2025, the volume of
starter motor associated with pure ICE (non-EV related) in calendar year 2025 is expected to be approximately
16 million units. The volume of starter motor associated with EV related products (micro hybrids, full hybrids
and plug-in hybrids) in calendar year 2025 is estimated to be approximately 64 million units.

Assuming the price of a standard 12v starter motor to be $35 per unit and a start-stop starter motor to be $39 per
unit Ricardo estimates that in calendar year 2025, the total market for starter motors (in value terms) would be
approximately $2.9 billion.

The volumes estimated are for OE sales only and does not include any aftermarket volumes.

Globally across all segments (Passenger Vehicles, Commercial Vehicle, Tractors) key competitors for Sona
Comstar include Denso, Borg Warner, SEG Automotive, Hitachi, Valeo etc. Given Sona Comstar exposure to the
passenger vehicle segment (which also happens to be the largest segment for starter motors) Ricardo expects Sona
Comstar (with market share of approximately 3%) to be among the top ten global starter motor suppliers.

Sona Comstar’s global market share of starter motors has increased from 2.5% in calendar year 2019 to 3% in
calendar year 2020.

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Starter Motor Market – India Exports

Million units

Source: Ricardo Analysis, Public domain information

Starter Motor exports registered a YoY decline of approximately 15% reaching approximately 3.1 million units
in calendar year 2020. Lockdown due to COVID-19 in Q2 2020 led to plant closures and hence fall in exports.
Once lockdown was lifted (in phases), export volumes during July to December 2020 period increased by
approximately 50% over January to June 2020.

Sona Comstar and SEG Automotive are two of the largest starter motor exporters from India with a combined
market share of 70%.

Lucas TVS exported approximately 120,000 starter motors per annum for PV OEMs. Spark Minda, Auto Ignition,
Mahle together export approximately 120,000 starter motors per annum catering to off-highway segments.

Belt-Driven Starter Generator

Source: Image Public domain

The mild hybrid market from 2015 through to 2020 has pre-dominantly been dominated by 48V systems. The
mild-hybrid market was approximately 0.3% of the total vehicles produced in 2015 amounting to approximately
255,000 units and growing to approximately 5% of the total vehicle production in 2020 to
approximately 3.5 million units. Of these, a dominant share of 95% was 48V BSG systems in 2015 and an
estimated share of approximately 92% in 2020 resulting in absolute volumes of approximately 242,000 units and
approximately 3.2 million units in calendar year 2015 and calendar year 2020 respectively.

In 2020, Europe led the BSG sales with approximately 1.3 million units followed by China at approximately
870,000 units. The rest of the volumes included approximately 770,000 units in Japan and Korea and
approximately 256,000 units in North America. Going forward, in the mild hybrid segment the proportion of other
configurations (P1 and P2) is expected to increase primarily due to the fuel consumption/CO2 benefits and the
current estimate is that that this is likely to reduce the proportion of the BSG units to approximately 60-65% (from
92% in 2020).

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The mild hybrids are estimated to make up approximately 21% of the total vehicle sales in calendar year 2020
(91.5 million) which amounts to approximately 19.2 million vehicles. Using a conservative estimate of 60% the
BSG units in calendar year 2025 are estimated to grow to approximately 11.5 million units with a CAGR of 3%
(from 3.2 million in calendar year 2020).

China and Europe are expected to lead the BSG market in 2025 with approximately 4.3 million units and 4.1
million units respectively primarily driven by stringent CAFE norms in Europe and NEV regulations in China.
Japan and South Korea are expected to have approximately 1.9 million units while North America is estimated to
consume approximately 1.3 million units of BSG.

In addition to the mild hybrids, the full hybrid BSGs are estimated to have accounted for an additional
approximately 400,000 units in 2020 and are estimated to grow to approximately 770,000 in 2025.

In summary, bringing all of this together, the estimated BSG units in 2020 is approximately 3.6 million and
approximately 12.27 million units in 2025 representing an overall CAGR of 28%

From a value perspective the overall size of the BSG market in 2020 was estimated to be $0.75 billion (assuming
unit price of BSG to be $235) and is expected to reach approximately $1.8 billion in 2025 assuming BSG unit
price will be approximately $150.

Key competitors in the 48V BSG segment are Valeo, SEG Automotive, Continental, Hyundai Mobis. Valeo is a
market leader in this space.

High Voltage Traction Motors

Traction motors predominantly find applications in BEV (Battery Electric Vehicles), Full Hybrids & Mild Hybrid
application.

In BEV, traction motors are prime movers and located in the front/rear or both depending on the vehicle
configuration. In case of Full hybrids, traction motors are primarily used in dedicated hybrid transmissions and/or
in combination with electric rear axle. This section primarily focuses on the high voltage traction motors that drive
BEVs.

In calendar year 2015 the total volume of passenger vehicle BEVs produced was approximately 0.35 million units.
96% of the BEVs produced had traction motor on either the front or the rear axle while approximately 4% of the
BEVs had traction motors on both axles. Given this the total volumes of traction motor produced in 2015 was
approximately 0.36 million units.

In calendar year 2020 the total volume of passenger vehicle BEVs produced was approximately 2.3 million units.
75% of the BEVs produced had traction motor on either the front or the rear axle while approximately 25% of the
BEVs had traction motors on both axles. Given this Ricardo estimates that total volumes of traction motor
produced in 2020 was approximately 2.9 million units.

Currently the traction motors are in the 60-110kw power range while the higher end traction motors (Tesla Model
3) are in the 190kw range. Assuming an average size of 100kw motor, and a price of $14/kw the current market
price for an 100kw traction motor with inverter is estimated to $1400 per unit. Hence, the total size of the traction
motor market for BEVs is estimated to be $4 billion.

In calendar year 2025 the total volume of passenger vehicle BEVs produced is expected to be approximately 11
million units. 65% of the BEVs produced had traction motor on either the front or the rear axle while
approximately 35% of the BEVs had traction motors on both axles. Given this Ricardo estimates that total volumes
of traction motor produced in 2025 is expected to be approximately 15 million units.

In 2025, Ricardo expects the traction motors to be in the 110-200kw power range while the higher end traction
motors will be in the 250-300kw range. Assuming an average size of 150kw motor, and a price point of $10/kw
Ricardo estimates the market price for an 150kw traction motor with inverter in calendar year 2025 to be $1,500
per unit. Hence, the total size of the traction motor market for BEVs is estimated to be $22.5 billion.

Between 2020-25 the BEV market sized form a value perspective is growing at approximately 41% compared to
the growth in volume perspective.

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Between 2020 to 2025 the market for traction motor is expected to grow to a CAGR of approximately 39%.

Key global players in the high voltage traction motor segment include Bosch, Valeo-Siemens, GKN, Schaeffler,
LG, Hitachi, Borg Warner, ZF etc.

Trends in Electric Drive Units

A ‘fully integrated’ e-Axle typically includers a motor, inverter and transmission. Most also integrate DC-DC and
differential into the unit.

Multi Speed Electric Drive Units

Move from single to multispeed Electric Drive Units

is a key factor in reducing BEV system costs. The
majority of BEVs currently available on the market
utilize single speed Electric Drive Units (EDU). Many
of these vehicles have significant high load and high-
top speed capability, driving the need for large electric
motors that are operating at poor levels of efficiency.
Introduction of additional gear ratios into the EDU
makes a compelling argument, allowing the motor to
spend time in a more efficient operating condition for
a broader range of use cases. Improved operating
efficiency allows OEMs to employ smaller electric
motors and reduce battery pack size to save cost and
weight whilst achieving the same range

The trend from major suppliers is towards a modular and/or scalable approach, creating a compact integrated
unit with a range of outputs

• ZF Electric Axle Drive

o Power: up to 150 kW
o Torque: 380 Nm
o Speed: 13,000 rpm
o Integrated unit: e-Motor, PE & gearbox
o Shared housing between e-Motor & gearbox
o Integrated Cooling of PE and e-Motor
o Uses ASM e-Motor
• Bosch strat-up E-axle
o Power: 50-300 kW
o Torque: 100-600* Nm
o Speed: 16,000 rpm
o Integrated unit: e-Motor, PE & gearbox
o High scalability & manufacturing flexibility
o Reduced copper cables, simplified cooling & no bearings

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Global market for Differential Assemblies & Differential Bevel Gears

Passenger Vehicle

Source: Ricardo Analysis

In calendar year 2015, Ricardo estimates that approximately 59% of the passenger vehicles produced were Front
Wheel Drive (FWD) while approximately 10% of the vehicles were Rear Wheeled Drive (RWD). Both FWD &
RWD would have one differential assembly per vehicle. Given this Ricardo estimates that in calendar year 2015,
the total volumes of differential produced for FWD & RWD passenger vehicles were approximately 59 million
units.

The proportion of Part time AWD and Full time AWD passenger vehicles accounted for approximately 31% of
the passenger vehicles produced in calendar year 2015. Each of these drive configurations would require two
differential assemblies (one on front axle and one on rear axle) to offer the ability to steer wheels on each axle in
case power to transferred to the same. Based on this Ricardo estimates that in calendar year 2015, the total volumes
of differential produced for Part time AWD and Full time AWD passenger vehicles were approximately 53 million
units.

Hence, the total volumes of differential assemblies produced in calendar year 2015 for passenger vehicles is
estimated to be approximately 112 million units.

In calendar year 2020, Ricardo estimates that approximately 55% of the passenger vehicles produced were Front
Wheel Drive (FWD) while approximately 8% of the vehicles were Rear Wheeled Drive (RWD). Given this
Ricardo estimates that in calendar year calendar year 2020, the total volumes of differential produced for FWD &
RWD passenger vehicles were approximately 44 million units.

The proportion of Part time AWD and Full time AWD passenger vehicles accounted for approximately 37% of
the passenger vehicles produced in calendar year 2020. Based on this Ricardo estimates that in calendar year 2020,
the total volumes of differential produced for Part time AWD and Full time AWD passenger vehicles were
approximately 52 million units.

Hence, the total volumes of differential assemblies produced in calendar year 2020 for passenger vehicles is
estimated to be approximately 96 million units. Ricardo assumes the price of a non-BEV differential assembly to
be $40 per unit. Ricardo’s assumption is that the price of a differential assembly used in BEV is approximately
25% higher compared to non-BEV vehicle given the increased NVH requirements. So, the price of BEV
differential is assumed to be approximately $50. Hence, Ricardo estimates the size of the market to be
approximately $3.9 billion.

Ricardo estimates that total differential assemblies produced for BEV were approximately 2.9 million units in
calendar year 2020. Given this Ricardo estimates the size of the BEV differential assembly market in calendar
year 2020 to be approximately $145 million.

Sona Comstar’s global market share of BEV differential assemblies in calendar year 2020 was 8.7%.

As popularity of Sport Utility Vehicles (SUVs) and Crossover Utility Vehicles (CUV) increases, there is a
preference towards Part time AWD and Full time AWD drive types. Ricardo expects this trend to continue over
the next few years with Part time AWD and Full time AWD accounting for approximately 39% of the market in
calendar year 2025.

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Given this passenger vehicles with FWD or RWD will decline to approximately 61% in calendar year 2025.

Hence, the total volumes of differential assemblies produced in calendar year 2025 for passenger vehicles is
estimated to be approximately 127 million units indicating a CAGR of approximately 6% between calendar years
2020 to 2025.

Based on the number of BEVs produced in 2025 and expected drive configuration Ricardo estimates that number
of differential assemblies produced for BEV will be approximately 15 million units. This results in a CAGR of
approximately 39% between 2020 and 2025.

Ricardo assumes the price of a non-BEV differential assembly to be $36 per unit in calendar year 2025. Their
assumption is that the price of a differential assembly used in BEV will be approximately 20% higher compared
to non-BEV vehicle in calendar year 2025 given the increased NVH requirements. So, the price of BEV
differential is assumed to be approximately $43 per unit. Hence, Ricardo estimates the size of the market to be
approximately $4.7 billion.

Each FWD differential would consists of four differential bevel gears. Typically, the differential is integrated into
the transmission in case of FWD passenger vehicle.

While RWD differential is exactly like an FWD differential and consists of four bevel gears.

Given this Ricardo estimates that in calendar year a total of approximately 448 million bevel gears were produced
globally.

For calendar year 2020 Ricardo estimates that a total of approximately 384 million differential bevel gears were
produced globally. Assuming $11.50 for a set of four differential bevel gears, Ricardo estimates that the overall
size of the differential bevel gear market in value terms is $1.1 billion.

Of the total bevel gears produced for passenger vehicles, approximately 11.6 million is estimated to be produced
for BEVs in 2020.

In calendar year 2025 Ricardo estimates that the total number of bevel gears produced for passenger vehicle
application increased by approximately 6% to reach approximately 508 million units. Assuming $10 for a set of
4 differential bevel gears Ricardo estimates that the overall size of the differential bevel gear market in value terms
is $1.3 billion.

Of the total bevel gears produced for passenger vehicles, approximately 60 million is estimated to be produced
for BEVs in 2025. Given above volumes, bevel gears for BEVs are expected to increase with a CAGR of
approximately 39% between 2020 to 2025.

Finally, increased preference for AWD/4WD/Part Time AWD will potentially drive demand for differential
assemblies and differential bevel gears.

Agriculture Tractor

For calendar year 2020 the total number of differential assemblies produced in India, North America, Europe and
China is estimated to be approximately 1.9 million units and total number of differential bevel gears produced in
calendar year 2020 estimated to be approximately 11.2 million.

For calendar year 2025 the total number of differential assemblies produced in India, North America, Europe and
China is estimated to be approximately 2.3 million units and total number of differential bevel gears produced in
calendar year 2025 estimated to be approximately 13.7 million.

India is expected to see an increased uptake of AWD tractors which will potentially drive increased demand for
differential assemblies and differential bevel gears.

Commercial Vehicle

In 2019, the global differential assembly market (including India) for commercial vehicle was approximately 5.6
million units. In 2020 the global differential assembly market was approximately 4 million units.

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In 2019, the global differential bevel gear market (including India) for commercial vehicle was approximately
48.3 million units. In 2020 the global differential bevel gear market was approximately 34.3 million units.

For 2025, Ricardo estimates based on the above, the total number of differential assemblies produced for MHCV
segment will be approximately 428,000 units and total number of differential bevel gears produced is estimated
to be approximately 3.8 million units.

Sona Comstar’s global market share of differential bevel gears has increased from 4.5% in calendar year 2019 to
5% in calendar year 2020.

Key Competitors – Differential Assembly and Differential Bevel Gears

In the differential assembly market, the key players include Borg Warner, JTEKT Corp, Dana, American Axle
Manufacturing, GKN, Hyundai WIA Corp etc.

In the differential bevel gear market, the key competitors for Sona Comstar include American Axle, Showa Corp,
Musashi Seimitsu Industries, Meritor, GKN etc. In calendar year 2020, Sona Comstar was among the top 10
players globally in the differential bevel gear market.

Revenue Realization

Source: Ricardo Analysis

With the advent of electrification, the vehicle level bill of materials will be different to the current ICE vehicle
and with it the revenue realization of various components and component suppliers is expected to undergo a
paradigm shift.

The table above illustrates how the revenue realization of the chosen components (differential bevel gears,
differential assembly, starter motor, BSG (Belt Starter Generator) and Traction motors) is expected to change
according to varying degrees of electrification.

The components which are a part of the base ICE vehicle are depicted with 100 to indicate the starting point and
subsequently a “+” indicates an increase in revenue realization and a “=” indicates that the revenue realization is
not expected to change going forward.

For example, differential bevel gears and differential assembly for BEVs and Full Hybrids would require better
durability and NVH characters compared to the same in ICE vehicles. The accessibility of “instant” torque and
the increased aggression of the regeneration torque, both introduce additional “work” for the differential which
can result in durability issues that would not have been seen historically on a similar ICE application. A differential
assembly and associated bevel gears are power source neutral. One needs a differential assembly for a pure ICE
vehicle as well as a pure BEV.

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According to the Deloitte 2019 Global Automotive Supplier Study4, electric drivetrain is expected to be the fastest
growing segment of the entire automotive supply chain and will grow approximately four times from US$ 14
billion in 2018 to US$ 56 billion in 2025 globally.

Importance of Electronics and Software

Source: Ricardo Analysis, Public domain

As BEV and Autonomous vehicles (AV) gain momentum, share of highly software and electronics determined
systems and components will rise to approximately 50% by 2030. Most innovations in the BEV & AV space will
be software and electronics enabled. Embedded Software and Electronics engineers are already in short supply
today and this will get worse in the future. As vehicle software becomes the key differentiator, building expertise
in software and electronics will become a must if suppliers need to be competitive.

CONCLUSIONS

Globally the electrification agenda will be driven by the passenger vehicle segment given the need to meet
stringent fuel economy regulations and potential ban of fossil fuel vehicles across many European countries. The
Light Commercial Vehicle (LCV) segment which is primarily used for transportation of goods lends itself well to
electrification given the TCO benefit. However, Medium and Heavy-duty commercial vehicles will gravitate
towards natural gas and hydrogen as an alternative propulsion source.

Globally with increasing electrification, the trend is for individual component manufacturers (mechanical or
electrical) to enhance their capabilities (organically or inorganically) to offer integrated system solutions.
Examples include- differential/axle manufactures forming a tie up with electric motor manufacturers, or electric
motor manufacturers teaming up with power electronics and/or software firms to offer seamless electric
powertrain/drivetrain solutions to OEMs. As the level of integration increases, the system complexity increases,
and it becomes very critical for organizations to build capabilities to handle this complexity.

Finally, limited players like GKN, Schaeffler, Bosch, Valeo and Sona Comstar are well placed to combine their
motor and driveline capabilities to offer a compelling value proposition to its EV customer base. Ricardo believes
that this complexity presents a unique opportunity in electrification for companies such as Sona Comstar who are
committed to building capabilities and products by bringing different elements (mechanical, electrical and
software) of the puzzle together under one roof.

4
https://documents.deloitte.com/insights/globalautosupplierstudy

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KEY COMPETITORS AND BENCHMARKING OF FINANCIAL DATA
2019 % EV
2015-2019
Revenue
Revenue EBITDA PBT R&D Spend Revenue
Company ROCE ROE (Oct-
M, USD Margin % % Revenue % Revenue CAGR
2020)
Valeo $ 23,372.40 13% 3% 11% 15% 7% <2% 8%
BorgWarner $ 10,168.00 18% 12% 5% 18% 16% 6%
GKN Automotive $ 15,881.04 13% 8% 2% 8% 9% 13%
American Axle $ 6,531.00 15% -8% 2% 8% -50% 14%
Meritor $ 4,388.00 12% 9% 2% 23% 71% 6%
Hota Industrial $ 193.19 24% 12% - 8% - 25-35% 3%
Sona Comstar $ 170.81 27% 19% 3% 29% 35% 11%
Aptiv PLC $ 14,357.00 14% 8% 5% 8% - 25-35% -1%
Nidec Corp $ 14,734.08 13% 7% 5% 8% - 7%
CATL $ 6,630.00 20% 13% - 14% - 100% 65%
Shenzhen Inovance Technolo-A $ 1,070.05 17% 14% - 20% - 25%
Zhejiang Sanhua Intelligen-A $ 1,634.31 18% 15% - 18% - 5-15% 14%

Source: Public Domain; Company Presentations, Bloomberg Data, Morgan Stanley Report

These companies are a representative list (not exhaustive) of the current day automotive suppliers who are global
in scale and are active in conventional and electrified powertrain and driveline systems.

The average EBITDA margins reported is approximately 17% with average reported PBT being approximately
9%. R&D spend as percentage of revenue is higher for companies who are working on products involving
integrated mechanical and electrical systems viz., Valeo (11%) and Borg Warner (5%). The % R&D Spend for
pure play mechanical orientated systems is found to be on the lower side viz., American Axle (2%), Meritor (2%)
and GKN (2%). The average R&D spend for this selection of companies in 2019 is approximately 4% of revenues.

Summary financial indicators for key auto components players

Financial performance of auto component players has remained subdued in the past one to two years due to
slowdown in the global and domestic automobile sector.

Profitability ratios: Summary for key auto components players

Opera Gearin
Opera
ting g ratio
PBT ( PAT ( ting
Operating EBIT PAT
Rs. Rs. EBIT ROCE ROE
income DA ( margi
million million DA (%) (%)
( Rs. million) Rs. n (%)
) ) margi
Companies/Particulars million
n (%)
)
CAG
R
FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20
FY16-
20

Key auto components players (differential assembly/ gears)

Sona BLW Precision Forgings

12,183 10.9% 3,261 2,273 2,217 26.8 18.2 28.0 40.2 0.6
Ltd (Consol)

Ramkrishna Forgings Ltd 11,945 2.3% 2,087 147 97 17.5 0.8 4.8 1.1 1.2
Musashi Auto Parts (India) Pvt
9,770 0.2% 1,183 174 94 12.1 1.0 4.2 1.3 0.4
Ltd

Automotive Axles Ltd 9,533 -3.8% 946 611 411 9.9 4.3 11.0 7.7 0

GKN Driveline 9,420 1.4% 1,461 835 633 15.5 6.7 19.6 13.5 0.6

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 Opera Gearin
Opera
ting g ratio
PBT ( PAT ( ting
Operating EBIT PAT
Rs. Rs. EBIT ROCE ROE
income DA ( margi
million million DA (%) (%)
( Rs. million) Rs. n (%)
) ) margi
Companies/Particulars million
n (%)
)

CAG
R
FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20 FY20
FY16-
20
American Axle & Manufacturing 6,209 24.7% 155 -148 -111 2.5 -1.8 -1.8 -3.2 0.4

Kalyani Forge Ltd 2,022 -3.1% 99 -81 -69 4.9 -3.4 -1.9 -6.5 0.3

Average 4.7% 12.7 3.7 9.1 7.1 0.5

Key auto components players (electric drive systems/ BLDC motors)

Lucas-TVS Ltd 21,016 5.2% 1,301 1,714 1,475 6.2 7.0 16.8 14.9 0.0
SEG Automotive India Pvt Ltd* 13,884 22.3% 823 634 408 5.9 2.9 48.8 15.1 0.0
Sona BLW Precision Forgings
12,183 10.9% 3,261 2,273 2,217 26.8 18.2 28.0 40.2 0.6
Ltd (Consol)
Mahle Electric Drives India Pvt
155 43.3% -18.7 -28 -21 -12.1 -13.4 -18.9 -17.4 0.0
Ltd
Average 26.4% 6.7 3.7 18.7 13.2 0.2

Publicly listed top 10 auto-component manufacturers in India by market capitalization

Motherson Sumi Systems Ltd 634,876 14.4% 52,042 20,258 11,735 8.2 1.8 12.0 11.4 1.1
Sundaram-Clayton Ltd 180,372 9.7% 5,932 8,363 6,266 3.3 3.5 11.9 17.6 3.4

Varroc Engineering Ltd 111,429 8.9% 8,942 314 -202 8.0 -0.2 3.5 -1.0 1.9
Bosch Ltd. (India) 97,216 0.4% 13,606 10,264 6,495 14.0 6.7 11.8 7.1 0.0

Bharat Forge Ltd 81,092 4.4% 11,903 4,536 3,412 14.7 4.2 6.9 6.5 0.8

Mahindra CIE Automotive Ltd 79,169 10.4% 9,769 6,279 3,538 12.3 4.5 24.9 28.9 1.4

Endurance Technologies Ltd 69,266 7.2% 11,451 7,478 5,655 16.5 8.2 23.1 21.9 0.3

Minda Industries Ltd 54,654 21.2% 6,263 2,652 1,877 11.5 3.4 12.3 11.1 0.7

Sundaram Fasteners Ltd 37,232 3.3% 6,044 3,932 3,265 16.2 8.8 14.9 16.9 0.4

WABCO India Ltd 19,309 1.2% 2,579 2,264 1,588 13.4 8.2 12.4 8.7 0.0

Average 8.1% 11.8 4.9 13.4 12.9 1.0

Note: Financials reclassified as per CRISIL
NR: Not reported
* Operating income, OPM, PAT, ROCE and ROE for FY19, CAGR for FY17-19 period
Operating EBITDA: Indicates operating earnings before interest, taxes, depreciation and amortization which takes into conside ration only
operating income whereas non-operating income is excluded
Operating EBITDA margin: Operating EBITDA / Operating income
PAT margin: PAT/ Operating income
ROCE: PBIT/average of last two years total debt plus tangible net worth
ROE: PAT/ average of last two years tangible net worth
Gearing ratio: Adjusted total debt/ Adjusted tangible networth
Source: Company reports, MCA, Rating Rationales, company websites, CRISIL Research

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Auto component majors’ R&D expenditure meagre

Research and development (R&D) expenditure of 10 listed auto component majors is very low – just over 1% of
their turnover on average. However, the companies such as Bosch Ltd, Sona BLW Precision Forging and Minda
Industries Ltd, have spent higher amount on R&D over Fiscal 2018 to Fiscal 2020 period.

R&D expenditure of publicly listed top 10 auto-component manufacturers in India by market

capitalization

Average R&D R&D expenditure

Companies/particulars expenditure* FY20
(as % of turnover) (as % of turnover)

Bharat Forge Ltd 0.5% 0.6%

Bosch Ltd. (India) 3.1% 4.4%

Endurance Technologies Ltd 0.9% 0.8%

Mahindra CIE Automotive Ltd* 0.0% NR

Minda Industries Ltd 2.0% 2.5%

Motherson Sumi Systems Ltd 0.0% 0.0%

Sundaram-Clayton Ltd 0.0% 0.0%

Sundram Fasteners Ltd 0.4% 0.5%

Varroc Engineering Ltd 0.5% 0.6%

WABCO India Ltd 0.2% 0.3%

Sona BLW Precision Forgings Ltd 2.3% 3.3%

Average 0.9% 1.2%

Note: Average for FY18-FY20; calculated as revenue expenditure and capital expenditure classified
under R&D head divided by total consolidated revenue of the company
* For FY17-19 period
NR: Not reported
Source: Company reports, MCA, Rating Rationales, Company websites, CRISIL Research

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 OUR BUSINESS

Some of the information in the following section, especially information with respect to our plans and strategies,
contain certain forward-looking statements that involve risks and uncertainties. You should read the section
“Forward-Looking Statements” on page 18 for a discussion of the risks and uncertainties related to those
statements and the section “Risk Factors” on page 25 for a discussion of certain risks that may affect our business,
financial condition or results of operations. Our actual results may differ materially from those expressed in, or
implied by, these forward-looking statements.

In Fiscal 2020 our Company completed the acquisition of Comstar Entities. We have included in this Draft Red
Herring Prospectus, the Pro Forma Consolidated Financial Information (to be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations – Basis of Preparation
of the Pro Forma Consolidated Financial Information” on page 372) as at and for the years ended March 31,
2018, 2019 and 2020 and the nine months ended December 31, 2020, to show the impact of the acquisition of
Comstar Entities on our Company, including the results of operations and the financial position that would have
resulted had the acquisition of Comstar Entities been completed at a date prior to the first period presented in the
Pro Forma Consolidated Financial Information. Further, the erstwhile subsidiary, SONA BV, and its subsidiaries,
and the erstwhile associate, Sona Skill Development Centre Limited, have not been considered for consolidation
in the Pro Forma Consolidated Financial Information. For further details, see “Financial Information – Pro
Forma Consolidated Financial Information” on page 310; “History and Certain Corporate Matters – Material
acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation of assets in the
last 10 years” on page 199; and see “Risk Factors - The Pro Forma Consolidated Financial Information included
in this DRHP to reflect the acquisition of Comstar Entities is not indicative of our future financial condition or
factual financial position or results of operations” on page 33.

Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived
from our Pro Forma Consolidated Financial Information included in this Draft Red Herring Prospectus on page
310.

Industry and market data used in this section have been extracted from the CRISIL Report and the Ricardo Report.
For further details and risks in relation to commissioned reports, see “Risk Factors – Certain sections of this
Draft Red Herring Prospectus disclose information from industry reports commissioned by us and any reliance
on such information for making an investment decision in the Offer is subject to inherent risks.” on page 44.

The following information is qualified in its entirety by, and should be read together with, the more detailed
financial and other information included in this Draft Red Herring Prospectus, including the information
contained in “Risk Factors”, “Industry Overview”, “Financial Information” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” on pages 25, 100, 230 and 351, respectively.

Overview

We are one of India’s leading automotive technology companies, designing, manufacturing and supplying highly
engineered, mission critical automotive systems and components such as differential assemblies, differential
gears, conventional and micro-hybrid starter motors, BSG systems, EV traction motors (BLDC and PMSM) and
motor control units to automotive OEMs across US, Europe, India and China, for both electrified and non-
electrified powertrain segments. According to the Ricardo Report, in calendar year 2020, we were among the top
10 players globally in the differential bevel gear market. We are also expected to be among the top 10 global
starter motor suppliers based on our exposure to the PV segment in calendar year 2020, according to the Ricardo
Report. We have been gaining global market share across products to reach a share of approximately 5.0% for
differential bevel gears, 3.0% for starter motors and 8.7% for BEV differential assemblies, in calendar year 2020,
according to the Ricardo Report. We have nine manufacturing and assembly facilities across India, China, Mexico
and USA, of which six are located in India, from where we supply our products to six out of the top 10 global PV
OEMs, three out of the top 10 global CV OEMs and seven out of the top eight global tractor OEMs by volume,
according to the Ricardo Report. We are a global supplier and we derived 75.4% of our income from sale of goods
with end-use in the overseas markets, including 40.2% in North America, 25.3% in Europe and 5.3% in China
and 24.6% of our income was derived from sale of goods with end-use in India, for the nine months ended
December 31, 2020. We are also one of the two largest exporters of starter motors from India, according to the
Ricardo Report.

We are a technology and innovation driven company. With a strong focus on research and development (“R&D”),
we develop mechanical and electrical hardware systems, components as well as base and application software

159
solutions, to meet the evolving demands of our customers. We are one of a few companies globally, with the
ability to design high power density EV systems handling high torque requirements with a lightweight design,
while meeting stringent durability, performance and NVH specifications, enabling EV manufacturers to enhance
the vehicle range, acceleration and the overall efficiency. While BEV sales as a percentage of total global vehicle
sales was 3.3% in calendar year 2020, according to the Ricardo Report, 13.7% of our income from sale of goods
was derived from the BEV market for the nine months ended December 31, 2020. Among the available propulsion
technologies, BEV has been the fastest growing segment at a CAGR of approximately 46% between calendar
years 2015 to 2020 and is expected to grow at a CAGR of approximately 36% between calendar years 2020 to
2025 with increased market penetration, according to the Ricardo Report. We have increased our sales to the EV
market at a CAGR of 35.8% from Fiscal 2018 to Fiscal 2020. We currently supply differential assemblies,
differential gears, EV Traction Motors to customers in US, China and India, for use in hybrid and battery electric
passenger vehicles, hybrid and battery electric light commercial vehicles, electric two-wheelers and electric three-
wheelers.

According to the CRISIL Report, our total operating income has grown at a CAGR of 10.9% from Fiscal Years
2016 to 2020, as compared to the average CAGR of 8.1% for the top 10 listed auto-component manufacturers in
India by market capitalization, in the same period. For Fiscal Years 2018, 2019 and 2020 and the nine months
ended December 31, 2020, we had EBITDA margin of 28.2%, 28.9%, 26.7% and 29.2%, respectively, average
ROE of 36.0%, 35.6%, 35.2% and 35.9%, respectively, and ROCE of 39.4%, 40.3%%, 29.0% and 32.5%,
respectively.

The chart below describes our products and their end-use application across various powertrains and vehicle
segments.

With our product offerings spanning across all types of conventional and electrified powertrains, we are one of
the few automotive technology manufacturers that are well-positioned to gain from high growth industry trends
as well as various initiatives introduced by the GoI to facilitate the growth of the automotive industry in India,
including the recently announced ₹570.42 billion production-linked incentive scheme, which is likely to increase
exports resulting in increased demand for differential gears in India, according to the CRISIL Report.

Some of the key high growth industry trends from which we expect to benefit are set forth below.

• BEVs are expected to grow at a CAGR of approximately 36% between calendar years 2020 to 2025 with
increased market penetration, according to the Ricardo Report, which will be positive for us as we supply EV
differential assemblies, differential gears, BSG systems and EV traction motors into this market. According
to the Ricardo Report, BEV global vehicle production volume is expected to grow by five times in the next
five years from 2.3 million units in calendar year 2020 to 11.2 million units in calendar year 2025. Further,

160
 revenue realization of various components is expected to change according to various degrees of
electrification as stated in the Ricardo Report.

Revenue realization analysis for various components, according the Ricardo Report is set forth below. For
further details, see “Industry Overview” on page 100.

Source: Ricardo Report

Note: The components which are a part of the base ICE vehicle are depicted with 100 to indicate the starting point and subsequently a
“+” indicates an increase in revenue realization and a “=” indicates that the revenue realization is not expected to change going
forward. (Source: Ricardo Report)

• Demand for electric two-wheelers is expected to grow at a CAGR of 72% to 74% between Fiscals 2021 to
2026, according to the CRISIL Report and the electric three-wheeler segment is expected to grow at a CAGR
of approximately 46% between calendar years 2021 to 2025 to reach 400,000 units in sales, according to the
Ricardo Report. We supply e-axles, BLDC motors and motor control units for use in the electric two-wheeler
and three-wheeler segments.

• According to the Ricardo Report, 2030 targets for India indicate that 70% of all commercial PV, 30% of
private PV, 40% of buses, 80% of two-wheeler and 80% of three-wheeler sales would be electric.

• According to the CRISIL Report, Indian CV and PV sales are expected to increase 9% to 10% CAGR and
12% to 14% CAGR, respectively, over Fiscals 2021 to 2026, with growth of 38% and 23%, respectively in
Fiscal 2022. This will be positive for our differential gears business as our estimated market share of the
Indian CV and PV markets is approximately 80% to 90% and 55% to 60%, respectively, according to the
CRISIL Report.

• The mix of SUVs, CUVs, multi axle trucks and high powered EVs in the Indian and global PV and CV market
is expected to increase according to the CRISIL Report and the Ricardo Report, leading to higher usage of
differential gears per vehicle as these vehicles are AWD/4WD/multi-axle. We expect this trend to be positive
for revenue growth of our differential gear business.

For further details on the growth trends and key growth drivers in the automotive industry, including government
initiatives, see “Industry Overview” on page 100.

Our Competitive Strengths

One of the leading manufacturers and suppliers to global EV markets

While BEV sales as a percentage of total global vehicle sales was 3.3% in calendar year 2020, according to the
Ricardo Report, 13.7% of our income from sale of goods was derived from the BEV market for the nine months
ended December 31, 2020. As a percentage of our total sale of goods, our income from sale of goods to the BEV
market has grown from 1.1% in Fiscal Year 2018 to 2.0% in Fiscal Year 2020 and 13.7% for the nine months

161
ended December 31, 2020. For the nine months ended December 31, 2020, approximately 72.8% of our income
from sale of goods was derived from sale of goods to BEV, hybrid/ micro-hybrid and power source neutral
products.

According to the Ricardo Report, among the available propulsion technologies, BEV has been the fastest growing
at CAGR of approximately 46% between calendar years 2015 to 2020. The momentum for EVs is being driven
by the global recognition of the need for clean mobility, norms, targets and incentives provided by several
governments to promote EV adoption, improving affordability and performance of EVs, rapid expansion of EV
charging infrastructure and OEM plans for electrification. For further details, see “Industry Overview” on page
100.

We have been supplying differential gears in the global EV market since April 2016 and differential assemblies
since 2018, and according to the Ricardo Report, our global market share of BEV differential assemblies in
calendar year 2020 was 8.7%. We also design and manufacture traction motors and motor control units for electric
vehicles, with PMSM motors for EV and hybrid PVs and BLDC motors for electric two-wheelers and electric
three-wheelers. According to the Ricardo Report, we are one of the leading suppliers of BLDC motors in India
for the two-wheeler and three-wheeler EV market. Further, we are developing a 48V BSG motor for hybrid PVs,
for which we have successfully completed vehicle level demonstration for selected global OEMs. The Ricardo
Report states that we are among a limited number of players who are well placed to combine our motor and
driveline capabilities to offer a compelling value proposition to our EV customer base. According to the Ricardo
Report, this complexity presents a unique opportunity in electrification for companies such as our Company, who
are committed to building capabilities and products by bringing different elements (mechanical, electrical and
software) of the puzzle together under one roof. We are committed to achieving better and stronger ESG norms
as a company, and our focus on developing EV specific products to facilitate the growing electrification trend
enables us to implement our ESG related commitment.

Our high power density EV systems and ability to engage with customers from concept to testing, has resulted in
us being awarded 14 EV systems and components development programs by 10 different customers as at
December 31, 2020, of which active production process has commenced for eight programs and regular
production is yet to commence for six programs. The table below sets forth the details of these programs.
Sr. Customer Program End-Customer Systems and Components Year of Win Year
Name Location** of
SOP#

1 Global Tier 1 Supplier for PVs,

CVs, OHVs and EVs - supplying to Program A1 North America Differential Gears Fiscal 2016 2016
Global OEM of EVs1

2 Global Tier 1 Supplier for PVs,

CVs, OHVs and EVs - supplying to Program A2 North America Differential Gears Fiscal 2020 2019
Global OEM of EVs1

3 Global OEM of EVs1 Program B1 North America Differential Assembly Fiscal 2018 2019

4 Global OEM of EVs1 Program B2 North America Differential Assembly Fiscal 2020 2020

5 Global OEM of EVs1 Program B3 China Differential Assembly Fiscal 2021 2020

6 Program C India BLDC Motor Fiscal 2021 2020

Indian OEM of Electric 2Ws-

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 Sr. Customer Program End-Customer Systems and Components Year of Win Year
Name Location** of
SOP#

Scooters1

7 Indian OEM of Electric 3Ws1 Program D India E-Axle Fiscal 2021 2021

8 Indian OEM of PVs, CVs, OHVs

Program E1 India E-Axle Fiscal 2021 2021
and EVs1

9 North American Tier 1 Supplier for

PVs, CVs, OHVs, and EVs - Program F North America Differential Gears Fiscal 2020 2021
supplying to Global OEM of EVs2

10 Chinese Tier 1 Supplier for EVs -

supplying to Global OEM of PVs Program G North America Differential Assembly Fiscal 2020 2021
and EVs2

11 European OEM of PVs and EVs2 Program H Europe Differential Assembly Fiscal 2021 2022

12 Indian OEM of PVs, CVs, OHVs

Program E2 India Differential Assembly Fiscal 2020 2022
and EVs2

13 European Tier 1 Supplier for PVs

and EVs - supplying to Chinese Program I* China Differential Assembly Fiscal 2021 TBD4
OEM of EVs3

14 Indian OEM of Electric 2Ws- PMSM Motor and

Program J India Fiscal 2021 TBD4
Motorcycles3 Controller

______________
# SOP means start of production.
* Proto order received, final order to be received.
** Customer location is based on the location of the OEM to whom products are supplied for end-use.
1. Active and in serial production.
2. Serial production to commence.
3. Prototype supplied, serial production to commence.
4. To be decided.

One of the leading global companies and gaining market share, diversified across key automotive geographies,
products, vehicle segments and customers

We have nine manufacturing and assembly facilities, of which six are located in India and one each in China,
Mexico and USA, as well as eight warehouses across India, USA, Germany and Belgium. Our facilities are
strategically located in order to serve and prioritize our customers’ needs. Our capabilities in precision-forging
technology has enabled us to become one of the top 10 players globally in the differential bevel gear market in
calendar year 2020, according to the Ricardo Report.

We are also one of the two largest exporters of starter motors from India and expected to be among the top 10
global starter motor suppliers in calendar year 2020 based on our exposure to the PV segment, according to the
Ricardo Report. We have increased our global market share of differential gears and starter motors to 5.0% and
3.0%, respectively in calendar year 2020 from 4.5% and 2.5%, respectively in calendar year 2019 and our global
market share of BEV differential assemblies was 8.7% in calendar year 2020, according to the Ricardo Report.
Further, according to the CRISIL Report, we are the largest manufacturer of differential gears for PV, CV and
tractor OEMs in India, with an estimated market share of approximately 55% to 60%, 80% to 90% and 75% to
85%, respectively.

Further, we aim to mitigate the impact of cyclical downturns in the automotive industry through our geographic
diversification, together with distributed presence in PV, CV and OHV segments. We are not dependent on a
single product, vehicle segment, customer or geography. For the nine months ended December 31, 2020, we
derived 40.2%, 24.6%, 25.3% and 5.3% of our total income from sale of goods with end-use in US, India, Europe
and China. For Fiscal Year 2020 and the nine months ended December 31, 2020, we derived 5.6% and 17.6% of
our total income from sale of goods from sale of differential assemblies, 34.8% and 27.9% from sale of differential
gears, 25.9% and 26.0% from sale of conventional starter motors, 29.5% and 24.9% from the sale of micro-hybrid
starter motors and 3.3% and 2.7%, from sale of other gears, respectively. Further, for the nine months ended
December 31, 2020, PVs, CVs and OHVs contributed 68.8%, 13.7% and 17.5%, respectively, of our total income
from sale of goods.

163
We are also focused on diversification of our business through the growth of new and existing customer
relationships. We supply our systems and components to leading OEMs and Tier 1 automotive suppliers in US,
Europe, India and China. For Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020,
income from sale of goods to our top 10 customers represented 79.1%, 79.1%, 80.8% and 79.9%, respectively, of
our total income from sale of goods. For further details on the breakdown of our sale of goods in terms of
geographic markets, systems and components, customers and vehicle segments, see “Business – Our Operations”
below and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key
Performance Indicators and Certain Non-GAAP Measures” on page 358.

Strong research and development and technological capabilities in both hardware and software development

We have developed strong in-house capabilities to deliver evolving green technologies for future mobility, with
an aggregate expenditure on R&D of ₹1,566.47 million during Fiscal Years 2018, 2019 and 2020 and the nine
months ended December 31, 2020. Our R&D expenditure as a percentage of our revenue from operations were
1.8%, 1.7%, 3.3% and 6.8% for Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020,
respectively. In comparison, average spend of the top 10 listed auto component players was 0.9% over Fiscal 2018
to Fiscal 2020, according to CRISIL Report. As at December 31, 2020, we had 175 on-roll employees engaged in
R&D activities, representing approximately 15% of our total on-roll manpower, with 14 software engineers
focused on R&D. Our R&D capabilities are further strengthened by our digital simulations, testing and validation
facilities located at our three R&D centers in India (Gurugram, Chennai and MM Nagar), which are approved by
the GoI’s Department of Scientific and Industrial Research. They are equipped with modern facilities including,
design software such as Creo, MotorSolve BLDC, ANSYS, MSC ADAMS, KISSsoft, Gear PRO, hyperMILL,
Siemens Solid Edge, Siemens NX, Siemens SPEED, FRENCO, UG NX and Nastran and equipment for white
light scanning, coordinate measuring machines, 3D printing, silicon molding and an electronic and endurance
testing laboratory.

A critical component of all electrified systems is embedded software. According to the Ricardo Report, most
innovations in the BEV and AV space will be software and electronics enabled. As vehicle software becomes the
key differentiator, building expertise in software and electronics will become essential if auto-component
suppliers need to be competitive. Of the R&D expenditure incurred during the nine months ended December 31,
2020, we invested ₹497.01 million towards building software standards, systems, and solutions. We develop the
base software implementing global standards such as ASPICE, MISRA, AUTOSAR, and ISO26262. Our highly
efficient Field Orientated Control (“FOC”) algorithm ensures that the motor/generator consistently operates in an
efficient band, leading to significant improvements in fuel efficiency and reduction in CO2 emissions in hybrids,
and higher range in EVs. Further, functional safety (“FuSa”) is a critical requirement for all electrified systems,
and Cybersecurity, OBD, and over the air updates (“OTA”), have become essential. We are developing software
products aligned to such market and OEM requirements. For example, our 48V BSG motor complies with OBD
2 and cyber security level 2, protecting OTA. According to the Ricardo Report, as BEVs and AVs gain
momentum, the share of highly software and electronics determined systems and components will rise to
approximately 50% by calendar year 2030. As a result of our strong R&D, technological and software
development capabilities, we are well-positioned to become value-added partners to OEMs.

Further, for our driveline systems and components, we have developed proprietary gear design software. Our
software generates micro- geometries to meet the specific requirements of our customers and allows us to design
gear tooth profile with minimal constraints and high flexibility. This flexibility to modify the geometry is
fundamental to our core strength of precision-forging technology, which enables us to design and make our tools
and dies in-house and our precision forging process technology allows us to develop gears with higher power
density, which is critical for the powertrains of EVs.

Our R&D capabilities are further supported by the intellectual property rights that we have in connection with our
business. We have been granted six patents in USA and one patent in China and await 17 patent approvals in India
and one in the UK. For details, see “Our Business – Intellectual Property” on page 183.

Strong business development with customer centric approach

As at December 31, 2020, we have been awarded 50 programs from 26 customers across our product portfolio,
from customers in India and overseas, where the start of production is either during Fiscal Year 2021 or a period
subsequent to Fiscal Year 2021. For further details, see the table under the heading “Our Business – Program
Pipeline” on page 178.

We have long-standing relationships of 15 years and more with 13 of our top 20 customers. For details, see “Our
Business – Our Operations – Customers” below. Some of our key OEM customers (in alphabetical order) include

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a Global OEM of EVs, a North American OEM of PVs and CVs, Ampere Vehicles, an Indian OEM of PVs, CVs
and EVs, Ashok Leyland, CNH, Daimler, Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere,
Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Revolt Intellicorp, TAFE, Volvo
Cars and Volvo Eicher. We also serve selected leading Tier 1 automotive system suppliers such as Carraro, Dana,
Jing-Jin Electric, Linamar and Maschio. We participate in a lengthy and rigorous vendor selection process with
our customers, which can take up to two to three years from the date of issue of a request for quote (“RFQ”), to
qualify and secure business for development of a program. If we are successful in converting the RFQ process
into firm orders then it generally leads to a long term relationship with such customer as the cost to the customer
of switching vendors after qualification in the RFQ process is typically high.

We engage closely with our customers from concept to delivery and aim to have all our systems and components
be industry leading in their category. For example, in 2009, our engineering team together with the team of a
European OEM undertook extensive study and research for creating one of the earliest variants of a hybrid vehicle,
now referred to as “micro-hybrid”. This involved designing a system to automatically shut down and restart the
engine to reduce idling time to achieve fuel economy and reduced CO2 emissions. We suggested innovative
designs and solutions to create a system with quick engine starting and durability of 350,000 cycles as compared
to then prevalent durability of 50,000 cycles. By demonstrating our in-depth R&D and engineering capabilities to
the customer, we were able to win the business to manufacture the micro-hybrid system for the global market for
the European OEM.

In addition to technology and collaboration in development of systems and components, we also meet regularly
with our customers to review our performance in a number of other areas including quality, delivery and cost. As
a result of our superior performance, technological capabilities, and our stringent manufacturing processes, we
have received several awards for the quality of our systems and components and customer satisfaction from
several OEMs.

The table below sets forth some of our customer awards for the quality of our systems and components and
customer satisfaction.

Year Award Customer

Indian OEM of PVs, CVs
2020 Exceptional support during Challenging Times (Covid-19)
and EVs,
Indian OEM of PVs, CVs
2019 Quality Excellence Award
and EVs
2019 Superior performance in the field of Comprehensive Excellence Maruti Suzuki
2018 Drive Customer Centricity Dana
2018 Supplier Excellence Award- In Recognition of Partner Level Performance TMA (John Deere)
North American OEM of
2016 World Excellence Award – Gold
PVs and CVs
Global OEM of PVs and
2011 Award of Excellence
CVs
2011 JLR Supplier Excellence Award JLR

Consistent financial performance with industry leading metrics

According to the CRISIL Report, as compared to the publicly listed top 10 auto-component manufacturers in India
by market capitalization, we are the highest in terms of operating EBITDA margin, PAT margin, ROCE and ROE.
and one of the top ten auto-component manufacturers in India in terms of operating EBITDA and profit before
tax in Fiscal Year 2020. For the Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020,
we achieved an EBITDA margin of 28.2%, 28.9%, 26.7% and 29.2%, respectively. Our average ROE was 36.0%,
35.6%, 35.2% and 35.9%, respectively in Fiscal Years 2018, 2019 and 2020 and the nine months ended December
31, 2020, and ROCE was 39.4%, 40.3%, 29.0% and 32.5%, respectively. Our total operating income has grown
at a CAGR of 10.9% from Fiscal 2016 to 2020 as compared to the average CAGR of 8.1% for the top 10 listed
auto-component manufacturers in India by market capitalization, in the same period, according to the CRISIL
Report.

We have made substantial investments in our R&D and in building production capacities for future growth. In
Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, our capital expenditure
(comprising of payments for acquisition of property, plant and equipment, intangibles and capital work in progress
including capital advances) was ₹1,130.00 million, ₹1,163.88 million, ₹2,240.59 million and ₹1,520.04 million,
respectively. As at December 31, 2020, we had a strong balance sheet with equity capital (including instruments
entirely equity in nature) of ₹477.48 million and other equity of ₹12,408.03 million. In addition, our cash flows

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from our operating activities (after tax) were ₹1,922.37 million, ₹2,689.43 million, ₹3,092.42 million and
₹1,078.07 million in Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020,
respectively.

Despite the overall slowdown in the global automotive sector in Fiscal Year 2020 and the impact of the COVID-
19 pandemic, we were able to maintain our EBITDA margins at 28.2%, 28.9%, 26.7% and 29.2% for Fiscal Years
2018, 2019 and 2020 and the nine months ended December 31, 2020. Our restated consolidated income from sale
of goods amounted to ₹4,681.34 million in the quarter ended December 31, 2020 as compared to ₹2,844.00 million
for the quarter ended December 31, 2019, representing a year-on-year growth of 64.6%.

Highly experienced board of directors and management team

We are led by a highly experienced board of directors, and a professional and experienced management team with
extensive experience in the automotive industry and a proven track record of performance. Mr. Sunjay Kapur, the
Chairman on the Board of our Company, has over 21 years of experience in the automotive industry. Previously,
he has also served as director on the board of directors of various companies and was the managing director of
Sona Koyo Steering Systems Limited (now JTKET India Limited). Mr. Kapur has extensive expertise in the
automobile industry, which provides our leadership team with the vision to steer the long-term strategic direction
of our business. We are further supported by an experienced board of directors with diversified expertise, which
actively contributes to and participates in our strategy. Mr. Kapur is joined on the board by Mr. Amit Dixit, senior
managing director and co-head of Asia acquisitions, and head of India for Blackstone Private Equity and Mr.
Ganesh Mani, managing director with the private equity business group of the Blackstone Group in India. We
also have strong oversight from the Independent Directors on our board which include, Mr. Jeff M. Overly, former
operating partner in the Blackstone Group; Mr. Prasan Firodia, the managing director of Force Motors Limited,
an Indian automotive OEM; Ms. Shradha Suri, the managing director of Subros Limited, an Indian auto-
component supplier and Mr. B V R Subbu, an auto industry veteran and former president of Hyundai Motor India
Limited.

Our management team is led by Mr. Vivek Vikram Singh, our Managing Director and Group Chief Executive
Officer. Mr. Singh is supported by Mr. Rohit Nanda, the Group Chief Financial Officer, Mr. Kiran Deshmukh,
the Group Chief Technology Officer, Mr. Vikram Verma, the Chief Executive Officer of our driveline business,
Mr. Sat Mohan Gupta, the Chief Executive Officer of our electrical business, Mr. Ajay Pratap Singh, our Vice
President (Legal), Company Secretary and Compliance Officer and a strong and experienced team of cross-
functional professionals across senior and mid-level management.

A large number of our senior management personnel have worked with us for a significant period of time, resulting
in effective operational coordination and continuity of business strategies. They have led the organization through
acquisitions, development of new systems and components and pivoting the business to EV markets in the last
five years. Therefore, we believe that our highly experienced and professional management team provides us a
key competitive advantage. Furthermore, our shareholders include Singapore VII Topco III Pte. Ltd., which is an
affiliate of funds managed and/or advised by affiliates of The Blackstone Group Inc. (collectively, “Blackstone”).
Blackstone is a leading global investment firm and its asset management businesses include investment vehicles
focused on real estate, private equity, public debt and equity, growth equity, opportunistic, non-investment grade
credit, real assets and secondary funds, all on a global basis. Through its different businesses, Blackstone had total
assets under management of over US$ 619 billion as of December 31, 2020.

We benefit from the resources, relationships, and expertise of Blackstone. Blackstone brings deep knowledge of
local markets along with global best practices in development, investment and asset management. For details on
our management, see “Our Management” on page 204.

Our Growth Strategies

“Electrification” – Capturing market opportunity in the growing EV space

The global trend towards electrification of vehicles continues to expand. According to the Ricardo Report, the key
drivers of vehicle electrification include climate change and public awareness of the importance to reduce CO 2
emissions and other pollutants, ban on fossil fuel vehicles by some countries, government support and fiscal
incentives that support the trend towards vehicle electrification, stringent emission and fuel economy norms
introduced by several countries to combat the impact of climate change and encourage alternate cleaner fuels,
increasing investment in charging infrastructure for EVs and decline in battery price contributing towards adoption
of EVs. Among the available propulsion technologies, BEV has been the fastest growing at CAGR of
approximately 46% between calendar years 2015 to 2020 and is expected to experience increased market

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penetration growing at a CAGR of approximately 36% between calendar year 2020 to 2025, according to the
Ricardo Report. Our product offerings span all types of electrified powertrains. Our commitment and focus
towards ESG will continue increasing going forward as we plan to increase the EV share of our revenue. We seek
to continue to increase our commitment and focus towards compliance with ESG norms, as we plan to increase
the share of our income derived from sale of goods in the EV market. As part of our growth strategy, we plan to
increase our market share in both the Indian and overseas markets by catering specifically to EV OEMs, across
three product groups as follows:

• Differential assemblies and differential gears: The Ricardo Report states that according to the Deloitte 2019
Global Automotive Supplier Study, electric drivetrain is expected to be the fastest growing segment of the
entire automotive supply chain and will grow approximately four times from US$ 14 billion in 2018 to US$
56 billion in 2025 globally. Anticipating this market shift to electric mobility, we have developed our
differential assemblies and differential gears with core design features that meet the demands of increasing
vehicle electrification such as high power density, improved fuel efficiency and reduced weight. We have
been supplying differential gears in the global EV market since April 2016 and differential assemblies since
2018, and according to the Ricardo Report, our global market share of BEV differential assemblies in calendar
year 2020 was 8.7%. These efforts have led to new business awards and further position us to compete in the
global marketplace. As at December 31, 2020, we had 10 EV program awards for production of differential
assemblies and differential gears for supply to EV manufacturers across North America, Europe, China and
India, of which five programs are currently under regular production. We expect to benefit from the growing
trend towards electrified drivetrains by further increasing our customer base and expanding our share of
business with existing EV customers.

• 48V BSG motor: OEMs and suppliers are competing to develop and market new and alternative technologies
that can meet future Corporate Average Fuel Efficiency (“CAFÉ”) norms, leading to a growth in the hybrid
vehicle market. The global mild hybrid market is expected to grow by approximately four times by calendar
year 2025, accounting for approximately 20.9% of the propulsion split for PVs in calendar year 2025,
according to the Ricardo Report. Key global markets such as China, Europe and US have made significant
commitments through stringent fuel economy and emission norms. According to the Ricardo Report,
proportion of BEVs is also dictated by the NEV credit regime in the China market and China’s ambition to
lead the global automotive electrification. In China, the share of mild hybrids is expected to grow from an
insignificant share to approximately 25% in calendar year 2025, according to the Ricardo Report. We are
responding, in part, to such shift in market demand, through the development of our 48V BSG motor for
hybrid PVs with features that enable fuel savings as well as reduction in CO2 emissions which will help to
meet the CAFE norms. We have successfully completed vehicle level demonstration of the 48V BSG system
to selected global OEMs, and it is currently undergoing rigorous testing in compliance with international
specifications. We aim to remain at the forefront of providing technologically advanced hybridization
solutions through expanding our customer base for and increasing the sales of our BSG hybrid motors
globally.

• EV traction motors (BLDC and PMSM) and motor control units: With the growing market shift towards
electrification of vehicles, the demand for hybrid and battery electric PVs, electric two-wheelers and electric
three-wheelers is growing rapidly in India as well as globally. According to the Ricardo Report, the full hybrid
market is expected to grow by approximately three times in terms of absolute volume by calendar year 2025,
accounting for approximately 12.0% of the propulsion split for PVs in calendar year 2025 and the BEV market
is expected to grow by around five times by 2025, accounting for approximately 12.2% of the propulsion
split for PVs in calendar year 2025. Further, according to the CRISIL Report, the two-wheeler EV sales are
expected to expand at a CAGR of 70% to 74% over Fiscals 2021 to 2026 and according to Ricardo Report,
the electric three-wheeler segment is expected to grow at a CAGR of approximately 46% between calendar
years 2021 and 2025 to reach 400,000 units in sales. Since we design and manufacture traction motors and
motor control units for electric vehicles, with PMSM motors for EV and hybrid PVs and BLDC motors for
electric two-wheelers and electric three-wheelers, we are well-positioned to benefit from the expected growth
in the Indian EV market across all vehicle categories. We pioneered the launch and commenced supply of
BLDC motors for Indian electric two-wheelers and electric three-wheelers since November 2020. As part of
our growth strategy to establish market leadership in the Indian EV segment, we aim to further increase our
customer penetration and acquire new customers for our traction motors and controllers.

Increasing market share globally

• Achieving significant global share from existing systems and components: We have increased our global
market share of differential gears and starter motors to 5.0% and 3.0%, respectively in calendar year 2020

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 from 4.5% and 2.5%, respectively in calendar year 2019 and our global market share of BEV differential
assemblies was 8.7% in calendar year 2020, according to the Ricardo Report. As part of our strategy, we
intend to penetrate the European market for supplying differential assemblies and differential gears, where
we currently have limited market share for our driveline products. We also plan to expand our presence in
China for supply of our micro-hybrid starter motors for PVs and LCVs as well as our 48V BSG systems for
hybrid PVs, as we expect to benefit from China’s growing position as a leading market for EV manufacturers.
As part of our growth strategy, we set-up an assembly plant in China in 2015 and Mexico in 2017, with an
aim to capture higher market share in the Chinese and North American markets.

• Benefiting from the industry trend towards multi-axle vehicle drives in India: The automotive industry, in
India, as well as globally, is experiencing a growing market preference for multiple axle vehicles, in PVs, CVs
as well as tractors according to the CRISIL Report. As stated in the CRISIL Report, a light commercial vehicle
(“LCV”) has six differential gears in a two-wheel-drive configuration, whereas a M&HCV has two sets of six
differential gears each, along with an inter-axle differential consisting of nine gears in a four-wheel-drive
configuration to support the torque requirement of respective vehicle segments. Therefore, in a four-wheel-
drive configuration, M&HCV truck has total of 20 differential gears. According to the CRISIL Report, a
gradual shift in demand towards four-wheel-drive vehicles, particularly in the utility vehicle segment, will
likely result in higher per-vehicle gear content. We expect this trend towards preference for multi-axle vehicles
to significantly increase the demand for our differential gears and aim to achieve our growth objectives by
capitalizing on this shift in market preference for multiple axle vehicles.

• Benefiting from integrated powertrain systems in EVs: According to the Ricardo Report, we are among the
limited number of players who are well placed to combine our motor and driveline capabilities to offer a
compelling value proposition to our EV customer base. Integrated drive units have three key components
namely, differential assembly, high voltage traction motors and high voltage inverters. Since we already
manufacture electric drive motors and inverters for electric 2-wheelers and hybrid PVs, as well as differential
assemblies for battery electric passenger vehicles, we are in a unique position to integrate the three key
constituents of the electric powertrain into a single matched unit, offering an efficient and compact solution to
EV OEMs.
Continue to focus on R&D to develop new and innovative systems and components

According to the Ricardo Report, with the advent of electrification, the vehicle level bill of materials will be
different from the current ICE vehicle and accordingly, revenue realization of various components such as
differential bevel gears, differential assembly, starter motors, BSG and traction motors is expected to undergo a
paradigm shift. We aim to capture the growth trend in revenue realization per component with increasing
electrification by continuously investing in R&D to develop and deliver new and innovative systems and
components. With our customers continuously focusing on weight reduction in EVs to enhance the range, augment
the vehicle’s acceleration and improve overall efficiency, we have been developing solutions and alternatives for
improving the power density and lightweighting of our differential assemblies and EV Traction Motors (BLDC
and PMSM) and motor control units through our R&D efforts. With the evolving vehicle electrification trend, a
key area of our focus is on integrating the powertrain and the drivetrain components by creating an integrated
drive unit. Control systems and software are becoming a critical part of powertrains. We have developed extensive
in-house capability to develop embedded systems and application software, along with integration capabilities to
offer our customers a complete solution.

The Ricardo Report states that, we are among the limited number of players who are well placed to combine our
motor and driveline capabilities to offer a compelling value proposition to our EV customer base. According to
the Ricardo Report, this complexity presents a unique opportunity in electrification for companies such as our
Company, who are committed to building capabilities and products by bringing different elements (mechanical,
electrical and software) of the puzzle together under one roof.

Although the core of our strategy is to continue to achieve growth organically through investment in our
technological capabilities, business development skills and customer relationships, we continue to evaluate
inorganic growth opportunities such as acquisitions and strategic alliances that may provide us with
complementary technologies that have a similar financial profile.

Our Operations

We design, develop, manufacture and supply highly engineered, mission critical systems and components to
automotive OEMs across US, Europe, India and China for both electrified and non-electrified powertrain
segments. With our strong focus on research and development and advanced in-house hardware and software

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capabilities, we develop innovative, mechanical, electrical and motor control systems and components with high
power density, light weightedness, durability, efficiency and improved performance, to meet the evolving
demands of customers at relatively lower costs and high margins.

Our Systems and Components

Our systems and component offerings include differential assemblies and precision forged differential bevel gears
for both electrified and non-electrified PVs, CVs, OHVs and three-wheelers, conventional and micro-hybrid
starter motors for PVs and light commercial vehicles (LCVs), BSG systems, EV traction motors (BLDC and
PMSM) and motor control units for hybrid and electric PVs, hybrid and electric LCVs, electric two-wheelers and
electric three-wheelers.

A description of the primary automotive systems and components offered by us are as follows:

• Differential assemblies: We design, develop and manufacture high torque drive units (i.e., differential
assembly with final gear) and different variants of differential assemblies such as, final drive assembly,
sealed differential, open differential, limited slip differential and forged case differential. Some of the
key design capabilities of our differential assemblies include, dynamic non-linear analysis, static non-
linear analysis and differential burst test-static non-linear analysis. Our differential assemblies typically
have a spherical radius of 20mm to 70mm, light weight ranging between 1kg to 15kg and undergo special
processes such as induction hardening, austempering and hardening and tempering. Our pinion shafts
which are used in assembly of gears have anti-seizure coatings such as manganese phosphating,
electroless nickel plating, quench polish quench (QPQ), gas nitriding and diamond like coating which
enables EVs to operate at higher speed. We offer differential assemblies with precision ground drive gear
to meet stringent NVH requirements for EVs.

• Precision forged differential bevel gears: This gear arrangement uses our in-house developed advanced
precision forging technology which provides our differential bevel gears with features such forged
spherical involute tooth profile, optimized tooth root filleting, oil slots and net forged external splines.
Our net-shaped gears provide significant advantages over conventional machine-cut gears including,
superior quality, increased strength, higher durability, design flexibility, consistent uniformity, long-
lasting performance and lighter weight. Further, the forged design of our gears possesses inherent
strength of refined grain flow which enables increased tooth fatigue, greater load-carrying capacity and
longer field life of our components. Our precision-forged gears are designed and produced with teeth
profile using our proprietary software and inimitable forming process, resulting in design flexibility,
uniformity in the tooth contour, repeated accuracy, robustness and long product life. Since we design and
manufacture our gears in-house using our proprietary technology, including the dies used to forge our
gears, and form the gears’ teeth from inception instead of cutting, we utilize lower amounts of raw
materials such as steel in our production process which makes our product cost-effective for our
customers and provides us with a competitive advantage. Differential bevel gears are a critical component
for automobiles and other wheeled vehicles as they allow transmission of power from the power source
to a pair of driving wheels while allowing them to rotate at different speeds. The technologically
advanced features and high performance of our differential gears facilitate their usage in passenger, heavy
commercial and off-highway vehicles.

• Conventional and micro-hybrid starter motor: We design, develop and manufacture various series of
four and six poles starter motors based on both field winding and permanent magnet design categories.
Some of the key features of our starter motors include, compact and light weight design ranging between
2 kg to 5.5 kg resulting in high power output of up to 3.5 kW, modular mountings, optimized magnetics
using pole shunts, hex free plating which can withstand up to 960 hours of salt spray, sealed noiseless
starter, bounce free solenoids which eliminate possibilities of contact welding, ice break feature on
solenoid terminals for sever cold start abilities, anti-cross thread feature, use of special greases for wide
temperature range, fully sealed protection and enhanced corrosion resistance of up to 960 hours. These
features result in enhanced durability with 150k to 350k starts to meet stop-start applications, increased
cold cranking capability, proven reliability for long product life, design flexibility, vibration and
environmental resistance to all types of customer specifications, pro-engaged reduction drive and high
power to weight ratio.

• Belt Starter Generator (BSG): We have developed 48V BSG (P0 configuration), which is our
hybridization solution for hybrid PVs and LCVs. It uses claw pole technology to meet global standards
offering higher fuel economy and CO2 reduction. Our BSG motors are designed to use high power

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 density magnets leading to high power to weight ratio and higher efficiency over broad speed ranges.
Some of the key features include safety features such as, over voltage short circuit and over temperature
to provide safe operations, quick engine start capability and optimized machine design with DAT pulley
system for energy flow during motor and generator modes. These features result in high torque
performance assistance for P0 engine configuration, high energy harvesting during regeneration mode,
efficient thermal management to ensure longest possible battery life, lightweight and vibration handling
capabilities which provide high quality experience for customers. We have successfully completed
vehicle level demonstration of our 48BSG for hybrid PVs to selected global OEMs, and it is currently
undergoing rigorous testing in compliance with international specifications.

• Traction motors (PMSM): We have developed a 48V PMSM motor for hybrid and BEV passenger
vehicle applications which uses PM synchronous reluctance technology for P3 topology with weight
ranging between 14kg to 17kg and peak power generation of 15 kw with liquid cooling.

• Traction motors (BLDC): We have developed 48V, 72V and 96V BLDC drive motors for electric two-
wheelers and three-wheelers, which use PM synchronous reluctance technology with weight ranging
between 5.2 kg to 17.5 kg and peak power generation of up to 16.5 kW. We have completed vehicle level
trials and expect to launch this component by Fiscal Year 2022 both in air cooled and liquid cooled
designs.

• Motor control units: We have developed motor controllers for electric two-wheelers, three-wheelers
and PV applications using the latest software and design solutions in accordance with international
standards. Motor control units control the power given to motors for providing torque and speed to the
vehicle. It also charges battery during the braking of vehicle. We are developing controllers for peak
power rating range from 1.2kw to 20kw and expect to launch some of these models/platforms by Fiscal
Year 2022.

• Rigid and independent e-axle: We design, develop and manufacture e-axles for electric three-wheelers.
Some of the key features of our e-axle include, optimized gear train system to minimize NVH, an e-axle
structure designed for both passenger and loader applications and BLDC motor to provide excellent pick-
up.

• Tandem axle gears: We design, develop and manufacture tandem axle gears for CVs, which are also
called inter-axle differential (IAD) gears, for vehicles with more than one live axle. Some of the key
features of this component include precision forged coupling, curvic tooth profiles and net forged
recessed bevel tooth on integral gear which facilitates reduction of space, weight and the total bill of
materials, resulting in improved quality, functionality and cost.

• Other gears: We also design, develop and manufacture gearbox gears, other bevel gears such as portal
axle bevel gears, farm implement gears and rotavator gears and different variants of cylindrical gears
such as, reverse idler gear, spur gears and mono-block gears. Some of the key features of our cylindrical
gears include optimized roof design, precision forged teeth, recessed dog teeth for mono-block gears,
integrated sleeve stops, back tapered tooth flank, smooth fillets, equidistant fiber flow and
microstructure, which improve functionality, strength and weight of these gears.

The table below sets forth the breakdown of our income from sale of goods across our systems and components,
as a percentage of our total sale of goods for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020

Sale of Goods ₹11,916.53 ₹13,649.75 ₹11,804.19 ₹9,684.67

million million million million

% of Sale of Goods
Differential Assembly 4.3% 4.5% 5.6% 17.6%
Differential Gears 42.5% 41.5% 34.8% 27.9%
Micro Hybrid Starter Motors 10.3% 17.0% 29.5% 24.9%
Conventional Starter Motors 39.5% 33.8% 25.9% 26.0%
Other Gears 2.4% 2.3% 3.3% 2.7%
Others 1.0% 0.9% 1.0% 1.0%

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Customers

We serve a broad range of customers both in the Indian and overseas markets. For the nine months ended
December 31, 2020, we derived 75.4% of our income from sale of goods with end-use in the overseas markets,
including 40.2% in North America, 25.3% in Europe and 5.3% in China and 24.6% of our income from sale of
goods with end-use in India.

The table below sets forth the breakdown of our income from sale of goods across geographic markets, as a
percentage of our total sale of goods for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020

Sale of Goods ₹11,916.53 ₹13,649.75 ₹11,804.19 ₹9,684.67

million million million million

% of Sale of Goods
North America 48.5% 42.4% 40.1% 40.2%
Europe 15.9% 18.2% 23.4% 25.3%
India 30.6% 31.5% 27.4% 24.6%
China 0.7% 1.9% 2.2% 5.3%
Others 4.4% 5.9% 6.9% 4.7%

Our global OEM customer portfolio (in alphabetical order) includes a Global OEM of EVs, a North American
OEM of PVs and CVs, Ampere Vehicles, an Indian OEM of PVs, CVs and EVs, Ashok Leyland, CNH, Daimler,
Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere, Mahindra and Mahindra, Mahindra Electric,
Maruti Suzuki, Renault Nissan, Revolt Intellicorp, TAFE, Volvo Cars and Volvo Eicher. We also serve selected
leading Tier 1 automotive system suppliers such as Carraro, Dana, Jing-Jin Electric, Linamar and Maschio.

The table below sets forth the breakdown of our income from sale of goods across our top ten customers, as a
percentage of our total sale of goods for the periods indicated. The order of our top ten customers in the table
below is based on information as at December 31, 2020.

For Fiscal Year For Fiscal Year For Fiscal Year For nine
2018 2019 2020 months ended
December 31,
2020

Sale of Goods ₹11,916.53 ₹13,649.75 ₹11,804.19 ₹9,684.67

million million million million

% of Sale of Goods
Customer 1 - North American OEM of
PVs and CVs 30.8% 26.7% 23.4% 18.1%
Customer 2 - European OEM of PVs and
CVs 12.2% 15.1% 20.1% 17.2%
Customer 3 - Global OEM of EVs 0.01% 0.2% 1.4% 12.9%
Customer 4 - Global Tier 1 Supplier for
PVs, CVs, OHVs and EVs 6.1% 6.1% 6.5% 5.4%
Customer 5 - Global OEM of OHVs - 1 5.1% 4.9% 4.6% 5.1%
Customer 6 - North American Tier 1
Supplier for PVs and EVs 11.4% 9.8% 8.1% 4.7%
Customer 7 - Indian OEM of PVs, CVs,
OHVs and EVs 5.1% 5.0% 5.0% 4.5%
Customer 8 - Indian OEM of PVs, CVs
and EVs 6.8% 7.2% 5.4% 4.4%
Customer 9 - Global OEM of PVs, CVs
and EVs 1.4% 1.4% 2.4% 3.9%
Customer 10 - Asian OEM of PVs and
CVs 0.3% 2.6% 4.0% 3.7%

In terms of vehicle segments, PVs, CVs and OHVs contributed 68.8%, 13.7% and 17.5% of our income from sale

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of goods for the nine months ended December 31, 2020, respectively. We started supplying differential gears in
the global EV market in April 2016, and have increased our focus on EV market through introduction of new
systems and components since then. For Fiscal Years 2018, 2019 and 2020 and the nine months ended December
31, 2020, 1.1%, 1.3%, 2.0% and 13.7% of our income from sale of goods were derived from the BEV market.

The table below sets forth the breakdown of our income from sale of goods across our vehicle segments, as a
percentage of our total sale of goods for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020

Sale of Goods ₹11,916.53 ₹13,649.75 ₹11,804.19 ₹9,684.67

million million million million

% of Sale of Goods
Passenger Vehicle (PV) 62.6% 62.0% 65.2% 68.8%
Commercial Vehicle (CV) 20.6% 21.5% 18.1% 13.7%
Off Highway Vehicle (OHV) 16.7% 16.4% 16.5% 17.5%
Others 0.1% 0.2% 0.2% 0.1%

We are continuously focused on strengthening our customer relationships by prioritizing our customers’ needs in
terms of customers’ design compliance and engineering standards. We achieve this through offering integrated
end-to-end solutions and engaging with our customers from concept to delivery for developing customer platform
centric systems and components. In addition, we also meet regularly with our customers to review our
performance in a number of other areas including quality, delivery and cost.

Some of our key OEM customers (in alphabetical order) include a Global OEM of EVs, a North American OEM
of PVs and CVs, Ampere Vehicles, an Indian OEM of PVs, CVs and EVs, Ashok Leyland, CNH, Daimler,
Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John Deere, Mahindra and Mahindra, Mahindra Electric,
Maruti Suzuki, Renault Nissan, Revolt Intellicorp, TAFE, Volvo Cars and Volvo Eicher. We also serve selected
leading Tier 1 automotive system suppliers such as Carraro, Dana, Jing-Jin Electric, Linamar and Maschio.

We have long-standing relationships of 15 years and more with 13 of our top 20 customers. The table below sets
forth the details of our long-standing relationships with our top 20 customers.

S. No. Customer Commencement of Number of Years of

Customer Relationship Customer Relationship
1. Mahindra & Mahindra 1998 23
2. Indian OEM of PVs, CVs and EVs 1999 22
3. Global Tier 1 Supplier for PVs and CVs 1999 22
4. TAFE 2000 21
5. Dana 2001 20
6. North American OEM of PVs and CVs 2002 19
7. Maruti Suzuki 2002 19
8. JLR 2003 18
9. Indian OEM of OHVs- 3 2003 18
10. Carraro 2003 18
11. Indian Tier 1 Supplier for CVs 2003 18
12. CNH 2004 17
13. Volvo Cars 2006 15
14. John Deere 2008 13
15. Escorts 2008 13
16. North American Tier 1 Supplier for PVs, CVs, OHVs
and EVs 2009 12
17. Linamar 2015 6
18. Renault Nissan 2015 6
19. Geely 2016 5
20. Global OEM of EVs 2017 4

We typically participate in a lengthy and rigorous vendor selection process with our customers, which can take
up to two to three years from the date of issue of a RFQ for securing business. We are generally required to submit
a detailed technical proposal including technical information such as, the product features, performance

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specifications, compliance with legal and regulatory requirements, proposed development timeline, product
validation plan, performance and durability expectations and prototype quantity for vehicle fitment. We may
further be required to develop and supply concept prototypes for the customer based on initial design plans. Once
our prototype is confirmed to have met the customer’s specifications and clears the testing phase, we are awarded
the product program. We invest in securing new customer relationships through this intense, time consuming and
costly vendor selection process, as it enables us to better understand our customers’ design and performance needs,
and demonstrates our capabilities in providing end-to-end integrated and technologically advanced customized
solutions for developing critical automotive systems and components. If we are successful in converting the RFQ
process into firm orders then it generally leads to a long term relationship with such customer as the cost to the
customer of switching vendors after qualification in the RFQ process is typically high. Upon qualifying for the
product development program, we enter into a letter of intent with the customer which specifies the expected
production commencement date and forecast volume for the program.

We execute standard global terms and conditions or master purchase agreements with most of our customers
followed by program specific engineering statement of work and open purchase orders. This is consistent with
market practice in our line of business. Under the engineering statement of work, our customers provide us with
program specific sourcing confirmations, including specific part numbers, volume projections of their
requirements for the specific program, program life and supply locations. Open purchase orders generally contain
the commercial terms of supply for the program including price, delivery location and certain incoterms. Delivery
schedules are released and refreshed regularly by customers throughout the program period.

Key Manufacturing Processes

The manufacturing processes involved in the production of our key systems and components are described below.

Differential Gears: We manufacture differential gears in our Gurugram Unit I, Gurugram Unit II and Gurugram
Unit III (collectively, the “Gurugram Units”) and the Pune Unit. Our gear making process starts with preparation
of gear design using 3D modelling, simulation, die design and 2D drawing. This is followed by purchase of raw
materials, color coding, billet cutting, precision warm forging, green machining, case carburizing, hardening,
finish machining, surface treatment, super-finishing, washing, packing and dispatch.

Differential Assembly: We manufacture differential assemblies in our Manesar Unit. We purchase cast housing
and blanks for final drive gear (FDG) from third-party suppliers and undertake the machining process in-house.
Our in-house manufacturing processes are classified into case housing machining, final gear machining and
assembly:

• Case house machining: This includes key processes such as machining, laser marking, balancing, R.P. oil
application, cleanliness inspection and quality inspection.

• Final gear machining: This includes key processes such as hobbing, chamfering and deburring, hard turning,
tooth grinding and helical gear tooth inspection before transferring the material to assembly line.

Case Housing, final drive gear and differential bevel gears are then sent for the final differential assembly
process.

• Assembly: Case housing, final drive gears, differential bevel gears and other child parts are input for the
assembly process. As part of our differential assembly manufacturing, we undertake ultrasonic washing of
child parts, following by sub-assembly, angular backlash and tare torque inspection, FDG fitment on sub-
assembly, bolt tightening, run-out inspection and laser marking, R.P. oil application and final packaging and
traceability.

Conventional and micro hybrid starter motors: We manufacture and/or assemble starter motors at our plants
located in India (Chennai), USA, Mexico and China. The key operations undertaken for manufacturing of starter
motors include high speed turning, induction heat treatment for hardening, grinding and multi-head drilling.
Armatures assembly comprising very controlled and precise copper pin forming and assembly, heat staking
process with Miyachi control mechanism, varnishing, core and commutator turning with dynamic balancing
process. Frame assembly is manufactured by welding of pole shunts and assembly of magnets and charging. We
use auto soldering process and gooping process to ensure 100% sealing for solenoid assembly with plunger contact
assembly. Final assembly comprises of assembly of housings, armature, solenoids, brush assembly and drive
assembly with very high levels of poka-yoke, digital control and high precision end of line tester for performance,
speed and NVH. Strong in-house manufacturing system engineering team supports high level of automation and

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machine building for optimal cost.

Traction Motors (BLDC): Our BLDC traction motors comprising of hub-wheel motors and drive motors for two-
wheelers and three-wheelers are manufactured at our plant located in Chennai, India. We have state-of-the-art
manufacturing facilities to make starters, rotors and final assembly of these motors. Key manufacturing processes
include high speed multi-strands winding machines, auto wedge paper insertion, dynamic balancing machines as
a rotor assembly and hall sensor assembly. Apart from motor manufacturing we have the capability of making
controllers on our own including integration of software systems.

Manufacturing Locations

We have nine manufacturing and assembly plants across India, China, Mexico and USA, of which six are located
in India. Our facilities in India (Chennai), China, Mexico and USA manufacture conventional and micro-hybrid
starter motors and BLDC traction motors and our plants in Gurugram, Manesar and Pune in India manufacture
differential gears, differential assemblies and other gears. While our facilities in India are manufacturing plants,
the facilities in US, Mexico and China operate as satellite final assembly plants. In India, our largest manufacturing
facility is located in Chennai spanning across 43,992 sqm followed by facilities in Gurugram and Manesar with
built-up areas of 19,587 sqm and 18,593 sqm, respectively. We also have eight warehouses, of which, five are
located in India and three across USA, Germany and Belgium. Our manufacturing and assembly facilities have
IATF, ISO, OHSAS and Q1 certifications as set forth in the table below.

The following map shows the locations of our manufacturing and assembly plants, R&D centres, warehouses,
tool and die shop and sales office as at December 31, 2020.

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 The table below sets forth certain details with respect to our manufacturing and assembly plants.

Annual
Installed Capacity Capacity Capacity
capacity Utilization Utilization Utilization Production Manufacturing
Location and Leased/ (December (Fiscal Year (Fiscal (Fiscal (Fiscal Year Processes at the
plant type Owned 31, 2020) 2018) Year 2019) Year 2020) 2020) location Certifications

IATF 16949
Forging, heat ISO 9001
Gurugram 1 unit owned, 28.70 million
111% 91% 72% 27.0 treatment and ISO 14001
(manufacturing) 2 leased gears
machining ISO 50001
OHSAS 18001

0.53 - - - - Case housing and

Manesar
Leased differential FDG machining -
(assembly)
assemblies and final assembly

Forging, heat IATF 16949

Pune 9.33 million
Owned 94% 89% 72% 7.4 treatment and ISO 9001
(manufacturing) gears
machining OHSAS 18001

Manufacture and IATF 16949

Chennai 3.8 million assembly of kits, ISO 14001
Owned 47% 46% 39% 1.47
(manufacturing) starter motors starter motors and ISO 50001
traction motors Q1 Certification

IATF 16949
Hangzhou 1 million Starter motor
Leased - 7% 7% 0.07 ISO 14001
(assembly) starter motors assembly
ISO 45001

IATF 16949
Mexico 1 million Starter motor ISO 14001
Leased - 2% 26% 0.26
(assembly) starter motors assembly ISO 45001
Q1 Endorsed

IATF 16949
Tecumseh 1 million Starter motor ISO 14001
Owned 25% 24% 23% 0.23
(assembly) starter motors assembly ISO 45001
Q1 Certification

Suppliers

We typically purchase our requirements for raw materials, commodities and components/parts used in the
production of our systems and components from multiple qualified sources in quantities sufficient for our needs.
However, we procure certain key critical components such as magnets required for manufacturing of our starter
motors from limited number of suppliers. We have long term relationships with most of our key suppliers, yet we
do not enter into any long-term volume commitment for material sourcing. This is consistent with the nature of
commitments our customers have with us and therefore does not expose us to any major risk from fluctuation in
the commodity prices. We generally pass-through to our customers, price changes in steel and copper with certain
time lag.

We have a rigorous vendor evaluation, selection and quality control process to ensure that we partner with
suppliers who have the ability to comply with our quality standards, delivery schedules and other contractual
obligations. Generally, we select suppliers based on total value delivered by them (including total landed price,
quality, delivery and technology), taking into consideration their production capacities and financial condition. In
order to ensure quality standards on an ongoing basis and to avoid supply disruptions, we also provide training
and guidance to the suppliers for upgradation of their manufacturing processes.

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R&D and Technology

We have strong research and development, engineering, designing and advanced in-house technological
capabilities in precision forging, mechanical and electrical systems, as well as base and application software. Our
R&D expenditures as a percentage of our revenue from operations were 1.8%, 1.7%, 3.3% and 6.8% for Fiscal
Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, respectively. As at December 31,
2020, we had 175 on-roll employees engaged in R&D activities, representing approximately 15% of our
company’s total on-roll manpower. We also have three digital simulations, testing and validation facilities, one
located in Gurugram and two in Chennai in India. These are approved by the GoI’s Department of Scientific and
Industrial Research and equipped with, among other things, design software such as Creo, UG NX and Nastran
and hardware such as white light scanning, coordinate measuring machine, 3D printing, silicon molding and an
electronic and endurance testing laboratory.

The table below sets forth details with respect to our R&D facilities:

Location Target vehicle segment Systems and Components

Gurugram Hybrid and EVs Differentials, E-axles, Cylindrical Gears, Spiral Bevel Gears
Chennai Hybrid and EVs High Efficiency Alternators; BSG, BLDC, Traction motors
Chennai ICE Vehicles Starter Motors, Alternators

Design and Engineering

We are a technology and innovation driven company with advanced design and engineering capabilities, including
capabilities in delivering green technologies suitable for future mobility. We offer end to end design solutions
from tools and die manufacturing to engineering solutions, new systems and components designing,
improvements in design of existing systems and components, benchmarking, design analysis and simulation, rapid
prototyping, testing and validation, light weighting, process optimization and material optimization solutions.

We are continuously focused on developing innovative systems and components across materials science
(advanced metallurgy) and precision forging to achieve better strength, wear and tear and hardness characteristics.
In recognition of our R&D and technological capabilities, we have received several awards for the quality of our
systems and components and customer satisfaction from several OEMs. For details of our customer awards, see
“Business –Awards” below.

We pioneered the launch and commenced supply of BLDC motors for Indian electric two-wheelers and electric
three-wheelers since November 2020. Further, we have achieved single digit PPM level for over seven years.

The table below sets forth our PPM level across our manufacturing and assembly plants in India, US, China and
Mexico for the periods indicated.

Plant For Fiscal Year 2018 For Fiscal Year 2019 For Fiscal Year 2020
India 0.41 0.43 0.68
USA 0.00 - 4.35
China - 37.50 -
Mexico - - -
Total 0.49 1.92 0.99

R&D Initiatives and Technical Collaborations

We engage in ongoing engineering and R&D activities to improve the reliability, performance and cost-
effectiveness of our existing systems and components and design and develop innovative components that meet
customer requirements for new applications. In this regard, we have taken several initiatives which include,
engaging closely with our customers to develop a number of power technology components and solutions that
will assist our customers to capitalize on market growth trends. For example, in 2009, our engineering team
together with the team of a European OEM undertook extensive study and research for creating one of the earliest
variants of a hybrid vehicle, now referred to as “micro-hybrid”. This involved designing a system to automatically
shut down and restart the engine to reduce idling time to achieve fuel economy and reduced CO2 emissions. We
suggested innovative designs and solutions to create a system with quick engine starting and durability of 350,000
cycles as compared to then prevalent durability of 50,000 cycles. By demonstrating our in-depth R&D and
engineering capabilities to the customer, we were able to win the business to manufacture the micro-hybrid system
for the global market for the European OEM. Further, using our extensive knowledge and experience in
metallurgy, designing and gear technology, we have provided our customers with design solutions within stringent

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timelines that resulted in significant improvements in their existing differential gears used in earlier vehicle
models to enable compatibility with new vehicle models, high power density, increased durability and reduced
costs.

The table below sets forth our customer quality ratings as at December 31, 2020.

Customer Quality Rating

North American OEM of PVs and CVs Chennai - Q1 certified - 97/100
USA - Q1 certified - 95/100
Mexico - Q1 approved, awaiting certification - 98/100
Volvo Cars 300/300
Renault Nissan Renault Global - L2 (second highest level)
Renault India - L1 (highest level)
Global OEM of PVs 0 PPM
JLR 1200/1300
Geely 300/300 - 0 PPM
Indian OEM of PVs, CVs and EVs 100/100

With our customers continuously focusing on weight reduction in EVs to enhance the range, augment the vehicle’s
acceleration and improve overall efficiency, we have been developing solutions and alternatives for improving
the power density and light weighting of our differential assemblies and EV traction motors (BLDC and PMSM)
and motor control units through our R&D efforts. Integrated drive units have three key components namely,
differential assembly, high voltage traction motors and high voltage inverters. Since we manufacture electric drive
motors and inverters for electric two-wheelers and hybrid PVs, e-axles for electric three-wheelers and differential
assemblies for battery electric passenger vehicles, we are in a unique position to integrate the three key
constituents of the electric powertrain into a single matched unit, offering an efficient and compact solution to EV
OEMs. Further, we are developing a 48V BSG motor for hybrid PVs, which is specifically designed in compliance
with global standards such as the stringent China-6 emission standards, ASPICE, MISRA, Autosar, Functional
Safety (ISO 26262), cybersecurity and OBD 2 to meet the requirements of our key global OEMs for fuel saving
and compliance with CAFÉ norms. According to the Ricardo Report, we are among the limited number of players
who are well placed to combine our motor and driveline capabilities to offer a compelling value proposition to
our EV customer base.

Software

A critical component of all electrified systems is embedded software. Of the R&D expenditure incurred during
the nine months ended December 31, 2020, we invested ₹497.01 million towards building software standards,
systems, and solutions. We develop the base software in accordance with global standards such as ASPICE,
MISRA, AUTOSAR, and ISO26262. Our highly efficient FOC algorithm ensures that the motor/generator
consistently operates in an efficient band, leading to significant improvements in fuel efficiency and reduction in
CO2 emissions in hybrids, and higher range in EVs. Further, FuSa is a critical requirement for all electrified
systems. With the adoption of CASE technologies in the automotive industry, cybersecurity, OBD and OTA have
become essential requirements and we are developing software products aligned to market and OEM
requirements. For example, our 48V BSG motor complies with OBD 2 and cyber security level 2, protecting
OTA.

Further, our R&D team has developed proprietary gear design software which generates spherical involute gear
tooth rolling geometries to meet the specific requirements of our customers and allows us to design gear tooth
profile with minimal constraints and high flexibility. This flexibility to modify the geometry is fundamental to
our core strength of precision-forging technology, which enables us to design and make our tools and dies in-
house and our precision forging process technology allows us to develop gears with higher power density, which
is critical for the powertrains of EVs. We also follow advanced and digitally enabled procedures for structural and
durability analysis, forging and heat treatment which enables us to develop systems and components with
minimum defects and high material yield.

In addition, our Company has also participated in several R&D focused conferences and collaborated with other
industry and technical experts to publish R&D related materials. The table below sets forth the details of some of
the key R&D related publications by our Company:

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 Year Title Paper published/Presented Conference
nd
2 International Conference of Fatigue Durability
Analysis and Design Optimization for Improved and Fracture Mechanics and Symposium on
2016 Fatigue Life of One-way Clutch Drive used in Condition Assessment/Residual Life Assessment
Starter Motor and Extension 2016 held at IISc, Bangalore.
Received BEST Paper Award
International Conference on Advances in Design,
Starter Motor Light Weighting through Use of
2017 Materials, Manufacturing and Surface Engineering
Alternate Materials
for Mobility.
International Conference on Mechanical and
NVH Analysis and Measurement Correlation of
2018 Production Engineering (ICMPE). Published in
Electrical Starter Motor for Automotive Vehicles
ICMPE and IIEEE.
A Concept to Reliability Prediction for Hybrid Presented in Applied Reliability and Durability
2019
Electric Motor Electronic Controller Conference.
Paper published in SAE Technical Paper, 2020 -
Design and Implementation of Field Oriented International Conference on Advances in Design,
2020
Control Strategies for Starter Generator Machine Materials, Manufacturing and Surface Engineering
for Mobility.

Program Pipeline

The table below sets forth a list of programs which have been awarded to us, along with their corresponding
details. The table includes those programs for which the start of production year for our customers is either Fiscal
Year 2021 or a period subsequent to Fiscal Year 2021. Accordingly, some of these programs have commenced
production in Fiscal Year 2021, while others are expected to commence production in a period subsequent to
Fiscal Year 2021.

Sr. Customer Name1 Program Product Customer

No. Name Location
1 Global OEM of EVs Program B3 Differential Assembly Outside India
2 North American OEM of PVs and CVs2 Program K1 Conventional Starter Motor Outside India
3 European OEM of PVs and CVs2 Micro-hybrid/Conventional Outside India
Program L
Starter Motor
4 Global OEM of PVs, CVs and EVs Program M1 Micro-hybrid Starter Motor Outside India
5 Asian OEM of PVs and CVs2 Micro-hybrid/Conventional Outside India
Program N
Starter Motor
6 Indian OEM of Electric 2Ws- Motorcycles Program J PMSM Motor and Controller India
7 North American OEM of PVs and CVs2 Program K2 Micro-hybrid Starter Motor Outside India
8 Global OEM of PVs and EVs Micro-hybrid/Conventional Outside India
Program O
Starter Motor
9 European OEM of PVs and EVs Program H Differential Assembly Outside India
10 Global OEM of PVs, CVs and EVs Program M2 Conventional Starter Motor Outside India
11 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears Outside India
Program A1
EVs
12 Chinese Tier 1 Supplier for EVs Program G Differential Assembly Outside India
13 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears Outside India
Program A2
EVs
14 North American Tier 1 Supplier for PVs and Differential Gears Outside India
Program P1
EVs
15 Chinese OEM of PVs and EVs Program Q1 Micro-hybrid Starter Motor Outside India
16 North American OEM of PVs and CVs2 Program K3 Micro-hybrid Starter Motor Outside India
17 North American Tier 1 Supplier for PVs, CVs, Differential Gears Outside India
Program F
OHVs, and EVs
18 North American Tier 1 Supplier for PVs and Differential Gears Outside India
Program P2
EVs
19 Chinese OEM of PVs and EVs Program Q2 Micro-hybrid Starter Motor Outside India
20 Global OEM of PVs, CVs and EVs Program M3 Micro-hybrid Starter Motor Outside India
21 North American Tier 1 Supplier for PVs, CVs, Differential Gears India
Program F2
OHVs, and EVs
22 Indian OEM of PVs, CVs and EVs Program R1 Other Gears India

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 Sr. Customer Name1 Program Product Customer
No. Name Location
23 Global OEM of PVs, CVs and EVs Program M4 Conventional Starter Motor India
24 Indian OEM of OHVs - 2 Program S Differential Gears India
25 Indian OEM of OHVs- 3 Other gears & Differential India
Program T1
Assembly
26 Indian Tier 1 Supplier for CVs Program U1 Differential Gears & Other gears India
27 Global OEM of OHVs - 1 Program V1 Differential Assembly Outside India
28 Indian OEM of PVs, CVs, OHVs and EVs Program E1 Differential Gears India
29 Indian OEM of Electric 2Ws- Scooters Program C BLDC Motor India
30 Global OEM of OHVs - 1 Program V2 Differential Assembly Outside India
31 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears Outside India
Program A3
EVs
32 North American Tier 1 Supplier for PVs, CVs, Differential Gears India
Program F3
OHVs, and EVs
33 Indian OEM of OHVs- 1 Program W1 Differential Gears India
34 North American Tier 1 Supplier for PVs, CVs, Differential Gears India
Program F4
OHVs, and EVs
35 Indian OEM of Farm Equipment Program X Other Gears India
36 Indian OEM of CVs - 1 Program Y Conventional Starter Motor India
37 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears India
Program A4
EVs
38 Global Tier-1 Supplier for OHVs Program Z Differential Gears Outside India
39 European OEM of Farm Equipment Program AA Other Gears India
40 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears & Other gears India
Program A5
EVs
41 Global OEM of OHVs - 1 Program V3 Differential Assembly Outside India
42 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears Outside India
Program A6
EVs
43 Indian OEM of OHVs- 2 Program AB1 Differential Gears & Other gears India
44 Indian Tier 1 Supplier for CVs Program U2 Differential Gears India
45 Indian OEM of OHVs- 1 Program W2 Differential Gears & Other gears India
46 Global Tier 1 Supplier for PVs, CVs, OHVs and Differential Gears Outside India
Program A7
EVs
47 Indian OEM of OHVs- 2 Program AB2 Differential Gears India
48 Indian OEM of OHVs- 3 Program T2 Other Gears India
49 Indian OEM of PVs, CVs and EVs Program R2 Other Gears India
50 Global OEM of CVs and OHVs Program AC Differential Gears India
_________________________

1
Classification criteria for customer name
I. If the revenue contribution, from each of at least three geographic regions, is greater than 10% of the total revenue
of the customer, then the customer is classified as ‘Global’.
II. If the condition in point (1) above is not satisfied and the revenue contribution from the geographic region where the
customer is located is greater than 60% of the total revenue of the customer, then the customer is classified as
‘Regional’ on the basis of the geographic region from where the customer is deriving more than 60% of its total
revenue i.e. North America/India/Europe/Asia/China. Accordingly, in such cases the customers are classified as
‘North American’, ‘Indian’, ‘European’, ‘Asian’ and ‘Chinese’.
III. If the financial information of the customers is not available in the public domain, such customers are classified as
‘Regional’, on the basis of the geographic region where the customer is located.
2
The classification in (1) above has not been applied to these customers. These customers have been classified as per the
geography of their business operations.

We have been awarded 50 programs, of which production has commenced for 21 programs during the Fiscal Year
2021. There is no assurance in relation to the sales volumes and revenue that any of these programs will eventually
generate for us. For further details, see “Risk Factors – Our Company may not realize all of the revenue expected
from our new and incremental business backlog and does not have firm arrangements with customers” on page
30.

Raw Materials and Components

We use a variety of raw materials in the production of our components. The principal raw materials and
components used for manufacturing differential gears and differential assemblies are special steel alloy bars, iron
castings, steel blanks and bolts. For starter motors and BLDC, key materials are steel forgings, copper enameled

179
wires, machined aluminium pressure die castings, bearings, magnets, plastic moulded components and other
proprietary parts. We source these raw materials and components mostly from India as well as from North
America, Europe, Korea, China, and Taiwan. For Fiscal Years 2018, 2019 and 2020 and the nine months ended
December 31, 2020, our total raw materials cost, including changes in inventories of finished goods and work-in-
progress accounted for 38.3%, 40.4%, 41.9% and 40.2% of our total income.

The cost of our core raw materials and bought out parts is susceptible to changes in overall steel and other
commodity prices, including ingredients used in various grades of steel. We generally pass-through to our
customers, with some time lag, the fluctuations in costs of raw materials like steel, key steel alloys and copper,
which are major commodity inputs used in our systems and components. Impact of price fluctuations in aluminium
and steel on bought out parts for starter motors and BLDC is however, not passed through to the customer.

Utilities

Power and Fuel

We use substantial amount of electricity for our operations. For Fiscal Years 2018, 2019 and 2020 and the nine
months ended December 31, 2020, our total costs for power and fuel comprised 3.1%, 3.1%, 2.7% and 2.6% of
our total income. We purchase utilities for our operations in India and overseas from the local utility companies
in the jurisdictions in which we operate. In India, we also purchase utility from third party suppliers, where costs
are less than purchasing directly from the state electricity boards. As a green energy initiative, we have installed
solar power plant(s) in some of our manufacturing locations.

Water

We source water from local utility companies in our India operations. We also undertake treatment of waste water
for its reuse in compliance with the local water usage and treatment guidelines. In our overseas facilities, no water
is used for industrial purpose.

Storage and Transportation

Storage

We have eight warehouses, of which, five are located in India and three across USA, Germany, and Belgium. The
warehouses work as our delivery point to key customer locations, help our customers manage their requirements
in an efficient manner and enhances our engagement with them. These warehouses are owned by third parties and
our storage space can be flexibly increased depending on the requirement.

Transportation

For our operations in India, we typically ship finished goods to our customers by road within their delivery
schedules. In a few cases, our customers may directly pick up the goods at our own facilities, and in such cases
our customers handle these arrangements. Costs associated with the transportation of incoming materials and
components are generally included in the purchase price.

In case of our overseas customers, we use a number of transportation arrangements. We generally export our
systems and components through sea shipments and in exceptional circumstances by air to ensure that customer
production lines operate without interruption. Our customers in North America and Mexico pick-up starter motors
from our plants. Our plant in China is responsible to deliver final starter motors to customer plants through road
transportation.

Sales and Marketing

Our sales and marketing department is responsible for designing and implementing a business development
strategy adapted to all markets, and forging local and global partnerships with OEMs to sustain profitable growth.
Our sales and marketing team closely coordinates with our engineering team and the customer’s design and
engineering department to understand the technical requirements of the component. The degree of involvement
varies depending upon the customer’s requirements and ranges from designing of systems and components from
inception, including providing inputs on the type of materials to be used to proposing unique features and
specifications to improve the existing design. Through this process we are able to deepen our engagement with
our customers at the business development stage itself which enhances our relationship with our customers. Key
account managers are assigned to serve specific customers for one or more business products and are responsible
for servicing existing business and for identifying and winning new business.

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Competition

The automotive component manufacturing industry is very competitive, and we face significant competition from
both players in the Indian and overseas markets. Technology, price, design, quality, delivery, engineering
development and program launch support are the primary elements of competition in our markets.

We compete worldwide with a number of other Indian and foreign manufacturers that produce and sell similar
products. In addition to traditional competitors in the automotive sector, the trend towards advanced electronic
integration and electrification has led to an increase in the amount of competition we face from technology focused
new market entrants. Many of our competitors are larger and have greater financial and other resources than our
Company as well as other economic advantages as compared to our business, such as patents, existing
underutilized capacity, lower labor costs, lower health care costs, lower tax rates and, in some cases, export or
raw materials subsidies.

In addition, a number of our major OEM customers manufacture for their own use and for others, products that
compete with our systems and components. Other current OEM customers could elect to manufacture products to
meet their own requirements or to compete with our Company. For many of its products, our competitors include
suppliers in parts of the world that enjoy economic advantages.

The following table sets forth our principal competitors according to the Ricardo Report:

Product Competitor
Differential Assembly Borg Warner, JTEKT Corp, Dana, American Axle, GKN and Hyundai WIA
Corporation
Differential Bevel Gears American Axle, Showa Corp, Musashi Seimitsu Industries, Meritor and GKN
Starter Motors Denso, Borg Warner, SEG Automotive, Hitachi and Valeo
BSG Valeo, SEG Automotive, Continental, Hyundai and Mobis
High-VoltageTraction Motors Bosch, Valeo-Siemens, GKN, Schaeffler, LG, Hitachi, Borg Warner and ZF
BLDC Motors Lucas TVS, Virya Mobility, EMF Innovations and Compageauto (Indian
competitors only)

Employees

As at December 31, 2020, we had 3,037 employees, comprising of 1,167 on-roll and 1,870 off-roll employees, of
which 2,965 are employed in India and 72 are employed outside India. As at December 31, 2020, 316 of our
employees are members of unions.

The table below sets forth the breakdown of our employees (including both on-roll and off-roll employees) by
function for the period indicated:

Function As of Fiscal Years As at

December 31,
2018 2019 2020 2020
Research and Development 232 274 271 261
Manufacturing and Operations 1,181 1,178 1,254 1,794
Quality Assurance 293 298 325 408
Supply Chain Management 301 340 333 398
Human Resources and Administration 79 80 81 84
Marketing and Corporate 28 31 33 34
Finance, IT and Legal 50 55 59 58
Total 2,164 2,256 2,356 3,037

In 2011, operators in our Chennai plant went on strike for 54 days. During the period of the strike, the Chennai
plant was accessible to rest of the employees and the movement of materials and employees was not constrained.
We hired temporary manpower and used them along with all the professionals to assemble/manufacture our
systems and components. Despite the strike, shipments were delivered to all the customers without impacting their
production. There were no customer line stoppages during and after the strike period. We have undertaken various
measures, including implementation of policies for career enhancement to professional level for operators,
industry relations policies to improve employee and employer relationship and hiring of trainees and temporary
manpower to meet our requirements. We have not experienced any strike or labour unrest after the strike in 2011.

Environment, Health, Quality and Safety

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We place great emphasis on environment, health, quality and safety matters for safe operations. During Fiscal
Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, we had incidents of four, one, two
and four injuries respectively, and zero fatalities during this period. We have established a dedicated environment,
health, occupational, health and safety (“EHS”) function to oversee EHS issues for our operations and adopted a
comprehensive EHS management system in accordance with applicable standards with policies and practices
which are applicable to our employees and contractors within our premises. Our EHS policy aims towards
continuous improvement in products, safety processes and EHS practices; encouraging creativity and innovation
for excellence; complying with all applicable compliance obligations, legal and other requirements; protecting
natural resources and global environment; promoting reduce, reuse and recycle of waste and potential hazardous
materials; and committing to prevent pollution, injury and any health hazard to all stake holders, among others.
In the event of an incident, we carry out an investigation and develop and implement corrective actions across all
processes, manufacturing lines, plants and sites. Information learning from incidents is communicated to
contractors engaged with us so that preventive actions can be taken. Further, the application of our EHS and
project management processes, practices and standards is regularly checked via audits.

Environment, Health and Safety

As of December 31, 2020, two of our plants were certified for environmental management systems, in accordance
with the requirements of ISO 9001 and OHSAS 18001, five were certified for quality management systems in
accordance with ISO 14001, two were certified for energy management systems in accordance with ISO 50001
and three were certificated for health and safety standards in accordance with ISO 45001. Our plants have sewage
and effluent water treatment units to treat waste water and enable reuse. Wastes are properly routed through
approved sources for further treatment. We have also installed rain water harvesting systems to collect and
channelize the water to harvesting pits for recharging ground water table. Our Gurugram Units and Manesar Unit
have solar panels installed on rooftops for power generation.

We have put in place various processes to reduce the risk of accidents and prevent environmental pollution at our
facilities including:

• ensuring that plant employee safety manuals covering employee safety and environmental procedures are in
place and implemented and that plant level hazard identification and risk assessments are periodically carried
out;

• providing training and awareness programs on employee safety and environment to all employees, including
training on use of cranes and forklifts, furnaces and other machines and operations, the use of first aid and
other procedures to deal with emergencies;

• implementing regular proactive employee safety audits, management review meetings and periodic employee
safety meetings;

• implementing corrective and preventive measures for all incidents and accidents;

• implementing and maintaining our legal compliance management system;

• conducting periodic safety and environment audits and ensuring necessary standard operating procedures are
in place for effective implementation;

• conducting periodic emergency mock drills in our plants; and

• maintaining an occupational health centre at each unit having first aid facility with nursing staff and regular
doctor visits.

Quality Control

Most of our manufacturing units have the IATF 16949:2016 international standards certification for automotive
quality management. Based on the type of operation, our quality control and quality assurance requirements are
finalized at the time of product development. Quality assurance includes determining and monitoring of process
parameters, incorporation of mistake proofing, training of personnel and implementing input material controls.
Quality control checks are performed with automated laser and vision systems during various stages of
manufacturing and assembly. We ensure 100% inspection of finished goods before they are dispatched to the
customers. Our commitment to quality assurance has been recognized by our customers, from whom we have
received quality assurance awards. For further details, see “– Awards” below

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Intellectual Property

We have obtained trademarks registrations in India, including for the logo of “Sona Driving Tomorrow” under
class 35 and “Comstar” under class 12. Further, we have applied for registration of, inter alia, the logo of our
Company under class 7 and class 12, respectively, and for other trademarks of our brands, such as “Sona BLW
More Torque Per Gram” under class 7. Further, we have received a word mark registration for our brand “Sona
Comstar” under class 7 in 2019. We have also filed eight applications for obtaining a no-objection from the
Registrar of Trademarks in India for protecting our logo under Indian copyright laws. Our domain name
www.sonacomstar.com has been registered in India. We have been granted six patents in USA and one patent in
China and await 17 patent approvals in India and one in the UK. We have initiated legal proceedings before the
High Court of Delhi against certain parties, for unauthorized use of the “SONA” brand and have, among other
things, sought for a permanent injunction restraining such persons from using the trademark/trade name/logo
“SONA”. The matter is currently pending. For further details, see “Outstanding Litigation and Material
Developments” on page 392.

Property

Our registered and corporate office is located at Sona Enclave Village, Begumpur Khatola, Sector 35, Gurugram,
Haryana-122001, India. Further, as at December 31, 2020, we had nine manufacturing and assembly facilities
across India, China, Mexico and USA, of which six manufacturing facilities are located in India. We also have
eight warehouses, of which, five are located in India and three across USA, Germany and Belgium. In addition,
we have three R&D centres located in Gurugram and Chennai. Of our eight properties which are located in India,
six are on lease or licensed basis. For further details on our manufacturing facilities, see “ – Our Operations –
Manufacturing Locations”, above.

Insurance

Our business, including our manufacturing operations, are subject to various risks inherent in the automobile
industry such as risk of equipment failure, work accidents, fire, theft, earthquake, flood, product recall and
liability, acts of terrorism, other force majeure events and other hazards that may cause personal injury, loss of
life, damage to property and equipment and environmental damage. We maintain insurance policies in respect of
our business, assets or stocks, machinery, building and equipment.

We maintain fire and special perils policy with add-on cover for earthquakes, insurance against theft and burglary
for our stocks at vendors and transporters end and marine cargo sales turnover policies to cover various risks
during the transit of goods anywhere in the country and overseas. In addition, we have a commercial general
liability policy to cover any product recall and product liability risk, personal accident insurance policy for our
employees, group mediclaim polices for our employees and their families and other insurance policies to manage
the risk of losses from potentially harmful events, including COVID-19 policy, business public liability insurance
policy, money insurance policy, director and officer liability insurance policy.

Corporate Social Responsibility

We have adopted a corporate social responsibility (“CSR”) policy in compliance with the requirements of the
Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014. Our CSR programs are
committed to the overall welfare and development of society, including environmental sustainability, disaster
management, supporting innovation, education, health care and sanitation. Our CSR interventions consist of four
pillars set forth below.

• Sona Comstar – Samridh Bharat Program: Focus is on achieving environmental sustainability,

ecological balance and conservation of natural resources. This program includes measures such as
supporting innovative projects aimed at reducing fossil fuel dependence, combating air pollution and
organizations working for nature and wildlife conservation. Under this program, we have made
contributions to IIT Delhi-CERCA (Centre of Excellence for Research on Clean Air) for undertaking
research and development for clean air, contributions towards planting of trees in industrial areas and
eliminating stubble burning which is one of the leading causes of pollution across Northern India.

• Sona Comstar – Swasth Bharat Program: Focus is on health care and nutrition through measures such
as health outreach program, health awareness program, support in developing health care centers, women
and child nutrition, promoting sanitation. Under this program, we have supported projects involving
promotion of sanitation in schools. During the lockdown restrictions on account of the COVID-19

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 pandemic, we provided support to foundations for distribution of dry ration, hygiene kits and meals in
local communities and villages.

• Sona Comstar – Surakshit Bharat Program: Focus is on measures to benefit armed force veterans and
dependents, providing support for setting up old age homes and day care centers. Under this program,
we have made contributions towards the cause of armed forces veterans, war widows and their
dependents.

• Sona Comstar – Saksham Bharat Program: Focus is on measures to provide employment and skill
development programs for rural youth, livestock and agriculture programs for farmers, empowering
women and promoting gender equality, promoting rural sports and providing scholarship programs for
under privileged children. Under this program, we have taken the following steps:

a. Education and Training: We have supported various trusts for promoting education of children,
including special education, vocational training and sponsorship for underprivileged children.

b. Innovation: We have made contributions to institutions, to support innovators in automotive

domain through a dedicated program. We also made contributions through Technology
Business Incubator Centre for Innovation Incubation and Entrepreneurship for the purpose of
supporting and fostering entrepreneurship in India.

For Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, we have spent ₹16.11
million, ₹21.10 million, ₹16.79 million and ₹35.82 million on corporate social responsibility initiatives.

Customer Awards

The table below sets out the customer awards we have received for our various systems and components.

Year Award Presenter

Indian OEM of PVs, CVs and

2020 Exceptional support during Challenging Times (Covid-19)
EVs
North American OEM of PVs
2019 World Excellence Award – Silver
and CVs
2019 Superior performance in the field of Comprehensive Excellence Maruti Suzuki
2019 Best Performance in Delivery Ashok Leyland
Indian OEM of PVs, CVs and
2019 Quality Excellence Award
EVs
2019 Best Benchmark Award for Quality TAFE
2019 Best Supplier Award for Exemplary Performance: Zero Defect TAFE
2018 Drive Customer Centricity Dana
Supplier Excellence Award- In Recognition of Partner Level
2018 TMA (John Deere)
Performance
Platinum Award- In Recognition of Best-in-class Performance in the Indian Tier 1 Supplier for
2018
field of Delivery- Forging CVs
Best Supplier Award for Exemplary Performance, Quality and
2018 TAFE
Reliability
2018 Best Suppliers Award- Quick Response Quality and Delivery Spicer India (Dana)
Supplier Excellence Award- In Recognition of Partner Level
2017 TMA (John Deere)
Performance
North American OEM of PVs
2016 World Excellence Award- Gold
and CVs
2016 Best Supplier Award for Outstanding Contribution in Co-Creating Value TAFE
2015 Overall Excellence for the Year 2014-15 Maruti Suzuki
2015 Best Performer Award Escorts
Supplier Excellence Award- In Recognition of Partner Level
2015 TMA (John Deere)
Performance
Indian Tier 1 Supplier for
2015 Award for Best Quality- Forging
CVs
2015 Best Supplier Award- Exemplary Performance Quality and Reliability TAFE
2014 Best Technology Partner of the Year Spicer India (Dana)
2014 Supplier Excellence Award TMA (John Deere)
North American OEM of PVs
2013 World Excellence Award- Silver
and CVs

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 Year Award Presenter

Indian Tier 1 Supplier for

2013 Best Supplier in Performance (Forging)
CVs
Indian OEM of PVs, CVs and
2013 Supplier Excellence Award
EVs
2013 Best Supplier Award for Quality, Delivery and Capacity Ramp-Up TAFE
Best Supplier Award for Consistent Performance in Quality and
2013 TAFE
Reliability
Indian OEM of PVs, CVs and
2013
Quality Performance Award EVs
2013 Overall Performer of the Year Award Escorts
Indian OEM of PVs, CVs and
2013
Best Supplier Award EVs
North American Tier 1
2013 Supplier for PVs, CVs, OHVs
Supplier Recognition Award for Outstanding Contribution and EVs
2012 Best Technology Partner Spicer India (Dana)
2012 Best Supplier Award New Holland (CNH)
2012 Quality Excellence Award Global OEM of PVs and CVs
Indian OEM of PVs, CVs and
2012
Quality Performance Award EVs
2012 Best Supplier Award-IBU Business Growth TAFE
2011 Award of Excellence Global OEM of PVs and CVs
2011 JLRQ Supplier Excellence Award JLR

Impact of the COVID-19 pandemic

March 2020 to May 2020

An outbreak of COVID-19 was recognized as a pandemic by the WHO on March 11, 2020. In response to the
COVID-19 outbreak, the governments of many countries, including India, Europe, USA and China have taken
preventive or protective actions such as imposing country-wide lockdowns, as well as restrictions on travel and
business operations. In India, some of these measures have been lifted and partial travel has been permitted. A
rapid increase in severe cases and deaths where measures taken by governments have failed or are lifted
prematurely, may cause significant economic disruption in India and in the rest of the world. The scope, duration
and frequency of such measures and the adverse impact of the COVID-19 pandemic remain uncertain and could
be severe. As a result of the complete suspension of commercial activities (excluding essential services), due to
lockdown restrictions in India and globally, followed by partial and gradual easing of the lockdown, we
experienced overall low consumer demand in the automotive markets, and consequently low orders from our
customers for our systems and components during the initial two months of the lockdown. A significant portion
of our income is derived from sale of goods with end-use in the overseas markets, including North America,
Europe and China. We also have assembly plants and warehouses across USA, China, Mexico, Germany and
Belgium and sell our products in various countries outside India. The COVID-19 pandemic and the related
preventive and protective actions had impacted our business through complete suspension of activities at our
manufacturing and assembly facilities in India and overseas jurisdictions.

The table below sets forth the periods during which our manufacturing and assembly facilities were shut down
due to the COVID-19 pandemic.

Period of shut down Duration of

shutdown (in
number of working
days)
China • December 30, 2019 until February 9, 2020 35
Mexico • April 1, 2020 until May 20, 2020; and 43
• December 24, 2020 until January 3, 2021
USA • March 20, 2020 until May 16, 2020 41
Chennai • March 23, 2020 until May 8, 2020; and 56
• June 8, 2020 until July 6, 2020
Three units in Gurugram • March 23, 2020 until May 3, 2020 29
Manesar • March 23, 2020 until April 23, 2020 23
Pune • March 23, 2020 until May 17, 2020 40

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June 2020 onwards

As a result of the movement restrictions in India and globally to curb the spread of the COVID-19 pandemic,
production in our manufacturing facilities were adversely impacted due to manpower constraints, supply chain
disruption, disruption in timely availability and transportation of raw materials, unavailability of personnel, delays
in obtaining local approvals and clearances and cash flow challenges of suppliers and contractors. However,
despite the COVID-19 pandemic, we did not experience any significant interruption in our ability to supply our
systems and components to our customers and ensured that our customers did not experience disruption of their
product lines due to us. We also managed to continue to drive business development and won new development
programs during the period after April 2020.

After commencement of operations at our manufacturing facilities due to easing of lockdown measures,
production levels at our manufacturing facilities returned to pre-COVID levels as set forth below.

China February, 2020

Mexico November, 2020

USA May, 2020

Chennai July, 2020

Three units in Gurugram July, 2020

Manesar July, 2020

Pune July, 2020

In response to the COVID-19 pandemic, we have taken active measures to promote health and safety and social
distancing efforts, including providing for PPEs, masks, hand sanitizers, and gloves to employees in our
manufacturing facilities and in affected areas, staggered working shifts at our manufacturing and assembly plants
and working closely with health authorities for obtaining approvals to commence operations at our plants and to
enact and enforce safety guidelines. In addition, as part of our risk management policy, we developed a mobile
phone based application for our employees to report their health status on a daily basis and also implemented a
safety SOP applicable for our employees travelling between workplace and home, inside shop safety management
practices including vendor safety management and measures to check vehicles entering and leaving our premises
and employees returning to the workplace after easing of lockdown.

See “Risk Factor – Risks Relating to Our Business and Industry – The COVID-19 pandemic, or a similar public
health threat, could adversely affect our business, financial condition, and results of operations.” on page 27 for
potential risks of the COVID-19 pandemic on our operations and financial condition.

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 KEY REGULATIONS AND POLICIES IN INDIA

Given below is a summary of certain sector specific laws and regulations in India, which are applicable to our
Company and our Indian subsidiaries and their respective businesses. The information detailed in this chapter
has been obtained from current provisions of various statutes, regulations and/or local legislations and the bye
laws of relevant authorities, judicial and administrative interpretations thereof, that are available in the public
domain. This description may not be exhaustive, and is only intended to provide general overview of information
to investors, and is neither designed, nor intended as a substitute for professional legal advice. Judicial and
administrative interpretations are subject to modification or clarification by subsequent legislative, judicial or
administrative decisions. For details see, “Government and other Approvals” on page 396.

Industry specific legislations

Bureau of Indian Standards Act, 2016

The Bureau of Indian Standards Act, 2016, as amended (the “Bureau of Indian Standards Act”), provides for
the standardization, marking and quality certification of goods. The Bureau of Indian Standards Act provides for
the functions of the bureau which include, among others (a) recognize as an Indian standard, any standard
established for any goods, article, process, system or service by any other institution in India or elsewhere; (b)
specify a standard mark to be called the Bureau of Indian Standards Certification Mark; and (c) make such
inspection and take such samples of any material or substance as may be necessary.

Steel and Steel Products (Quality Control) Order, 2020

The Steel and Steel Products (Quality Control) Order, 2020, as amended (the “Quality Control Order 2020”),
was notified by the Ministry of Steel, Government of India, to bring specified steel products under mandatory BIS
certification. All manufacturers of steel and steel products are required to apply to the Bureau of Indian Standards
for certification and ensure compliance with the Quality Control Order 2020.

Legal Metrology Act, 2009

The Legal Metrology Act, 2009, as amended (the “Metrology Act”) aims to establish and enforce standards of
weights and measures, regulate trade and commerce in weights, measures and other goods which are sold or
distributed by weight, measure or number and for matters connected therewith or incidental thereto. Any
transaction/contract relating to goods/class of goods or undertakings shall be as per the
weight/measurement/numbers prescribed by the Metrology Act. The specifications with respect to the exact
denomination of the weight of goods to be considered in transactions are contained in rules by each state.

Duty Drawback Scheme, 2020

The duty drawback scheme is an option available to exporters. Under this scheme, an exporter of goods is entitled
to a refund of the excise duty and integrated goods and services tax paid by him on the inputs used in the products
exported by him. It neutralizes the duty impact on the goods exported by giving a relief on customs and central
excise duties suffered on the inputs used in the manufacture of export product. The Customs and Central Excise
Duties Drawback Rules, 2017, as amended (the “Drawback Rules”) have also been framed outlining the
procedure to be followed for the purpose of grant of duty drawback (for both kinds of duties suffered) by the
customs authorities processing export documentation.

Under duty drawback scheme, an exporter can opt for either all industry rate of duty drawback scheme or brand
rate of duty drawback scheme. The all industry rate of duty drawback scheme essentially attempts to compensate
exporters of various export commodities for average incidence of customs and central excise duties suffered on
the inputs used in their manufacture.

National Electric Mobility Mission Plan 2020

The National Electric Mobility Mission Plan 2020 (“NEMMP”), which was released in 2013, is a vision and the
roadmap for the faster adoption of electric vehicles and their manufacturing in the country. This plan has been
designed by the Ministry of Heavy Industries and Public Enterprises to enhance national fuel security, to provide
affordable and environmentally friendly transportation and to enable the Indian automotive industry to achieve
global manufacturing leadership. Further, it is also proposed to establish necessary charging infrastructure for
electric vehicles across India.

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As part of the NEMMP, a scheme was formulated namely, Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles in India Scheme (“FAME India”) in the year 2015 to promote manufacturing of electric and
hybrid vehicle technology and to ensure sustainable growth of the same (“Phase-I Scheme”). The Phase-I Scheme
was initially launched for a period of two years, commencing from April 1, 2015, which was subsequently
extended from time to time and the last extension was allowed up to March 31, 2019. Department of Heavy
Industry has notified Phase-II of the Fame India scheme, with an outlay of ₹ 10,000 crore for a period of three
years commencing from April 1, 2019 (“Phase-II Scheme”). The main objective of the Phase-II Scheme is to
encourage faster adoption of electric and hybrid vehicle by way of offering upfront incentive on purchase of
electric vehicles and also by establishing the necessary charging infrastructure for electric vehicles.

Automotive Mission Plan 2016-2026

The Ministry of Heavy Industries and Public Enterprises, GoI released the Automotive Mission Plan 2016-26
(“AMP”) in September 2015 with the objective of making the Indian automotive industry an integral part of the
“Make in India” initiative. This plan aims to, among others, promote safe, efficient and comfortable mobility for
every person in the country along with environmental protection and affordability through both public and
personal transport options.

Labour law legislations

Factories Act, 1948

The Factories Act, 1948, as amended (the “Factories Act”), defines a “factory” to cover any premises which
employs 10 or more workers on any day of the preceding 12 months and in which a manufacturing process is
carried on with the aid of power or any premises where at least 20 workers are employed, and where a
manufacturing process is carried on without the aid of power. Each state government has enacted rules in respect
of the prior submission of plans and their approval for the establishment of factories and registration/licensing
thereof. The Factories Act provides for imposition of fines and imprisonment of the manager and occupier of the
factory in case of any contravention of the provisions of the Factories Act.

In addition to the Factories Act, the employment of workers, depending on the nature of activity, is regulated by
a wide variety of generally applicable labour laws. The following is an indicative list of labour laws which may
be applicable to our Company due to the nature of the business activities:

(i) Contract Labour (Regulation and Abolition) Act, 1970.

(ii) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
(iii) Employees’ State Insurance Act, 1948.
(iv) Minimum Wages Act, 1948.
(v) Payment of Bonus Act, 1965.
(vi) Payment of Gratuity Act, 1972.
(vii) Payment of Wages Act, 1936.
(viii) Maternity Benefit Act, 1961.
(ix) Industrial Disputes Act, 1947.
(x) Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
(xi) The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979.
(xii) The Industries (Development and Regulation) Act, 1951.
(xiii) Employees’ Compensation Act, 1923.
(xiv) The Industrial Employment Standing Orders Act, 1946.
(xv) The Child Labour (Prohibition and Regulation) Act, 1986.
(xvi) The Equal Remuneration Act, 1976.
(xvii) The Trade Unions Act, 1926 and the Trade Union (Amendment) Act, 2001.
(xviii) Building and Other Construction Workers Regulation of Employment and Conditions of Service Act,
1996.
(xix) The Code on Wages, 2019*.
(xx) The Occupational Safety, Health and Working Conditions Code, 2020**.
(xxi) The Industrial Relations Code, 2020***.
(xxii) The Code on Social Security, 2020****.

*The Government of India enacted ‘The Code on Wages, 2019’ which received the assent of the President of India
on August 8, 2019. The provisions of this code are proposed to be brought into force on April 1, 2021 by the
Central Government. It proposes to subsume four separate legislations, namely, the Payment of Wages Act, 1936,

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the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal Remuneration Act, 1976.

**The Government of India enacted ‘The Occupational Safety, Health and Working Conditions Code, 2020’
which received the assent of the President of India on September 28, 2020. The provisions of this code are
proposed to be brought into force on April 1, 2021. It proposes to subsume several separate legislations, including
the Factories Act, 1948, the Contract Labour (Regulation and Abolition) Act, 1970, the Inter-State Migrant
Workmen (Regulation of Employment and Conditions of Service) Act, 1979 and the Building and Other
Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996.

***The Government of India enacted ‘The Industrial Relations Code, 2020’ which received the assent of the
President of India on September 28, 2020. The provisions of this code are proposed to be brought into force on
April 1, 2021. It proposes to subsume three separate legislations, namely, the Industrial Disputes Act, 1947, the
Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946.

****The Government of India enacted ‘The Code on Social Security, 2020 which received the assent of the
President of India on September 28, 2020. The provisions of this code are proposed to be brought into force on
April 1, 2021. It proposes to subsume several separate legislations including the Employee’s Compensation Act,
1923, the Employees’ State Insurance Act, 1948, the Employees’ Provident Funds and Miscellaneous Provisions
Act, 1952, the Maternity Benefit Act, 1961, the Payment of Gratuity Act, 1972, the Building and Other
Construction Workers’ Welfare Cess Act, 1996 and the Unorganised Workers’ Social Security Act, 2008.

Intellectual Property

Intellectual property rights refer to the general term for intangible, intellectual, industrial property rights through
patents, copyrights and trademarks and includes geographical indications, trade secrets, and confidential
information. In India, patents, trademarks and copyrights enjoy protection under both statutory and common law.
The key legislations governing intellectual property in India and which are applicable to our Company are the
Patents Act, 1970, Copyright Act, 1957, the Designs Act, 2000 and the Trade Marks Act, 1999.

Environmental Laws

The major statute in India which seek to regulate and protect the environment in India include the Environment
Protection Act, 1986 which aims to protect and improve the environment by, inter alia, laying down standards for
emission or discharge of pollutants, providing for restrictions regarding areas where industries may operate and
so on. Further, Noise Pollution (Regulation and Control) Rules, 2000, Water (Prevention and Control of Pollution)
Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981 aim to control, abate and prevent pollution
by setting the standards for maintenance, directing the installation of pollution control devices in industries and
undertaking inspection to ensure that industries are functioning in compliance with the standards prescribed and

Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2016 and the Public Liability
Insurance Act, 1991 aim to regulate the usage of hazardous substances by enumerating a list of hazardous
substances and imposing a liability on the owner and controller of hazardous substances for any damage arising
out of an accident.

Foreign Investment Regulations

Foreign investment in India is governed by the provisions of Foreign Exchange Management Act, 1999, as
amended, along with the rules, regulations and notifications made by the Reserve Bank of India thereunder, and
the consolidated FDI Policy, effective from October 15, 2020, issued by the DPIIT, and any modifications thereto
or substitutions thereof, issued from time to time (the “Consolidated FDI Policy”). Under the current
Consolidated FDI Policy, foreign direct investment in companies engaged in the manufacturing sector is permitted
up to 100% of the paid-up share capital of such company under the automatic route, subject to compliance with
certain prescribed pricing guidelines and reporting requirements.

Foreign Trade Regulations

Imports and exports are governed by the Foreign Trade (Development and Regulation) Act, 1992, as amended
(the “FTDR”) and the Export and Import Policy (the “EXIM Policy”) formulated by the Central Government
from time to time. FTDR provides for an Importer Exporter Code (“IEC”) to be granted to those persons licensed
to carry out imports and exports, which may be suspended or cancelled in case of violation of the provisions of
FTDR or the EXIM Policy.

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Export Promotion Capital Goods Scheme, 2020

The Export Promotion Capital Goods Scheme (the “EPCG Scheme”) provides that importers can benefit from
reduced duties on the import of capital goods provided that they fulfil an export obligation to export a prescribed
amount of their goods manufactured or services rendered (such amount being a multiple of the duty saved) within
a specified period. Export obligations can be fulfilled by either through direct exports or through third parties. An
EPCG authorization holder shall be liable to pay custom duties along with interest custom in the event of non-
fulfillment of prescribed export obligations.

Laws Relating to Taxation

The Goods and Services Tax (“GST”) is levied on supply of goods or services or both jointly by the Central
Government and State Governments. GST provides for imposition of tax on the supply of goods or services and
will be levied by the Central Government and by the state government including union territories on intra-state
supply of goods or services. Further, Central Government levies GST on the inter-state supply of goods or
services. The GST law is enforced by various acts viz. Central Goods and Services Act, 2017 (“CGST”), relevant
state’s Goods and Services Act, 2017 (“SGST”), Union Territory Goods and Services Act, 2017 (“UTGST”),
Integrated Goods and Services Act, 2017 (“IGST”), Goods and Services (Compensation to States) Act, 2017 and
various rules made thereunder.

Further, the Income-tax Act, 1961 (the “Income Tax Act”) is applicable to every company, whether domestic or
foreign whose income is taxable under the provisions of this Act or rules made there under depending upon its
“Residential Status” and “Type of Income” involved. The Income Tax Act provides for the taxation of persons
resident in India on global income and persons not resident in India on income received, accruing or arising in
India or deemed to have been received, accrued or arising in India. Every company assessable to income tax under
the Income Tax Act is required to comply with the provisions thereof, including those relating to tax deduction at
source, advance tax, minimum alternative tax, etc. In 2019, the Government has also passed an amendment act
pursuant to which concessional rates of tax are offered to a few domestic companies and new manufacturing
companies.

Customs Act, 1962 (“Customs Act”)

The Customs Act, as amended, regulates import of goods into and export of goods from India by providing for
levy and collection of customs duties on goods in accordance with the Customs Tariff Act, 1975. Any Company
requiring to import or export goods is first required to get registered under the Customs Act and obtain an Importer
Exporter Code under FTDR. Customs duties are administrated by Central Board of Indirect Tax and Customs
under the Ministry of Finance.

Other applicable laws

Special Economic Zones Act, 2005

Special Economic Zones Act, 2005 (“SEZ Act”) and the rules thereunder prescribe formation of a zone to
incentivise entities present therein. An SEZ is a specifically delineated duty-free enclave, deemed to be a foreign
territory for the purposes of trade as well as duties and tariffs. A board of approval has been set up under the SEZ
Act, which is responsible for promoting the SEZ and ensuring its orderly development.

Motor Vehicles Act, 1988 read with Central Motor Vehicle Rules 1989

Motor Vehicles Act, 1988 read with Central Motor Vehicle Rules 1989 (“Motor Vehicle Laws”) aims to ensure
quality, safety and performance standards in relation to any part, component or assembly to be used in the
manufacture of an automobiles. In 2019, by way of an amendment, Central Government has introduced a
mandatory recall provision for automobiles if any defects were found in the vehicle or a component of the vehicle,
which were harmful to the environment, driver or occupant or road users or defects which are reported to the
Central Government.

Consumer Protection Act, 2019

The Consumer Protection Act, 2019 (“CPA 2019”) has superseded Consumer Protection Act, 1986 and came into
force on July 20, 2020. The CPA 2019 has introduced certain definitions including, inter alia, ‘product liability’,
product manufacturer’ and ‘defect’. The CPA Act 2019 further established Central Consumer Protection Authority
to protect, promote and enforce the rights of the consumers.

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 HISTORY AND CERTAIN CORPORATE MATTERS

Brief history of our Company

Our Company was originally incorporated as “Sona Okegawa Precision Forgings Limited” at New Delhi as a
public limited company under the Companies Act, 1956, pursuant to a certificate of incorporation dated October
27, 1995, issued by the RoC and commenced operations pursuant to the certificate of commencement of business
dated November 16, 1995 issued by the RoC. For the purpose of expansion of business and with the aim of
accessing global automotive markets, the name of our Company was changed to “Sona BLW Precision Forgings
Limited” as approved by our Shareholders by way of a resolution dated June 28, 2013 and a fresh certificate of
incorporation dated July 23, 2013, consequent upon change of name was issued by the RoC.

Changes in the Registered and Corporate Office

The following table sets forth details of the changes in our Registered and Corporate Office since the date of its
incorporation:

Date of Details of change in the address of the Registered and Corporate Office Reasons for change in
change the address of the
Registered and
Corporate Office
June 30, The registered and corporate office of our Company was changed from 12 th Floor, To facilitate
2002 Indraprakash, 21 Barakhamba Road, New Delhi, India – 110001 to UGF-6, administrative
Indraprakash, 21 Barakhamba Road, New Delhi, India – 110001 convenience
February The registered and corporate office of our Company was changed from UGF-6, Pursuant to divestment of
11, 2017 Indraprakash, 21 Barakhamba Road, New Delhi, India – 110001 to GF-19, JTEKT India Limited and
Indraprakash, 21 Barakhamba Road, New Delhi, India – 110001 cessation of the
underlying lease period
September The registered and corporate office of our Company was changed from GF-19, For administrative and
26, 2019 Indraprakash, 21 Barakhamba Road, New Delhi, India – 110001 to Sona Enclave, operational
Village Begumpur Khatola, Sector 35, Gurugram, Haryana, India – 122004* convenience
* Pursuant to the order dated September 12, 2019 of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi.

Main objects of our Company

The main objects contained in the Memorandum of Association are as follows:

1. “To design, manufacture, assemble, test, import, export, buy, sell, distribute, service, repair, stock, deal
and trade in precision forgings and castings of all types, including items of ferrous, and non-ferrous
metals for application in automotive and general industries”;

2. “To design, develop, manufacture, assemble, test, import, export, buy, sell, distribute, service, repair,
stock, deal and trade in precision machined components and assemblies for use in automotive and
general industries and for all types, parts, components and accessories thereof and products related
thereto”;

3. “To design, develop, manufacture, buy, sell, lease or hire, import, export, process, use, deal and trade in
plant, machinery, equipment apparatus, materials, articles and commodities in relation to designing,
developing, manufacturing, testing, assembling, installing, repairing, reconditioning and overhauling
precision components and assemblies of all types, parts, components and accessories thereof and
products related thereto in all types of precision forgings using all types of ferrous and non-ferrous
metals for parts and components to be used in automotive and other general industries and parts,
components, accessory, assemblies and components thereof”;

4. “To design, develop, manufacture, assemble, test, import, export, buy, sell, distribute, services, repair,
stock, deal and trade in dies, tools, fixtures for use in manufacturing of precision forgings, castings and
components of all types, parts and components thereof including gears of all types, synchronisers,
linkages, clutch parts, shifters, yokes, ball, pins, cups, sleeves, castings and any accessories thereof and
materials, equipment and stores used in any relation thereof”;

5. “To develop, sell, import, export and deal in forgings and castings of all types, and all equipment,
materials and stores used therein or in any relation thereof”;

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6. “To design, and offer technical services to industries on manufacturing of precision forgings, castings
and machined components and assemblies and thing related to project planning and implementation,
project financing, process development, productivity related activities, quality up gradation, imports and
exports”; and

7. “To design, develop, test, sell, import, export and deal in plant and machinery required for the
manufacture of precision, forgings, castings, components and assemblies required in automotive and
general industries and for all types, parts, components and accessories thereof and products related
thereof.”

The main objects as contained in our Memorandum of Association enable our Company to carry on the business
presently being carried on and proposed to be carried out by it.

Amendments to our Memorandum of Association

The amendments to our Memorandum of Association in the last 10 years are set out below.

Date of Shareholders’ Details of the amendments

resolution
June 28, 2013 Amendment to Clause I of the Memorandum of Association to reflect the change in the name
of our Company from “Sona Okegawa Precision Forgings Limited” to “Sona BLW Precision
Forgings Limited”.
September 28, 2017 Adoption of a fresh Memorandum of Association to ensure compliance with the provisions of
the Companies Act, 2013.
January 7, 2019 Amendment to Clause V of the Memorandum of Association to reflect increase in authorised
share capital from ₹ 300,000,000 divided into 30,000,000 Equity Shares of ₹ 10 each to ₹
520,000,000 divided into 50,500,000 Equity Shares of ₹ 10 each and 1,500,000 Preference
Shares of ₹ 10 each.
May 17, 2019 Amendment to Clause II of the Memorandum of Association to reflect the change in the
registered office and corporate of our Company from GF-19, Indraprakash, 21 Barakhamba
Road, New Delhi, India – 110001 to Sona Enclave, Village Begumpur Khatola, Sector 35,
Gurugram, Haryana, India – 122 001 and such amendment was approved pursuant to the order
dated September 12, 2019 of the Regional Director, Northern Region, Ministry of Corporate
Affairs, New Delhi.
January 22, 2021 Amendment to Clause V of the Memorandum of Association to reflect increase in authorised
share capital from ₹ 520,000,000 divided into 50,500,000 Equity Shares of ₹ 10 each and
1,500,000 Preference Shares of ₹ 10 each to ₹ 10,000,000,000 divided into 998,500,000 Equity
Shares of ₹ 10 each and 1,500,000 Preference Shares of ₹ 10 each

Major events in the history of our Company

The table below sets forth the key events in the history of our Company:

Calendar Year Particulars

1995 • Incorporation of our Company
1998 • Commencement of production at Gurugram Unit I
2005 • Commencement of operations at Pune Unit I
2013 • Our Company was renamed as “Sona BLW Precision Forgings Limited”
2017 • Commencement of operations at Gurugram Unit I and Gurugram Unit II
2018 • Acquisition of new land for Pune Unit II
2019 • Adopted “Sona Comstar” as our brand name
• Commencement of operations at our Manesar Unit
• Awarded contract by a renowned global electric vehicle manufacturer
2020 • Achieved milestone of production of approximately 250 million gears

Awards and accreditations

For details, see “Our Business – Customer Awards” on page 184.

Corporate profile of our Company

For details in relation to our corporate profile including details of our business, profile, activities, services, market,
growth, competition, launch of key products, entry into new geographies or exit from existing markets, suppliers,

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customers, capacity build-up, location of manufacturing plants, technology, and managerial competence, see “Our
Business”, “Our Management”, “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and “Government and Other Approvals” beginning on pages 159, 204, 351, and 396, respectively.

Time or cost overrun

There have been no time or cost overruns pertaining to the setting up of projects and the business operations
undertaken by our Company, except in the ordinary course of business.

Defaults or rescheduling of borrowings

There have been no defaults or rescheduling/ restructuring of borrowings with financial institutions/ banks in
respect of our Company’s borrowings.

Total number of shareholders of our Company

As on date of this Draft Red Herring Prospectus, our Company has eight shareholders. For details, see “Capital
Structure – Shareholding Pattern of our Company” beginning on page 74.

Our holding company

Singapore Topco, is our holding company. For details, see “Our Promoters and Promoter Group” beginning on
page 220.

Our Subsidiaries

As of the date of this Draft Red Herring Prospectus, our Company has three directly held Subsidiaries and seven
indirectly held Subsidiaries.

I. Directly held Subsidiaries

Indian Subsidiaries

1. Comstar Automotive Technologies Private Limited (“Comstar Automotive”)

Corporate information

Comstar Automotive was incorporated as “Electrical and Fuel Handling India Private Limited” on March
21, 1997 under the Companies Act, 1956 pursuant to a certificate of incorporation issued by the Registrar
of Companies, Tamil Nadu. The name was subsequently changed to “Visteon Powertrain Control Systems
India Private Limited” and a fresh certificate of incorporation pursuant to change of name was issued by
the Registrar of Companies, Tamil Nadu on August 12, 1998. Thereafter, the name was changed to
“Comstar Automotive Technologies Private Limited” and a fresh certificate of incorporation pursuant to
change of name was issued by the Registrar of Companies, Tamil Nadu on January 3, 2008. The CIN of
Comstar Automotive is U35911HR1997PTC083740 and its registered office is located at Sona Enclave,
Village Begumpur Khatola, Sector 35, Gurugram, Haryana, India – 122001.

Nature of business

Comstar Automotive is engaged in the business of manufacture and assembly of starter motors, controllers,
alternators and starter kits forming part of automobiles and electric vehicles in domestic and international
markets.

Capital structure

The capital structure of Comstar Automotive is as follows:

Authorised Aggregate nominal value

15,00,00,000 equity shares of ₹ 10 each ₹ 1,500,000,000
Issued, subscribed and paid up
64,527,564 equity shares of ₹ 10 each ₹ 645,275,640

Shareholding pattern

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 The shareholding pattern of Comstar Automotive is as follows:

S. No. Name of the shareholder No. of equity shares of Percentage of

₹ 10 each shareholding (%)
1. Our Company 64,527,563 100
2. Vivek Vikram Singh (on behalf of our Company) 1 Negligible
Total 64,527,564 100

2. Sona Comstar eDrive Private Limited (“SCDPL”)

Corporate information

SCDPL was incorporated as a private limited company on November 12, 2020 under the Companies Act,
2013 pursuant to a certificate of incorporation issued by the Registrar of Companies, Haryana. Its CIN is
U34100HR2020PTC090921 and its registered office is located at Sona Enclave, Village Begumpur,
Khatola, Gurgaon, Haryana, India 122004.

Nature of business

SCDPL is permitted to engage in the business to design, develop, manufacture, assemble, supply, sell,
trade and otherwise deal in motors, controllers and other components for electric vehicles.

Capital structure

The capital structure of SCDPL is as follows:

Authorised Aggregate nominal value

100,000 equity shares of ₹ 10 each ₹ 1,000,000
Issued, subscribed and paid up
10,000 equity shares of ₹ 10 each ₹ 100,000

Shareholding pattern

The shareholding pattern of SCDPL is as follows:

S. No. Name of the shareholder No. of equity shares of ₹ 10 Percentage of

each shareholding (%)
1. Our Company 9,999 100
2. Vadapalli Vikram Verma (on behalf of our
1 Negligible
Company)
Total 10,000 100

Foreign Subsidiary

3. Comstar Automotive Hong Kong Limited (“Comstar Automotive HK”)

Corporate information

Comstar Automotive HK was incorporated under the Companies Ordinance (Chapter 622 of the Laws of
Hong Kong) on May 21, 2015 as a limited company. Comstar Automotive HK’s company registry
reference is 2240569. Its registered office is located at Flat/RM 1307 13F, Two Harbourfront, 22 Tak Fung
Street, Hung Hom, Kowloon, Hong Kong.

Nature of business

Comstar Automotive HK’s primary activity is investment holding and support funding requirements for
its subsidiaries.

Capital structure

The capital structure of Comstar Automotive HK is as follows:

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 Authorised Aggregate nominal value
NA NA
Issued, subscribed and paid up
1,878,801 equity shares of USD 1 each USD 1,878,801

Shareholding pattern

The shareholding pattern of Comstar Automotive HK is as follows:

S. No. Name of the shareholder No. of equity shares of USD Percentage of

1 each shareholding (%)
1. Our Company 1,878,801 100
Total 1,878,801 100

II. Indirectly held Subsidiaries

Indian Subsidiary

1. Comstar Automotive Technology Services Private Limited (“CATSPL”)

Corporate information

CATSPL was incorporated as a private limited company on November 12, 2012 under the Companies Act,
1956, pursuant to a certificate of incorporation issued by the Registrar of Companies, Tamil Nadu. Its CIN
is U31501TN2012PTC088468 and its registered office is located at No. 30-A, Singaravelan Street NH-II,
Maraimalai Nagar, Chengalpattu, Kancheepuram, Tamil Nadu, India – 603204.

Nature of business

CATSPL is is engaged in the business of providing support service relating to purchase, sale, design,
accounting, treasury, financial, computer related software consultancy and other information services in
India and abroad.

Capital structure

The capital structure of CATSPL is as follows:

Authorised Aggregate nominal value

2,000,000 equity shares of ₹ 10 each ₹ 20,000,000
Issued, subscribed and paid up
130,000 equity shares of ₹ 10 each ₹ 1,300,000

Shareholding pattern

The shareholding pattern of CATSPL is as follows:

S. No. Name of the shareholder No. of equity shares of ₹ Percentage of shareholding

10 each (%)
1. Comstar Automotive Technologies Private
129,990 99.9
Limited
2. Comstar Automotive Technologies Private
10 Negligible
Limited jointly with Sat Mohan Gupta
Total 130,000 100

Foreign Subsidiaries

1. Comstar Automotive USA LLC (“CAUL”)

Corporate information

CAUL was incorporated on October 9, 2012 as a limited liability company under the Delaware Limited
Liability Company Act. Its registered office is located at Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801, USA with Corporate ID reference D91833.

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 Nature of business

CAUL is engaged in the business of design, manufacture and supply of automotive components to major
OEMs manufacturing four wheelers.

Capital structure

The capital structure of CAUL is as follows:

Authorised Aggregate nominal value

250,000 shares of USD 1 each USD 250,000
Issued, subscribed and paid up
250,000 shares of USD 1 each USD 250,000

Shareholding pattern

The shareholding pattern of CAUL is as follows:

S. No. Name of the shareholder No. of equity shares of USD 1 Percentage of

each shareholding (%)
1. Comstar Automotive 250,000 100
Total 250,000 100

2. Comestel Automotive Technologies Mexicana Limited (“CATML”)

Corporate information

CATML was incorporated on October 9, 2017 as a limited company registered under the Companies
Ordinance (Chapter 622 of the Laws of Hong Kong). CATML’s company registry reference is 258936. Its
registered office is located at Unit 1307A 13/F, Two Harbourfront, 22 Tak Fung Street, Hung Hom,
Kowloon, Hong Kong.

Nature of business

CATML’s primary activity includes manufacture and sales of automotive components to OEM’s
manufacturing four wheelers for commercial and passenger vehicles.

Capital structure

The capital structure of CATML is as follows:

Authorised Aggregate nominal value

100 equity shares of USD 1 each USD 100
Issued, subscribed and paid up
100 equity shares of USD 1 each USD 100

Shareholding pattern

The shareholding pattern of CATML is as follows:

S. No. Name of the shareholder No. of ordinary shares of Percentage of

USD 1 each shareholding (%)
1. Comstar Automotive HK 100 100
Total 100 100

3. Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V (“CATM”)

Corporate information

CATM was incorporated on January 17, 2017 and is a wholly foreign owned investment enterprise under
the “Ley General de Sociedades Mercantiles” or the General law of Commercial Companies in conformity
with Mexican Legislation with a FME Reference (Customer Identification Number) N 2017026101. Its

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 registered office is located at Logistica Integral del Bajio, Warehouses 1 and 3 of Iraupato Street, No. 204,
Corner with Salamanca street, Fraccionamiento Ciudad, Industrial 36541 Irapuato, Guanajuato, Mexico.

Nature of business

CATM’s primary activity includes manufacture and sales of automotive components to OEM’s
manufacturing four wheelers for commercial and passenger vehicles and also engages in professional and
manpower consultancy services to other companies.

Capital structure

The capital structure of CATM is as follows:

Authorised Aggregate nominal value

NA Mexican Peso 32,496,785
Issued, subscribed and paid up
NA Mexican Peso 32,496,785

Shareholding pattern

The shareholding pattern of CATM is as follows:

S. No. Name of the shareholder Value of shares of face Percentage of

value of Mexican Peso 200 shareholding (%)
each
1. CATML Mexican Peso 32,496,585 99.9
2. Comstar Automotive USA LLC Mexican Peso 200 0.1
Total 32,496,785 100

4. Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V (“CATMS”)

Corporate information

CATMS was incorporated on January 17, 2017 and is a wholly foreign owned investment enterprise under
“Ley General de Sociedades Mercantiles” or the General law of Commercial Companies in conformity
with Mexican Legislation with a FME Reference (Customer Identification Number) N 2017025334. Its
registered office is located in Logistica Integral del Bajio, Warehouses 1 and 3 of Iraupato Street, No. 204,
Corner with Salamanca street, Fraccionamiento Ciudad Industrial C.P. 36541, Irapuato, Guanajuato,
Mexico.

Nature of business

CATMS’ primary activity includes manufacture and sales of automotive components to OEM’s
manufacturing four wheelers for commercial and passenger vehicles and also engages in professional and
manpower consultancy services to other companies.

Capital structure

The capital structure of CATMS is as follows:

Authorised Aggregate nominal value

100 equity shares of Mexican Peso 200 each Mexican Peso 20,000
Issued, subscribed and paid up
100 equity shares of Mexican Peso 200 each Mexican Peso 20,000

Shareholding pattern

The shareholding pattern of CATMS is as follows:

S. No. Name of the shareholder No. of equity shares of Percentage of shareholding

Mexican Peso 200 each (%)
1. Comstar Automotive HK 99 99%

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 S. No. Name of the shareholder No. of equity shares of Percentage of shareholding
Mexican Peso 200 each (%)
2. Comstar Automotive Technologies Private 1 1%
Limited
Total 100 100

5. Comstar Automotive (Hangzhou) Co. Ltd. (“CAHCL”)

Corporate information

CAHCL was incorporated on August 27, 2015 and is a wholly foreign owned investment enterprise under
“Foreign Investment Enterprise Law of the People’s Republic of China”, “Company Law of the People’s
Republic of China” and relevant laws and regulations as applicable in China. CAHCL obtained its business
license with unified social credit code no: 91330109336456925R. Its registered office is located at
Building #4, No 557-1 Gaotang Road, Guali Xiaoshan district, Hangzhou City, Zhejiang Province, China.

Nature of business

CAHCL’s primary activity includes manufacture and sales of automotive components to OEM’s
manufacturing four wheelers for commercial and passenger vehicles.

Capital structure

The capital structure of CAHCL is as follows:

Authorised Aggregate nominal value

NA USD 2,740,000
Issued, subscribed and paid up
NA USD 1,740,000 or RMB 11,199,473

Shareholding pattern

The shareholding pattern of CAHCL is as follows:

S. No. Name of the shareholder Value of equity shares Percentage of

shareholding (%)
1. Comstar Automotive HK USD 1,740,000 100
Total USD 1,740,000 100

6. Comstar Hongkong Mexico No. 1 LLC (“CHM”)

Corporate information

CHM was incorporated under the Delaware Limited Liability Company Act effective December 1, 2016
with Corporate ID EIN 32-0514708. Its registered office is located at 840 West Long Lake Road, Suit 150,
Tray, Michigan 48098.

Nature of business

CHM is authorised to operate as an investment holding company and support investments in group
companies for its parent company.

Capital structure

The capital structure of CHM is as follows:

Authorised Aggregate nominal value

10 equity shares of USD 1 each USD 10
Issued, subscribed and paid up
10 equity shares of USD 1 each USD 10

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 Shareholding pattern

The shareholding pattern of CHM is as follows:

S. No. Name of the shareholder No. of equity shares of USD Percentage of

1 each shareholding (%)
1. Comstar Automotive HK 10 100
Total 10 100

Accumulated profits or losses

Except as disclosed below, as on December 31, 2020, there are no accumulated profits or losses of our Subsidiaries
that have not been accounted for or consolidated by our Company.

The majority shareholding in Sona Holdings B.V., The Netherlands (“SHBV”), an erstwhile subsidiary of the
Company, which was classified as a ‘discontinued operation’ in the consolidated financial statements for year
ended and as at March 31, 2019, was sold to Sona Autocomp on July 4, 2019, and the Company therefore, did not
exercise control over the erstwhile subsidiary company from this date onwards. Owing to the unavailability of the
consolidated financial statements of such subsidiary company and its subsidiaries (“Sona BV Group”) for the
period April 1, 2019 to July 4, 2019, the consolidated financial information of Sona BV Group for the period April
1, 2019 to July 4, 2019 has not been included in the Restated Consolidated Financial Information for the year
ended March 31, 2020, and the assets and liabilities of Sona BV Group have been derecognized at their respective
carrying values as at March 31, 2019 instead of July 4, 2019. For further details, see “Risk Factors – Our Statutory
Auditors have included an audit qualification in relation to our erstwhile subsidiary, SONA BV in the Restated
Consolidated Financial Information” and “Financial Information” on pages 33 and 230, respectively.

Joint Ventures

As of the date of this Draft Red Herring Prospectus, our Company has no joint ventures.

Significant financial and strategic partners

Our Company does not have any significant financial or strategic partners as of the date of this Draft Red Herring
Prospectus.

Material acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation

of assets in the last 10 years

Except as disclosed below, our Company has not made any material acquisitions or divestments of any business
or undertaking, and has not undertaken any mergers, amalgamation or revaluation of assets in the last 10 years:

Divestment of the Sona BV Group

Our Company entered into a share purchase and shareholders’ agreement dated October 16, 2018 with Sona
Autocomp, Sunjay Kapur, SHBV, Sona Autocomp Germany GmbH (“SAGG”) and Sona BLW
Prazissionchmiede GmbH (“SBPG”), read with the amendment agreement dated March 28, 2019 (“Europe
Separation Agreement”) pursuant to which our Company transferred 40,727 equity shares of SHBV having face
value of € 500 each and 1,673,918 redeemable preference shares of SHBV having face value of € 5 each, together
representing 81% of the issued and outstanding share capital of SHBV on a fully diluted basis, to Sona Autocomp
for an aggregate consideration of ₹ 1,399.48 million. The transfer was completed on July 4, 2019 and the Sona
BV Group comprising SAGG, Sona BLW Driveline LLC, Sona BLW Precision Forge, Inc., Sona Autocomp USA
LLC, PHT Beteiligungs GmbH and Co. KG, Sona BLW Hungary Limited, Sona BLW-Hilfe GmbH and SBPG
(collectively referred to as, the “Sona BV Group”) ceased to be subsidiaries of our Company with effect from
July 4, 2019.

The Europe Separation Agreement provides for certain non-compete restrictions on setting up business in India,
China and USA, and non-solicitation provisions in relation to certain customers and employees which are required
to be complied with by Sona Autocomp, SHBV, SAGG, SBPG and the Sona BV Group for a stipulated period of
time, among other things.

In terms of the Europe Separation Agreement, our Company granted SHBV and the Sona BV Group the right to
certain intellectual property including certain trademarks and logos (“Brand”) on a worldwide, non-exclusive,

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non-assignable, non-transferable and royalty free basis, subject to certain conditions. On or from the expiry of 24
months from July 4, 2019 the Sona BV Group is required to adopt trademarks or logos which are substantially
different from the ones used by our Company, however, the Sona BV Group is entitled to use the word “Sona” in
their corporate names and business designations, subject to Sona Autocomp remaining in control and holding a
majority of the equity shares of SHBV, among other things. The Europe Separation Agreement also provides for
certain transfer pricing and services arrangements, among other things. As per the terms of the Europe Separation
Agreement, Sona Autocomp and SHBV are required to indemnify our Company and its representatives for breach
of the customary representations and warranties contained in the Europe Separation Agreement, and
noncompliance with non-compete and non-solicit provisions, among other things. For further details, see “– Key
terms of other subsisting material agreements”.

Our Company continues to hold 9,953 equity shares and 392,647 outstanding redeemable preference shares of
SHBV aggregating 19% of the of the issued and outstanding share capital of SHBV on a fully diluted basis. Our
subsisting rights in respect of SHBV are governed by the terms of the Europe Separation Agreement. Such rights
include (i) right to appoint nominee directors on the board of SHBV; (ii) inspection rights; (iii) pre-emptive rights
in case of further capital raises; and (iv) right of first offer, tag-along rights and drag rights in the event of certain
proposed transfer of shares by certain parties.

Acquisition of Comstar Entities

Our Company entered into a share purchase agreement dated October 16, 2018 with Comstar Automotive,
Comstar Automotive HK and Singapore Topco, read with the amendment agreement dated July 2, 2019 (“SPA”),
pursuant to which our Company acquired 64,527,564 fully paid up equity shares of Comstar Automotive
constituting 100% of the equity share capital of Comstar Automotive on a fully diluted basis and 1,878,801 equity
shares of Comstar Automotive HK constituting 100% of the equity share capital of Comstar Automotive HK on
a fully diluted basis, for an aggregate consideration of approximately USD 124 million (“Purchase
Consideration”). Our Company has inter-alia received certain customary representations and warranties from
Singapore Topco in relation to the title to the shares of the Comstar Entities under the SPA. In addition, our
Company is entitled to certain representations and warranties along with associated indemnities provided by
Singapore Topco under the share purchase agreement dated January 1, 2018 executed amongst Comstar Mauritius
Limited, Comstar Holdings Pte. Limited, Comstar International Limited, Comstar Automotive Technologies USA
LLC, Comstar Entities and Singapore Topco. As per the terms of the SPA, the liability of Singapore Topco for
breach of the representations and warranties provided by it and the Comstar Entities, is limited to the Purchase
Consideration, subject to tax gross up, except in case of liability arising as a result of fraud or wilful misconduct.
The acquisition was completed on July 5, 2019 and the Comstar Entities became Subsidiaries of our Company
with effect from July 5, 2019.

Scheme of amalgamation of Comstar Automotive with our Company

Our Company has filed a scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013, read
with the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 before the NCLT Chandigarh
(the “Scheme”). The Scheme was approved by our Board on December 20, 2019. The rationale for the proposed
merger is for consolidation and simplification of existing structure and more focussed operational efforts, realising
synergies in terms of compliance, governance, administration and costs, among other things. Pursuant to the
Scheme, Comstar Automotive is proposed to merge with our Company. July 5, 2019 is the appointed date. With
effect from the appointed date, the entire business of Comstar Automotive, including all its properties and assets
(whether movable/ immovable or tangible/ intangible) and all nature of liabilities is proposed to stand transferred
to our Company on a going concern basis. The Scheme is pending approval by the NCLT Chandigarh and is
subject to receipt of requisite approvals.

Shareholders’ agreements and other agreements

Key terms of subsisting shareholders’ agreements

The share subscription and share purchase agreement dated October 16, 2018 executed among our Company,
Sona Autocomp, Sunjay Kapur, JM Financial Trustee and BCP Topco VI Pte. Ltd (the “SSSPA”) and the
shareholders’ agreement dated October 16, 2018 executed among our Company, Sona Autocomp, Sunjay
Kapur and BCP Topco VI Pte. Ltd. (the “SHA”), read with (i) the assignment agreement dated February 14,
2019 executed between BCP Topco VI Pte. Ltd and the Singapore Topco (“Assignment Agreement”); (ii) the
deed of adherence dated February 14, 2019 to the SHA executed between the Singapore Topco and BCP Topco
VI Pte. Ltd. (“DoA”); and (iii) the waiver cum amendment agreement dated February 22, 2021 entered into

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amongst our Company, Singapore Topco, Sona Autocomp and Sunjay Kapur (“SHA Amendment Agreement”)

Pursuant to the SSSPA, BCP Topco VI Pte. Ltd, directly or through its Affiliates (“Investor”) agreed to subscribe
to 22,028,503 Equity Shares and 594,436 Preference Shares of our Company for an aggregate consideration of ₹
8,706 million (“Subscription Consideration”). Further, as per the terms of the SSSPA, the Investor agreed to
acquire from JM Financial Trustee 9,024,687 Equity Shares for an aggregate consideration of ₹ 3,576 million. In
accordance with the terms of the SSSPA, JM Financial Trustee, our Company and Sona Autocomp provided the
Investor with certain customary representations and warranties along with associated indemnity for such
representations and warranties, among other things. BCP Topco VI Pte. Ltd’s rights and obligations under the
SSSPA and SHA were assigned to Singapore Topco, being an affiliate of BCP Topco VI Pte. Ltd, pursuant to the
Assignment Agreement and the subscription and acquisition of the Equity Shares and Preference Shares pursuant
to the SSSPA was completed by Singapore Topco. Singapore Topco thereafter entered into the DoA pursuant to
which it became entitled to the rights and obligations of BCP Topco VI Pte. Ltd. under the SHA.

In terms of the SHA, the Investor has certain rights and obligations, among others, the right to appoint nominee
directors on our Board along with the right to appoint a majority of the directors on the Board and a majority of
the members on the committees of the Board; appointment of certain key management personnel; information and
inspection rights; pre-emptive rights; certain transfer restrictions on proposed transfers of shares by certain parties;
rights in relation to an initial public offering etc. Sona Autocomp is also entitled to rights and obligations, among
others, the right to appoint nominee directors on our Board; reserved matter rights; certain transfer restrictions in
the event of proposed transfers of shares by certain parties; appointment of certain key management personnel
etc. Other than on reserved matters, Sona Autocomp is required to ensure that its nominee directors and/or
authorised representative at all times vote along with and in a manner similar to the Investor’s nominee directors/
Investor’s authorised representative at Board and/or Shareholder meetings, respectively, to the extent permitted
under applicable law and subject to certain conditions. Further, as per the terms of the SHA, Sunjay Kapur has
the right to be appointed as the non-executive Chairman of the Board subject to certain conditions. Our Company
has agreed to indemnify inter-alia Sona Autocomp, Sunjay Kapur, the Investor, and each of its officers, directors,
employees, consultants and legal advisers, from and against any loss or liability incurred or suffered, that arise
out of or are based on any misstatements in any Offer related documentation and/or any violation of applicable
law.

In addition, Sona Autocomp, Sunjay Kapur and their affiliates (directly or indirectly) are subject to certain non-
compete obligations under the SHA and non-compete letter dated October 16, 2018 entered into between BCP
Topco VI Pte. Ltd. and Sona Autocomp, pursuant to which they are required to conduct or operate businesses
being conducted by our Company or businesses similar to our Company’s business through our Company or our
Subsidiaries exclusively, and for a stipulated amount of time, certain other non-compete restrictions on
establishment, investment and development of a competing business, product or service, among other restrictions.
The SHA also provides for non-solicitation restrictions applicable to Sona Autocomp, Sunjay Kapur and their
affiliates for a stipulated period of time. Singapore Topco has agreed to continue paying an upfront annual fee to
Sona Autocomp in this regard inter alia until the earlier of the date on which Sunjay Kapur ceases to be the
Chairman of our Company or upon Singapore Topco ceasing to hold shares below specified thresholds.

The parties to the SHA have entered into the SHA Amendment Agreement, which is effective from the date on
which this Draft Red Herring Prospectus is approved by our Board, and shall remain in effect until the earlier of:
(i) the IPO long stop date, i.e., one year from the execution date of the SHA Amendment Agreement, or such
extended date as may be mutually agreed amongst the parties; (ii) consummation of the Offer; (iii) the date on
which the Board and Singapore Topco jointly decide not to undertake the Offer; or (iv) the date on which the offer
document filed by the Company is rejected by SEBI and/or one or more of the recognised stock exchanges, unless
the offer document is successfully re-filed with the relevant authorities within 15 days from the date on which it
was first rejected (“Term”). The parties have agreed that our Company’s indemnification obligation in relation to
the Offer and compliance with applicable laws as set out under the SHA shall survive the termination of the SHA.
Pursuant to the SHA Amendment Agreement, the Investor has agreed to waive its information rights under the
SHA from the date of filing of the Red Herring Prospectus until the expiry of the Term. Further, the rights that
are otherwise available to the parties under the SHA shall stand terminated from the receipt of final listing and
trading approvals from the Stock Exchanges for the listing and trading of the Equity Shares of the Company.

In the event that the Offer is not completed on or prior to the IPO long stop date, or if the Board and Singapore
Topco jointly decide not to undertake the Offer, the SHA Amendment Agreement shall stand immediately and
automatically terminated with effect from the long stop date or the date on which the Board and Singapore Topco
jointly decide not to undertake the IPO, without any further action by any party and the provisions of the SHA

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shall be deemed to have been in force during the period between the execution date and the date of termination of
the SHA Amendment Agreement, without any break or interruption whatsoever.

Inter se agreement dated February 22, 2021 executed among Singapore Topco, Sona Autocomp and Sunjay
Kapur (the “Inter-se Agreement”)

Singapore Topco, Sona Autocomp and Sunjay Kapur have entered into the Inter-se Agreement to govern the inter-
se relationship amongst parties with respect to the Company. Certain clauses of the Inter-se Agreement shall come
into force from the date of the Inter-se Agreement while other clauses will come into force from the date of receipt
of final listing and trading approval from the Stock Exchanges for the listing and trading of Equity Shares of the
Company.

Pursuant to the Inter-se Agreement, the parties have agreed that they shall exercise their rights in the Company to
enable Singapore Topco to appoint at least the majority of the non-independent directors on the Board and for
Sona Autocomp to appoint the remaining non-independent directors on the Board, until such time that Sona
Autocomp continues to hold at least 7.5% of the total Equity Share capital of the Company on a fully diluted basis.
Sunjay Kapur would be entitled to be appointed as the non-executive Chairman of the Board and Singapore Topco
has agreed to exercise its rights and powers to support resolutions for his appointment as a non-executive
Chairman. Sunjay Kapur would be entitled to this right until the earlier of Sona Autocomp and its affiliates,
collectively holding less than 10% of the Equity Shares of the Company on a fully diluted basis, or upon his
chairmanship being terminated by the Company.

The Inter se Agreement also provides for inter-se transfer restrictions amongst parties, including a right of first
refusal in the event of proposed transfer of shares by certain parties. In addition, Sona Autocomp is permitted to
transfer its Equity Shares to third parties subject to compliance with certain conditions. Sona Autocomp and
Sunjay Kapur are also required to comply with certain non-compete restrictions on establishing and operating
businesses similar to the Company, and non-solicitation restrictions inter alia in relation to certain customers and
employees, for a stipulated period of time.

Agreements with Key Managerial Personnel, Director, or any other employee

Except as disclosed below, there are no agreements entered into by a Key Managerial Personnel or Director or
Promoters or any other employee of our Company, either by themselves or on behalf of any other person, with
any shareholder or any other third party with regard to compensation or profit sharing in connection with dealings
in the securities of our Company:

Exit Return Incentive Plan

Singapore Topco has adopted an exit return incentive plan (“ERI Plan”) pursuant to which Singapore Topco will
reward certain identified employees of our Company and Subsidiaries, including each of our Key Managerial
Personnel, with cash awards based on the multiple of the invested capital and the aggregate sale proceeds received
by Singapore Topco upon certain disposition events in relation to its interest in our Company, which awards may
be paid over a two-year period following relevant disposition event. These cash awards will be paid to such
employees entirely by Singapore Topco (without any recourse or liability to our Company). Our Company will
seek the approval of the Board of Directors and the Shareholders in relation to the ERI Plan, post the listing of the
Equity Shares, in compliance with Regulation 26(6) of the Listing Regulations.

Key terms of other subsisting material agreements

Brand ownership agreement dated March 28, 2019 (“BOA”) executed between our Company, Sona Autocomp,
Sunjay Kapur, Sona Management Services Limited (“SMSL”) and Sona Skill Development Centre Limited
(“SSDCL”)

Our Company entered into the BOA pursuant to which SMSL irrevocably and perpetually transferred and assigned
on a worldwide, exclusive, transferable and sub-license basis all the intellectual property owned by SMSL
including trademarks and domain names (“Sona IP”) to our Company for an aggregate consideration of
approximately ₹ 650 million. Our Company became the legal and beneficial owner, proprietor of, and exclusive
owner of all rights, title and interest in connection with the Sona IP. As per the terms of the BOA, our Company
has granted Sona Autocomp, SMSL and SSDCL (“Licensees”) on a worldwide, non-exclusive, non-transferable,
non-sub-license basis the right to use the brand name “Sona” in their respective corporate names until the expiry
of 36 months from July 6, 2019, (“License”), subject to certain conditions. Our Company has the right to terminate

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the License in case there has been a breach or violation by Sona Autocomp of the terms of the SHA, and the
Licensees conduct business in a manner materially detrimental to the goodwill or reputation of our Company,
among other things.

German brand ownership agreement dated March 28, 2019 (“GBOA”) executed between our Company, Sona
Autocomp, SBPG and Sunjay Kapur

Our Company entered into the GBOA with Sona Autocomp, SBPG and Sunjay Kapur pursuant to which SBPG
irrevocably and perpetually transferred and assigned on a worldwide, exclusive, transferable, sub-license basis
certain intellectual property including trademarks (“Sona Germany IP”) to our Company for an aggregate
consideration of approximately € 225,000. Our Company became the legal and beneficial owner, proprietor of,
and exclusive owner of all rights, title and interest in connection with the Sona Germany IP. In addition, as per
the terms of the Europe Separation Agreement, our Company granted the Sona BV Group the right to use Sona
Germany IP.

Other than as disclosed above, our Company has not entered into any material agreement including with strategic
partners, joint venture partners, and/or financial partners other than in the ordinary course of business of our
Company.

Guarantees given by our Promoters

Our Promoters have not provided any guarantees on behalf of our Company. For details, see “Our Promoters and
Promoter Group” and “Financial Indebtedness” on pages 220 and 349, respectively.

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 OUR MANAGEMENT

In terms of our Articles of Association, our Company is required to have not less than three Directors and not
more than 15 Directors. As on the date of this Draft Red Herring Prospectus, our Board comprises eight Directors,
including four Independent Directors (including one woman independent director), one Executive Director, and
three Non-Executive Directors.

Details regarding our Board as on the date of this Draft Red Herring Prospectus are set forth below:

S. No. Name, DIN, designation, term, period of directorship, Other Directorships

address, occupation, date of birth and age

1. Sunjay Kapur Indian Companies

Designation: Chairman and Non-Executive Director 1. Automotive Component Manufacturers

Association of India;
Term: With effect from July 5, 2019 and not liable to retire
by rotation* 2. Azarias Advance Systems Private Limited;

Period of Directorship: Director since August 22, 2006 3. B R S Finance and Investment Company Private
Limited;
Address: 11, The Green, Rajokri, New Delhi-110038, India
4. Comstar Automotive;
Occupation: Businessman
5. Indian Public Schools Society;
Date of Birth: October 15, 1971
6. Phalanx Advanced Systems Private Limited;
DIN: 00145529
7. Raghuvanshi Investment Private Limited;
Age: 49
8. Sona Autocomp; and

9. Sona Management Services Limited.

2. Vivek Vikram Singh Indian Companies

Designation: Managing Director and Group Chief 1. Comstar Automotive.

Executive Officer

Term: Three years with effect from July 5, 2019 and liable
to retire by rotation

Period of Directorship: Director since July 5, 2019

Address: House No. 14/907, Heritage City, DLF Phase -2,

Gurgaon-122002, Haryana, India

Occupation: Service

Date of Birth: July 24, 1979

DIN: 07698495

Age: 41

3. Amit Dixit Indian Companies

Designation: Non – Executive Director (Nominee) 1. Aadhar Housing Finance Limited.

Term: With effect from July 5, 2019 and liable to retire by 2. Aakash Educational Services Limited;
rotation
3. Blackstone Advisors India Private Limited;
Period of Directorship: Director since July 5, 2019
4. Comstar Automotive;
Address: The Imperial, Flat no. 2102, South Tower, B.B.
Nakashe Marg, Tardeo, Mumbai-400034, Maharashtra, 5. EPL Limited;
India

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S. No. Name, DIN, designation, term, period of directorship, Other Directorships
address, occupation, date of birth and age

Occupation: Investor 6. Jagran Prakashan Limited;

Date of Birth: January 26, 1973 7. Midday Infomedia Limited;

DIN: 01798942 8. Mphasis Limited; and

Age: 48 9. PGP Glass Private Limited.

Foreign Companies

1. IBS Software Pte. Ltd.;

2. TU TopCo Inc.;

3. TU MidCo Inc.; and

4. TU BidCo Inc.

4. Ganesh Mani Indian Companies

Designation: Non – Executive Director (Nominee) 1. Comstar Automotive

Term: With effect from July 5, 2019 and liable to retire by Foreign Companies
rotation
1. Comstar Automotive HK
Period of Directorship: Director since July 5, 2019

Address: 4/149, Shobha, Major Parameshwaran Road,

Wadala, Mumbai-400031, Maharashtra, India

Occupation: Service

Date of Birth: January 1, 1988

DIN: 08385423

Age: 33

5. Jeff M. Overly Foreign Companies

Designation: Independent Director 1. Performance Food Group;

Term: Five years with effect from February 12, 2021 2. Schenck Process Holding GmbH;

Period of Directorship: Director since February 12, 2021 3. Packer Sanitation Services Incorporated;

Address: 103, College Drive, Davidson, North Carolina, 4. Custom Truck One Source LLP; and
United States 28036
5. Comstar Automotive USA LLC.
Occupation: Professional

Date of Birth: April 27, 1958

DIN: 09041143

Age: 62

6. Prasan Abhaykumar Firodia Indian Companies

Designation: Independent Director 1. Force Motors Limited;

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S. No. Name, DIN, designation, term, period of directorship, Other Directorships
address, occupation, date of birth and age

Term: Five years with effect from January 27, 2021 2. Force MTU Power Systems Private Limited;

Period of Directorship: Director since January 27, 2021 3. Jaya Hind Industries Limited; and

Address: Sanmitra, 132-B, Ganeshkhind Road, Pune- 4. Jaya Hind Montupet Private Limited.
411007, Maharashtra, India

Occupation: Business

Date of Birth: February 16, 1979

DIN: 00029664

Age: 42

7. Shradha Suri Indian Companies

Designation: Independent Director 1. Asahi India Glass Limited;

Term: Five years with effect from August 5, 2020 2. Automotive Component Manufacturers
Association of India;
Period of Directorship: Director since August 5, 2020
3. PCL Hotels Limited;
Address: N-101, Panchsheel Park, New Delhi-110017,
India 4. DB Motors Private Limited;

Occupation: Business 5. Denso Subros Thermal Engineering Centre

India Private Limited;
Date of Birth: March 22, 1978
6. Fibcom India Limited;
DIN: 00176902
7. GLOBALYDK Electric Private Limited;
Age: 42
8. Mercantile Capitals and Financial Services
Private Limited;

9. Prima Infratech Private Limited;

10. Prima Telecom Limited;

11. Rohan Motors Limited;

12. Subros Limited; and

13. Uniparts India Limited.

8. Venkata Rama Subbu Behara (B V R Subbu) Indian Companies

Designation: Independent Director 1. Altius Leo Automotive Private Limited;

Term: Five years with effect from July 5, 2019 2. Altius Trucks Sales and Service Private
Limited;
Period of Directorship: Director since July 5, 2019
3. Ampere Vehicles Private Limited;
Address: House-23, Road-1, Shanti Niketan, Chanakya
Puri, New Delhi-110021, India 4. Beyond Visual Range Consulting Private
Limited;
Occupation: Consultant
5. Comstar Automotive;
Date of Birth: February 14, 1954
6. Eurofinance Training Private Limited;
DIN: 00289721
7. Eurofinance Training and Publishing Private
Age: 67 Limited;

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 S. No. Name, DIN, designation, term, period of directorship, Other Directorships
address, occupation, date of birth and age

8. Greaves Cotton Limited;

9. KPIT Technologies Limited;

10. MTAR Technologies Limited;

11. NMC Automotive Infrastructure Private

Limited;

12. Octogence Digital Systems Private Limited;

13. Octogence Technologies Private Limited; and

14. Ola Electric Mobility Private Limited.

*
Re-appointed as Chairman with effect from February 22, 2021.

Relationship between our Directors and our Key Managerial Personnel

None of our Directors are related to each other or to any of the Key Managerial Personnel.

Brief Biographies of Directors

Sunjay Kapur is the Chairman and Non-Executive Director of our Company. He holds a bachelor’s degree in
science (business studies) from the University of Buckingham. He has over 21 years of experience in the
automotive industry. He also served as director on the board of directors of various companies and was the
managing director of Sona Koyo Steering Systems Limited (now JTKET India Limited). He holds membership
in various autonomous bodies, such as Automotive Component Manufacturers Association of India where he has
been appointed as the Vice President, and the Confederation of Indian Industry. He is also acting as the chairman
of the Haryana State Council and the co-chairman of the Manufacturing Council of the Confederation of Indian
Industry and has been an erstwhile chairman of the Entrepreneurs’ Organization. He has been appointed as a
member of the board of governors of the Doon School, Dehradun. Prior to his appointment as the Chairman and
Non-Executive Director, he served as the managing director on our Board.

Vivek Vikram Singh is the Managing Director and Group Chief Executive Officer of our Company. He holds a
bachelor’s degree in technology (computer science and engineering) from HBTI, Kanpur and a post graduate
diploma in management from the Indian Institute of Management, Ahmedabad. He has over 15 years of
experience, including six years of experience in the automotive industry. He is inter alia responsible for
overseeing the production of auto components and systems platform in electric vehicles and hybrids, capital
allocation decisions, external shareholder management at our Company. He was recognised as one of the India’s
40 under forty hottest business leaders by the Economic Times in 2018. He joined our Company on July 1, 2016.
He was appointed as the Managing Director and Group Chief Executive Officer on our Board with effect from
July 5, 2019.

Amit Dixit is a Nominee Director of our Company. He holds a bachelor’s degree of technology in civil
engineering from the Indian Institute of Technology, Bombay, (where he was awarded the institute silver medal)
a master’s degree in science in civil engineering from the Leland Stanford Junior University and a master’s degree
in business administration from Harvard University. He has significant experience in various investments and
investment opportunities in India and South Asia. He is a senior managing director, co-head of Asia acquisitions,
and head of India for Blackstone Private Equity. He has been associated with various companies including
Mphasis Limited, Aadhar Housing Finance Limited, EPL Limited, Aakash Educational Services Limited, IBS
Software Pte. Ltd., among others. He was appointed as a Nominee Director on our Board with effect from July 5,
2019.

Ganesh Mani is a Nominee Director of our Company. He holds a bachelor’s degree of technology in mechanical
engineering from the Indian Institute of Technology, Bombay. He is currently managing director with the private
equity business group of the Blackstone Group in India. Since joining Blackstone in 2011, he has been involved
in the execution of several investments at Blackstone Advisors India Private Limited and in the evaluation of
investment opportunities across sectors in South Asia. Prior to joining the Blackstone group, he was working as
an associate at the Boston Consulting Group. He was appointed as a Nominee Director on our Board with effect

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from July 5, 2019.

Jeff M. Overly is an Independent Director of our Company. He holds a bachelor’s degree of science in industrial
management from the University of Cincinnati and a master’s degree of science in admin from Central Michigan
University. He is on the board of directors of, among others, Performance Food Group, Schenck Process Holding
GmbH and Packer Sanitation Services Incorporated. Prior to joining our Company, he has worked with The
Blackstone Group for approximately 10 years where he also served as the operating partner. He was appointed as
an Independent Director on our Board with effect from February 12, 2021.

Prasan Abhaykumar Firodia is an Independent Director of our Company. He holds a bachelor’s degree of arts
in international business from the Regents Business School, London. He has over 12 years of experience in the
automotive industry. He is the managing director of Force Motors Limited and the trustee and president of the
Aluminium Casters Association and is also a member of the Society of Indian Automobile Manufacturers. Under
his leadership, Jaya Hind Industries Limited won the “Best Foundry in India– Large Sector” award in 2008, 2010,
2014, 2016 and 2018. He is also the managing director of Jaya Hind Industries Limited and a director on the board
of directors of, among others, Force MTU Power Systems Private Limited and Jaya Hind Montupet Private
Limited. He was appointed as an Independent Director on our Board with effect from January 27, 2021.

Shradha Suri is an Independent Director of our Company. She holds a master’s degree of science in international
marketing and management from the University of Leeds and a master’s of science in analysis, design and
management of information systems from the London School of Economics and Political Science, University of
London. She has over 20 years of experience in the automotive industry. She is the Managing Director of Subros
Limited and has played a key role in the management of affairs, formulation and implementation of policies,
directing strategy towards profitable growth and operations for Subros Limited. She is also the chairperson of
Northern Region of Automotive Components Manufacturers Association of India and a member of Confederation
of Indian Industry Manufacturing Council. She was appointed as an Independent Director on our Board with effect
from August 5, 2020.

Venkata Rama Subbu Behara (B V R Subbu) is an Independent Director of our Company. He holds a bachelor’s
degree in arts (honours) from the Bangalore University and a master’s degree of arts in economics from the
Jawaharlal Nehru University. He also holds a post graduate diploma in international trade from the Indian Institute
of Foreign Trade. He is an auto industry veteran who has served as the president of Hyundai Motor India Limited
and earlier held positions in Tata Motors Limited. He is a presently a director on the board of directors of KPIT
Technologies Limited, Ola Electric Mobility Private Limited, Greaves Cotton Limited, Ampere Vehicles Private
Limited and MTAR Technologies Limited, among others. He was appointed as an Independent Director on our
Board with effect from July 5, 2019.

Confirmations

None of our Directors is or was a director of any listed company during the five years immediately preceding the
date of this Draft Red Herring Prospectus, whose shares have been or were suspended from being traded on any
stock exchange during their tenure.

None of our Directors is or was a director of any listed company which has been or was delisted from any stock
exchange during their tenure.

Except for (a) Vivek Vikram Singh (nominated as Group Chief Executive Officer of our Company) and Sunjay
Kapur who were nominated by Sona Autocomp in terms of the SHA on our Board; and (b) Ganesh Mani and
Amit Dixit who were nominated by Singapore Topco, there is no arrangement or understanding with the major
shareholders, customers, suppliers or others, pursuant to which any of our Directors were appointed on the Board
or as a member of senior management.

Further, none of our Directors have been identified as wilful defaulters as defined under the SEBI ICDR
Regulations.

Terms of Appointment of our Executive Director

Vivek Vikram Singh

Pursuant to the resolution passed by the Board on July 5, 2019, Vivek Vikram Singh was appointed as the
Managing Director and Group Chief Executive Officer of our Company for a term of three years from July 5,
2019 and his appointment was subsequently approved by the Shareholders at the EGM held on July 5, 2019.

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Further, pursuant to the resolutions passed by our Board and Shareholders on February 12, 2021 and February 22,
2021 respectively, the term of Vivek Vikram Singh was amended to make him liable to retire by rotation. In terms
of the Board resolution dated July 5, 2019, Vivek Vikram Singh is entitled to receive remuneration comprising
salary, perquisites and other allowances. Pursuant to the resolution passed by our Board and Shareholders on July
5, 2019 each, his remuneration was fixed as per the provisions of Sections 196, 197 and 203 read with Schedule
V of the Companies Act, Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The
overall remuneration payable to Vivek Vikram Singh for the Financial Year 2020 was as follows:

Particulars Remuneration
Basic salary ₹ 0.46 million per month
Special allowance* ₹ 0.91 million per month
Perquisites • House rent allowance including gas, electricity, water,
medical reimbursement, soft furnishings and leave travel
concessions for self and family, medical insurance etc.
The value of these perquisites was restricted to ₹ 0.2
million per month;

• Chauffer driven car for official duties or car allowance as

per Company’s policy;

• Provision of telephone / mobile as per our Company’s

policy;

• Company’s contribution to provident fund and

superannuation fund (if applicable);

• Gratuity not exceeding half month’s salary for each

completed year of service; and

• Encashment of leave as per Company’s policy.

* In the absence or inadequacy of profits in any financial year during Vikram Vivek Singh’s tenure as Group Chief Executive
Officer of our Company, the above remuneration shall be the minimum remuneration payable to him. In addition to the
above salary and perquisites, the variable amount to be paid may vary according to the performance of our Company and
as may be decided by our Board/ Nomination and Remuneration Committee from time to time.

Vivek Vikram Singh has also entered into an employment agreement dated November 25, 2019 with our Company
which includes details of his remuneration, allowances and perquisites. Further, in accordance with the
employment agreement, his remuneration includes house rent allowance, special allowance, vehicle allowance,
monthly reimbursements, among others.

Payment or benefit to Directors of our Company

Details of the sitting fees or other remuneration, including any contingent or deferred compensation accrued for
the year, paid to our Directors in Financial Year 2020 are set forth below.

Remuneration to our Executive Director

Details of the remuneration paid to our Managing Director and Group Chief Executive Officer in Financial Year
2020 are set forth below:

S. No. Name of executive Director Remuneration (in ₹ million)

1. Vivek Vikram Singh 27.60*
*
Includes variable pay for Financial Year 2019 and an accrued amount of approximately ₹ 3.03 million pertaining to Financial Year 2020
paid to Vivek Vikram Singh in Financial Year 2021.

Remuneration to our Non-Executive Directors

(a) Chairman

Our Chairman and Non-Executive Director, Sunjay Kapur is entitled to a remuneration of ₹ 24.00 million
per annum; and (b) certain perquisites such as reimbursement of travel expenses (including boarding,
lodging, airfare, and conveyance) for the purposes of attending customer meetings and industry
association meetings on actual basis, use of car owned by the Company with a chauffer provided by our

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 Company, memberships to industry associations, professional bodies and clubs etc. The details of the
remuneration paid to the Sunjay Kapur in the Financial Year 2020 is set forth below:

S. No. Name of Director Sitting Fees (in ₹ Commission Total Remuneration

million) (in ₹ million) (in ₹ million)
1. Sunjay Kapur Nil 17.74 27.44*
* Includes the remuneration of ₹ 9.70 million paid to Sunjay Kapur for the period between April 1, 2019 and July 4,
2019 in his capacity as erstwhile managing director of our Company.

(b) Independent Directors

Our Independent Directors are entitled to the sitting fees of (a) ₹ 0.05 million for attending each meeting
of our Board and Audit Committee; (b) ₹ 0.01 million for attending each meeting of other board
committees of our Company. Details of the remuneration paid to the Independent Directors of our
Company in the Financial Year 2020 are set forth below.

S. Name of Independent Director Sitting Fees (in ₹ Commission Total Remuneration

No. million) (in ₹ million) (in ₹ million)
1. Venkata Rama Subbu Behara (B 0.37 Nil 0.37
V R Subbu)
*
Since Shradha Suri, Prasan Abhaykumar Firodia and Jeff Overly were appointed as Independent Directors after
March 31, 2020, no remuneration was paid to them during Financial Year 2020.

(c) Nominee Directors

The Nominee Directors are not entitled to any sitting fees for attending meetings of the Board and its
Committees.

Bonus or Profit Sharing Plan of the Directors

None of our Directors are entitled to any bonus or profit-sharing plan of our Company.

Remuneration paid to Directors of our Company by our Subsidiaries

Except for Venkata Rama Subbu Behara (B V R Subbu) who was paid a commission of ₹ 2.90 million and a
sitting fees of ₹ 1.10 million for Financial Year 2020 for attending the meetings of board of directors of Comstar
Automotive, none of our Directors received remuneration or are entitled to receive remuneration from our
Subsidiaries for the Financial Year 2020.

Shareholding of Directors in our Company

As per our Articles of Association, our Directors are not required to hold any qualification shares.

As of the date of filing of this Draft Red Herring Prospectus, none of our Directors hold any Equity Shares.

Interests of Directors

(a) All our Directors may be deemed to be interested to the extent of remuneration and reimbursement of
expenses, if any, payable to them by our Company as well as sitting fees, if any, payable to them for
attending meetings of our Board or Committees thereof. For further details, see “– Terms of Appointment
of our Executive Director” and “– Payment or benefit to Directors of our Company”.

(b) Except for Sunjay Kapur, who is one of our Promoters, none of our Directors have any interests in the
promotion or formation of our Company.

(c) None of our Directors have any interest in any property acquired or proposed to be acquired of our
Company or by our Company.

(d) Further, none of our Directors have any interest in any transaction by our Company for acquisition of
land, construction of building or supply of machinery.

(e) No consideration in cash or shares or otherwise has been paid or agreed to be paid to any of our Directors
or to the firms or companies in which any of our Directors are interested as a member, by any person,

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 either to induce him to become, or to qualify him as a Director, or otherwise for services rendered by our
Directors or by the firm or company in which they are interested, in connection with the promotion or
formation of our Company. However, our nominee directors may be entitled to receive remuneration and
other benefits in the ordinary course of business from affiliates of the entities nominating them.

(f) Our nominee directors may be deemed to be interested to the extent of the shareholding in our Company
of the entities nominating them.

(g) Our Directors may also be interested to the extent of Equity Shares, if any (together with dividends and
other distributions in respect of such Equity Shares), held by the entities in which they are associated,
directly or indirectly, as promoters, directors, partners, proprietors or trustees or held by their relatives.
Certain of our Directors may be deemed to be interested to the extent of options granted to them pursuant
to ESOP 2020. For details, see “Capital Structure” beginning on page 71.

(h) No loans have been availed by our Directors from our Company.

Changes in our Board in the last three years

Details of the changes in our Board in the last three years preceding the date of this Draft Red Herring Prospectus
are set forth below.

S. Name Date of Change Reason

No.
1. Neeraj Mohan February 12, 2021 Resignation
2. Jeff M. Overly February 12, 2021 Appointment
3. Prasan Abhaykumar Firodia January 27, 2021 Appointment
4. Prasan Abhaykumar Firodia January 27, 2021 Resignation
5. Amit Jain January 1, 2021 Resignation
6. Shradha Suri August 5, 2020 Appointment
7. Pallavi Joshi Bakhru May 2, 2020 Resignation
8. Rani Kapur August 22, 2019 Resignation
9. Bhaswati Mukherjee August 20, 2019 Resignation
10. Siddharth Pradip Kothari July 10, 2019 Resignation
11. Vivek Vikram Singh July 5, 2019 Appointment
12. Ganesh Mani July 5, 2019 Appointment
13. Amit Dixit July 5, 2019 Appointment
14. Neeraj Mohan July 5, 2019 Appointment
15. Amit Jain July 5, 2019 Appointment
16. Prasan Abhaykumar Firodia July 5, 2019 Appointment
17. Venkata Rama Subbu Behara (B V R July 5, 2019 Appointment
Subbu)
18. Vadapalli Vikram Verma July 5, 2019 Resignation
19. Jurgen Klaus Theodor Ziegler July 5, 2019 Resignation

Borrowing Powers of Board

As per Section 180(1)(c) of the Companies Act, our Board is authorised to borrow money and create charge and/
or pledge, mortgage, hypothecate on its properties, as permissible, within the overall limits prescribed under
Section 180(1)(c) read with Section 180(1)(a) of the Companies Act.

Corporate Governance

The provisions of the SEBI Listing Regulations with respect to corporate governance will be applicable to us
immediately upon the listing of our Equity Shares with the Stock Exchanges. We are in compliance with the
requirements of the applicable regulations, including the SEBI Listing Regulations, the Companies Act and other
applicable regulations of SEBI, in respect of corporate governance including in respect of the constitution of the
Board and Committees thereof, and formulation and adoption of policies. Our Board has been constituted in
compliance with the Companies Act and the SEBI Listing Regulations.

As on the date of this Draft Red Herring Prospectus, our Board comprises eight Directors, including four
Independent Directors (including one woman independent director), one Executive Director (who is also our
Managing Director and Group Chief Executive Officer), and three Non-Executive Directors. In compliance with

211
Section 152 of the Companies Act, not less than two thirds of the Directors (excluding Independent Directors) are
liable to retire by rotation.

Our Company undertakes to take all necessary steps to continue to comply with all the requirements of SEBI
Listing Regulations and the Companies Act.

Committees of the Board

Details of the Committees are set forth below. In addition to the Committees detailed below, our Board of
Directors may, from time to time constitute Committees for various functions.

Audit Committee

The members of the Audit Committee are:

Sr. No. Name of Director Committee Designation

1. Venkata Rama Subbu Behara (B V R Subbu) Chairperson
2. Prasan Abhaykumar Firodia Member
3. Jeff M. Overly Member
4. Ganesh Mani Member

The Audit Committee was constituted pursuant to resolution passed by our Board in its meeting held on June 5,
2001 and was last reconstituted pursuant to resolution passed by our Board in its meeting held on February 12,
2021. The scope and functions of the Audit Committee are in accordance with Section 177 of the Companies Act
and the SEBI Listing Regulations and its terms of reference as stipulated pursuant to resolution passed by our
Board in its meeting held on February 12, 2021 are set forth below.

• Overseeing our Company’s financial reporting process and disclosure of its financial information to
ensure that its financial statements are correct, sufficient and credible;

• Recommending to our Board the appointment, remuneration and terms of appointment of the auditor of
our Company;

• Approving payments to statutory auditors for any other services rendered by the statutory auditors;

• Reviewing, with the management, the annual financial statements and auditor’s report thereon before
submission to our Board for approval, with particular reference to:

o Matters required to be included in the Director’s Responsibility Statement to be included in our

Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act;

o Changes, if any, in accounting policies and practices and reasons for the same;

o Major accounting entries involving estimates based on the exercise of judgment by management;

o Significant adjustments made in the financial statements arising out of audit findings;

o Compliance with listing and other legal requirements relating to financial statements;

o Disclosure of any related party transactions; and

o Modified opinion(s) in the draft audit report.

• Reviewing, with the management, the quarterly and half-yearly financial statements before submission
to our Board for approval;

• Reviewing, with the management, the statement of uses/ application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the statement of funds utilised for purposes other than
those stated in the offer document/ prospectus/ notice and the report submitted by the monitoring agency

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 monitoring the utilisation of proceeds of a public or rights issue and making appropriate
recommendations to our Board to take up steps in this matter.

• Reviewing and monitoring the statutory auditor’s independence and performance, and effectiveness of
audit process;

• Approval or any subsequent modifications of transactions of our Company with related parties;

• Scrutinising of inter-corporate loans and investments;

• Valuation of undertakings or assets of our Company, wherever it is necessary;

• Evaluating of internal financial controls and risk management systems;

• Reviewing, with the management, the performance of statutory and internal auditors, and adequacy of
the internal control systems;

• Reviewing the adequacy of internal audit function if any, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure coverage
and frequency of internal audit;

• Discussing with internal auditors on any significant findings and follow up thereon;

• Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting
the matter to our Board;

• Discussing with statutory auditors before the audit commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of concern;

• Looking into the reasons for substantial defaults in the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared dividends) and creditors;

• Establishing and reviewing the functioning of the whistle blower mechanism/ vigil mechanism to report
genuine concerns or grievances ;

• Approving the appointment of the chief financial officer after assessing the qualifications, experience
and background, etc. of the candidate;

• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee and
any other terms of reference as may be decided by the Board and/or specified/provided under the
Companies Act, the Listing Regulations or by any other regulatory authority; and

• Reviewing the utilization of loans and/ or advances from/investment by the holding company in any
subsidiary exceeding rupees 100 crore or 10% of the asset size of the subsidiary, whichever is lower
including existing loans / advances / investments existing as per applicable law.

• Reviewing compliance with the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 at
least once in a financial year and shall verify that the systems for internal control are adequate and are
operating effectively.

Powers of the Audit Committee

The powers of the Audit Committee shall include the following:

o To investigate any activity within its terms of reference;

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o To seek information from any employee;

o To obtain outside legal or other professional advice; and

o To secure attendance of outsiders with relevant expertise, if it considers necessary.

Reviewing Powers

The Audit Committee shall mandatorily review the following information:

o Management’s discussion and analysis of financial condition and results of operations;

o Statement of significant related party transactions (as defined by the Audit Committee), submitted by the
management;

o Management letters / letters of internal control weaknesses issued by the statutory auditors;

o Internal audit reports relating to internal control weaknesses;

o The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review
by the Audit Committee;

o Examination of the financial statements and the auditors’ report thereon; and

o Statement of deviations:

▪ quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to

stock exchange(s) in terms of the SEBI Listing Regulations; and

▪ annual statement of funds utilised for purposes other than those stated in the
document/prospectus/notice in terms of Regulation 32(7) of SEBI Listing Regulations.

Nomination and Remuneration Committee

The members of the Nomination and Remuneration Committee are:

Sr. No. Name of Director Committee Designation

1. Jeff M. Overly Chairperson
2. Amit Dixit Member
3. Sunjay Kapur Member
4. Venkata Rama Subbu Behara (B V R Subbu) Member

The Nomination and Remuneration Committee was constituted pursuant to resolution passed by our Board in its
meeting held on July 30, 2002 and last reconstituted pursuant to resolution passed by our Board in its meeting
held on February 12, 2021. The scope and functions of the Nomination and Remuneration Committee are in
accordance with Section 178 of the Companies Act and the SEBI Listing Regulations and its terms of reference
as stipulated pursuant to resolution passed by our Board in its meeting held on February 12, 2021 are set forth
below.

• Formulating the criteria for determining qualifications, positive attributes and independence of a director
and recommending to our Board a policy, relating to the remuneration of the directors, key managerial
personnel and other employees;

• Identifying persons who qualify to become directors or who may be appointed in senior management in
accordance with the criteria laid down, recommending to the Board their appointment and removal, and
carrying out evaluations of every director’s performance and specify the manner for effective evaluation
of performance of our Board, its committees and individual directors to be carried out either by our
Board, by the Nomination and Remuneration Committee or by an independent external agency and
review its implementation and compliance;

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• Formulating of criteria for evaluation of the performance of the independent directors and the Board;

• Devising a policy on Board diversity;

• Determining whether to extend or continue the term of appointment of the independent director, on the
basis of the report of performance evaluation of independent directors;

• Recommending to our Board, all remuneration, in whatever form, payable to senior management; and

• Performing such other activities as may be delegated by the Board and/or specified/provided under the
Companies Act, the SEBI Listing Regulations, any applicable law or by any other regulatory authority.

Stakeholders’ Relationship Committee

The members of the Stakeholders’ Relationship Committee are:

Sr. No. Name of Director Committee Designation

1. Shradha Suri Chairperson
2. Prasan Abhaykumar Firodia Member
3. Jeff M. Overly Member
4. Vivek Vikram Singh Member

The Stakeholders’ Relationship Committee was constituted pursuant to resolution passed by our Board in its
meeting held on February 12, 2021. The scope and functions of the Stakeholders’ Relationship Committee are in
accordance with Section 178 of the Companies Act and the SEBI Listing Regulations and its terms of reference
as stipulated pursuant to resolution passed by our Board in its meeting held on February 12, 2021 are set forth
below.

• Consider and resolve grievances of security holders of our Company, including complaints related to
transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of
new/duplicate certificates, general meetings, etc.;

• Review of measures taken for effective exercise of voting rights by shareholders. Review of adherence
to the service standards adopted by our Company in respect of various services being rendered by the
Registrar and Share Transfer Agent.

• Review of the various measures and initiatives taken by our Company for reducing the quantum of
unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices
by the shareholders of our Company.

• To authorise affixation of common seal of our Company, if any;

• Ensure proper and timely attendance and redressal of investor queries and grievances;

• Carrying out any other functions contained in the Companies Act and/or equity listing agreements (if
applicable), as and when amended from time to time; and

• To further delegate all or any of the power to any other employee(s), officer(s), representative(s),
consultant(s), professional(s), or agent(s).

Corporate Social Responsibility Committee

The members of the Corporate Social Responsibility Committee are:

Sr. No. Name of Director Committee Designation

1. Prasan Abhaykumar Firodia Chairperson
2. Sunjay Kapur Member
3. Shradha Suri Member
4. Ganesh Mani Member

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The Corporate Social Responsibility Committee was constituted pursuant to resolution passed by our Board in its
meeting held on March 13, 2014 and last reconstituted pursuant to resolution passed by our Board in its meeting
held on February 12, 2021. The scope and functions of the Corporate Social Responsibility Committee are in
accordance with Section 135 of the Companies Act and its terms of reference as stipulated in the charter of
Corporate Social Responsibility Committee adopted pursuant to resolution passed by our Board in its meeting
held on August 14, 2020 are set forth below.

• Formulate and recommend to the Board, the CSR Policy of our Company and any amendment thereto
from time to time, indicating the activities to be undertaken by our Company in areas or subject, as
specified in Schedule VII of the Companies Act;

• Review and recommend the amount of expenditure to be incurred by our Company on various CSR
activities;

• Monitor the adherence by our Company with the CSR Policy from time to time;

• Ensure that our Company is taking appropriate measures to undertake CSR activities as mentioned in the
CSR Policy;

• Have access to any internal information necessary to fulfil its oversight role; and

• Perform other activities related to the CSR charter as requested by our Board or to address issues related
to any significant subject within its terms of reference.

Risk Management Committee

The members of the Risk Management Committee are:

Sr. No. Name of Director Committee Designation

1. Jeff M. Overly Chairperson
2. Sunjay Kapur Member
3. Ganesh Mani Member
4. Vivek Vikram Singh Member

The Risk Management Committee was constituted pursuant to resolution passed by our Board in its meeting held
on February 12, 2021. The scope and functions of the Risk Management Committee are in accordance with SEBI
Listing Regulations and its terms of reference as provided in the risk management policy adopted by our Board
on February 12, 2021 are set forth below:

• Laying down procedures to inform our Board about the risk assessment and minimization procedures;

• To assist the Board with regard to the identification, evaluation and mitigation of risks and assess
management actions to mitigate such risks;

• To evaluate and ensure that our Company has an effective system internal control systems to enable
identifying, mitigating and monitoring of the risks related to the business of our Company;

• To review effectiveness of risk management and control system;

• To evaluate risks related to cyber security and ensure appropriate procedures are placed to mitigate these
risks in a timely manner;

• Periodic reporting to our Board of non-financial risk management issues and actions taken in such regard;

• To ensure the implementation of the suggestions / remarks / comments, if any, of our Board on the risk
management plan and system; and

• Performing such other functions as may be assigned by our Board from time to time.

216
 Management Organisation Structure

217
Key Managerial Personnel

The details of the Key Managerial Personnel, in terms of the Companies Act, as of the date of this Draft Red Herring Prospectus
are as follows:

Vivek Vikram Singh is the Managing Director and Group Chief Executive Officer of our Company. For details, see “– Brief
Biographies of Directors”. For details of compensation paid to him during Financial Year 2020, see “– Payment or benefit to
Directors of our Company – Remuneration to our Executive Director”.

Rohit Nanda is the Group Chief Financial Officer of our Company. He is a qualified chartered accountant and has significant
experience in diverse industries including steel, engineering, pharma, chemical and industrial goods, among others. He is
responsible for, among others, capital allocation, financial reporting and investment decisions in our Company. Prior to joining
our Company, he was associated with, among others, Usha Martin Limited, MTAR Technologies Private Limited, Jindal
Stainless Limited, SRF Limited and Ranbaxy Laboratories Limited. He joined our Company on April 11, 2019. During the
Financial Year 2020, he received a remuneration of ₹ 18.48 million#.

Ajay Pratap Singh is the Vice President (Legal), Company Secretary and Compliance Officer of our Company. He holds a
bachelor’s degree in law from the University of Delhi and is also a qualified company secretary. He also attended a certificate
course in competition law from the Indian Institute of Corporate Affairs under the aegis of the Ministry of Corporate Affairs. He
has significant experience in, among others, mergers, acquisitions, private equity, joint ventures, company secretarial and
corporate governance matters. He is responsible for leading the secretarial functions and corporate legal portfolio of our
Company. Prior to joining our Company, he has worked with Hindustan Construction Company Limited and was also associated
with Nuvoco Vistas Corporation Limited (previously known as Lafarge India Limited), Jaypee Hotels Limited, Hero Motors
Limited and Abhipra Capital Limited. He joined our Company on February 24, 2020. During the Financial Year 2020, he
received a remuneration of ₹ 0.52 million.

Sat Mohan Gupta is the director and chief executive officer of Comstar Automotive. He completed a master’s degree course in
commerce from the University of Delhi and is a qualified cost and management accountant. He is responsible for, among others,
developing new products and achieving operational excellence in Comstar Automotive. He has over 35 years of experience in
the auto industry. He joined Comstar Automotive in 1997. He was designated as the chief executive officer of Comstar
Automotive on August 20, 2012. During the Financial Year 2020, he received a remuneration of ₹ 20.08 million** from Comstar
Automotive.

Kiran Manohar Deshmukh is the Chief Technology Officer of our Company. He holds a bachelor’s degree of technology in
metallurgical engineering from the Indian Institute of Technology, Bombay. He has significant experience in automotive
components manufacturing and has worked in the areas of, among others, manufacturing, process control and design. He was
honored with the Ashoka award by the Indian Society for Quality in 2006. He is responsible for, among others, developing new
technology partnerships and building competencies in manufacturing excellence in our Company. Prior to joining our Company,
he has worked with Bharat Gears Limited where during the term of his employment, he attended the training program at Gleason
Works. He has also worked with Sona Koyo Steering Systems Limited as the deputy managing director and executive vice
chairman, CQ Workskills Services Private Limited (now Sona Skill Development Centre Limited) as the managing director,
SKAP Forging Private Limited as a director. He joined our Company on July 1, 2019. During the Financial Year 2020, he
received a remuneration of ₹ 9.42 million#.
Vadapalli Vikram Verma is the chief executive officer of driveline division of our Company. He holds a bachelor’s degree of
technology in mechanical engineering from the Karnataka Regional Engineering College, Surathkal. He has significant
experience in the automotive industry. He is responsible for, among others, customer acquisitions and providing leadership for
operational excellence in our Company. Prior to joining our Company, he has worked with Sona Steering Systems Limited (now
JTKET Limited). He joined our Company on April 26, 2007. During the Financial Year 2020, he received a remuneration of ₹
24.94 million*.
#
Accrued amount of variable pay pertaining to Financial Year 2020 was paid in Financial Year 2021.
*
Includes variable pay for Financial Year 2019 and accrued amount of variable pay pertaining to Financial Year 2020 paid in Financial Year
2021.
**
Includes variable pay for Financial 2020 paid in the same Financial Year.

The aggregate remuneration paid to the Key Managerial Personnel (other than the Key Managerial Personnel in terms of the
Companies Act), in the Financial Year 2020 is ₹ 54.44 million.

All our Key Managerial Personnel are permanent employees of our Company or our Indian Subsidiaries, as the case may be.

218
Except for Vivek Vikram Singh who was nominated by Sona Autocomp as Group Chief Executive Officer in terms of the SHA
on our Board, there is no arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to
which any of our Key Managerial Personnel have been appointed.

Shareholding of Key Managerial Personnel in our Company

Except for Kiran Manohar Deshmukh who holds 12 Equity Shares, none of our Key Managerial Personnel hold any Equity
Shares as on the date of this Draft Red Herring Prospectus.

Relationship between our Key Managerial Personnel

None of our Key Managerial Personnel are related to each other.

Interests of Key Managerial Personnel

Other than as disclosed in “– Interests of Directors” on page 210, none of the Key Managerial Personnel of our Company have
any interests in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per their
terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. Except for the
variable pay payable to our KMPs, there is no contingent or deferred compensation accrued for the year payable to the Key
Managerial Personnel, even if the compensation is payable at a later date.

Loans to Key Managerial Personnel

No loans have been availed by our Key Managerial Personnel from our Company.

Changes in our Key Managerial Personnel in the three immediately preceding years:

Other than as disclosed in “- Changes in the Board in the last three years” on page 211, the changes in our Key Managerial
Personnel in the three immediately preceding years are set forth below.

Name Date of change Reason

Munish Sapra January 1, 2019 Resignation from the position of chief financial officer with effect
from January 1, 2019
Rohit Nanda April 11, 2019 Appointed as Group Chief Financial Officer with effect from April
11, 2019
Kiran Manohar Deshmukh July 1, 2019 Appointed as Chief Technology Officer with effect from July 1, 2019
Raajesh Kumar Gupta February 29, 2020 Resigned from the position of Vice President (Legal) and Company
Secretary of the Company with effect from February 29, 2020
Ajay Pratap Singh February 24, 2020 Appointed as the Vice President (Legal) and Company Secretary of
the Company with effect from February 24, 2020

Payment or benefit to officers of our Company

Except any vested options (where applicable) and statutory entitlements for benefits upon termination of their employment in
our Company or retirement, no officer of our Company, including our Directors, Key Managerial Personnel, is entitled to any
benefits upon termination of employment under any service contract entered into with our Company. Except as disclosed in (a)
“History and Certain Corporate Matters – Shareholders’ agreements and other agreements – Exit Return Incentive Plan” on
page 202; (b) this Draft Red Herring Prospectus; and (c) any statutory payments made by our Company, no amount or benefit
has been paid or given, and no consideration for payment of giving such benefit has been paid or given in the two years preceding
the date of this Draft Red Herring Prospectus or is intended to be paid or given to any of our Company’s officers except
remuneration for services rendered as Directors, officers or employees of our Company.

Bonus or profit sharing plan for our Key Managerial Personnel

None of our Key Managerial Personnel are party to any bonus or profit-sharing plan of our Company.

Employee stock option plan and employee stock purchase plan

For details of our employee stock option plans, see “Capital Structure” beginning on page 71.

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 OUR PROMOTERS AND PROMOTER GROUP

Sunjay Kapur, Sona Autocomp and Singapore Topco are the Promoters of our Company as on the date of this Draft Red Herring
Prospectus.

While Sunjay Kapur does not directly hold any Equity Shares in our Company as on the date of this Draft Red Herring Prospectus,
Sona Autocomp presently holds 193,208,904 Equity Shares, aggregating to 33.7% of the pre-Offer issued, subscribed and paid-
up Equity Share capital of our Company and Singapore Topco presently holds 379,771,512 Equity Shares, aggregating to 66.2%
of the pre-Offer issued, subscribed and paid-up Equity Share capital of our Company. For further details, see “Capital Structure”,
on page 71.

Sona Promoters

Sunjay Kapur

Sunjay Kapur, born on October 15, 1971, is a citizen of the US. He resides at 11, The Green,
Rajokri, Delhi - 110038, India. He is the Chairman and a Non-Executive Director of our
Company. For further details, see “Our Management – Brief Biographies of Directors” on page
207.

His PAN is ABCPK7670F and his driving license number is DL-0820160341541.

His Aadhaar card number is 531307624368.

Sona Autocomp Holding Private Limited

Corporate information

Sona Autocomp was incorporated as Mandira Investment and Finance Company Private Limited on February 12, 1982, under
the Companies Act, 1956. Subsequently, the name of the company was changed to Sona Autocomp Holding Private Limited on
August 9, 2007. The name of the company was again changed to Sona Autocomp Holding Limited on March 12, 2014 and
subsequently back to Sona Autocomp Holding Private Limited on August 7, 2017. The registered office of Sona Autocomp is
located at J-1201, BPTP Park Serene, Sector 37D, Gurugram, Haryana – 122 006, India and its CIN is
U50404HR1982PTC082436.

Sona Autocomp is authorised to inter alia engage in the business of investing, acquiring or underwriting securities of companies
or any government bodies, lending or borrowing money and selling, exporting, distributing or dealing in all kinds of automobile
parts and it has not changed its activities from the date of its incorporation.

Board of directors

1) Sunjay Kapur

2) Priya Sachdev Kapur

Shareholding pattern

The shareholding pattern of Sona Autocomp is as follows:

Name of shareholder Percentage of

shareholding (%)
Rani Kapur – RK Family Trust 42.2
SKAP Forging Private Limited 32.5
Raghuvanshi Investment Private Limited 25.1
Sunjay Kapur Negligible*
Kiran Manohar Deshmukh Negligible*
Total 100
*Holds one share

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Promoter of Sona Autocomp

Sunjay Kapur is the promoter of Sona Autocomp. RK Family Trust is the largest shareholder in Sona Autocomp.

The RK Family Trust Deed (“RK Family Trust”) was settled on October 26, 2017 under the Trusts Act by Mrs. Rani Kapur.
RK Family Trust is a non-discretionary private family trust which is not revocable. The trustees of RK Family Trust are Mrs.
Rani Kapur, Mr. Sunjay Kapur and Mr. Sanjay Mohan Labroo. Presently, the sole beneficiary of the RK Family Trust is Sunjay
Kapur.

Change in control of Sona Autocomp

There has been no change in control of Sona Autocomp in the last three years preceding the date of this Draft Red Herring
Prospectus.

Singapore VII Topco III Pte Ltd.

Corporate information

Singapore Topco was incorporated as a private limited company under the laws of Singapore on May 17, 2016 having UEN:
201613351K. The registered office of Singapore Topco is located at 77 Robinson Road, #13-00, Robinson 77, Singapore –
068896.

The principal activity of Singapore Topco is to serve as an investment holding company and it has not changed its activities from
the date of its incorporation.

Board of directors

1) William Christian Greer Nicholson

2) Kimmo Benjam Tammela

3) See Kwang Yew

4) Lee Lai Juan (Alternate Director)

Shareholding pattern

The shareholding pattern of Singapore Topco is as follows:

Name of shareholder Percentage of

shareholding (%)
BCP Topco I Pte. Ltd. 100.00
Total 100.00

Promoter of Singapore Topco

BCP Topco I Pte Ltd. is the promoter of Singapore Topco.

BCP Topco I Pte Ltd.

BCP Topco I Pte Ltd. is a private limited company organized under the laws of Singapore having UEN: 201736980N. BCP
Topco I Pte Ltd. is an affiliate of The Blackstone Group Inc. (“Blackstone”). Blackstone (NYSE: BX) is one of the world’s
leading investment firms. Blackstone’s asset management businesses include investment vehicles focused on real estate, private
equity, public debt and equity, growth equity, opportunistic, non-investment grade credit, real assets and secondary funds, all on
a global basis. Through its different businesses, Blackstone had total assets under management of USD $619 billion as of
December 31, 2020.

Presently, no natural person is in direct control (i.e. holding 15% or more voting rights) of BCP Topco I Pte Ltd.

Board of directors of BCP Topco I Pte Ltd.

The board of directors of BCP Topco I Pte Ltd. comprise the same persons as the board of directors of Singapore Topco.

Shareholding pattern of BCP Topco I Pte Ltd.

The shareholding pattern of BCP Topco I Pte Ltd. is as follows:

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Name of shareholder Percentage of
shareholding (%)
Singapore VII Holding Co. Pte. Ltd. 38.7
BCP Asia (SG) Holdings Co. Pte. Ltd. 57.5
Others 3.7
Total 100.00

Change in control of Singapore Topco

There has been no change in the control of Singapore Topco in the last three years preceding the date of this Draft Red Herring
Prospectus.

Our Company confirms that the permanent account number, bank account numbers and passport number of Sunjay Kapur and
the permanent account numbers, bank account numbers, company registration numbers and the addresses of the registrar of
companies or corresponding authorities where Sona Autocomp and Singapore Topco, are registered, shall be submitted to the
Stock Exchanges at the time of filing this Draft Red Herring Prospectus.

Change of Promoter

Sona Promoters and Singapore Topco are not the original promoters of the Company.

While the Sona Promoters were invested (directly and indirectly) in our Company prior to the five years immediately preceding
the date of filing of this Draft Red Herring Prospectus, Singapore Topco invested in our Company on July 5, 2019 and acquired
66.2% percent of the total issued and paid up Equity Share capital of our Company by subscribing to certain Equity Shares and
Preference Shares issued by our Company and purchasing certain Equity Shares from an existing shareholder of our Company.
On January 27, 2021, the Preference Shares have been converted into 594,436 Equity Shares of the Company. For details of the
terms of acquisition and consideration paid for acquisition, see “Capital Structure” and “History and Other Corporate Matters”
on pages 71 and 191, respectively.

Interests of our Promoters

The Sona Promoters are interested in our Company to the extent of their shareholding, in our Company and dividend payable, if
any, and other distributions in respect of the Equity Shares held by them. For details of the shareholding of our Promoter in our
Company, see “Capital Structure – Shareholding of our Promoters and Promoter Group” on page 77. Sona Autocomp is also
entitled to appoint nominee directors on the Board of the Company. For further details, see “History and Certain Other Corporate
Matters – Key terms of Subsisting Shareholders Agreements” on page 200. The Sona Promoters have no interest in any property
acquired in the three years preceding the date of this Draft Red Herring Prospectus or any property that is proposed to be acquired
by our Company or in any transaction by our Company for acquisition of land, construction of building or supply of machinery.
Sunjay Kapur, is also the Chairman and a Non-Executive Director of our Company and a director on some of our Subsidiaries
and may be deemed to be interested to the extent of any managerial remuneration or reimbursement of expenses payable to him
by our Company and/or our Subsidiaries for providing professional services, attending meetings of our Board or a Committee
thereof or the meetings of the boards or committees of our Subsidiaries. For further details, see “Our Management” on page 204.

Singapore Topco is interested in our Company to the extent it has invested in our Company and to the extent of its shareholding
in our Company and dividends payable by our Company, if any, and other distributions in respect of the Equity Shares held by
it. For details of the shareholding of our Promoter in our Company, see “Capital Structure – Shareholding of our Promoters and
Promoter Group” on page 77. Singapore Topco is also entitled to appoint nominee directors on the Board of the Company. For
further details, see “History and Certain Other Corporate Matters – Key terms of Subsisting Shareholders Agreements” on page
200. Singapore Topco has no interest in any property acquired in in the three years preceding the date of this Draft Red Herring
Prospectus or any property that is proposed to be acquired by our Company or in any transaction by our Company for acquisition
of land, construction of building or supply of machinery.

No sum has been paid or agreed to be paid by the Company to the Sona Promoters, Singapore Topco, or to the firms or companies
in which the Sona Promoters or Singapore Topco are interested as members in cash or shares or otherwise by any person, either
to induce them to become or to qualify them, as directors or promoters or otherwise for services rendered by such promoters or
by such firms or companies in connection with the promotion or formation of our Company.

Payment or benefits to our Promoters and their respective Promoter Groups

Apart from payment of dividend to the Sona Promoters and Singapore Topco, and the professional or managerial remuneration
paid to Sunjay, no amount or benefit has been paid or given by our Company to the Sona Promoters, Singapore Topco or their
respective Promoter Groups during the two years preceding the filing of this Draft Red Herring Prospectus nor is there any
intention to pay or give any amount or benefit to the Sona Promoters, Singapore Topco or their respective Promoter Groups. For
details, see “Our Management – Interest of Directors” on page 210.

222
Indebtedness of our Promoters

Singapore Topco has availed a loan from certain overseas lenders. As on February 15, 2021, an aggregate principal amount of
approximately USD 30 million remains outstanding under this loan. Singapore Topco has accordingly entered into certain
security arrangements with such overseas lenders. Under these arrangements, security has been created over the entire share
capital of the Singapore Topco by BCP Topco I Pte. Ltd. in favour of certain overseas lenders. Pursuant to the terms of the loan,
our Company is required to maintain certain prescribed debt leverage ratios and also ensure compliance with certain financial
and other covenants at the time of evaluating further acquisitions and/or divestments of assets.

Material guarantees given by our Promoters to third parties with respect to Equity Shares

The Sona Promoters or Singapore Topco have not provided any material guarantees to third parties with respect to the Equity
Shares.

Companies or firms with which our Promoters have disassociated in the last three years

The Sona Promoters have not disassociated, sold or transferred their stake in any company or firm in the three years immediately
preceding the date of this Draft Red Herring Prospectus.

Except for the sale of the Comstar Entities to our Company, Singapore Topco has not disassociated, sold or transferred its stake
in any company or firm in the three years immediately preceding the date of this Draft Red Herring Prospectus. For further
details, see “History and Certain Corporate Matters – Acquisition of Comstar Entities” on page 200.

Promoter Group

Sona Promoters Group

A. Natural Persons forming part of the Sona Promoters Group

1. Rani Kapur
2. Kiaan Raj Kapur
3. Azarias Suri Kapur
4. Samaira Kapur
5. Safira Sifat Chatwal
6. Priya Sachdev Kapur
7. Ashok Sachdev
8. Jasbir Sachdev
9. Hans Sachdev
10. Harpreet Sachdev
11. Charu Sachdev

B. Entities forming part of the Sona Promoters Group

1. Azarias Advance Systems Private Limited

2. Phalanx Advanced Systems Private Limited
3. Kiaan Autocomp (FZE) (Dubai)
4. Kiaan Autocomp Holding Germany GmbH
5. Raghuvanshi Investment Private Limited
6. RK Family Trust
7. PHT Beteiligungs GmbH and Co. KG, Germany (dormant)
8. SKAP Forging Private Limited
9. SONA Autocomp Germany GmbH, Germany (filed for insolvency)
10. SONA Autocomp USA LLC, USA (dormant)
11. SONA BLW Driveline LLC, USA (dormant)
12. SONA BLW Hungary Kft.
13. SONA BLW Prazisionsschmiede GmbH, Germany (filed for involvency)
14. SONA BLW Hilfe GmbH, Germany (dormant)
15. SONA Holding B.V, Netherlands
16. Sona Skill Development Centre Limited
17. TSG International Marketing Private Limited
18. Bhodhi Dharma Entertainment & Productions Private Limited
19. Rocknshop Private Limited
20. Galaxy Automobiles Pvt Ltd.
21. TSG Intercontinental Pvt Ltd.

223
 22. Vaishno Films Pvt Ltd.
23. C.L. Sachdev Foundation
24. Autoginie Services Pvt. Ltd.
25. A&S Constructions Pvt. Ltd.
26. India Export House Pvt Ltd.
27. Sachdev Textiles Pvt Ltd.
28. Charu Motors Pvt Ltd.
29. Harpreet Motors Pvt Ltd.
30. 3T Plus Technologies Pvt Ltd.
31. Harpreet Insurance Agent Pvt Ltd.
32. VPM Projects Pvt. Ltd.
33. Krishna Enterprise (Partnership Firm)

Singapore Topco Promoter Group

BCP Topco I Pte Ltd. forms part of the Promoter Group of Singapore Topco.

224
 OUR GROUP COMPANIES

In accordance with the SEBI ICDR Regulations and the applicable accounting standards, for the purpose of identification of
group companies, our Company has considered (i) the companies (other than our Promoters and Subsidiaries) with which there
are related party transactions, as disclosed in the Restated Consolidated Financial Information; and (ii) the companies considered
material by our Board.

Accordingly, in terms of the policy adopted by our Board for determining group companies, our Board has identified the
following as group companies of our Company (“Group Companies”).

1. JTEKT India Limited (“JIL”)

2. SKAP Forging Private Limited (“SFPL”).

3. Sona Management Services Limited (“SMSL”).

4. Sona Skill Development Centre Limited (“SSDCL”).

I. Details of our Group Companies

The details of our Group Companies are provided below:

1. JTEKT India Limited

Corporate Information

JIL (formerly known as Sona Koyo Steering Systems Limited) was incorporated on June 14, 1984 under the Companies
Act, 1956. The corporate identity number of JIL is L29113DL1984PLC018415. The equity shares of JIL are listed on
the National Stock Exchange of India Limited and BSE Limited.

Nature of Activities

JIL is authorised inter-alia to engage in the business of designing, developing, manufacturing, assembling, testing,
buying, selling, distributing, and dealing in automotive steering systems of all types.

Financial Performance

The financial information derived from the audited financial results of JIL for the Fiscals 2020, 2019 and 2018 are set
forth below:

(Figures in ₹ million except per share data)

Particulars Fiscal
2020 2019 2018
Equity capital 244.48 244.48 198.74
Reserves (excluding revaluation reserve) 5,493.51 5,487.94 2,976.41
Sales 15,309.02 17,730.93 12,509.12
Profit/ (loss) after tax 252.88 684.44 308.10
Earnings per share (Basic) 1.13 2.80 1.63
Earnings per share (Diluted) 1.13 2.80 1.63
Net asset value 8,365.71 10,335.37 7,368.25

There are no significant notes of the auditors in relation to the aforementioned financial statements for the last three
Fiscals.

Highest and lowest market price of shares during the preceding six months

Details of the highest and lowest market prices of the equity shares of JIL during the six immediately preceding months
is as set out below:

Month NSE BSE

High (`) Low (`) High (`) Low (`)
August, 2020 91.80 61.05 91.55 61.15
September, 2020 84.20 70.85 84.00 70.95
October, 2020 82.30 72.50 82.00 72.00
November, 2020 87.60 71.10 84.90 72.25
December, 2020 94.35 79.00 94.50 77.00

225
 Month NSE BSE
High (`) Low (`) High (`) Low (`)
January, 2021 104.80 86.05 104.70 86.60
Source: Websites of NSE and BSE.

2. SKAP Forging Private Limited

Corporate Information

SFPL was incorporated on February 22, 2017 under the Companies Act, 2013. The corporate identity number of SFPL
is U28999HR2017PTC082437

Nature of Activities

SFPL is authorised to inter-alia to engage in the development, sale, import, export and dealing in forgings and castings
of all types and equipment and materials used therein or any relation thereof.

Financial Performance

The financial information derived from the audited financial results of SFPL for the Fiscals 2020, 2019 and 2018 are
set forth below:

(Figures in ₹ million except per share data)

Particulars Fiscal
2020 2019 2018
Equity capital 0.30 0.30 0.30
Reserves (excluding revaluation reserve) 79.97 (65.30) (63.67)
Sales 3.16 12.67 12.47
Profit/ (loss) after tax (160.99) (1.63) (65.36)
Earnings per share (Basic) (5342) (54.22) (2171.14)
Earnings per share (Diluted) (5342) (54.22) (2171.14)
Net asset value 80.27 1697.54 1699.17

There are no significant notes of the auditors in relation to the aforementioned financial statements for the last three
Fiscals:

3. Sona Management Services Limited

Corporate Information

SMSL was incorporated on October 20,1993 under the Companies Act, 1956. The corporate identity number of SMSL
is U51101HR1993PLC082438.

Nature of Activities

SMSL is authorised to inter-alia engage in the business of rendering management, consultative and advisory services
in various fields including the management, manufacturing, technology, administration, finance, commerce, law,
economics, labour, industry, public relation, statistics, science, computers, accountancy, taxation, quality control,
processing, educational training, placement, distribution, marketing and sales of goods and/or relating to rendering of
services and rendering of consultancy and other professional services of commercial / technical nature.

Financial Performance

The financial information derived from the audited financial results of SMSL for the Fiscals 2020, 2019 and 2018 are
set forth below:

(Figures in ₹ million except per share data)

Particulars Fiscal
2020 2019 2018
Equity capital 5.20 5.20 5.20
Reserves (excluding revaluation reserve) 508.25 545.21 96.19
Sales 4.37 81.85 175.76
Profit/ (loss) after tax (36.96) 449.02 69.78
Earnings per share (Basic) (71.08) 863.50 134.18
Earnings per share (Diluted) (71.08) 863.50 134.18
Net asset value 513.45 550.41 101.39

226
 There are no significant notes of the auditors in relation to the aforementioned financial statements for the last three
Fiscals.

4. Sona Skill Development Centre Limited

Corporate Information

SSDCL was incorporated on July 23, 2010 under the Companies Act, 1956. The corporate identity number of SSDCL
is U80302HR2010PLC040946.

Nature of Activities

SSDCL is authorised inter-alia to engage in the business of advancing both academic and vocational education in all
its forms and for this purpose do all and any activities/deeds, to the extent permissible by law in India and other
countries.

Financial Performance

The financial information derived from the audited financial results of SSDCL for the Fiscals 2020, 2019 and 2018 are
set forth below:

(Figures in ₹ million except per share data)

Particulars Fiscal
2020 2019 2018
Equity capital 45.15 45.15 45.15
Reserves (excluding revaluation reserve) (39.15) (38.39) (34.47)
Sales Nil Nil 2.93
Profit/ (loss) after tax (0.76) (3.91) (4.34)
Earnings per share (Basic) (0.17) (0.87) (0.96)
Earnings per share (Diluted) (0.17) (0.87) (0.96)
Net asset value 6.01 6.77 10.68

There are no significant notes of the in auditors in relation to the aforementioned financial statements for the last three
Fiscals.

A. Scheme of Amalgamation involving our Group Companies

A scheme of amalgamation dated January 27, 2020 (“Scheme”) has been filed by Sona Autocomp, SFPL, SMSL,
SSDCL and Kiaan Sports and Nutrition Private Limited before the NCLT Chandigarh, pursuant to which, SFPL, SMSL,
SSDCL and Kiaan Sports and Nutrition Private Limited are proposed to be amalgamated with Sona Autocomp. The
Scheme is pending before the NCLT, Chandigarh for its final hearing.

B. Litigation

Our Group Companies are not party to any pending litigation which has a material impact on our Company.

C. Group Companies that have become sick or under winding-up/insolvency proceedings

Our Group Companies have neither become a sick company within the meaning of the Sick Industrial Companies
(Special Provisions) Act, 1985 nor are they under winding-up or insolvency proceedings under the Insolvency and
Bankruptcy Code, 2016.

D. Loss making Group Companies

Except for SFPL, SMSL and SSDCL, none of our Group Companies have made any losses in the immediately preceding
Financial Year. For details of the profits/ losses in the preceding three years, see “- Details of our Group Companies”
on page 225.

E. Defunct Group Companies

Our Group Companies are not defunct and no applications have been made to the concerned registrar of companies for
striking off the name of our Group Companies in the five years immediately preceding the date of filing of this Draft
Red Herring Prospectus.

F. Nature and extent of interest of Group Companies

227
 In the promotion of our Company

Our Group Companies do not have any interest in the promotion of our Company.

In the properties acquired by our Company in the past three years prior to filing this Draft Red Herring Prospectus
or proposed to be acquired by our Company

Our Group Companies are not interested in the properties acquired by our Company in the three years preceding the
filing of this Draft Red Herring Prospectus or proposed to be acquired by our Company.

In transactions for acquisition of land, construction of building, supply of machinery, etc.

Our Group Companies are not interested in any transactions for the acquisition of land, construction of building or
supply of machinery, etc.

G. Common pursuits between our Group Companies and our Company

None of our Group Companies are in the same line of business as our Company and our Subsidiaries and there are no
common pursuits between our Group Companies and our Company and our Subsidiaries.

H. Related business transactions within the Group Companies and significance on the financial performance of our
Company

Other than the transactions disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Related Party Transactions” on page 387, there are no other related business transactions between the
Group Companies and our Company.

I. Business interests or other interests

There are related party transactions between the Group Companies and our Company as disclosed in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations - Related Party Transactions” on page 387.
Other than the related party transactions, our Group Companies do not have any business interest or other interest in
our Company.

J. Other confirmations

Except for JIL, whose equity shares are listed on the BSE and NSE, the equity shares of our Group Companies are not
listed on any stock exchange. Our Group Companies have not made any public or rights issue of securities in the
preceding three years.

Further, none of our Group Companies have been refused listing by any stock exchange in India or abroad or any has
failed to meet the listing requirements of any stock exchanges in India or abroad.

228
 DIVIDEND POLICY

The declaration and payment of dividends on our Equity Shares, if any, will be recommended by our Board and approved by our
Shareholders, at their discretion, subject to the provisions of the Articles of Association and the Companies Act. The dividend
distribution policy of our Company was approved and adopted by our Board on January 27, 2021.

The dividend, if any, will depend on a number of internal factors, including but not limited to our Company’s profits earned
during the financial year, accumulated reserves and distributable profits; working capital and capital expenditure requirement;
financial commitments with respect to the borrowings undertaken/ proposed to be undertaken and interest thereon; capital
requirements for maintenance of appropriate capital adequacy ratio; provisioning for financial implications arising out of
unforeseen events and/or contingencies; past dividend declaration trend of our Company; and such other factors and/ or material
events which our Board may consider relevant. In addition, the dividend, if any, will also depend on a number of external factors
including but not limited to legal requirements/ regulatory restrictions; macro-economic environment; cost of borrowing and
covenants, if any, with lenders; business outlook for the future years; and prevalent market practices.

Further, our Shareholders may not expect dividend in certain circumstances including broad adverse macro-economic scenario
which may require our Board to retain a larger portion of profits to build up reserves; proposed expansion/ diversification plans
requiring higher capital allocation; decision to undertake any acquisitions, amalgamation, merger, joint ventures etc. which
requires significant capital outflow; regulatory restrictions/ obligations which may restrict the issue of dividends; requirement of
higher working capital to support business and operations of our Company; proposal for corporate action requiring significant
capital outflow such as buy-back of securities; cost of raising funds from alternate sources; in the event of loss or inadequacy of
profit or cash flow available for distribution; other factors beyond control of our Company like natural calamities, fire etc.
effecting the operations of our Company; and any other factor as deemed appropriate by our Board.

Our Company may also, from time to time, pay interim dividends. Our past practices with respect to the declaration of dividends
are not necessarily indicative of our future dividend declaration. For details in relation to risks involved in this regard, see “Risk
Factors – We cannot assure payment of dividends on the Equity Shares in the future” on page 50.

In addition, our ability to pay dividends may be impacted by a number of factors, including restrictive covenants under the loan
or financing arrangements our Company is currently availing of or may enter into to finance our fund requirements for our
business activities. For further details, see “Financial Indebtedness” on page 349.

Equity Shares

The dividend declared and paid on Equity Shares by our Company during the last three Financial Years and the current Financial
Year is set out in the following table:

Particulars Financial Performance For the nine Period

(For the Financial Year) months period between last
2018 2019 2020* ended audited period
December 31, and the date of
2020 filing this
Draft Red
Herring
Prospectus#
Number of equity shares (including compulsory 27,718,376 27,718,376 47,748,380 47,748,380 572,980,560
convertible preference shares)
Face value per equity share (in ₹) 10 10 10 10 10
Amount dividend (in ₹ million) Nil Nil (i) 868.09; and 460.00 444.01
(ii) 100.00
Dividend per equity share (in ₹) Nil Nil (i) 31.32; and (ii) 9.634 9.299
11.08
Rate of dividend (%) NA NA (i) 313.18%; and 96.34% 92.99%
(ii) 110.80%
Mode of payment of dividend NA NA Bank transfer Bank transfer Bank transfer
Dividend tax (%) NA NA 20.56% NA NA
* The Board of Directors had declared two interim dividends in their meeting held on July 3, 2019: (i) interim dividend for ₹ 31.32 per Equity share to all
the shareholders as on July 3, 2019 i.e. 2,77,18,376 Equity Shares; and (ii) special interim dividend only to JM Financial Trustee for ₹ 11.08 per Equity
Share on 9,024,687 Equity Shares.
# The Company had declared interim dividend in Board Meeting held on January 27, 2021 and in the same meeting, bonus issue of 11 equity shares for each
1 equity share was also approved. Dividend has been paid on equity shares before the effect of bonus issue.

229
 SECTION V: FINANCIAL INFORMATION

RESTATED CONSOLIDATED FINANCIAL INFORMATION

(The remainder of this page is intentionally left blank)

230
INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED CONSOLIDATED
FINANCIAL INFORMATION

The Board of Directors

Sona BLW Precision Forgings Limited
Sona Enclave Village Begumpur Khatola,
Sector 35, Gurugram, Haryana, India

Dear Sirs,

1. We, Walker Chandiok & Co LLP, have examined the attached Restated Consolidated Financial
Information of Sona BLW Precision Forgings Limited (the “Company”) its subsidiaries and
associate (the Company, its subsidiaries and its associate together referred to as the “Group"),
comprising the Restated Consolidated Statement of Assets and Liabilities as at 31 December
2020, 31 March 2020, 31 March 2019 and 31 March 2018, the Restated Consolidated
Statement of Profit and Loss (including other comprehensive income), the Restated
Consolidated Statement of Changes in Equity and the Restated Consolidated Cash Flow
Statement for the nine month period ended 31 December 2020 and for the years ended 31
March 2020, 31 March 2019 and 31 March 2018, the significant accounting policies and other
explanatory information (collectively, the “Restated Consolidated Financial Information”), as
approved by the Board of Directors of the Company at their meeting held on 12 February 2021
for the purpose of inclusion in the Draft Red Herring Prospectus (“DRHP”) / Red Herring
Prospectus / Prospectus (“Offer Documents”) prepared by the Company in connection with its
proposed Initial Public Offer of equity shares (“IPO”) prepared in terms of the requirements of:

a. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the “Act");
b. The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, as amended ("ICDR Regulations"); and
c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the
Institute of Chartered Accountants of India (“ICAI”), as amended from time to time (the
“Guidance Note”).

2. The Company’s Board of Directors is responsible for the preparation of the Restated
Consolidated Financial Information for the purpose of inclusion in the Offer Documents to be
filed with Securities and Exchange Board of India, National Stock Exchange of India Limited
and BSE Limited and Registrar of Companies, National Capital Territory of Delhi & Haryana at
New Delhi in connection with the proposed IPO. The Restated Consolidated Financial
Information have been prepared by the management of the Company on the basis of
preparation stated in note 3(A)(a) to the Restated Consolidated Financial Information. The
responsibility of the Board of Directors of the companies included in the Group includes
designing, implementing and maintaining adequate internal control relevant to the preparation
and presentation of the Restated Consolidated Financial Information. The respective Board of
Directors are also responsible for identifying and ensuring that the Group complies with the Act,
ICDR Regulations and the Guidance Note.

3. We have examined such Restated Consolidated Financial Information taking into

consideration:

a. The terms of reference and terms of our engagement agreed upon with you in accordance
with our engagement letter dated 16 January 2021 in connection with the proposed IPO
of equity shares of the Company;
b. The Guidance Note which also requires that we comply with the ethical requirements of
the Code of Ethics issued by the ICAI;
c. Concepts of test checks and materiality to obtain reasonable assurance based on
verification of evidence supporting the Restated Consolidated Financial Information; and
d. The requirements of Section 26 of the Act and the ICDR Regulations. Our work was
performed solely to assist you in meeting your responsibilities in relation to your
compliance with the Act, the ICDR Regulations and the Guidance Note in connection with
the proposed IPO.

231
INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED CONSOLIDATED
FINANCIAL INFORMATION (Cont’d)

4. These Restated Consolidated Financial Information have been compiled by the management
from:

a. Audited special purpose interim consolidated financial statements of the Group as at and
for the nine month period ended 31 December 2020 prepared in accordance with Indian
Accounting Standard (Ind AS) 34 "Interim Financial Reporting", specified under section
133 of the Act and other accounting principles generally accepted in India (the “Special
Purpose Interim Consolidated Financial Statements”) which have been approved by the
Board of Directors at their meeting held on 12 February 2021; and
b. Audited consolidated financial statements of the Group as at and for the years ended 31
March 2020, 31 March 2019 and 31 March 2018 for the Group prepared in accordance
with the Indian Accounting Standards (referred to as “Ind AS”) as prescribed under Section
133 of the Act read with Companies (Indian Accounting Standards) Rules 2015, as
amended, and other accounting principles generally accepted in India, which have been
approved by the Board of Directors at their meeting held on 29 December 2020, 20
November 2019 and 29 August 2018 respectively.

5. For the purpose of our examination, we have relied on auditors’ reports issued by us dated 12
February 2021, 29 December 2020, 20 November 2019 and 29 August 2018 on the
consolidated special purpose financial statements of the Group as at and for the nine month
period ended 31 December 2020 and consolidated financial statements as at and for the years
ended March 31, 2020, March 31 2019 and March 31, 2018 respectively as referred in
paragraph 4 above.

6. The audit report dated 29 December 2020 on the consolidated financial statements as at and
for the year ended 31 March 2020 issued by us was modified and included following matter
giving rise to modification on the consolidated financial statements as at and for the year ended
31 March 2020:

“As stated in note 49 to the accompanying consolidated financial statements, the majority
shareholding in Sona Holdings B.V., The Netherlands, the erstwhile subsidiary company, which
was classified as a ‘discontinued operation’ in the consolidated financial statements for previous
year ended 31 March 2019, was sold to Sona Autocomp Holdings Private Limited on 4 July
2019, and the Holding Company therefore, did not exercise control over the erstwhile subsidiary
company from 5 July 2019 onwards . Owing to the unavailability of the consolidated financial
statements of such subsidiary company and its subsidiaries (‘SONA BV Group’) for the period
1 April 2019 to 4 July 2019, the consolidated financial information of SONA BV Group for the
period 1 April 2019 to 4 July 2019 (‘the current year period’) has not been included in the
accompanying consolidated financial statements for the year ended 31 March 2020, and the
assets and liabilities of SONA BV Group have been derecognized at their respective carrying
values as at 31 March 2019 instead of 4 July 2019. The said accounting treatment is not in
compliance with the requirements of Ind AS 110 - Consolidated Financial Statements.

Had the accompanying consolidated financial statements been prepared after considering the
consolidated financial statements of SONA BV Group for the period 1 April 2019 to 4 July 2019,
the “Profit or Loss from discontinued operations” would have been higher and “Exceptional
Item” would have been lower by the same amount with no effect on the consolidated profit of
the Group for the year ended 31 March 2020 and its equity attributable to the owners on that
date. However, in absence of necessary financial information, we are unable to quantify such
impact on the said items in the accompanying consolidated financial statements, and the
consequential impact thereof, on the disclosures given under Note 49 as per the requirements
of Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations.”

7. As indicated in our audit reports referred above, we did not audit financial statements of :

a. eight subsidiaries and an associate for the year ended and as at 31 March 2018;
b. eight subsidiaries and an associate for the year ended and as at 31 March 2019;

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INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED CONSOLIDATED
FINANCIAL INFORMATION (Cont’d)

c. three subsidiaries for the year ended and as at 31 March 2020 and
d. three subsidiaries for the period ended and as at 31 December 2020

whose share of total assets, total revenues, net cash inflows / (outflows) and share of profit /
(loss) in the consolidated financial statements, for the relevant periods or years is tabulated
below, which have been audited by other auditors, and whose reports have been furnished to
us by the Company’s management and our opinion on the consolidated financial statements,
in so far as it relates to the amounts and disclosures included in respect of these components,
is based solely on the reports of the other auditors:
(INR in million)
Particulars As at / for the As at / for the As at / for the As at / for the
nine month year ended 31 year ended 31 year ended 31
period ended 31 March 2020 March 2019 March 2018
December 2020
Total assets 477.74 1,284.65 9,716.81* 9,948.92*
Total revenues 274.67 1,333.35 23,783.46* 18,299.85*
Net cash inflow / (17.83) 39.48 145.05* (15.20)*
(outflow)
Share of profit / - - 2.17 (2.17)
(loss)
* relates to discontinued operations.

Our opinions on the consolidated financial statements and special purpose interim consolidated
financial statements were not modified in respect of these matters.

8. Based on our examination and according to the information and explanations given to us, we
report that the Restated Consolidated Financial Information :

a. have been prepared after incorporating adjustments for the changes in accounting
policies, material errors and regrouping / reclassifications retrospectively in the financial
years ended 31 March 2020, 31 March 2019 and 31 March 2018 to reflect the same
accounting treatment as per the accounting policies and grouping / classifications followed
as at and for the nine month period ended 31 December 2020;except that no effect to the
matter giving rise to modification mentioned in paragraph 6 above has been given; and
b. have been prepared in accordance with the Act, ICDR Regulations and the Guidance
Note.

9. The Restated Consolidated Financial Information do not reflect the effects of events that
occurred subsequent to the respective dates of the reports on the special purpose interim
consolidated financial statements and audited consolidated financial statements mentioned in
paragraph 4 above.

10. This report should not in any way be construed as a reissuance or re-dating of any of the
previous audit reports issued by us, nor should this report be construed as a new opinion on
any of the financial statements referred to herein.

11. We have no responsibility to update our report for events and circumstances occurring after the
date of the report.

12. Our report is intended solely for use of the Board of Directors for inclusion in the Offer
Documents to be filed with Securities and Exchange Board of India, National Stock Exchange
of India Limited and BSE Limited and Registrar of Companies, NCT of Delhi & Haryana at New
Delhi, as relevant, in connection with the proposed IPO. Our report should not be used, referred
to, or distributed for any other purpose except with our prior consent in writing. Accordingly, we
do not accept or assume any liability or any duty of care for any other purpose or to any other

233
INDEPENDENT AUDITOR’S EXAMINATION REPORT ON RESTATED CONSOLIDATED
FINANCIAL INFORMATION (Cont’d)

person to whom this report is shown or into whose hands it may come without our prior consent
in writing.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No: 001076N/N500013

Arun Tandon
Partner
Membership Number: 517273
UDIN: 21517273AAAABA6726

Place: New Delhi

Date: 12 February 2021

234
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Assets and Liabilities
(Figures in Million ₹, unless stated otherwise)
Notes As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

ASSETS
Non-current assets
Property, plant and equipment 5 3,218.88 2,845.07 1,783.52 5,270.25
Capital work-in-progress 5 820.67 581.37 131.67 179.60
Right-of-use assets 5 1,607.69 1,419.41 405.13 1,005.10
Goodwill on consolidation 6 1,758.09 1,758.09 - 1,552.45
Other intangible assets 6 4,450.99 4,629.18 723.91 105.07
Intangible assets under development 6 910.21 315.00 - -
Investments accounted for using the equity method 7A - - - 5.34
Financial assets
(i) Investments 7B - 19.00 - -
(ii) Loans 8 54.02 50.79 23.14 16.64
(iii) Other financial assets 9 - 0.87 38.11 26.79
Income tax assets (net) 10 243.09 291.42 11.24 13.66
Other non-current assets 11 209.57 278.49 84.19 91.50
Deferred tax asset (net) 22 - - - 171.86
Total non-current assets 13,273.21 12,188.69 3,200.91 8,438.26

Current assets
Inventories 12 2,838.40 1,962.36 677.84 2,838.97
Financial assets
(i) Trade receivables 13 3,938.98 2,336.28 1,520.98 2,809.88
(ii) Cash and cash equivalents 14 333.38 1,049.85 1.94 264.01
(iii) Bank balances other than (ii) above 15 2.57 623.08 254.12 -
(iv) Loans 8 1.52 4.92 0.19 149.29
(v) Other financial assets 9 159.90 5.30 32.26 37.60
Income tax assets (net) 10 - - - 9.63
Other current assets 11 572.46 336.34 130.40 290.13
Total current assets 7,847.21 6,318.13 2,617.73 6,399.51

Assets of disposal group classified as held for sale 49 - - 10,506.93 -

Total assets 21,120.42 18,506.82 16,325.57 14,837.77

EQUITY AND LIABILITIES

Equity
Equity share capital 16(A) 471.54 471.54 277.18 277.18
Instruments entirely equity in nature 16(B) 5.94 5.94 - -
Other equity 17 12,408.03 11,301.93 1,460.59 (275.41)
Equity attributable to the owners 12,885.51 11,779.41 1,737.77 1.77
Non-controlling interest - - 24.23 25.40

Total equity 12,885.51 11,779.41 1,762.00 27.17

LIABILITIES
Non-current liabilities
Financial liabilities
(i) Borrowings 18 (i) 1,698.15 1,768.22 733.07 3,944.23
(ii) Lease liabilities 19 733.17 532.33 156.84 928.46
(iii) Other financial liabilities 20 1.24 1.24 1.24 1.24
Provisions 21 103.93 66.78 23.82 3,941.26
Deferred tax liabilities (net) 22 1,195.05 1,076.71 110.55 -
Total non-current liabilities 3,731.54 3,445.28 1,025.52 8,815.19

Current liabilities
Financial liabilities
(i) Borrowings 18 (ii) 603.74 846.09 389.10 349.51
(ii) Trade payables 23
-Total outstanding dues of micro enterprises and small enterprises 504.81 166.99 76.77 0.62

-Total outstanding dues of creditors other than micro enterprises 1,916.64 995.26 615.44 3,297.39
and small enterprises
(iii) Lease liabilities 19 98.63 71.73 24.06 335.88
(iv) Other financial liabilities 20 938.79 922.65 1,027.44 1,284.49
Other current liabilities 24 159.01 110.35 120.93 296.05
Provisions 21 71.26 51.06 15.76 376.67
Current tax liabilities (net) 25 210.49 118.00 0.71 54.80
Total current liabilities 4,503.37 3,282.13 2,270.21 5,995.41

235
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Assets and Liabilities
(Figures in Million ₹, unless stated otherwise)

Notes As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Liabilities of disposal group classified as held for sale 49 - - 11,267.84 -

Total liabilities 8,234.91 6,727.41 14,563.57 14,810.60

Total equity and liabilities 21,120.42 18,506.82 16,325.57 14,837.77

The accompanying notes form an integral part of these restated consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

236
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Profit and Loss
(Figures in Million ₹, unless stated otherwise)
Notes For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Income
Revenue from operations 26 10,269.56 10,379.82 6,992.20 6,231.20
Other income 27 26.72 57.83 32.81 28.03
Total income 10,296.28 10,437.65 7,025.01 6,259.23
Expenses
Cost of materials consumed 4,707.39 4,424.22 1,928.41 1,759.38
Changes in inventories of finished goods and work-in-progress 28 (566.68) 31.78 122.19 (84.72)
Excise duty - - - 111.17
Employee benefits expense 29 1,015.53 1,027.30 490.04 417.74
Finance costs 30 230.85 259.75 177.63 190.64
Depreciation and amortisation expense 31 688.62 671.20 309.57 233.26
Other expenses 32 2,110.06 2,473.75 2,451.71 2,320.62
Total expenses 8,185.77 8,888.00 5,479.55 4,948.09
Profit before profit/(loss) in associates, tax and exceptional items 2,110.51 1,549.65 1,545.46 1,311.14
Share of profit/(loss) in associate - - 2.17 (2.17)
Profit before exceptional items and tax 2,110.51 1,549.65 1,547.63 1,308.97
Exceptional item 33 - 2,320.53 - -
Profit before tax 2,110.51 3,870.18 1,547.63 1,308.97

Tax expense 34
- Current tax 435.08 365.04 471.52 423.16
- Deferred tax (credit)/charge 120.74 (98.29) 74.97 24.51
Total tax expense 555.82 266.75 546.49 447.67

Profit for the year from continuing operations 1,554.69 3,603.43 1,001.14 861.30
Discontinued operations: 49
Profit for the period / year from discontinued operation before tax - - 1,127.32 236.10
Tax expense of discontinued operations - - (396.66) (321.68)
Profit for the period / year 1,554.69 3,603.43 1,731.80 775.72

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obligations (8.62) 12.28 (1.02) (17.06)
Income tax relating to above mentioned item 2.41 (3.57) 0.36 5.96
Changes in fair values of equity instruments carried at fair value through other (19.00) (309.28) - -
comprehensive income
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign subsidiaries 13.80 14.00 - -
Other comprehensive income for the year, net of tax from continuing (11.41) (286.57) (0.66) (11.10)
operations
Other comprehensive income for the year, net of tax from discontinued operations 49 - - 6.46 (212.13)

Total comprehensive income for the year 1,543.28 3,316.86 1,737.60 552.49

Profit attributable to:

Owners 1,554.69 3,603.43 1,729.71 774.24
Non-controlling interests - - 2.09 1.48

Profit attributable to owners arising from:

Continuing operations 1,554.69 3,603.43 1,001.14 861.30
Discontinued operations - - 728.57 (87.06)

Profit attributable to non-controlling interests arising from:

Continuing operations - - - -
Discontinued operations - - 2.09 1.48

Other comprehensive income/(loss) attributable to:

Owners (11.41) (286.57) 6.29 (223.22)
Non-controlling interests - - (0.49) -

Other comprehensive income attributable to owners arising from:

Continuing operations (11.41) (286.57) (0.66) (11.09)
Discontinued operations - - 6.95 (212.13)

Other comprehensive income attributable to non-controlling interests arising from:

Continuing operations - - - -
Discontinued operations - - (0.49) -

Total comprehensive income/(loss) attributable to:

Owners 1,543.28 3,316.86 1,736.00 551.02
Non-controlling interests - - 1.60 1.48

Total comprehensive income/(loss) attributable to owners arises from:

Continuing operations 1,543.28 3,316.86 1,000.48 850.21
Discontinued operations - - 735.52 (299.19)

Total comprehensive income/(loss) attributable to non-controlling interests arises from:

Continuing operations - - - -
Discontinued operations - - 1.60 1.48

237
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Profit and Loss
(Figures in Million ₹, unless stated otherwise)

Notes For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Earnings per equity share of face value of ₹ 10 each

Earnings per share from continuing operations (Basic) (in ₹) 41 2.71 7.06 3.01 2.59
Earnings per share from discontinued operations (Basic) (in ₹) 41 - - 2.19 (0.26)

Earnings per share from continuing operations (Diluted) (in ₹) 41 2.71 7.06 3.01 2.59
Earnings per share from discontinued operations (Diluted) (in ₹) 41 - - 2.19 (0.26)

The accompanying notes form an integral part of these restated consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Ajay Pratap Singh

Rohit Nanda Company Secretary
Group Chief Financial Officer M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

238
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Cash Flow Statement
(Figures in Million ₹, unless stated otherwise)
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
A. Cash flows from operating activities
Profit before income tax 2,110.51 3,870.18 1,547.63 1,311.14
Adjustments for:
Depreciation and amortisation expense 688.62 671.20 309.57 233.26
(Profit)/loss on sale of property plant and equipment (net) (6.02) 5.25 3.67 1.41
Allowance for doubtful receivables and advances - 3.52 2.01 1.07
Share based payments 22.81 - - -
Unwinding of discount on fair valuation of security deposits (0.67) (0.84) 0.10 0.08
Amortisation of transaction cost based on effective interest rate (0.91) (0.68) (2.90) 1.96
Unwinding of discount on deferred payment liabilities 0.36 4.02 3.72 0.62
Gain on loss of control over a subsidiary company - (2,320.53) - -
Provision for slow moving inventory 25.49 0.80 7.92 -
Liabilities/ provisions no longer required written back - (15.00) (4.62) -
Fair value loss/(gain) on derivatives (159.84) 266.62 (6.47) 2.17
Profit on sale of investments - (18.00) - -
Share of (profit)/loss in associate - - (2.17) 2.17
Finance costs 230.85 259.75 177.63 190.64
Interest income (26.11) (19.91) (27.33) (23.70)
Unrealised foreign exchange (gain) (158.80) (58.64) 0.09 7.12
Operating profit before working capital changes 2,726.29 2,647.74 2,008.85 1,727.94
Changes in working capital
Movement in inventories (901.53) 208.68 37.99 (178.87)
Movement in trade receivables (1,450.42) 46.13 (101.45) (222.95)
Movement in other financial asset (46.62) (108.60) 315.05 (176.20)
Movement in other assets (211.17) 118.01 (151.63) 165.20
Movement in trade payable 1,178.01 (40.29) (246.94) 212.05
Movement in financial liabilities (157.12) 20.78 554.63 56.80
Movement in provision 109.82 1.56 (16.51) 10.52
Movement in other current liabilities 111.74 (82.51) 45.68 33.72
Cash generated from operations 1,359.00 2,811.50 2,445.67 1,628.21
Direct taxes paid (280.93) (278.09) (494.07) (411.61)
Net cash flow generated from operating activities (Continuing 1,078.07 2,533.41 1,951.60 1,216.60
operations)
Net cash flow generated from operating activities (Discontinued - - (405.55) 272.12
operations)
Net cash flow generated from operating activities - Total (A) 1,078.07 2,533.41 1,546.05 1,488.72
B.Cash flows from investing activities
Payments for acquisition of property, plant and equipment, intangibles and (1,520.04) (2,120.60) (1,417.69) (878.00)
capital work in progress including capital advances
Proceeds from sale of property, plant and equipment 8.33 1.19 3.67 1.64
Movement in bank deposits (net) 621.38 (331.72) (254.12) 0.13
Amount received on losing of control over subsidiary (net of cash and cash - 1,011.12 - -
equivalents in the books of subsidiary)
Sale of current investment investments - 80.00 7.51 -
Purchase of long term investments (0.10) - - (162.95)
Acquisition of subsidiaries (net of cash and cash equivalents in the books of - (8,218.00) - -
subsidiaries)
Interest received 21.27 35.91 27.33 23.70
Net cash (used in)/generated from investing activities (Continuing (869.16) (9,542.10) (1,633.30) (1,015.48)
operations)
Net cash (used in)/generated from investing activities (Discontinued - - 3,674.77 (363.85)
operations)
Net cash (used in)/generated from investment activities - Total (B) (869.16) (9,542.10) 2,041.47 (1,379.33)

C.Cash flows from financing activities

Proceeds from short term borrowings, net (242.32) 256.99 39.59 (35.19)
Proceeds from long term borrowings 323.39 1,607.55 343.18 319.16
Repayment of long term borrowings (290.74) (373.66) (534.76) (338.23)
Repayment of deferred payment liabilities (11.61) (86.42) (1.57) 80.40
Repayment of lease liabilities (69.26) (56.88) (23.31) (14.59)
Dividend paid (460.70) (968.09) - -
Dividend tax paid - (197.99) - -
Proceeds from issue of equity shares - 8,477.30 - -
Proceeds from issue of compulsorily convertible preference shares - 228.76 - -
Buyback of shares - (814.21) - -
Tax paid on buy back of shares - (183.64) - -
Fees paid for increase in authorised share capital - (8.72) - -
Interest paid (174.14) (212.75) (160.19) (179.29)
Net cash (used in)/generated from financing activities - (Continuing (925.38) 7,668.24 (337.06) (167.74)
operations)
Net cash (used in)/generated from financing activities - (Discontinued - - (3,124.17) 39.30
operations)
Net cash (used in)/generated from financing activities - Total (C) (925.38) 7,668.24 (3,461.23) (128.44)

239
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Cash Flow Statement
(Figures in Million ₹, unless stated otherwise)

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

D Net (decrease)/increase in cash and cash equivalents (A)+(B)+(C) (716.47) 659.55 126.29 (19.05)

E Cash and cash equivalents at the beginning of the period/year 1,049.85 390.30 264.01 283.06

F. Cash and cash equivalents at the end of the period/year (D)+(E) 333.38 1,049.85 390.30 264.01

Reconciliation of cash and cash equivalents as per the cash flow

statement
Cash and cash equivalents as per above comprise of the following
Balances in current accounts 310.46 445.43 1.84 261.91
Cash on hand 0.12 0.14 0.10 2.10
Bank deposits with original maturity of less than three months 22.80 604.28 - -
Balances of cash and cash equivalents of disposal group classified as held for sale - - 388.36 -
(refe note 49)
Balances per statement of cash flows 333.38 1,049.85 390.30 264.01

Cash and cash equivalents of discontinued operations, classified as held for sale - - 388.36 -
(refe note 49)
Cash and cash equivalents of continuing operations 333.38 1,049.85 1.94 264.01

The accompanying notes form an integral part of these restated consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and 'Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

240
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Changes in Equity
(Figures in Million ₹, unless stated otherwise)

A. Equity share capital

Amount
Balance as at 1 April 2017 277.18
Changes in equity share capital during the year -
Balance as at 31 March 2018 277.18
Changes in equity share capital during the year -
Balance as at 31 March 2019 277.18
Issue of shares 220.29
Buyback of shares (25.93)
Balance as at 31 March 2020 471.54
Changes in equity share capital during the period -
Balance as at 31 December 2020 471.54

B. Instruments entirely equity in nature

Amount
Balance as at 1 April 2017 -
Changes during the year -
Balance as at 31 March 2018 -
Changes during the year -
Balance as at 31 March 2019 -
Issue of compulsorily convertible preference shares during the 5.94
year (refer note 56)
Balance as at 31 March 2020 5.94
Changes during the period -
Balance as at 31 December 2020 5.94

C. Other equity
General reserve Securities Foreign currency Equity instruments Capital redemption Employee’s stock Retained Total Non-controlling
premium translation reserve through other reserve options outstanding earnings interest
comprehensive income reserve

Balance as at 1 April 2017 120.00 382.14 - - - - (1,341.18) (839.04) 23.92

Profit for the year - - - - - - 774.24 774.24 1.48
Ind-AS 116 transition adjustments (net of tax) - - - - - - 12.61 12.61 -
Remeasurements of defined benefit obligations - - - - - - (10.80) (10.80) -
Currency translation during the year - - (212.42) - - - - (212.42) -
Balance as at 31 March 2018 120.00 382.14 (212.42) - - - (565.13) (275.41) 25.40
Profit for the year - - - - - - 1,729.71 1,729.71 2.09
Remeasurements of defined benefit obligations - - - - - - (13.76) (13.76) (0.49)
Currency translation during the year - - 20.05 - - - - 20.05 -
Others - - - - - - - - (2.77)
Balance as at 31 March 2019 120.00 382.14 (192.37) - - - 1,150.82 1,460.59 24.23
Profit for the year - - - - - - 3,603.43 3,603.43 -
Transferred to profit and loss on disposal of foreign operations - - 192.37 - - - - 192.37 (24.23)
Net changes in fair values of equity instruments carried at fair - - - (309.28) - - - (309.28) -
value through other comprehensive income
Premium on fresh issue of equity shares - 8,257.02 - - - - - 8,257.02 -
Premium on fresh issue of preference shares - 222.81 - - - - - 222.81 -
Premium on buy back of shares - (788.28) - - - - - (788.28) -
Tax paid on buy back of shares - (183.64) - - - - - (183.64) -
Stamp duty paid for increase in authorised share capital - (8.72) - - - - - (8.72) -
Remeasurements of defined benefit obligations - - - - - - 8.71 8.71 -
Currency translation during the year - - 14.00 - - - - 14.00 -
Dividend paid - - - - - - (968.09) (968.09) -
Tax on dividend - - - - - - (198.99) (198.99) -
Transfer to capital redemption reserve - - - - 25.93 - (25.93) - -
Balance as at 31 March 2020 120.00 7,881.33 14.00 (309.28) 25.93 - 3,569.95 11,301.93 -

241
SONA BLW PRECISION FORGINGS LIMITED
Restated Consolidated Statement of Changes in Equity
(Figures in Million ₹, unless stated otherwise)

General reserve Securities Foreign currency Equity instruments Capital redemption Employee’s stock Retained Total Non-controlling
premium translation reserve through other reserve options outstanding earnings interest
comprehensive income reserve

Balance as at 1 April 2020 120.00 7,881.33 14.00 (309.28) 25.93 - 3,569.95 11,301.93 -
Net profit for the period - - - - - - 1,554.69 1,554.69 -
Remeasurement of defined benefit obligations, net of tax - - - - - - (6.21) (6.21) -
Less:-Dividend paid - - - - - - (459.99) (459.99) -
Employee stock option charge for the period - - - - - 22.81 - 22.81 -
Currency translation during the period - - 13.80 - - - - 13.80 -
Net changes in fair values of equity instruments carried at fair - - - (19.00) - - - (19.00) -
value through other comprehensive income

Balance as at 31 December 2020 120.00 7,881.33 27.80 (328.28) 25.93 22.81 4,658.44 12,408.03 -

The accompanying notes form an integral part of these restated consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

242
1. Group overview

Sona BLW Precision Forgings Limited (the “Parent Company”), a public limited company was incorporated
on 27 October 1995 and began commercial production in November 1998. Sona BLW and its subsidiaries
and associate (together referred to as “the Group”) are engaged in the manufacturing of precision forged
bevel gears, differential case assemblies, conventional and micro-hybrid starter motors, EV traction motors
etc., for automotive and other applications

Pursuant to approval of the Board of Directors and the shareholders in their meetings held on 16 October
2018, the Company executed Share Purchase Agreement with Singapore VII Topco III Pte. Ltd and
consequently, the Parent Company on 5 July 2019 had acquired 100% equity shares (representing 100%
voting interest) of Comstar Automotive Technologies Pvt. Ltd. and its subsidiaries and Comstar Automotive
Hong Kong Limited and its subsidiaries.

Further, the Parent Company had executed an agreement dated 16 October 2018 to sell 81% stake in its
wholly owned subsidiary, Sona Holding BV Netherlands (Sona BV), to Sona Autocomp Holding Private
Limited. On 4 July 2019, the Parent Company completed the aforementioned transaction and accordingly,
with effect from that date, Sona Holding BV Netherlands ceased to be Company’s subsidiary.

2. Group Companies

Consolidated financial statements comprise the financial statements of Sona BLW Precision Forgings
Limited, its subsidiaries and its associate (hereinafter referred together referred to as ‘Group’) which are listed
below:

Name of Subsidiary Country of Proportion Proportion Proportion

Proportion of
incorporation of of of
ownership
ownership ownership ownership
(%) as at
(%) as at (%) as at (%) as at
31 December
31 March 31 March 31 March
2020
2020 2019 2018
Sona Holding B.V Netherland
Amsterdam, The Nil Nil 100% 100%
Netherlands*
Sona Autocomp USA Nil Nil
USA 100% 100%
LLC*
Sona Autocomp Nil Nil
Germany 100% 100%
Germany GmBH*
PHT Beteiligungs Nil Nil
Germany 94.4% 94.4%
GmbH & Co. KG
SONA BLW Driveline Nil Nil
USA 100% 100%
LLC*
SONA BLW-Hilfe Nil Nil
Germany 100% 100%
GmbH*
SONA BLW Hungary Nil Nil
Hungary 100% 100%
Ltd*
SONA BLW Nil Nil
Prazisionsschmiede Germany 99.7% 99.7%
GmbH*
Comstar Automotive 100% 100% Nil Nil
Technologies Private India
Limited#
Comstar Automotive 100% 100% Nil Nil
Technologies Services India
Private Limited#

243
 Comstar Automotive 100% 100% Nil Nil
USA
USA LLC#
Comstar Hong Kong 100% 100% Nil Nil
USA
Mexico No. 1, LLC#
Comstar Automotive 100% 100% Nil Nil
Hong Kong
Hong Kong Ltd.#
Comestel Automotive 100% 100% Nil Nil
Technologies Hong Kong
Mexicana Ltd#
Comstar Automotive 100% 100% Nil Nil
China
(Hangzhou) Co., Ltd#
Comenergia 100% 100% Nil Nil
Automotive
Technologies Mexico
Mexicana, S. DE R.L.
DE C.V#
Comestel Automotive 100% 100% Nil Nil
Technologies
Mexico
Mexicana, S. DE R.L.
DE C.V#
# Acquired on 5 July 2019.
* Ceased to be subsidiary from 4 July 2019.

Name of Associate Country of Proportion Proportion

Proportion Proportion
incorporation of of ownership
of ownership of ownership
ownership (%) as at
(%) as at (%) as at
(%) as at 31 31 March
31 March 31 March
December 2018
2020 2019
2020
Sona Skill
Development Centre India Nil Nil Nil 50%
Limited

3. (A) Significant accounting polices

This note provides a list of the significant accounting policies adopted in the preparation of this restated
consolidated financial information. These policies have been consistently applied to all the years presented,
unless otherwise stated.

a) Basis of preparation

The Restated Consolidated Financial Information relates to the Group and has been specifically prepared for
inclusion in the document to be filed by the Company with the Securities and Exchange Board of India
(“SEBI”) in connection with the proposed Initial Public Offer (‘IPO’) of equity shares of the Company
(referred to as the “Issue”). The Restated Consolidated Financial Information comprise of the Restated
Consolidated Balance Sheet as at 31 December 2020, 31 March 2020, 31 March 2019 and 31 March 2018,
the Restated Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the
Restated Consolidated Cash Flow Statement, the Restated Consolidated Statement of Changes in Equity
and Statement of Significant Accounting Policies and other explanatory information for the nine months
period ended 31 December 2020 and the years ended 31 March 2020, 31 March 2019 and 31 March 2018
(hereinafter collectively referred to as “Restated Consolidated Financial Information”).

The Restated Consolidated Financial Information has been prepared to comply in all material respects with
the requirements of Section 26 of Part I of Chapter III of the Companies Act, 2013, as amended (the “Act")
read with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

244
 Regulations, 2018, as amended from time to time, in pursuance of provisions of Securities and Exchange
Board of India Act, 1992 ("ICDR Regulations").

The Restated Consolidated Financial Information has been compiled by the Management from:

a. The audited special purpose interim consolidated financial statements as at and for the nine-month period
ended 31 December 2020, prepared in accordance with the Indian Accounting Standards (Ind AS)
prescribed under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting
Standards) Rules, 2015 (as amended) and other relevant provisions of the Act, which have been approved
by the Board of Directors at their meeting held on 12 February 2021.
b. The audited consolidated financial statements as at and for the years ended 31 March 2020, 31 March
2019 and 31 March 2018 prepared in accordance with the Indian Accounting Standards (Ind AS)
prescribed under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting
Standards) Rules, 2015 (as amended) and other relevant provisions of the Act, which have been approved
by the Board of Directors at their meeting held on 29 December 2020, 20 November 2019 and 29 August
2018, respectively.

The Restated Consolidated Financial Information have been prepared so as to contain information /
disclosures and incorporating adjustments set out below in accordance with the ICDR Regulations:

a. Adjustments to the profits or losses of the earlier periods and of the period in which the change in the
accounting policy has taken place is recomputed to reflect what the profits or losses of those periods
would have been if a uniform accounting policy was followed in each of these periods, if any;
b. Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in
order to bring them in line with the groupings as per the audited consolidated financial statements of the
Group for the nine months period ended 31 December 2020 and the requirements of the SEBI
Regulations, if any;
c. The resultant impact of tax due to the aforesaid adjustments, if any.

b) Current versus non-current classification

The Group presents assets and liabilities in the Balance Sheet based on the current/non-current classification.

An asset is treated as current when:

• It is expected to be realised or intended to be sold or consumed in normal operating cycle;

• It is held primarily for the purpose of trading;
• It is expected to be realised within twelve months after the reporting period; or
• It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.

Current assets include the current portion of non-current financial assets. The Group classifies all other assets
as non-current.

A liability is treated current when:

• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period.

Current liabilities include current portion of non-current financial liabilities. The Group classifies all other
liabilities as non-current.

245
 The operating cycle is the time between the acquisition of assets for processing and their realisation in cash
and cash equivalents. The Group has identified twelve months as its operating cycle for the purpose of current
/ non-current classification of assets and liabilities.

c) Business combinations

The Group applies the acquisition method in accounting for business combinations. The cost of acquisition
is the aggregate of the consideration transferred measured at fair value at the acquisition date. Acquisition
costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

At the acquisition date, identifiable assets acquired and liabilities assumed are measured at fair value. Goodwill
is measured as excess of the aggregate of the fair value of the consideration transferred over the fair value of
the net of identifiable assets acquired and liabilities assumed. If the fair value of the net of identifiable assets
acquired and liabilities assumed is in excess of the aggregate mentioned above, the resulting gain on bargain
purchase is recognised.

Goodwill represents the future economic benefits arising from a business combination that are not
individually identified and separately recognised. Goodwill is carried at cost less accumulated impairment
losses.

d) Property, plant and equipment

Freehold land is carried at cost. All other items of property, plant and equipment are stated at historical cost
less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the
items. The present value of the expected cost for the decommissioning of an asset after its use is included in
the cost of the respective asset if the recognition criteria for a provision are met.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and
the cost of the item can be measured reliably. The carrying amount of any component accounted for as a
separate asset is de-recognised when replaced. All other repairs and maintenance are charged to profit or loss
during the reporting period in which they are incurred.

The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. If
payment is deferred beyond normal credit terms, the property, plant and equipment is capitalized at
discounted value. The difference between the discounted value and the total payment is recognized as interest
over the period of credit.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment is provided on the straight-line method, computed on the
basis of useful lives (as set out below) as prescribed in Schedule II of the Act: -

Asset category Useful life (in years)

Factory Buildings 30
Roads 10
Sheds 3
Plant and equipment 15
Furniture and fixtures 10
IT equipment 6
Computers 3
Vehicles 4-8
Office equipment 5
Leasehold improvements Over the effective term of lease

246
 In case of subsidiaries, the following useful lives have been used by the Group:

Asset category Useful life (in years)

Buildings 10 to 50 years
Buildings and land improvements 15 to 25 years
Technical machinery and equipment 8 to 25 years
Other equipment, factory and office equipment 3 to 10 years

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each
reporting period.

Where, during any financial year, any addition has been made to any asset, or where any asset has been sold,
discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is
calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or,
as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed
or replaced.

De-recognition

An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognised.

e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for
its intended use.

Expenditure on the research phase of projects is recognised as an expense as incurred.

Costs that are directly attributable to a project’s development phase are recognised as intangible assets,
provided the Group can demonstrate the following:

• the technical feasibility of completing the intangible asset so that it will be available for use.
• its intention to complete the intangible asset and use or sell it.
• its ability to use or sell the intangible asset.
• how the intangible asset will generate probable future economic benefits.
• the availability of adequate technical, financial and other resources to complete the development and
to use or sell the intangible asset.
• its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development costs not meeting these criteria for capitalisation are expensed as incurred.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates.

Amortisation methods and periods.

The amortization period and the amortization method for an intangible asset with a finite useful life is
reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the

247
 amortization period or method, as appropriate and are treated as changes in accounting estimates. The
amortization expense on intangible assets with finite lives is recognised in the Statement of Profit and Loss.

Asset class Useful life (in years)

Computer software 6
Technical know-how 6

In case of subsidiaries, the following useful lives have been used by the Group:

Intangible assets with finite useful lives are capitalized at cost and amortized on a straight-line basis generally
over a period of 3 to 15 years, depending on their estimated useful lives. Useful lives are examined on an
annual basis and adjusted when applicable on a prospective basis.

Intangible assets - Customer relationships

Customer relationships acquired in a business combination are recognized at fair value at the acquisition date.
Customer relationships have a finite useful life and are carried at cost less accumulated amortization.
Amortization is calculated using the straight-line method to allocate the cost of customer relationships over
their estimated useful lives of 15 years.

f) Leases

Transition to Ind AS 116 – Leases:

For the purposes of this restated consolidated financial information, effective 1 April, 2017, the Group
adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on 1 April, 2017 using
the modified retrospective method. the Group adopted Ind AS 116 “Leases” and applied the standard to all
lease contracts existing on 1 April 2017 using the modified retrospective method with the cumulative effect
of adopting Ind AS 116 being recognised in equity as an adjustment to the opening balance of retained
earnings.

Ind AS 116 will result in an increase in cash inflows from operating activities and an increase in cash outflows
from financing activities on account of lease payments. On application of Ind AS 116, the nature of expenses
has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and finance
cost for interest accrued on lease liability.

The following is the summary of practical expedients elected on initial application:

1. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12
months of lease term on the date of initial application

2. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial
application.

3. Applied the practical expedient to grandfather the assessment of which transactions are leases.
Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind
AS 17.

The Group lease asset classes primarily consist of leases for land, buildings and plant and machinery. The
Group assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a
lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Group assesses whether: (i) the contract involves the use of an identified asset (ii) the Group has substantially
all of the economic benefits from use of the asset through the period of the lease and (iii) the Group has the
right to direct the use of the asset.

248
 At the date of commencement of the lease, the Group recognises a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the
Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease.

Certain lease arrangements include the right to extend the lease. ROU assets and lease liabilities includes these
options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of
the lease term and useful life of the underlying asset.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured
with a corresponding adjustment to the related right of use asset if the Group changes its assessment if
whether it will exercise an extension or a termination option.

g) Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net
realisable value. Cost of raw materials and traded goods comprises cost of purchases. Cost of work in progress
and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and
fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.

Cost of inventories also include all other costs incurred in bringing the inventories to their present location
and condition. Cost are assigned to individual items of inventory on the basis of weighted average method.
Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is
the estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.

h) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposit accounts, margin deposit money and highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank
overdrafts, if any, are shown within borrowings in current liabilities in the balance sheet.

i) Impairment of non-financial assets

Intangible assets that have an indefinite useful life (including Goodwill and Brands) are not subject to
amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances
indicate that they might be impaired.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. At each reporting date, the Group assesses whether there is any indication
based on internal/external factors, that an asset may be impaired. If any such indication exists, the Group
estimates the recoverable amount of the asset. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are

249
 grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units).

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model is used. After impairment,
depreciation is provided on the revised carrying amount of asset over its remaining useful life.

Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the
end of each reporting period.

j) Impairment of financial assets

All financial assets except for those at fair value through profit and loss (FVTPL) are subject to review for
impairment at least at each reporting date to identify whether there is any objective evidence that a financial
asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for
each category of financial assets. In accordance with Ind-AS 109, the Group applies expected credit loss
(ECL) model for measurement and recognition of impairment loss for financial assets carried at amortised
cost. ECL is the weighted average of difference between all contractual cash flows that are due to the Group
in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the
original effective interest rate, with the respective risks of default occurring as the weights. When estimating
the cash flows, the Group is required to consider –

• All contractual terms of the financial assets (including prepayment and extension) over the expected
life of the assets.
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.

Trade receivables

The Group applies approach permitted by Ind AS 109 Financial Instruments, which requires lifetime
expected credit losses to be recognized upon initial recognition of receivables. Lifetime ECL are the expected
credit losses resulting from all possible default events over the expected life of a financial instrument. The
Group uses the expected credit loss model to assess any required allowances and uses a provision matrix to
compute the expected credit loss allowance for trade receivables. Life time expected credit losses are assessed
and accounted based on Group historical collection experience for customers and forecast of macroeconomic
factors.

Other financial assets

For recognition of impairment loss on other financial assets and risk exposure, the Group determines whether
there has been a significant increase in the credit risk since initial recognition. If the credit risk has not
increased significantly since initial recognition, the Group measures the loss allowance at an amount equal to
12-month expected credit losses, else at an amount equal to the lifetime expected credit losses. When making
this assessment, the Group uses the change in the risk of a default occurring over the expected life of the
financial asset. To make that assessment, the Group compares the risk of a default occurring on the financial
asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of
initial recognition and considers reasonable and supportable information, that is available without undue cost
or effort, that is indicative of significant increases in credit risk since initial recognition. The Group assumes
that the credit risk on a financial asset has not increased significantly since initial recognition if the financial
asset is determined to have low credit risk at the balance sheet date.

k) Financial instruments

250
Financial instruments are recognised when the Group becomes a party to the contractual provisions of the
instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at
FVTPL which are measured initially at fair value.

If the Group determines that the fair value at initial recognition differs from the transaction price, the Group
accounts for that instrument at that date as follows:

a) at the measurement basis mentioned above if that fair value is evidenced by a quoted price in an active
market for an identical asset or liability (i.e. a Level 1 input) or based on a valuation technique that uses
only data from observable markets. The Group recognises the difference between the fair value at initial
recognition and the transaction price as a gain or loss.

b) in all other cases, at the measurement basis mentioned above, adjusted to defer the difference between
the fair value at initial recognition and the transaction price. After initial recognition, the Group
recognises that deferred difference as a gain or loss only to the extent that it arises from a change in a
factor (including time) that market participants would take into account when pricing the asset or liability.

Subsequent measurement of financial assets and financial liabilities is described below:

Financial assets

Classification and subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into the following categories upon
initial recognition:

Financial assets at amortised cost

A financial instrument is measured at amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the
effective interest method.

Financial assets at fair value

Investments in equity instruments (other than subsidiaries / associates) – All equity investments in scope of
Ind AS 109 are measured at fair value. Equity instruments which are held for trading are generally classified
at FVTPL. For all other equity instruments, the Group decides to classify the same either at fair value through
other comprehensive income (FVOCI) or FVTPL. The Group makes such election on an instrument by
instrument basis. The classification is made on initial recognition and is irrevocable.

If the Group decides to classify an equity instrument as at FVOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the other comprehensive income (OCI). There is no
recycling of the amounts from OCI to P&L, even on sale of investment. However, the Group may transfer
the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss
unless the dividend clearly represents a recovery of part of the cost of the investment.

251
 Equity instruments included within the FVTPL category are measured at fair value with all changes
recognised in the statement of profit and loss.

De-recognition of financial assets

A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired
or the Group has transferred its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement

After initial recognition, the financial liabilities are subsequently measured at amortised cost using effective
interest method. Amortised cost is calculated after considering any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The effect of EIR amortisation is included as finance costs
in the statement of profit and loss.

De-recognition of financial liabilities

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Derivative financial instruments

The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign
exchange rate risks, including foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is
recognised in consolidated statement of profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realise the assets and settle the liabilities simultaneously

l) Fair value measurement

The Group measures certain financial instruments, such as, investments at fair value at each balance sheet
date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

252
 The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.

m) Provisions, contingent liabilities and contingent assets

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation, it is probable that an outflow of resources will be required to settle the obligation and the amount
can be reliably estimated. Provisions are measured at the present value of best estimate of the expenditure
required to settle the present obligation at the balance sheet date.

The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense. Expected future operating losses are not provided for.

Contingencies

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the control of
the Group; or
• Present obligations arising from past events where it is not probable that an outflow of resources will
be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be
made.

Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset
is disclosed.

n) Revenue recognition

Revenue is measured based on the consideration specified in a contract with a customer and excludes
amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a
product or service to a customer.

Revenue from sale of goods

Revenue from sale of goods is recognised when the control of goods is transferred to the buyer as per the
terms of the contract, in an amount that reflects the consideration the Group expects to be entitled to in
exchange for those goods. Control of goods refers to the ability to direct the use of and obtain substantially
all of the remaining benefits from goods.

Revenue is measured at fair value of the consideration received or receivable and are accounted for net of
returns and discounts. Sales, as disclosed, are exclusive of goods and services tax.

Other incomes

Interest income is recognised on time proportion basis taking into account the amount outstanding and rate
applicable. For all financial assets measured at amortised cost, interest income is recorded using the effective
interest rate (EIR) i.e. the rate that exactly discounts estimated future cash receipts through the expected life
of the financial asset to the net carrying amount of the financial assets. The future cash flows include all other
transaction costs paid or received, premiums or discounts if any, etc.

Dividend is recognized as and when the right of the Group to receive payment is established.

Export benefit entitlements under various schemes notified by the government are recognized in the
statement of profit and loss when the right to receive credit as per terms of the scheme is established in

253
 respect of the exports made and no significant uncertainties exist as to the amount of consideration and its
ultimate collection.

o) Employee benefits

i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled.

ii) Post-employment benefits

Defined contribution plan: A defined contribution plan is a post-employment benefit plan under which
the Group pays specified contributions to a separately entity. The Group has defined contribution plans
for provident fund and employees’ state insurance scheme. The Group’s contribution in the above plans
is recognised as an expense in the Statement of Profit and Loss during the year in which the employee
renders the related service.

Defined benefit plans: The Group has defined benefit plan namely Gratuity for employees. The liability
in respect of gratuity plans is calculated annually by independent actuary using the projected unit credit
method. The Group recognises the following changes in the net defined benefit obligation under
employee benefits expense in statement of profit or loss:

- Service costs comprising current service costs, past service costs, gains and losses on curtailment and
non-routine settlements
- Net interest expense

Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity and in the balance sheet. Re-
measurements are not reclassified to profit or loss in subsequent periods.

iii) Other long-term employee benefits

Compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as
per projected unit credit method at the end of the year. Actuarial gains/losses are immediately recognised
to the Statement of Profit and Loss.

iv) Termination benefits are recognized as an expense immediately.

p) Employee share based payments

The Company has equity-settled share-based remuneration plans for its employees. None of the Company’s
plans are cash-settled. Where employees are rewarded using share-based payments, the fair value of
employees’ services is determined indirectly by reference to the fair value of the equity instruments granted.
This fair value is appraised at the grant date. All share-based remuneration is ultimately recognised as an
expense in profit or loss with a corresponding credit to equity. If vesting periods or other vesting conditions
apply, the expense is allocated over the vesting period, based on the best available estimate of the number of
share options expected to vest. Upon exercise of share options, the proceeds received, net of any directly
attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares
issued with any excess being recorded as share premium.

254
q) Foreign currency transactions

Items included in the financial statements are measured using the currency of the primary economic
environment in which the Group operates (‘the functional currency’). The financial statements are presented
in Indian rupee (INR), which is the Group’s functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange
rates are recognised in profit or loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement
of profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the
statement of profit and loss on a net basis within other gains/ (losses). Non-monetary items denominated in
foreign currency are reported at the exchange rate ruling on the date of transaction.

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates
different from those at which they were initially recorded, are recognised in the statement of profit and loss
in the year in which they arise.

r) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost
also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. Eligible
transaction/ ancillary costs incurred in connection with the arrangement of borrowings are adjusted with the
proceeds of the borrowings.

s) Income taxes

The income tax expense or credit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the country where the Group operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.

Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of Goodwill. Deferred income tax is also not accounted
for if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred
income tax is determined using tax rates (and laws) that have been enacted by the end of the reporting period
and are expected to apply when the related deferred income tax asset is realised or the deferred income tax
liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.

255
 Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the Group has a legally enforceable right to offset and intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised
in other comprehensive income or directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

t) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Group;

• by the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year.

Dilute earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods
presented for any share splits and bonus shares issues including for changes effected prior to the approval of
the financial statements by the Board of Directors.

u) Non-current assets held for sale and discontinued operations

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be
recovered principally through a sale transaction rather than through continuing use. This condition is
regarded as met only when the asset is available for immediate sale in its present condition subject only to
terms that are usual and customary for sale of such asset and its sale is highly probable. Management must
be committed to sale which should be expected to qualify for recognition as a completed sale within one year
from the date of classification. Non-current assets classified as held for sale are presented separately and
measured at the lower of their carrying amounts immediately prior to their classification as held for sale and
their fair value less costs to sell. However, some held for sale assets such as financial assets, assets arising
from employee benefits and deferred tax assets, continue to be measured in accordance with the Company’s
relevant accounting policy for those assets. Once classified as held for sale, the assets are not subject to
depreciation or amortisation. A discontinued operation is a component of the Company that either has been
disposed of, or is classified as held for sale. Profit or loss from discontinued operations comprise the post-
tax profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement
and disposal of assets classified as held for sale. Any profit or loss arising from the sale or re-measurement
of discontinued operations is presented as part of a single line item, profit or loss from discontinued
operations.

3. (B) Standards issued but not yet effective

All the Ind AS issued and notified by the Ministry of Corporate Affairs (‘MCA’) under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorised have been
considered in preparing these financial statements.

Standards issued but not effective

256
 Ministry of Corporate Affairs ('MCA') notifies new standards or amendments to the existing standards.
However, there are no such notifications which have been issued but are not yet effective or applicable from
1 January 2021.

4. Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amount of
assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these
financial statements and the reported amount of revenues and expenses for the years presented. Actual results
may differ from the estimates. Estimates and underlying assumptions are reviewed at each balance sheet date.
Revisions to accounting estimates are recognised in the period in which the estimates are revised and future
periods affected. In particular, information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant effect on the amounts recognised
in the financial statements includes:

• measurement of defined benefit obligations;

• estimation of useful lives of property, plant and equipment;
• provision and contingent liabilities;
• carrying values of inventories;
• expected credit loss on receivables;
• impairment of non-financial assets (goodwill and brands);
• measurement of share based payments;
• cash flow projections and liquidity assessment with respect to Covid-19 (refer note 58).

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

5 Property, plant and equipment and Capital work-in-progress

Right-of-use assets
Property, plant and equipment Freehold Leasehold Buildings Plant and Plant and Furniture Office Computers Vehicles Leasehold Total Leasehold land Building Plant and Total
land land (Refer note i) equipment equipment and fixtures equipment improvement machinery
(Refer note ii) on lease

Deemed cost as at 1 April 2017 13.10 14.16 1,427.95 2,130.39 576.13 29.89 191.40 9.49 29.77 12.26 4,434.54 - - - -
Transition impact on account of adoption of Ind AS - (14.16) - - - - - - - - (14.16) 14.16 710.02 219.07 943.25
116 (refer note 47 and note iii and iv)
Additions - - 63.77 757.25 137.19 3.26 69.08 32.98 52.70 27.19 1,143.42 - 123.62 - 123.62
Disposals - - (21.60) (39.43) - - (104.76) - (1.74) - (167.53) - - - -
Foreign currency translation adjustment - - 361.24 1,079.04 (151.72) - 121.26 - - - 1,409.82 - 102.93 34.42 137.35
Gross block as at 31 March 2018 13.10 - 1,831.36 3,927.25 561.60 33.15 276.98 42.47 80.73 39.45 6,806.09 14.16 936.57 253.49 1,204.22

Accumulated depreciation
Depreciation charge during the year - - 50.78 529.29 89.40 4.72 79.05 5.00 9.48 4.84 772.56 0.24 132.29 55.20 187.73
Disposals - - (21.57) (24.51) - - (104.76) - (0.24) - (151.08) - - - -
Foreign currency translation adjustment - - 190.90 625.87 (1.17) - 98.76 - - - 914.36 - 7.86 3.54 11.40
Closing accumulated depreciation - - 220.11 1,130.65 88.23 4.72 73.05 5.00 9.24 4.84 1,535.84 0.24 140.15 58.74 199.13

Net carrying amount as at 31 March 2018 13.10 - 1,611.25 2,796.60 473.37 28.43 203.93 37.47 71.49 34.61 5,270.25 13.92 796.43 194.75 1,005.10

Gross carrying amount as at 1 April 2018 13.10 - 1,831.36 3,927.25 561.60 33.15 276.98 42.47 80.73 39.45 6,806.09 14.16 936.57 253.49 1,204.22
Additions - - 22.17 573.75 192.98 1.08 71.90 6.36 4.41 40.51 913.16 227.68 168.36 66.72 462.76
Disposals - - (826.30) (112.27) (0.23) (1.21) (16.01) - (5.03) - (961.05) - - - -
Asset held for sale (refer note 49) - - (653.99) (2,742.51) (571.56) - (260.30) - - - (4,228.36) - (889.20) (312.12) (1,201.32)
Foreign currency translation adjustment - - (47.66) (4.36) (182.79) - (22.58) - - - (257.39) - (24.17) (8.09) (32.26)
Gross block as at 31 March 2019 13.10 - 325.58 1,641.86 - 33.02 49.99 48.83 80.11 79.96 2,272.45 241.84 191.56 - 433.40

Accumulated depreciation as at 1 April 2018 - - 220.11 1,130.65 88.23 4.72 73.05 5.00 9.24 4.84 1,535.84 0.24 140.15 58.74 199.13
Depreciation charge during the year - - 47.06 565.30 63.96 5.13 84.41 10.13 10.65 12.07 798.71 2.04 166.21 61.80 230.05
Disposals - - (187.86) (95.55) - (0.57) (16.01) - (1.09) - (301.08) - - - -
Asset held for sale (refer note 49) - - (31.82) (1,132.70) (70.69) - (97.86) - - - (1,333.07) - (270.21) (116.19) (386.40)
Foreign currency translation adjustment - - (16.81) (89.01) (81.50) - (24.14) - - - (211.46) - (10.16) (4.35) (14.51)
Closing accumulated depreciation - - 30.68 378.69 - 9.28 19.45 15.13 18.80 16.91 488.94 2.28 25.99 - 28.27

Net carrying amount as at 31 March 2019 13.10 - 294.90 1,263.17 - 23.74 30.54 33.70 61.31 63.05 1,783.52 239.56 165.57 - 405.13

Gross carrying amount as at 1 April 2019 13.10 - 325.57 1,641.86 - 33.02 49.98 48.83 80.11 79.96 2,272.45 241.84 191.56 - 433.40
Acquired pursuant to business combination (refer 15.00 - 164.00 416.66 - 13.04 20.00 18.71 13.12 13.48 674.00 683.59 - - 683.59
note 55)
Additions - - 15.78 667.41 - 6.76 10.08 16.32 14.42 18.87 749.64 - 381.63 - 381.63
Transfer on capitalisation - - - 48.00 - - - - - - 48.00 - - - -
Disposals - - - (0.19) - (5.92) (0.14) (3.94) (5.26) (0.97) (16.42) - (4.67) - (4.67)
Gross block as at 31 March 2020 28.10 - 505.35 2,773.74 - 46.90 79.92 79.92 102.39 111.34 3,727.67 925.43 568.52 - 1,493.95

Accumulated depreciation as at 1 April 2019 - - 30.65 378.79 - 9.28 19.45 15.13 18.80 16.91 489.04 2.28 25.99 - 28.27
Depreciation charge during the year - - 23.85 313.59 - 6.89 14.74 20.60 16.12 8.80 404.59 13.32 31.84 - 45.16
Transfer on capitalisation - - - - - - - - - - - 2.00 - - 2.00
Disposals - - - (0.19) - (2.76) (0.14) (3.73) (4.21) - (11.03) - (0.89) - (0.89)
Closing accumulated depreciation - - 54.50 692.19 - 13.41 34.05 32.00 30.71 25.71 882.60 17.60 56.94 - 74.54

Net carrying amount as at 31 March 2020 28.10 - 450.85 2,081.55 - 33.49 45.87 47.92 71.68 85.63 2,845.07 907.83 511.58 - 1,419.41

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Right-of-use assets
Property, plant and equipment Freehold Leasehold Buildings Plant and Plant and Furniture Office Computers Vehicles Leasehold Total Leasehold land Building Plant and Total
land land (Refer note i) equipment equipment and fixtures equipment improvement machinery
(Refer note ii) on lease

Gross carrying amount as at 1 April 2020 28.10 - 505.35 2,773.74 - 46.90 79.92 79.92 102.39 111.34 3,727.67 925.43 568.52 - 1,493.95
Additions - - 5.83 685.86 - 2.08 7.24 17.00 9.20 9.70 736.91 - 242.86 - 242.86
Transfer on capitalisation - - - 34.00 - - - - - - 34.00 - - - -
Foreign currency translation reserve - - - 9.00 - - - - - - 9.00 - - - -
Disposals (1.86) - - (66.49) - - (0.03) (0.03) (8.31) - (76.70) - - - -
Gross block as at 31 March 2020 26.24 - 511.18 3,436.11 - 48.98 87.13 96.89 103.28 121.04 4,430.87 925.43 811.38 - 1,736.81

Accumulated depreciation as at 1 April 2020 - - 54.50 692.19 - 13.41 34.05 32.00 30.71 25.71 882.58 17.60 56.94 - 74.54
Depreciation charge during the year - - 21.02 320.98 - 6.02 11.24 19.16 14.15 7.33 399.90 16.55 38.04 - 54.59
Disposals - - - (65.68) - - (0.02) (0.02) (6.76) - (72.49) - - - -
Foreign currency translation reserve - - - 2.00 - - - - - - 2.00 - - - -
Closing accumulated depreciation - - 75.52 949.49 - 19.43 45.27 51.14 38.10 33.04 1,211.99 34.15 94.98 - 129.13

Net carrying amount as at 31 December 2020 26.24 - 435.66 2,486.62 - 29.55 41.86 45.75 65.18 88.00 3,218.88 891.28 716.40 - 1,607.69

Capital work-in-progress
Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Capital work-in-progress
820.67 581.37 131.67 179.60

Total 820.67 581.37 131.67 179.60

Notes:
(i) In Parent Company, Building (gross block) amounting ₹ 177.58 million (31 March 2020: ₹ 167.34 million, 31 March 2019: ₹ 148.47 million, 31 March 2018: ₹ 107.96 million), net block ₹ 124.84 million (31 March 2020:₹ 123.62 million, 31 March 2019: ₹ 115.29 million, 31 March 2018: ₹
89.24 million) is constructed on leasehold land
(ii) Refer note 44 for disclosure of contractual commitments for the acquisition of property, plant and equipment.
(iii) The Parent Company has a leasehold land at Pune which has been taken on a lease for a period of 95 years in the year 2018-19. Initial lease payment of ₹ 227.68 million has been made. No annual rent is required to be paid for the aforementioned leasehold land.
(iv) The Parent Company has a leasehold land at Pune which has been taken on a lease for a period of 71 years and 8 months in the year 2004-05. Initial lease payment of ₹ 17.15 millions has been made. No annual rent is required to be paid for the aforementioned leasehold land.
(v) Out of total depreciation of ₹ 798.71 million, of Property, plant and equipment, for the year ended 31 March 2019, depreciation amounting to ₹ 520.77 million pertains to discontinued operation which has been transferred to asset held for sale (refer note 49)
(vi) Out of total amortisation of right-of-use assets of ₹ 230.05 million, for the year ended 31 March 2019, depreciation amounting to ₹ 211.98 million pertains to discontinued operation which has been transferred to asset held for sale (refer note 49)

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

6 Intangible assets and Intangible assets under development

Intangible assets Computer Technical Brand Other intangible Customer Total Goodwill on
software knowhow assets relationships consolidation

Deemed cost as at 1 April 2017 13.48 - - 46.67 - 60.15 1,341.75

Additions 23.52 27.18 - 11.23 - 61.93 -
Foreign currency translation adjustment - - - 19.70 - 19.70 210.70
Gross block as at 31 March 2018 37.00 27.18 - 77.60 - 141.78 1,552.45

Accumulated amortisation as at 1 April 2017 - - - - - - -

Amortisation charge for the year 4.72 3.40 - 15.24 - 23.36 -

Foreign currency translation adjustment - - - 13.35 - 13.35 -
Closing accumulated amortisation 4.72 3.40 - 28.59 - 36.71 -

Net carrying amount as at 31 March 2018 32.28 23.78 - 49.01 - 105.07 1,552.45

Gross carrying amount as at 1 April 2018 37.00 27.18 - 77.60 - 141.78 1,552.45
Additions 11.38 - 670.03 18.35 - 699.76 -
Disposals - - - (1.94) - (1.94) -
Asset held for sale (refer note 49) - - - (89.41) - (89.41) (1,502.97)
Foreign currency translation adjustment - - - (4.60) - (4.60) (49.48)
Gross block as at 31 March 2019 48.38 27.18 670.03 - - 745.59 -

Accumulated amortisation as at 1 April 2018 4.72 3.40 - 28.59 - 36.71 -

Amortisation charge for the year 9.03 4.53 - 18.95 - 32.51 -

Asset held for sale (refer note 49) - - - (41.95) - (41.95) -
Foreign currency translation adjustment - - - (5.59) - (5.59) -
Closing accumulated amortisation 13.75 7.93 - - - 21.68 -

Net carrying amount as at 31 March 2019 34.63 19.25 670.03 - - 723.91 -

Gross carrying amount as at 1 April 2019 48.38 27.18 670.03 - - 745.59 -

Acquired pursuant to business combination (refer 13.00 - - - 4,009.00 4,022.00 1,758.09
note 55)
Additions 89.67 - 17.37 - - 107.04 -
Disposals (7.95) - - - - (7.95) -
Gross block as at 31 March 2020 143.10 27.18 687.40 - 4,009.00 4,866.68 1,758.09

Accumulated amortisation as at 1 April 2019

Opening accumulated amortisation 13.75 7.93 - - - 21.68 -

Amortisation charge for the year 18.62 4.53 - - 198.30 221.45 -
Disposals (5.63) - - - - (5.63) -
Closing accumulated amortisation 26.74 12.46 - - 198.30 237.50 -

Net carrying amount as at 31 March 2020 116.37 14.72 687.40 - 3,810.70 4,629.18 1,758.09

Gross carrying amount as at 1 April 2020 143.10 27.18 687.40 - 4,009.00 4,866.68 1,758.09
Additions 55.93 - - - - 55.93 -
Gross block as at 31 December 2020 199.03 27.18 687.40 - 4,009.00 4,922.61 1,758.09

Accumulated amortisation as at 1 April 2020 26.74 12.46 - - 198.30 237.50 -

Amortisation charge for the year 29.51 3.40 - - 201.22 234.13 -

Closing accumulated amortisation 56.25 15.86 - - 399.52 471.62 -

Net carrying amount as at 31 December 2020 142.78 11.32 687.40 - 3,609.48 4,450.99 1,758.09

Intangible assets under development As at As at As at As at

31 December 2020 31 March 2020 31 March 2019 31 March 2018
Patent under development 910.21 315.00 - -

910.21 315.00 - -
Note
(i) Out of total amortisation of ₹ 32.51 million on intangible assets for the year ended 31 March 2019, depreciation amounting to ₹ 18.95 million pertains to discontinued operation which has
been transferred to asset held for sale (refer note 49)
(ii) In subsidiary companies, development cost of ₹ Nil (31 March 2020: ₹ Nil, 31 March 2019: ₹ 3.97 million, 31 March 2018: ₹ 20.44 million) have been capitalised. Research and
development cost are recognised as part of the other expenses

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

7 A Investments accounted for using the equity method

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Non-trade (unquoted) investments

In associate company:
Unquoted equity instruments, fully paid up
Nil (31 March 2020: Nil, 31 March 2019: Nil, 31 March 2018: 2,257,591) equity shares of ₹ 10 each in
Sona Skill Development Centre Limited
Cost of acquisition - - - 24.04
Less: Group's share of net losses - - - (18.70)
Total - - - 5.34

B Other investments
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Unquoted equity instruments, fully paid up

9,953 (31 March 2020: 9,953) equity shares of Euro 500 each in Sona Holding B.V. The Netherlands - 19.00 - -
(refer note 49)

- 19.00 - -
Aggregate amount of unquoted non-current investments 19.00 19.00 - -

8 Loans

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Unsecured, considered good
Non current
Security deposits 54.02 50.79 23.14 16.64
Total loans - non current 54.02 50.79 23.14 16.64

Current
Security deposits 1.52 4.92 0.19 148.45
Others - - - 0.84
Total loans - current 1.52 4.92 0.19 149.29
Notes
(i) The exposure to financial risks and fair value measurement related to these financial instruments is described in note 37
(ii) The carrying amounts of current financial assets are considered to be a reasonable approximation of their fair values.

9 Other financial assets

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Unsecured, considered good
Non current
Fixed deposits with banks with maturity period of more than 12 months (refer note (i)) - 0.87 38.11 26.79
Total other financial assets- non current - 0.87 38.11 26.79

Current
Receivable from related parties - 0.30 2.46 -
Forward contract receivables 157.69 - 6.47 -
Royalty income receivable 2.00 5.00 - -
Others 0.21 - 23.33 37.60
Total other financial assets- current 159.90 5.30 32.26 37.60
Notes:
(i) Held as margin money deposits against bank guarantees, letter of credit availed by the Group and under lien for loan facility.
(ii) The carrying amounts of current financial assets are considered to be a reasonable approximation of their fair values.

10 Income tax assets (net)

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Non current
Prepaid taxes 243.09 291.42 11.24 13.66
243.09 291.42 11.24 13.66
Current
Prepaid taxes - - - 9.63
- - - 9.63

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

11 Other assets
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Non current
Prepaid expenses 11.70 11.41 6.23 2.36
Capital advances 162.87 219.08 77.96 82.17
Balance with government authorities - - - 6.74
Loans and advances to employees - - - 0.23
Un-adjusted consideration for revenue contract 35.00 48.00 - -
Total other assets- non current 209.57 278.49 84.19 91.50

Current `
Prepaid expenses 16.51 46.65 23.63 97.45
Loans and advances to employees 13.99 4.49 3.42 29.07
Advance to suppliers for goods and services 171.87 88.47 8.51 10.55
Balance with government authorities 312.13 168.53 92.07 13.68
Un-adjusted consideration for revenue contract 13.00 - - -
Other assets 67.14 50.38 22.29 158.90
Less: Allowance for doubtful advances (22.18) (22.18) (19.52) (19.52)

Total other assets- current 572.46 336.34 130.40 290.13

12 Inventories
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Raw materials and components * 866.28 572.41 94.09 196.75

Work-in-progress ** 239.56 163.30 149.68 1,594.27
Finished goods *** 1,385.60 895.18 181.58 538.35
Stores and spares 164.44 174.36 110.81 395.04
Loose tools 35.21 17.91 17.15 14.81
Dies, jigs and fixtures 136.68 122.89 119.22 99.75
Scrap 10.63 16.31 5.31 -
Total # 2,838.40 1,962.36 677.84 2,838.97

# Total inventory is net of 'provision for obsolete and slow moving inventory' amounting to ₹ 26.29 million (31 March 2020: ₹ 0.80 million, 31 March 2019: ₹ 7.92 million 31 March 2018: ₹ Nil )
* Includes raw materials and components in transit amounting ₹ 142 million (31 March 2020:₹ 20.00 million, 31 March 2019: ₹ Nil, 31 March 2018: ₹ Nil)
** Includes with the vendors sent for job work ₹ 100.55 million ( 31 March 2020: ₹ 49.31 million, 31 March 2019: ₹ 69.43 million, 31 March 2018: ₹ 91.26 million)
*** Includes goods in transit ₹ 400.80 million (31 March 2020: ₹ 174.93 million, 31 March 2019: ₹ 123.68 million; 31 March 2018: ₹ 205.12 million)

13 Trade receivables
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Unsecured
Trade receivables considered good 3,938.98 2,336.28 1,520.98 2,809.88
Trade receivables - credit impaired 3.93 3.94 3.08 1.07
Less: Allowances for expected credit loss (3.93) (3.94) (3.08) (1.07)
Total trade receivables 3,938.98 2,336.28 1,520.98 2,809.88
Notes:
(i) Refer note 40 for receivable balance from related parties.
(ii) Refer note 37 - Financial instruments for assessment of expected credit losses.

14 Cash and cash equivalents

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Balance with banks

- in current accounts 310.46 445.43 1.84 261.91
Cash on hand 0.12 0.14 0.10 2.10
Bank deposits with original maturity of less than three months 22.80 604.28 - -
Total cash and cash equivalents 333.38 1,049.85 1.94 264.01

15 Other bank balances

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Bank deposits with original maturity of more than three months but residual maturiry of less than 2.57 623.08 254.12 -
twelve months

Total other bank balances 2.57 623.08 254.12 -

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

16 (A) Equity share capital

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Authorised share capital

50,500,000 (31 March 2020: 50,500,000, 31 March 2019: 50,500,000, 31 March 2018: 30,000,000) 505.00 505.00 505.00 300.00
equity shares of ₹ 10 each (refer note 52)

Issued, subscribed and paid up share capital

47,153,944 (31 March 2020: 47,153,944, 31 March 2019: 27,718,376, 31 March 2018: 27,718,376) 471.54 471.54 277.18 277.18
equity shares of ₹ 10 each fully paid up

i) Reconciliation of shares outstanding at the beginning and at the end of the reporting period

Number of shares As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Equity shares outstanding at the beginning of the year 47,153,944 27,718,376 27,718,376 27,718,376
Less: Buyback of shares (refer note v below) - (2,592,935) - -
Add : Issue of shares (refer note 56) - 22,028,503 - -
Equity shares outstanding at the end of the year 47,153,944 47,153,944 27,718,376 27,718,376

Amount As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Equity shares outstanding at the beginning of the year 471.54 277.18 277.18 277.18
Less: Buyback of shares (refer note v below) - (25.93) - -
Add : Issue of shares (refer note 56) - 220.29 - -
Equity shares outstanding at the end of the year 471.54 471.54 277.18 277.18
471.54 471.54 -
ii) Rights, preferences and restrictions attached to equity shares

The Parent Company has only one class of equity shares having a par value of ₹10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity share holders are eligible to receive the remaining assets of the Group after distribution of all
preferential amounts, in proportion to their shareholding.

iii) Shares of the Company held by Holding Company

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 31,053,190 31,053,190 - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) - - 18,693,677 18,693,677

iv) Details of shareholders holding more than 5% of the total number of equity shares in the Group

Number of shares As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 31,053,190 31,053,190 - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) 16,100,742 16,100,742 18,693,677 18,693,677
JM Financial Trustee Company Private Limited- JM Financial India Fund - - 9,024,687 9,024,687

Percentage As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 65.85% 65.85% - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) 34.15% 34.15% 67.44% 67.44%
JM Financial Trustee Company Private Limited- JM Financial India Fund - - 32.56% 32.56%

(v) The shareholders of the Parent Company approved the buyback of 2,592,935 equity shares on 3 July 2019 and subsequently on 5 July 2019, Group has bought back 2,592,935 equity shares and Capital Redemption
Reserve has been created in accordance with provision of the Companies Act, 2013 for the buy back of equity shares. Other than this, the Parent Company has not bought back any shares during the period ended 31
December 2020 and five years immediately preceeding the year ended 31 March 2020 .

(vi) The Parent Company has not issued any shares pursuant to contracts without payment being received in cash, or allotted as fully paid up by way of bonus shares during the period ended 31 December 2020 and
five years immediately preceeding the year ended 31 March 2020 the period of five years immediately preceding the period ended 31 December 2020.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

16 (B) Instruments entirely equity in nature

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Authorised share capital

1,500,000 (31 March 2020: 1,500,000, 31 March 2019: 1,500,000, 31 March 2018: Nil ) preference 15.00 15.00 15.00 -
shares of ₹ 10 each

Issued, subscribed and paid up share capital

594,436 (31 March 2020: 594,436, 31 March 2019: Nil, 31 March 2018: Nil) Compulsorily 5.94 5.94 - -
convertible preference shares of ₹ 10 each fully paid up

i) Reconciliation of shares outstanding at the beginning and at the end of the reporting period

Number of shares As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Compulsorily convertible preference shares outstanding at the beginning of the year 594,436 - - -
Add : Issue of shares (refer note 56) - 594,436 - -
Compulsorily convertible preference shares outstanding at the end of the year 594,436 594,436 - -

Amount As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Compulsorily convertible preference shares outstanding at the beginning of the year 5.94 - - -
Add: Issue of 594,436 preference shares of ₹ 10 each fully paid up - 5.94 - -
Compulsorily convertible preference shares outstanding at the end of the year 5.94 5.94 - -

ii) Rights, preferences and restrictions attached to preference shares

Each compulsorily convertible preference shares (CCPS) has a par value of ₹10 and would be converted into equity shares of the holding company on the date falling five years from the date of issue of such CCPS or
the last date of conversion under applicable laws, whichever is earlier. The preference shareholders shall receive a dividend of 0.01% per annum and carry a preferential right vis-à-vis equity shares of the holding
company with respect to payment of dividend or repayment of capital. Each CCPS shall have the same voting as that given to the equity shareholders in the shareholders’ meeting, to the extent of their respective
ownership of equity shares (assuming the CCPS have been converted into equity shares in accordance with their terms).The preference shares shall have preferential rights vis-a-vis the equity shares, with respect to
interest and other distribution rights and rights on liquidation, dissolution and winding up of the affairs of the holding company.

iii) Shares of the Company held by Holding Company

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 594,436 594,436 - -

iv) Details of shareholders holding more than 5% of the total number of equity shares in the Group

Number of shares As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 594,436 594,436 - -

Percentage As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 100.00% 100.00% - -

v) No shares have been issued for consideration other than cash or as bonus shares and no shares have been bought back during the period ended 31 December 2020 and five years immediately preceeding the year

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

17 Other equity
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Retained earnings 4,658.44 3,569.95 1,150.82 (565.13)
General reserve 120.00 120.00 120.00 120.00
Securities premium 7,881.33 7,881.33 382.14 382.14
Capital redemption reserve 25.93 25.93 - -
Foreign currency transaltion reserve 27.80 14.00 (192.37) (212.42)
Equity instruments through other comprehensive income (328.28) (309.28) - -
Employee’s stock options outstanding account 22.81 - - -
Total reserves and surplus 12,408.03 11,301.93 1,460.59 (275.41)
11,301.93 1,460.59 (275.41)
a) Retained earnings (0.00) 0.00 -
Retained earnings represent the undistributed profits that the Group has till date and it includes remeaurements of defined benefit obligation.

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance 3,569.95 1,150.82 (565.13) (1,341.18)
Net profit for the year 1,554.69 3,603.43 1,729.71 774.24
Remeasurement of defined benefit obligations, net of tax (6.21) 8.71 (13.76) (10.80)
Less: Ind-AS 116 transition adjustments(net of adjustment of deferred tax) - - - 12.61
Less:-Dividend paid (459.99) (968.09) - -
Less:-Tax on dividend - (198.99) - -
Less : Transfer to capital redemption reserve - (25.93) - -
Closing balance 4,658.44 3,569.95 1,150.82 (565.13)
4,658.44 3,569.95 1,150.82 (565.13)
b) General reserve (0.01) (0.01) 0.00 -

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Opening balance 120.00 120.00 120.00 120.00

Closing balance 120.00 120.00 120.00 120.00

The Group transferred a portion of the net profit before declaring dividend to general reserve pursuant to the earlier provision of Companies Act 1956. Mandatory transfer to general reserve
is not required under the Companies Act, 2013. This reserve is available for distribution to shareholders in accordance with provisions of Companies Act, 2013.

c) Securities premium
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance 7,881.33 382.14 382.14 382.14
Premium on fresh issue of equity shares - 8,479.83 - -
Less: Stamp duty paid for increase in authorised share capital - (8.72) - -
Less : Premium paid on buy back of shares - (788.28) - -
Less: Tax paid on buy back of shares - (183.64) - -
Closing balance 7,881.33 7,881.33 382.14 382.14

Securities premium represents premium received on issuance of shares. The balance is utilised in accordance with the provisions of the Companies Act, 2013.

d) Capital redemption reserve

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance 25.93 - - -
Transferred from retained earnings - 25.93 - -
Closing balance 25.93 25.93 - -

Companies Act, 2013 requires that where a Group purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased
shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the
Group, in paying up unissued shares of the Group to be issued to shareholders of the Group as fully paid bonus shares. The Group established this reserve pursuant to the buyback of shares
in current year.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

e) Foreign currency translation reserve

Exchange differences arising on translation of the foreign operations are recognised in other comprehensive income as described in accounting policy and accumulated in a separate reserve
within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance 14.00 (192.37) (212.42) -
Exchange difference reclassified to profit or loss on disposal of subsidiary - 192.37 - -
Other Comprehensive income (OCI) for the year 13.80 14.00 20.05 (212.42)
Closing balance 27.80 14.00 (192.37) (212.42)

f) Equity instruments through other comprehensive income

The Group has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. Such fair value changes are not reclassified to profit or
loss even upon disposal of the investment, but are transferred to retained earnings.
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance (309.28) - - -
Add: Net changes in fair values of equity instruments carried at fair value through (19.00) (309.28) - -
other comprehensive income
Closing balance (328.28) (309.28) - -

g) Employee’s stock options outstanding reserve

This reserve represents the shared based compensation expense recorded with the respect to options granted to employees as and when the related grant conditions are met and is adjusted
on exercise/ forfeiture of options.
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Opening balance - - - -
Add: Movement during the year 22.81 - - -
Closing balance 22.81 - - -

18 Borrowings

(i) Non - current borrowings

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Secured
Term loans from banks
Indian rupee loans 2,213.98 2,179.70 650.66 689.87
Vehicle loans 8.85 10.49 7.99 6.41
Foreign currency loans - - - 3,269.69
Term loans from financial institutions
Indian rupee loans - - 298.33 451.67

Deferred payment liabilities 19.93 31.54 113.96 110.77

2,242.76 2,221.73 1,070.94 4,528.41

Less: Amount disclosed under other financial liabilities (refer note 20) (544.61) (453.51) (337.87) (584.18)

Total non-current borrowings 1,698.15 1,768.22 733.07 3,944.23

(ii) Current borrowings

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018'

Indian Rupee loans repayable on demand from banks - secured* 511.49 846.09 389.10 349.51
Bills discounted from financial institution - unsecured** 92.25 - - -
Total current borrowings 603.74 846.09 389.10 349.51

* Cash credit/packing credit/other loans repayable on demand from banks are secured by hypothecation of inventories, book debts, other current assets and other collateral charges and
second pari passu charge on movable and immovable fixed assets of the Group. The interest rate on these loans are ranging from 4.70% to 10.35%. (31 March 2020: 5.60% to 10.35%, 31
March 2019: 6.05% to 10.50%, 31 March 2018: 8.00% -12.00%)
** The Group enters into factoring arrangements with recourse for its trade receivables with various banks. As at 31 December 2020 the Group had factoring facilities in place for trade
receivables and amount of Rs. 92.26 million were realised by using these facilities against which the monies were yet to be collected by the financial institution from the Group's customers.
The Group does not derecognize the receivables from its books since, it does not transfer substantially all the risks and rewards of ownership of the financial asset (i.e. receivables) and a
corresponding liability towards the banks is recognised in respect of aforementioned amounts so realised by the Group from the banks but yet to be collected by the financial institution from
the Group's customers.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

iii) Terms of Long term borrowing

Name of Bank/Financial Particulars As at As at As at As at
institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

HDFC (Term loan) -1 Amount (₹ million) 215.03 269.07 321.70 318.39

Interest rate 0.50% above one year MCLR of HDFC Bank 1 Year MCLR + 185 bps 11%(linked to HDFC bank's 1 year MCLR)) 11%(linked to HDFC bank's 1 year MCLR))

Security 1. First pari passu charge on entire movable & immovable fixed assets of the company
2. Second pari passu charge on current assets (present and future) of the company
Repayment schedule Quarterly Installments Quarterly Installments Quarterly Installments Quarterly Installments
1 Installment for Rs 17.79 million 4 Installment for Rs 17.79 million total 4 Installments of Rs. 13.34 million total 4 Installments of Rs. 10 million each total
4 Installment for Rs 22.24 million(Total Rs amounting Rs. 71.17 million amounting Rs. 53.37 million amounting Rs. 40 million
88.96) 4 Installment for Rs 22.24 million(Total Rs 4 Installment for Rs 17.79 million total 4 Installment for Rs 15 million each total
4 Installment for Rs 26.69 million (Total Rs 88.96) amounting Rs. 71.17 million amounting Rs. 60 million
106.75 million) 4 Installment for Rs 26.69 million (Total Rs 4 Installment for Rs 22.24 million(Total Rs 4 Installment for Rs 20 million each total
106.75 million) 88.96) amounting Rs 80 millon)
4 Installment for Rs 26.69 million (Total Rs 4 Installment for Rs 25 million each total Rs
106.75 million) 100 million)
4 Installment for Rs 9.15 million each total Rs
36.63 million
HDFC (Term loan) - 2 Amount (₹ million) 847.33 989.56 302.43 -
Interest rate 0.50% above one year MCLR of HDFC Bank 1 Year MCLR + 185 bps 1 year MCLR+100 bps -

Security 1. First pari passu charge on entire movable & immovable fixed assets of company -
2. Second pari passu charge on current assets (present and future) of company

Repayment schedule Quarterly 12 insallments of Rs. 70.15 each Quarterly 14 Installment for Rs 70.15 million Quarterly 14 insallments of Rs. 21.509 million -
total amounting Rs 841.75 million each (Total Rs 982.04 million ) each total amounting Rs. 301.12 million

HDFC (Term loan) - 3 Amount (₹ million) 656.61 424.56 - -

Interest rate 0.85% above one year MCLR of HDFC Bank 0.85% above one year MCLR of HDFC Bank - -

Security 1. First pari passu charge on entire movable & immovable fixed assets of the company - -
2. Second pari passu charge on current assets (present and future) of the company

Repayment schedule Quarterly 18 Installment for Rs 36.21 million Quarterly 18 Installment for Rs 23.41 million - -
each starting from 01st October 2021 (Total each starting from 01st October 2021, (total
Rs 651.75 million ) amounting Rs 421.44)
HDFC (Term loan) - 4 Amount (₹ million) 93.24 - - -
Interest rate 0.20% above six month MCLR of HDFC - - -
Bank
Security 1. Movable Fixed assets: First pari-passu - - -
charge on the entire movable fixed assets,
present and future of the Company
2. Immovable Fixed assets: First paripassu
charge on the immoveable fixed assets situated
at Gurgaon.
3.Current Assets: Second paripassu charge on
entire current assets of the Company, both
present and future
Repayment schedule Quarterly 16 Installment for Rs 5.82 million - - -
each starting from 23rd December 2022 (Total
amounting Rs 93.09 million )

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Name of Bank/Financial Particulars As at As at As at As at

institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

Citi Bank (Term loan) Amount (₹ million) 408.79 500.00 - -

Interest rate 3 Months T-Bill Rate +3.67% 3 Months T-Bill Rate +3.67% - -
Security 1. First pari passu charge on entire fixed assets of company excluding immovable fixed assets - -
situated at Pune.
2. Second pari passu charge on entire current assets of the company
Repayment schedule Quarterly Instalments Quarterly Installments - -
13 Installments of Rs 31.25 million each total 16 Installments of Rs 31.25 million each total
amounting Rs. 406.25 million amounting Rs. 500 million
State Bank of India Amount (₹ million) - - 25.19 75.05
Interest rate - - 2.75% above MCLR (1 yr) ie. 10.75% p.a. 2.75% above MCLR (1 yr) ie. 10.75% p.a.

Security - - First Pari Passu charge on all Fixed assets of the company including immovable asset along
with their other collateral security.
Second Pari Passu charge on Current assets of the company.
Repayment schedule - - Quarterly Installments Quarterly Installments
2 Installments of Rs 12.5 million (Total Rs 25 6 Installments of Rs 125 million(Total Rs 75
million) million)
Hero Fincorp - Term Loan Amount (₹ million) - - 225.98 315.34
Interest rate HFCL bench mark rate+ 0.25% ie. 11.65% + HFCL bench mark rate+ 0.25% ie. 11.65% +
0.15% 0.15%
Security First Pari Passu charge on entire Fixed assets First Pari Passu charge on Fixed assets
both present and future of the company Second Pari Passu charge on Current assets
excluing those which have been exclusively (Present &Future)
charged to specific lenders valued at Rs 123.31
cr as per projected BS as on 31.3.2016.The
min collatoral coverage to be between 1.1 x for
FY 2016-17 and 1.2 x from FY2017-18
onwards till loan closure
Second Pari Passu charge on entire Current
assets

Repayment schedule Quarterly Installments Quarterly Installments

10 Installments of Rs 22.5 million (Total Rs 14 Installments of Rs 22.5 million (Total Rs
225 million) 315 million)
Tata Capital Limited Amount (₹ million) - - 73.65 136.82
Interest rate - - Long term lending rate of TATA minus 7.25% Long term lending rate of TATA minus 7.25%
(min 10.5%) (min 10.5%)
Security - - First Pari Passu charge on entire movable First Pari Passu charge on Fixed assets
Fixed assets (both present and future) Second Pari Passu charge on Current assets
(Present &Future)
First Part passu charge over the immovable
property of the borrower situated at Gurgaon
Second Pari Passu charge on Current assets
(both Present &Future)

Repayment schedule - - Quarterly Quarterly Installments

2 Installment for Rs 20 milion(Total Rs 1 Installment for Rs 10 million
40million) 2 Installment for Rs 16.66 million(Total Rs
1 Installment for Rs 33. 33 million 33.33 million)
3 Installment for Rs 20 milion (Total Rs 60
million)
1 Installment for Rs 33.33 million

268
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
Terms of Long term borrowing (continued)
Name of Bank/Financial Particulars As at As at As at As at
institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

ICICI Term loans Amount (₹ million) - - - 250.27

Interest rate - - - I year Base Rate+3.75%
Security - - - First Pari Passu charge on Fixed assets
(Movable & Immovable)

Repayment schedule - - - Quarterly

2 Installment for Rs 62.5 million (Total Rs 125
million
1 Installment for Rs 125 million
Indusind Term loans Amount (₹ million) - - - 46.93
Interest rate - - - Bank base rate +1.00% (min 12%)
Security - - - Exclusive charge on specific fixed assets with
asset cover of 1.33x
Repayment schedule - - - Quarterly Installments
3 Installment for Rs 15.63 million (Total Rs.
46.88 million)

Yes Bank (Vehicle loan) Amount (₹ million) 3.36 3.62 4.36 3.58
Interest rate
Security Vehicle Vehicle Vehicle Vehicle
Repayment schedule 23 Installments of Rs 22,218 each (Total Rs 32 Installments of Rs 22,218 each (Total Rs 44 Installments of Rs 22,218 each (Total Rs 56 Installments of Rs 22,218 each (Total Rs
515,614) 717,376) 986,392) 1,255,408)
23 Installments of Rs 12,236 each (Total Rs 32 Installments of Rs 12,236 each (Total Rs 44 Installments of Rs 12,236 each (Total Rs 56 Installments of Rs 12,236 each (Total Rs
281,428) 391,552) 538,384) 685,216)
16 Installments of Rs 24,029 each (Total Rs 25 Installments of Rs 24,029 each (Total Rs 37 Installments of Rs 24,029 each (Total Rs
384,464) 600,725) 889,073)
22 Installments of Rs 14,888 each (Total Rs 31 Installments of Rs 14,888 each (Total Rs 43 Installments of Rs 14,888 each (Total Rs
327,536) 461,528) 640,184)
24 Installments of Rs 14,305 each (Total Rs 33 Installments of Rs 14,305 each (Total Rs 45 Installments of Rs 14,305 each (Total Rs
343,320) 472,065) 643,725)
15 Installments of Rs 37,752 each (Total Rs 24 Installments of Rs 37,752 each (Total Rs 36 Installments of Rs 37,752 each (Total Rs
566,280) 906,048) 1,359,072)
31 Installments of Rs 24,829 each (Total Rs 31 Installments of Rs 24,829 each (Total Rs 31 Installments of Rs 24,829 each (Total Rs
769,699) 769,699) 769,699)

HDFC (Vehicle loan) Amount (₹ million) 5.59 6.87 3.66 2.83

Interest rate
Security Vehicle Vehicle Vehicle Vehicle
Repayment schedule 37 Installments for Rs 77,150 (Total Rs 46 Installments for Rs 77150 (Total Rs 46 Installments for Rs 77150 (Total Rs 56 Installments of Rs 60,401 each (Total
2,854,550) 3,548,900) 3,548,900) amount Rs 3,382,456)
39 Installments for Rs 13,845 (Total Rs 32 Installments of Rs 60,401 each (Total 32 Installments of Rs 60,401 each (Total
539,955) amount Rs 1,932,832) amount Rs 1,932,832)
32 Installments of Rs 30,622 each (Total 41 Installments of Rs 30,622 each (Total 41 Installments of Rs 30,622 each (Total
amount Rs 979,904) amount Rs 1255502) amount Rs 1255502)
47 Installments of Rs 10,455 each (Total 56 Installments of Rs 10,455 each (Total 56 Installments of Rs 10,455 each (Total
amount Rs 491,385) amount Rs 585,480) amount Rs 585,480)

269
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
Terms of Long term borrowing (continued)
Name of Bank/Financial Particulars As at As at As at As at
institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

Term Loan A from Axis Amount (₹ million) * - - 374.69 608.29

Bank Amount (foreign currency) - - Euro 5 million less transaction cost Euro 0.20 Euro 8 Million less transaciton Cost Euro 0.43
million million.
(Pertaining to discontinued Interest rate - - 6 months Euro LIBOR plus 5.00% 6 months Euro LIBOR plus 5.00%
operations) Security - - Secured by assignment of exisitng and future industrial property rights, non-real estate fixed
assets and inventories of raw materials and supplies, as well as work-in-progress and finished
goods, arrangement of land charges for property, buildings etc., assignment of existing and
future bank balances and all exisiting and future receivables
Repayment schedule - - Repayable fully in March 2023 Repayable fully in March 2023
Term Loan B from Axis Amount (₹ million) * - - 365.83 1,291.31
Bank Amount (foreign currency) - - Euro 5 million less transaciton Cost Euro 0.29 Euro 17 Million less transaciton Cost Euro
(Pertaining to discontinued million 0.91 million.
operations) Interest rate - - 3 months Euro LIBOR plus 2.50% ( if 3 months Euro LIBOR plus 2.50%
property event happens @2.5%)
Security - - Secured by assignment of exisitng and future industrial property rights, non-real estate fixed
assets and inventories of raw materials and supplies, as well as work in progress and finished
goods, arrangement of land charges for property, buildings etc., assignment of existing and
future bank balances and all exisiting and future receivables
Repayment schedule - - Repayable fully in March 2023 Repayable fully in March 2023
Working Capital (Revolver Amount (₹ million) * - - - 1,366.21
Loan) from Axis Bank Amount (foreign currency) - - - Euro 17 Million
Interest rate - - 3 months Euro LIBOR plus 2.50% 3 months Euro LIBOR plus 2.50%
(Pertaining to discontinued Security - - Secured by assignment of exisitng and future industrial property rights, non-real estate fixed
operations) assets and inventories of raw materials and supplies, as well as work in progress and finished
goods, arrangement of land charges for property, buildings etc., assignment of existing and
future bank balances and all exisiting and future receivables
Repayment schedule - - Expiry in 2022-23 Expiry in 2022-23
Deferred payment liabilities Amount (₹ million) 19.93 31.54 113.96 110.77

* Inclusive of interest accrued

270
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
Terms of short term borrowing (continued)
Name of Bank/Financial Particulars As at As at As at As at
institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

State Bank Of India New Amount (₹ million) - 41.57 346.32 328.35

Delhi-EPC Interest rate MCLR(1yr)+55 bps(5.6%-6.05%) As mutually agreed(5.5%-6.05% Card Rate as per Bank's extant guidelines
prevailing at the time of availment of limit(8%-
10.45%)
Security First pari passu on the entire (present & future) current assets of the Company, Second charge is on all fixed assets of the company
Repayment schedule Repayable on demand Repayable on demand Repayable on demand
State Bank Of India New Amount (₹ million) 10.35 - 20.34
Delhi-CC Interest rate MCLR(1yr)+85 bps MCLR(1yr)+85 bps(9.35%-9.8%) -
Security First pari passu on the entire (present & - First pari passu on the entire (present & -
future) current assets of the Company, Second future) current assets of the Company, Second
on all fixed assets of the company on all fixed assets of the company
Repayment schedule Repayable on demand - Repayable on demand -
Citi Bank-EPC Amount (₹ million) 145.21 - - -
Interest rate Mutually agreed 6.5%/3.5% (before/after - -
interest subvention)
Security First pari passu on the entire (present & - -
future) current assets of the Company, Second
on all movable fixed assets of the company
and immovable property of gurgaon plant
only.
Repayment schedule Repayable on demand - -
Citi Bank-PCRE Amount (₹ million) 80.26 - -
Interest rate As Mutually agreed time to time 6.8%/3.8% - -
(before/after interest subvention)

Security First Pari Passu charge on Entire Current - -

Assets of the Company
Repayment schedule 180 Days - -
IndusInd Bank-CC Amount (₹ million) 0.53 68.08 0.89 8.71
Interest rate MCLR(1yr)+80 bps MCLR(1yr)+80 bps(10.25%-10.5%) Base Rate +1% (9.75%-10.5%) Base Rate +1% (9.65%-11.8%)
Security First pari passu on all current assets of the First pari passu on all current assets of the First pari passu on all current assets of the First pari passu on all current assets of the
company . company . company . company .
Second on fixed assets(present & future) of Second on fixed assets(present & future) of Second on fixed assets(present & future) of Second on fixed assets(present & future) of
the company the company the company the company

Repayment schedule Repayable on demand

HDFC Bank -CC Amount (₹ million) 4.98 255.27 21.54 5.25
Interest rate MCLR(1yr)+130 bps MCLR(1yr)+130 bps(9.60-9.65%) 1 year MCLR (9.45%-9.65%) 10.65%(linked to HDFC bank's 1 year
MCLR)(9.45%-10.5%)
Security First pari passu on all current assets of the company .
Second on fixed assets(present & future) of the company
Repayment schedule Repayable on demand Repayable on demand Repayable on demand Repayable on demand
HDFC Bank -EPC 1 Amount (₹ million) 49.41 121.09
Interest rate As mutually agreed 4.3%/7.3% (before/after 8.5%-3%=5.85%
interest subvention)
Security First pari passu on all current assets of the company .
Second on fixed assets(present & future) of the company
Repayment schedule Repayable on demand Repayable on demand

271
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
Terms of short term borrowing (continued)
Name of Bank/Financial Particulars As at As at As at As at
institution 31 December 2020 31 March 2020 31 March 2019 31 March 2018

HDFC Bank -EPC 2 Amount (₹ million) 220.98 301 - -

Interest rate Monthly MCLR [3.7% to 4.2%] Monthly MCLR [4.85%] - -
Security First Pari Passu charge on Entire Current Exclusive charge on Stocks & Book Debts - -
Assets of the Company
Repayment schedule 180 Days 180 Days - -
Yes Bank-CC Amount (₹ million) 0.00 59.03 1.61 6.65
Interest rate 3 months MCLR +60% p.a (7.5%-9.8%) 3 months MCLR +60% p.a(9.8%-10.5%) 3 months MCLR +60% p.a(9.80%-10.35%) 3 months MCLR +1.15% p.a(9.45%-9.95%)

Security First pari passu on the entire (present & future) current assets of the Company, Second on all movable fixed assets of the company and immovable property of gurgaon plant only.
Repayment schedule Repayable on demand Repayable on demand Repayable on demand Repayable on demand
ICICI Bank -CC Amount (₹ million) 0.93
Interest rate 1 year MCLR +Spread Minimum 1 year
MCLR 1.60%+SPREAD(11.6%-12%)
Security
Repayment schedule Repayable on demand
Tata Capital loan-Financial Amount (₹ million) 92.25 -
Institution Interest rate The interest rate agreed with customer is -
0.45% for 30 days credit period (current
effective rate is 5.48% p.a.).
Security Trade receivables against corresponding loan -

Repayment schedule - -

(iv) Assets pledged as security for borrowings

(a) Assets pledged by Parent Company

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
First charge
Non-current
Non financial assets 2,501.80 2,138.42 2,022.98 1,582.65
Current
Financial assets 2,346.27 1,334.39 1,520.98 1,418.06
Non financial assets 837.73 614.14 677.84 723.76

(b) Assets pledged by subsidiary company (Sona Holding B.V. The Netherlands) (refer note 49)

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
First charge
Non-current
Non financial assets - - 2,833.48 3,724.32

(c) Assets pledged by subsidiary company (Comstar Automotive Technologies Private Limited)
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
First charge
Current
Financial assets 1,329.00 1,790.00 - -
Non financial assets 2,004.00 1,134.00 - -

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(v) Reconciliation of liabilities arising from financing activities (as per requirements of Ind AS 7 'Statement of cashflows')

The changes of the Group's liabilities arising from financing activities can be classified as follows:

Long term borrowings Short term borrowings Leases ** Total

Balance as at 1 April 2017 * 1,194.14 384.70 55.13 1,633.97

Cash flows:
Proceeds from non-current borrowings 319.16 - - 319.16
Repayment of non-current borrowings (338.23) - - (338.23)
Proceeds from current borrowings (net) - (35.19) - (35.19)
Movement in deferred payment liabilities 80.40 - - 80.40
Repayment of lease liabilities - - (14.59) (14.59)

Non-cash changes
Amortisation of transaction cost based on effective interest rate 0.55 - - 0.55
Interest expense on lease liabilities - - 11.35 11.35
Creation of lease liabilities under Ind AS 116 - - - -
New leases entered during the year - - 121.77 121.77
Unwinding of discount on deferred payment liabilities 0.70 - - 0.70

Balance as at 31 March 2018 1,258.72 349.51 173.66 1,779.89

Cash flows:
Proceeds from non-current borrowings 343.18 - - 343.18
Repayment of non-current borrowings (534.76) - - (534.76)
Proceeds from current borrowings (net) - 39.59 - 39.59
Repayment of Deferred payment liabilities (1.57) - - (1.57)
Repayment of lease liabilities - - (23.31) (23.31)

Non-cash changes:
Amortisation of transaction cost based on effective interest rate 0.61 - - 0.61
Interest expense on lease liabilities - - 17.44 17.44
Creation of lease liabilities under Ind AS 116 - - 13.11 13.11
Unwinding of discount on deferred payment liabilities 4.76 - - 4.76
Balance as at 31 March 2019 1,070.94 389.10 180.90 1,640.94

Cash Flows:
Repayment of non-current borrowings (373.66) - - (373.66)
Proceeds from non-current borrowings 1,607.55 - - 1,607.55
Proceeds from current borrowings (net) - 256.99 - 256.99
Acquired through business combination (net) (refer note 55) - 200.00 - 200.00
Repayment of Deferred payment liabilities (86.44) - - (86.44)
Repayment of lease liabilities - - (56.88) (56.88)

Non-cash changes:
Amortisation of transaction cost based on effective interest rate (0.68) - - (0.68)
Interest expense on lease liabilities - - 42.67 42.67
Creation of lease liabilities under Ind AS 116 - - 441.12 441.12
Terminated during the year - - (3.76) (3.76)
Unwinding of discount on deferred payment liabilities 4.02 - - 4.02
Balance as at 31 March 2020 2,221.73 846.09 604.05 3,671.87

Cash Flows:
Repayment of non-current borrowings 323.39 - - 323.39
Proceeds from non-current borrowings (290.74) - - (290.74)
Proceeds from current borrowings (net) - (242.35) - (242.35)
Repayment of Deferred payment liabilities (11.61) - - (11.61)
Repayment of lease liabilities - - (69.26) (69.26)

Non-cash changes
Interest expense on lease liabilities - - 51.92 51.92
Creation of lease liabilities under Ind AS 116 - - 245.09 245.09

Balance As at
31 December 2020 2,242.76 603.74 831.80 3,678.31
* Consist of balance pertaining to continuing operations
** Balance of lease liabilities amounting ₹ 55.13 million as at 1 April 2017 pertain to creation of lease liabilities under Ind AS 116

273
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
19 Lease liabilities
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Non-current
Lease liabilities (refer note 47) 733.17 532.33 156.84 928.46
733.17 532.33 156.84 928.46

Current
Lease liabilities (refer note 47) 98.63 71.73 24.06 335.88
98.63 71.73 24.06 335.88

20 Other financial liabilities

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Non current
Security deposits 1.24 1.24 1.24 1.24
Total other financial liabilities - non current 1.24 1.24 1.24 1.24

Current
Current maturities of long-term borrowings (refer note 18) 529.67 409.06 243.77 552.61
Current maturities of deferred payment liabilities (refer note 18) - 31.54 86.69 31.57
Interest accrued and due on borrowings (refer note 18) 14.94 12.91 7.41 -
Employee benefits payable 164.42 95.80 61.90 512.55
Capital creditors 184.59 98.83 621.57 125.09
Forward contract payables - 226.15 - 2.17
Other payables 45.17 48.36 6.10 60.50
Total other financial liabilities - current 938.79 922.65 1,027.44 1,284.49

21 Provisions
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Non current
Provision for compensated absences 61.93 43.78 23.82 18.38
Provision for defined benefit plans (gratuity) (refer note 42) 19.00 14.00 - -
Provision for warranty 23.00 9.00 - -
Provision for defined benefit plans (Pension)(refer note 42) - - - 3,341.41
De-commissioning obligations - - - 159.91
Litigation risks - - - 306.34
Other - - - 115.22
Total provisions - non current 103.93 66.78 23.82 3,941.26

Current
Provision for defined benefit plans (gratuity)(refer note 42) 28.57 16.94 1.43 24.04
Provision for compensated absences 33.39 16.12 14.33 12.66
Provision for warranty 9.30 18.00 - 54.99
Other contractual costs - - - 73.94
Litigation risks - - - 24.08
Employees compensation and benefits - - - 106.85
Other - - - 80.11
Total provisions - current 71.26 51.06 15.76 376.67

The reconciliation of the carrying amount of provision from beginnning of the year to end of the year is provided below:
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Provision for warranty

Opening balance 27.00 - 54.99 142.31
Foreign currenct translation adjustment - - (1.83) 22.34
Acquired through business combination (refer note 55) - 45.00 - -
Additions 11.30 9.00 85.49 59.65
Amounts utilised (6.00) (27.00) (7.11) (39.34)
Liability directly attributable to asset held for sale (refer note 49) - - (121.75) -
Reversals - - (9.79) (129.97)
Closing balance 32.30 27.00 - 54.99

Other contractual costs

Opening balance - - 73.93 90.96
Foreign currenct translation adjustment - - (2.31) 14.28
Additions - - 80.91 -
Amounts utilised - - (5.83) (31.30)
Liability directly attributable to asset held for sale (refer note 49) - - (146.70) -
Closing balance - - - 73.94

Others provisions
Opening balance - - 80.12 61.68
Foreign currenct translation adjustment - - (2.56) 9.68
Additions - - 118.75 72.17
Amounts utilised - - (104.46) (58.19)
Liability directly attributable to asset held for sale (refer note 49) - - (91.85) -
Reversals - - - (5.22)
Closing balance - - - 80.12

Litigation risks
Opening balance - - 330.42 265.60
Acquired through business combination (refer note 55) - 3.00 -
Foreign currenct translation adjustment - - (10.49) 41.70
Additions - - - 24.08
Amounts utilised - (3.00) (23.32) (0.96)
Liability directly attributable to asset held for sale (refer note 49) - - (296.61) -
Closing balance - - - 330.42

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

De-commissioning obligations
Opening balance - - 159.91 137.38
Additions - - - 22.53
Amounts utilised - - (159.91) -
Closing balance - - - 159.91

Employee compensation and benefits and others

Opening balance - - 302.18 570.86
Utilisations - - (302.18) -
Amounts utilised - - - (268.68)
Closing balance - - - 302.18
Notes:
a) Provisions for product warranties and product defects primarily include provisions for warranty, product liability and punitive damages.
b) Provisions for other contractual costs represent expected losses from contracts in progress
c) The provisions for decommissioning obligations consists of an obligation to remove a building on leased land.
d) The provision for litigation risks were mainly recorded for an antitrust proceedings and personnel-related litigations.
e) Other provision for employee benefits includes provisions for employee compensation and benefit cost represents employment anniversary bonuses, Christmas bonuses and severance pay. It also includes
obligations for partial retirement agreements.
f) The Group permits encashment of compensated absences accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Group, for outstanding
balance of privilege leave at the balance sheet date is determined and provided on the basis of actuarial valuation performed by an independent actuary. The Group does not maintain any plan assets to fund
its obligation towards compensated absences.

22 Deferred tax liabilities (net)

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Deferred tax liabilities
# Property, plant and equipment and intangible assets 1,044.11 1,094.43 126.20 342.71
# R&D expense capitalised in books allowed as expenditure per Income Tax 218.00 69.00 - -
Others 22.57 4.03 3.60 125.44
Total deferred tax liabilities 1,284.68 1,167.46 129.80 468.15

Deferred tax assets

Property, plant and equipment and intangible assets 4.01 - - 9.03
Expenditure allowed for tax purposes on payment basis 19.21 13.51 15.25 553.17
# Provision for employee benefits obligation 11.00 18.00 - -
# Foreign currency forward contracts 40.00 31.00 - -
# Others 15.41 28.24 4.00 77.81

Total deferred tax assets 89.63 90.75 19.25 640.01

Net deferred tax liabilities/(assets) 1,195.05 1,076.71 110.55 (171.86)

a) Movement in deferred tax assets/liabilities

Movement in deferred tax liabilities 31 December 2020 31 March 2020 31 March 2019 31 March 2018

Property, plant and equipment and intangible assets

Opening balance 1,094.43 126.20 333.69 5.87
Acquired through business combination (refer note 55) - 1,027.94 - -
Charged/(credited):
- to profit or loss (54.32) (64.40) 77.03 313.67
- to directly in equity - 4.69 - -
Foreign currency translation adjustment - - (8.21) 14.14
Deferred tax asset directly attributable to asset held for sale (refer note 49) - - (276.31) -
Closing balance 1,040.11 1,094.43 126.20 333.68

Provision for employee benefits obligation

Opening balance (18.00) - - -
Acquired through business combination (refer note 55) - (23.00) - -
Charged/(credited): -
- to profit or loss 9.00 2.00 - -
- to other comprehensive income (2.00) 3.00 - -
Closing balance (11.00) (18.00) - -

Foreign currency forward contracts

Opening balance (31.00) - - -
Acquired through business combination (refer note 55) - (1.00) - -
Charged/(credited):
- to profit or loss (9.00) (30.00) - -
Closing balance (40.00) (31.00) - -

275
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

R&D expense capitalised in books allowed as expenditure per Income Tax

Opening balance 69.00 - - -
Acquired through business combination (refer note 55) - - - -
Charged/(credited):
- to profit or loss 149.00 69.00 - -
Closing balance 218.00 69.00 - -

Inventory
Opening balance - - - -
Acquired through business combination (refer note 55) - 62.86 - -
Charged/(credited): - -
- to profit or loss - (62.86) - -
Closing balance - - - -

Brought forward losses

Opening balance - - - (231.66)
Charged/(credited):
- to profit or loss - - - 251.88
Foreign currency translation adjustment - - - (20.22)
Closing balance - - - -

Other
Opening balance (37.71) (15.63) (505.54) (210.03)
Acquired through business combination (refer note 55) - (6.00) - -
Charged/(credited):
- to profit or loss 26.06 (12.03) (46.59) (243.71)
- to other comprehensive income (0.41) 0.57 (0.36) (5.96)
- directly in equity - (4.63) - -
Foreign currency translation adjustment - - 9.85 (45.84)
Deferred tax asset directly attributable to asset held for sale (refer note 49) - - 527.01 -
Closing balance (12.06) (37.72) (15.63) (505.54)

1,195.05 1,076.71 110.55 (171.86)

Deferred tax assets amounting to ₹ 82.62 million as at 31 December 2020 (31 March 2020: ₹ 77.84 million) on fair value adjustment recognised in respect of investments held in Sona Holding B.V. The
Netherlands has not been recognised due to uncertainty regarding the allowability of such loss.

23 Trade payables
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Trade payables
- micro enterprises and small enterprises (refer to note 45) 504.81 166.99 76.77 0.62
- other than micro enterprises and small enterprises 1,916.64 995.26 615.44 3,297.39
Total Trade payables 2,421.45 1,162.25 692.21 3,298.01

Note:
(i) Refer note 40 for balance payable to related parties

24 Current liabilities
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Statutory dues payable 59.48 57.30 77.24 121.69

Advance from customers 85.13 53.05 43.69 50.73
Liability to customer related to warranty case settlement - - - 123.63
Others 14.40 - - -
Total current liabilities 159.01 110.35 120.93 296.05

25 Current tax liabilities

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Income tax liabilities (net) 210.49 118.00 0.71 54.80

Total current tax liabilities 210.49 118.00 0.71 54.80

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Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

26 Revenue from operations

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Sale of goods 9,684.67 10,030.10 6,588.75 5,974.69

Other operating revenue

Scrap sales 141.87 140.94 226.22 167.04
Export incentive 107.05 171.78 104.54 53.62
Liabilities written back - 18.00 4.62 -
Foreign exchange gain (net) 314.97 - 68.07 35.85
Royalty income 15.00 7.00 - -
Others 6.00 12.00 - -

Total revenue from operations 10,269.56 10,379.82 6,992.20 6,231.20

27 Other income
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Interest income 20.50 19.91 27.23 23.62

Profit on sale of investments at fair value (net) - 18.00 - -
Other non- operating income 0.20 19.92 5.58 4.41
Profit on sale of property, plant and equipment 6.02 - - -
Total other income 26.72 57.83 32.81 28.03

28 Changes in inventories of finished goods and work-in-progress

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Inventories at the beginning of the year

Continuing operations
Work-in-progress 163.30 149.68 227.66 152.86
Finished goods 895.18 181.58 225.79 215.87
Discontinued operations
Work-in-progress - - 1,366.61 1,021.73
Finished goods - - 312.56 280.92
1,058.48 331.26 2,132.62 1,671.38
Inventories at the end of the year
Continuing operations
Work-in-progress 239.56 163.30 149.68 227.66
Finished goods 1,385.60 895.18 181.58 225.79
Discontinued operations
Work-in-progress - - 1,342.21 1,366.61
Finished goods - - 370.12 312.56
1,625.16 1,058.48 2,043.59 2,132.62

Changes in inventories (A) (566.68) (727.22) 89.03 (461.24)

Adjusmtnet:
Acquisition of subsidiary
Work-in-progress - 19.00 - -
Finished goods - 740.00 - -
Total (B) - 759.00 - -

Effect of changes in foreign exchange rates relating to discontinued - - (57.11) 214.88

operations (C)

Transferred to discontinued operations (D) (refer note 49) - - (90.27) (161.64)

Total changes in inventories for continuing operations (A+B+C-D) (566.68) 31.78 122.19 (84.72)

29 Employee benefits expense

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Salaries, wages and allowances 849.99 863.76 380.05 327.23

Contribution to provident and other funds (refer note 42) 55.67 70.97 42.34 36.61
Staff welfare expenses 87.06 92.57 67.65 53.90
Share based payment to employees (refer note 53) 22.81 - - -
Total employee benefits expense 1,015.53 1,027.30 490.04 417.74

277
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

30 Finance costs
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Interest on loans 162.08 177.35 134.07 152.92

Other borrowing costs 3.41 6.33 8.08 6.41
Bank and other finance charges 11.57 23.40 18.04 19.96
Interest on lease liabilities (refer note 47) 51.92 42.67 17.44 11.35
Interest expenses on others 1.87 10.00 - -
Total finance costs 230.85 259.75 177.63 190.64

31 Depreciation and amortisation expense

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Depreciation of property, plant and equipment 399.90 404.59 279.98 215.18

Amortisation of intangible assets 234.13 221.45 13.56 8.12
Amortisation of right-of-use assets 54.59 45.16 16.03 9.96
Total depreciation and amortisation expense 688.62 671.20 309.57 233.26

32 Other expenses
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Consumption of stores, spares and tool 411.61 392.07 481.18 403.85
Power and fuel 262.70 315.72 393.15 329.97
Freight, clearing and forwarding charges 162.15 165.46 112.46 115.83
Packing material 126.32 99.41 81.81 76.28
Sub contracting cost 372.44 483.76 651.75 565.92
Rent 17.46 18.63 27.80 25.79
Repairs and maintenance - plant and machinery 149.80 163.86 136.69 153.95
Repair and maintenance - buildings 10.15 7.39 16.08 12.04
Repair and maintenance - others 88.36 78.69 26.19 23.36
Manpower hiring on contract 196.28 169.35 200.92 182.05
Legal and professional charges 98.50 208.03 163.43 285.55
Rates and taxes 5.69 13.51 8.80 5.12
Insurance 22.26 21.81 9.70 16.28
Travelling, conveyance and vehicle expenses 58.02 96.79 70.02 58.01
Communication and stationery expenses 11.82 16.31 17.78 15.27
Security charges 11.25 13.41 13.34 11.80
Corporate social responsibility expense (refer note below) 30.82 16.79 16.10 11.11
Business promotion 6.60 13.04 6.23 10.47
Fair value loss on derivatives - - - 2.17
Sales commission - 5.00 - -
Foreign exchange loss (net) - 126.56 - -
Directors sitting fees 18.94 19.74 1.42 1.35
Loss on sale of fixed assets (net) - 5.25 3.67 1.41
Miscellaneous expenses 48.89 23.17 13.19 13.04
Total other expenses 2,110.06 2,473.75 2,451.71 2,320.62

Note: Corporate social responsibility expenditure For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Gross amount required to be spent by the Group during the period/year 40.44 47.99 16.54 10.73
as per Section 135 of the Act *
Amount spent during the year on:
(i) Construction/acquisition of an asset - - - -
(ii) On purposes other than (i) above 30.82 16.79 16.10 11.11
30.82 16.79 16.10 11.11
Amount yet to be spent 9.62 31.20 0.44 -
* Gross amount for the period ended 31 December 2020 has been pro-rated for 9 months based on annual amount required to be spent in accordance with section 135 of the Act

33 Exceptional item
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Gain on loss of control over a subsidiary company (refer note 49) - 2,320.53 - -
- 2,320.53 - -

278
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Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

34 Income tax expense

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Current tax 435.08 365.04 471.52 423.16

Deferred tax charge/(credit) 120.74 (98.29) 74.97 24.51
Total Income Tax expense 555.82 266.75 546.49 447.67

a) The reconciliation of estimated income tax expense at statutory income tax rate to income tax expense reported in statement of profit and loss is as follows:
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Profit before income tax expense 2,110.51 3,870.18 1,547.63 1,308.97

Income tax as per statement of profit and loss 555.82 266.75 546.49 447.67

Tax at the Indian tax rate of 25.167% (31 March 2020: 25.167%, 31 March 531.15 974.01 543.60 456.08
2019: 34.944%, 31 March 2018: 34.608%)
Current tax related to previous years - 5.97 5.17 (1.74)
Effect of non-deductible expenses - 1.61 3.51 4.14
Income exempt from tax - - (2.26) -
Additional deduction as per the provisions of Income tax Act, 1961 - - (2.30) (6.39)
Transaction cost of an equity transaction - 1.02 - -
Impact of gain on loss of control (non-taxable) - (584.03) - -
Tax effect of write off of investment in respect of which deferred tax asset was - (102.60) - -
not recognised earlier
Change in tax rate - (45.16) - -
Others 24.67 15.93 (1.23) (4.42)
Income tax expense (as per statement of profit and loss) 555.82 266.75 546.49 447.67
The Taxation Laws (Amendment) Act, 2019 has amended the Income-tax Act, 1961 and Finance Act, 2019 to inter-alia provide an option to the Company to pay Income Tax at concessional rate of
22% plus applicable surcharge and cess, subject to certain specified conditions, as compared to the earlier rate of 30% plus applicable surcharge and cess for the assessment year 2020-21 onwards. The
Indian entities within the Group have opted for the concessional tax rate during the year ended 31 March 2020 and accordingly remeasured deferred tax and current tax liability at such concessional rate.

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Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

35 Research and development expenses

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Revenue expenditure charged to statement of profit and loss 178.54 69.91 10.52 12.39
Capital expenditure (including certain revenue expenditure based on allocations made by the Group) 521.00 224.22 - -
Total Research expenses 699.54 294.13 10.52 12.39

36 Fair value measurements

a) Financial instruments by category

As at

31 December 2020 As at

31 March 2020 As at

31 March 2019 As at

31 March 2018
FVTPL FVOCI Amortised FVTPL FVOCI Amortised FVTPL FVOCI Amortised FVTPL FVOCI Amortised
cost cost cost cost
Financial assets
Loans - - 55.54 - - 55.71 - - 23.33 - - 165.93
Trade receivables - - 3,938.98 - - 2,336.28 - - 1,520.98 - - 2,809.88
Cash and bank balances - - 335.95 - - 1,672.93 - - 256.06 - - 264.01
Other financial assets - - 2.21 - - 6.17 - - 63.90 - - 64.39
Investments - - - - 19.00 - - - - - - -
Derivative financial assets 157.69 - - - - - 6.47 - - - - -

Total financial assets 157.69 - 4,332.68 - 19.00 4,071.09 6.47 - 1,864.27 - - 3,304.21

Financial liabilities
Borrowings - - 2,846.50 - - 3,067.82 - - 1,460.04 - - 4,877.92
Trade payables - - 2,421.45 - - 1,162.25 - - 692.21 - - 3,298.01
Other financial liabilities - - 395.42 - - 244.23 - - 690.81 - - 699.38
Lease liabilities - - 831.80 - - 604.06 - - 180.90 - - 1,264.34
Derivative financial liabilities - - - 226.15 - - - - - 2.17 - -

Total financial liabilities - - 6,495.17 226.15 - 5,078.36 - - 3,023.96 2.17 - 10,139.65

(b) Fair value hierarchy

To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial investments into the three levels prescribed under the accounting standard. An explanation of
each level follows underneath.

i) Assets and liabilities measured at fair value - recurring fair value measurements

Level 1 Level 2 Level 3 Total

As at

31 December 2020
Foreign exchange forward contracts- liability - - - -
Total financial liabilities - - - -

Foreign exchange forward contracts- asset - 157.69 - 157.69

Investments measured at fair vlaue through other comprehensive income - - - -
Total financial assets - 157.69 - 157.69

As at

31 March 2020
Foreign exchange forward contracts- liabilities - 226.15 - 226.15
Total financial liabilities - 226.15 - 226.15

Investments measured at fair vlaue through other comprehensive income - - 19.00 19.00
Total financial assets - - 19.00 19.00

As at

31 March 2019
Foreign exchange forward contracts- Asset - 6.47 - 6.47
Total financial assets - 6.47 - 6.47

As at

31 March 2018
Foreign exchange forward contracts- liabilities - 2.17 - 2.17
Total financial liabilities - 2.17 - 2.17

ii) Fair value of instruments measured at amortised cost

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Level Carrying Fair Carrying Fair Carrying Fair Carrying Fair
value value amount value amount value value value
Financial assets
Trade receivables Level 3 3,938.98 3,938.98 2,336.28 2,336.28 1,520.98 1,520.98 2,809.88 2,809.88
Cash and bank balances Level 3 335.95 335.95 1,672.93 1,672.93 256.06 256.06 264.01 264.01
Other financial assets Level 3 2.21 2.21 6.17 6.17 63.90 63.90 64.39 64.39
Loans Level 3 55.54 71.32 55.71 66.29 23.33 27.29 165.93 169.64
Total financial assets 4,332.68 4,348.46 4,071.09 4,081.67 1,864.27 1,868.23 3,304.21 3,307.92

Financial liabilities
Borrowings Level 3 2,846.50 2,846.50 3,067.82 3,067.82 1,460.04 1,460.04 4,877.92 4,998.13
Lease liabilities Level 3 831.80 831.80 604.06 604.06 180.90 180.90 1,264.34 1,264.34
Trade payable Level 3 2,421.45 2,421.45 1,162.25 1,162.25 692.21 692.21 3,298.01 3,298.01
Other financial liability Level 3 395.42 395.42 244.23 244.23 690.80 690.80 699.38 699.38
Total financial liabilities 6,495.16 6,495.16 5,078.36 5,078.36 3,023.95 3,023.95 10,139.65 10,259.86

There are no transfers amongst levels during the year.

Level 1: It includes financial instruments measured using quoted prices in active markets for identical assets or liabilities.
Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs other than Level 1 inputs; and
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

37 Financial risk management

The Group’s principal financial liabilities comprise loans and borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to provide finance to the Group to support its operations.
The Group’s principal financial assets include loans, trade and other receivables; cash and bank balances etc. that derive directly from its operations.
The Group's activities expose it to the financial risk of market risk, credit risk and liquidity risk . The Group enters into a certain derivative financial instrument to manage its exposure to foreign currency. There have been no
major changes to the Group's exposure to market risk or the manner in which it manages and measures the risk in recent past. The Group’s senior management oversees the management of these risks. The Group’s senior
management ensures that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk
objectives.

(A) Credit risk

Credit risk is the risk that a customer or counterparty to a financial instrument fails to discharge an obligation to the Group. The Group’s maximum exposure to credit risk is limited to the carrying amount of following types
of financial assets.
- Cash and cash equivalents
- Trade receivables
- Loans carried at amortised cost, and
- Other financial assets
- Derivative financial assets

(a) Credit Risk Management

(i) Credit risk rating
The Group assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.
a) Low credit risk
b) Moderate credit risk
c) High credit risk

Based on business environment in which the Group operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting
defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.
Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Group. The Group continues to engage with parties whose balances are
written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

The Group provides for expected credit loss based on the following:
Asset group Categorization of items Provision for expenses credit loss
Low credit risk Cash and cash balances, loans, other financial assets and derivative financial assets 12 month expected credit loss/life time expected
credit loss

Moderate credit risk Trade receivables Other financial assets-12 month expected credit
loss,unless credit risk has increased significantly since
initial recognition, in which case allowance is
measured at lifetime expected credit loss.

High credit risk Other financial assets Other financial assets-lifetime expected credit loss
(when there is a significant deterioration), or specific
provision, whichever is higher.

In respect of trade receivables that result from contracts with customers, loss allowance is always measured at lifetime expected credit losses.

Financial assets that expose the entity to credit risk –

Credit rating Particulars As at As at As at As at

31 December 2020 31 March 2020 31 March 2019 31 March 2018
Low credit risk Loans 55.54 55.71 23.33 165.93
Cash and bank balances 335.95 1,672.93 256.06 264.01
Other financial assets 2.21 6.17 63.90 64.39
Derivative financial assets 157.69 - 6.47 -
Moderate credit risk Trade receivables 3,938.98 2,336.28 1,520.98 2,809.88

Cash & cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country. In respect of derivative
assets, the credit risk is considered negligible as counterparties are banks.

Trade receivables
To mitigate the credit risk related to trade receivables, the Group closely monitors the credit-worthiness of the trade receivables through internal systems that are configured to define credit limits of customers, thereby,
limiting the credit risk to pre-calculated amounts. The Group assesses increase in credit risk on an ongoing basis for amounts receivable that become past due and default is considered to have occurred when amounts
receivable become past due.

Other financial assets measured at amortised cost

Other financial assets measured at amortised cost includes security deposits, other receivables etc. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously,
while at the same time internal control system in place ensure the amounts are within defined limits.

(b) Expected credit losses for financial assets (other than trade receivables)
i) Financial assets (other than trade receivables)
Group provides for expected credit losses on loans and advances other than trade receivables by assessing individual financial instruments for expectation of any credit losses.
For cash & cash equivalents and other Bank balances - Since the Group deals with only High-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, other bank balances and bank deposits is
evaluated as low.
For loans comprising security deposits paid - Credit risk is considered low because the Group is in possession of the underlying asset.
For other financial assets - Credit risk is evaluated based on Group knowledge of the Credit worthiness of those parties and loss allowance is measured. Since this category includes loans and receivables of varied natures and
purpose, there is no trend that the Group can draw to apply consistently to entire population. For such financial assets, the Group policy is to provide for 12 month expected credit losses upon initial recognition and provide
for lifetime expected credit losses upon significant increase in credit risk. The Group does not have any expected loss based impairment recognised on such assets.

ii) Expected credit loss for trade receivables under simplified approach
The Group recognises lifetime expected credit losses on trade receivables using a simplified approach. In accordance with Ind AS 109, the Group uses expected credit loss model to assess the impairment loss. The Group
uses a provision matrix to compute the expected credit loss allowance of trade receivables. The provision matrix takes into account available external and internal credit risk factors such as default risk of industry, historical
experience for customers etc. However, the allowance for lifetime expected credit loss on customer balances for the period ended 31 December 2020, and for the years ended 31 March 2020, 31 March 2019 and 31 March
2018 is insignificant.

Ageing of trade receivables is as follows:

31 December 2020 31 March 2020 31 March 2019 31 March 2018

Not due and overdue less than 6 months 3,829.07 2,333.48 1,517.42 2,737.50
Overdue more than 6 months 109.91 2.80 3.56 72.38
3,938.98 2,336.28 1,520.98 2,809.88

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(B) Liquidity risk

Liquidity risk is defined as the risk that the Group will not be able to settle or meet its obligations on time or at reasonable price. The Group's objective is to at all times maintain optimum levels of liquidity to meet its cash
and liquidity requirements. The Group closely monitors its liquidity position and maintains adequate source of financing through the use of short term bank deposits, demand loans and cash credit facility. Processes and
policies related to such risks are overseen by senior management.

(i) Maturities of financial liabilities

The table below provides details regarding the contractual maturities of significant financial liabilities:

Contractual maturities of financial liabilities: (undiscounted)

Less than 1 year 1 to 5 years More than 5 years Total

31 December 2020
Borrowings 1,312.85 1,894.84 60.93 3,268.62
Trade payables 2,421.45 - - 2,421.45
Other financial liabilities 394.63 1.24 - 395.87
Lease liabilities 105.48 475.87 944.72 1,526.07
Total 4,234.41 2,371.95 1,005.65 7,612.01

Less than 1 year 1 to 5 years 1 to 5 years Total

31 March 2020
Borrowings 1,454.52 2,000.22 99.07 3,553.81
Trade payables 1,162.25 - - 1,162.25
Other financial liabilities 244.25 - - 244.25
Derivative financial liabilities 226.15 - - 226.15
Lease liabilities 69.12 297.61 676.83 1,043.56
Total 3,156.29 2,297.83 775.90 6,230.02

31 March 2019
Borrowings 726.97 740.51 - 1,467.48
Trade payables 692.21 - - 692.21
Other financial liabilities 690.82 - - 690.82
Lease liabilities 24.06 106.24 155.26 285.56
Total 2,134.06 846.75 155.26 3,136.07
Above schedule does not include maturity profile of Sona Holding B.V. The Netherlands, which has been classified under 'Liabilities of disposal group classified as held for sale' as at 31 March 2019

31 March 2018
Borrowings 928.15 4,249.60 - 5,177.75
Trade payables 3,298.01 - - 3,298.01
Other financial liabilities 699.38 - - 699.38
Lease liabilities 349.00 832.35 231.70 1,413.05
Total 5,274.54 5,081.95 231.70 10,588.19

(ii) Undrawn borrowing facilities

The Group had access to the following undrawn borrowing facilities at the end of the reporting period:
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Expiring within one year (bank loans) 1,064.33 532.65 785.01 83.37
Expiring beyond one year (bank loans) - - - -

(C) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency rate risk, interest rate risk and other
price risks, such as equity price risk and commodity price risk. Financial instruments affected by market risks include loans and borrowings, deposits and foreign currency receivables and payables. The sensitivity of the
relevant profit and loss item is the effect of the assumed changes in the respective market risks. This is based on the financial assets and financial liabilities.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to risk of changes in borrowing rates. The Board
continuously monitors the prevailing interest rates in the market.
Interest rate risk exposure
The exposure of the Group’s borrowing to interest rate changes at the end of the reporting period are as follows:

Particulars 31 December 2020 31 March 2020 31 March 2019 31 March 2018

Variable rate borrowings 2,817.72 3,025.79 1,338.09 4,760.74

Fixed rate borrowings 28.78 42.03 121.95 117.18
Total borrowings 2,846.50 3,067.82 1,460.04 4,877.92

Sensitivity
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.

Impact on profit after tax 31 December 2020 31 March 2020 31 March 2019 31 March 2019

Interest rate (increase by 1.00% (31 March 2020: 0.5%, 31 March 2019: 0.5%,31 March 2018: 0.5%)* 21.86 8.16 9.94 15.47
Interest rate (decrease by 1.00% (31 March 2020: 0.5%, 31 March 2019: 0.5%,31 March 2018: 0.5%)* (21.86) (8.16) (9.94) (15.47)
* Holding other variables constant

(ii) Foreign currency risk

The Parent company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the trade receivables and payables. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency (₹).

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)
The Parent Company's exposure to foreign currency risk at the end of the reporting period expressed as follows
Foreign
currency 31 December 2020 31 March 2020 31 March 2019 31 March 2018
Trade receivables and others
United States Dollar (USD) 50.76 18.15 8.38 9.84
Euro (EUR) 1.03 0.44 0.12 0.23
Japanese Yen (JPY) - - - 3.78
RMB 8.69 5.03 - -
Others 0.15 - - -

Trade payables
United States Dollar (USD) 10.58 1.58 0.48 0.82
Euro (EUR) 0.29 0.46 0.36 0.09
Japanese Yen (JPY) 180.02 38.72 132.53 159.02
Canadian Dollar (CAD)^ 0.00 0.00 0.00 0.00
Swiss Franc (CHF) - 0.01 - 0.14
RMB 11.92 - - -
Others - 0.05 - -
^Rounded off to Nil

Indian

Rupee (₹) 31 December 2020 31 March 2020 31 March 2019 31 March 2018
Trade receivables and others
United States Dollar (USD) 3,708.74 1,373.82 579.69 631.46
Euro (EUR) 92.03 36.82 8.99 18.00
Japanese Yen (JPY) - - - 2.24
RMB 97.38 53.25 - -

Trade payables
United States Dollar (USD) 805.17 119.39 33.22 53.79
Euro (EUR) 25.21 37.60 27.86 7.58
Japanese Yen (JPY) 127.69 26.96 82.70 99.41
Canadian Dollar (CAD)^ 0.17 0.18 0.18 0.23
Swiss Franc (CHF) - 0.80 - 9.24
RMB 133.59 - - -
Others 5.62 5.57 - -
^Rounded off to Nil

Outstanding forward contracts as at the reporting date (USD) 92.07 78.65 1.50 5.48
Outstanding forward contracts as at the reporting date (₹) 6,966.39 5,931.35 101.63 355.77
Sensitivity
The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial instruments:-

Impact on profit after tax For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Net currency receivables/(payables)
USD sensitivity
₹/USD- increase by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* 21.73 9.39 3.57 3.76
₹/USD- decrease by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* (21.73) (9.39) (3.57) (3.76)
EUR sensitivity
₹/EURO- increase by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* 0.47 (0.02) (0.12) 0.07
₹/EURO- decrease by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* (0.47) 0.02 0.12 (0.07)
JPY sensitivity
₹/JPY- increase by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* (0.96) (2.17) (0.54) (0.63)
₹/JPY- decrease by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* 0.96 2.17 0.54 0.63
CAD sensitivity
₹/CAD- increase by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* (0.00) (0.01) (0.00) (0.00)
₹/CAD- decrease by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* 0.00 0.01 0.00 0.00
RMB sensitivity
₹/RMB- increase by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* (1.35) 5.32 - -
₹/RMB- decrease by 1.00% (31 March 2020: 1.00%, 31 March 2019 1.00%, 31 March 2018: 1.00%)* 1.35 (5.32) - -
* Holding other variables constant

38 Capital management
For the purposes of the Group’s capital management, capital includes equity attributable to the equity holders of the Company and all other equity reserves. The primary objective of the Group’s capital management is to
ensure that it maintains an efficient capital structure and maximize shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the
financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements.

The Group monitors capital using net debt to equity ratio, which is net debt (as reduced by cash and cash equivalent) divided by total equity.

31 December 2020 31 March 2020 31 March 2019 31 March 2018

Long term borrowings including current maturities (refer note 18) 2,242.76 2,221.73 1,070.94 4,842.73
Short term borrowings (refer note 18) 603.74 846.09 389.10 349.51
Less: Cash and cash equivalents (refer note 14) (333.38) (1,049.85) (1.94) (264.01)
Net debts * 2,513.12 2,017.97 1,458.10 4,928.23

Equity share capital (refer note 16) 471.54 471.54 277.18 277.18
Instruments entirely equity in nature (refer note 16) 5.94 5.94 - -
Other equity (refer note 17) 12,408.03 11,301.93 1,460.59 (275.41)
Total equity (excluding compulsorily convertible preference shares) 12,885.51 11,779.41 1,737.77 1.77

Gearing ratio 19.50% 17.13% 83.91% 278274.70%

* Excluding lease liabilities

Dividends For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Equity share
Interim dividend of ₹ 31.32 per each 27,718,376 equity share 460.00 868.09 - -
Special dividend of ₹ 11.08 per each 9,024,687 equity share - 100.00 - -
Dividend distribution tax on dividends paid - 198.99 - -
460.00 1,167.08 - -
Proposed dividend 444.01 - - -
In the board meeting held on 27 January 2021 the board had approved to declare the interim dividend to the shareholders of the Company at a rate of ₹ 9.299 per equity share of ₹ 10/- each.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

39 Segment information
The Group’s operating business is organised and managed according to a single primary reportable business segment namely “Automotive Components”.

Information about geographical areas

"The Group's revenue (from continuing operations) disaggregated by primary geographical markets is as follows:
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Continuing operations
India 3,208.47 4,312.86 4,706.22 4,104.34
Outside India 6,476.20 5,717.24 1,882.53 1,870.35
Total 9,684.67 10,030.10 6,588.75 5,974.69

Revenue outside India For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
North America 3,496.17 3,441.33 1,648.96 1,681.03
Europe 2,423.63 2,047.45 123.30 114.73
China 507.17 220.06 109.24 72.73
Others 49.23 8.40 1.03 1.86
6,476.20 5,717.24 1,882.53 1,870.35

Customers exceeding 10% of total revenue For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
No of customers exceeding 10% of total revenue 3 2 2 1
Total revenue of such customers (₹ million) 4,677.67 3,775.81 2,056.38 1,354.94

The Group's non-current assets (property, plant and equipment, right of use assets, capital work in progress, intangible assets and goodwill) are located into the following geographical regions:
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
India 11,430.34 10,147.38 3,044.23 1,929.24
Outside India * 1,336.19 1,400.74 - 6,183.23
Total 12,766.53 11,548.12 3,044.23 8,112.47
*Non current assets of the discontinuing operations as at 31 March 2019 were disclosed as part of the disposal group and hence not included in above schedule
Non-current assets outside India include: North America amounting ₹ 925.27 million (31 March 2019: Nil), Others amounting ₹ 475.47 million (31 March 2019: Nil).
Carrying amount of non-current assets by location As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
North America 882.92 925.27 - -
Europe * - - - 6,183.23
Others 453.27 475.47 - -
1,336.19 1,400.74 - 6,183.23
*Non current assets of the discontinuing operations as at 31 March 2019 were disclosed as part of the disposal group and hence not included in above schedule

40 Related party disclosures

In accordance with the requirement of Indian Accounting Standard (Ind AS) 24 "Related Party Disclosures", name of the related parties, related party relationships, transactions and outstanding balances
including commitments where control exist and with whom transactions have taken place during the reported period are as follows:

(a) Names of related parties and nature of relationship

(i) Entity exercising control of Group

Singapore VII Topco III Pte Ltd. (with effect from 5 July 2019)
Sona Autocomp Holding Private Ltd. with ultimate control exercised by RK Family Trust (from 9 February 2018 till 4 July 2019)
Sona Autocomp Holding Private Ltd. with ultimate control exercised by Mrs. Rani Kapur (till 8 February 2018)

(ii) Key Management Personnel

Name Designation
Mr. Sunjay Kapur Managing Director (till 4 July 2019)
Mr.Vadapalli Vikram Verma Executive Director (till 4 July 2019)
Chief Executive Officer of Parent Company
Mr. Vivek Vikram Singh President (Finance) & Group COO (till 4 July 2019)
Managing Director & Group CEO (with effect from 5 July 2019)
Mr. Rohit Nanda Group Chief Financial Officer (with effect from 11 April 2019)
Mr. Munish Sapra Chief Financial Officer (till 31 December 2018)
Mr. Raajesh Kumar Gupta Vice President (Legal) & Company Secretary (till 29 February 2020)
Mr. Ajay Pratap Singh Vice President (Legal) & Company Secretary (with effect from 24 February 2020)
Mr. Tanay Gupta CEO- Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V. (with effect from 5
July 2019)
Mr. Hariprasath K Company Secretary - Comstar Automotive Technologies Private Limited (with effect from 5
July 2019)
Mr. Sat Mohan Gupta Chief Executive Officer and Director - Comstar Automotive Technologies Private Limited
(with effect from 5 July 2019)
Non executive Directors
Mrs. Rani Kapur Chairperson (till 22 August 2019)
Mr. Sunjay Kapur Non-executive Chairman (with effect from 5 July 2019)
Mr. Juergen Ziegler Director (till 4 July 2019)
Mrs. Bhaswati Mukherjee Director (till 20 August 2019)
Mr. Prasan Abhaykumar Firodia Director (with effect from 5 July 2019)
Mr Subbu Venkata Rama Behara Independent director (with effect from 5 July 2019)
Mrs Pallavi Joshi Bakhru Independent director (till 2 May 2020)
Mr. Siddharth Pradip Kothari Director (till 10 July 2019)
Mr. Amit Dixit Director (with effect from 5 July 2019)
Mr. Amit Jain Director (with effect from 5 July 2019)
Mr. Neeraj Mohan Director (with effect from 5 July 2019)
Mr. Ganesh Mani Director (with effect from 5 July 2019)
Mrs Shradha Suri Independent director (with effect from 5 August 2020)

284
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(iii) Entities over which key management personnel are able to exercise significant influence and with whom transactions have taken place during the period/year
Sona Management Services Limited
Mandira Marketing Private Limited
Sona Charitable Trust
SKAP Forging Private Limited
JTEKT India Limited (formerly known as 'Sona Koyo Steering Systems Limited') (till 18 May 2017)

(iv) The entity having substantial interest in the Group

JM Financial Tustee Company Private Limited (till 4 July 2019)
Sona Autocomp Holding Private Limited (with effect from 5 July 2019)

(v) Associates
Sona Skill Development Centre Limited (till 18 December 2018)

(vi) Subsidiary companies

Sona Holding B.V. The Netherlands (till 4 July 2019)
Sona Autocomp Germany GmBh, Germany (till 4 July 2019)
Sona Autocomp USA Llc, USA (till 4 July 2019)
Sona BLW Prazisionsschmiede GmBh (till 4 July 2019)
Sona BLW Precision Forging Inc, USA (till 4 July 2019)
Sona BLW Kft, Hungary (till 4 July 2019)
Sona BLW Driveline LLC (till 4 July 2019)
Sona BLW-Hilfe GmbH, München, Germany ( till 4 July 2019)
Comstar Automotive Technologies Private Limited (with effect from 5 July 2019)
Comstar Automotive Hongkong Limited (with effect from 5 July 2019)
Comstar Automotive USA LLC (with effect from 5 July 2019)
Comstar Automotive Technologies Services Private Limited (with effect from 5 July 2019)
Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V (with effect from 5 July 2019)
Comstar Automotive (Hangzhou) Co., Ltd (with effect from 5 July 2019)
Comstar Hong Kong Mexico No. 1, LLC (with effect from 5 July 2019)
Comestel Automotive Technologies Mexicana Ltd (with effect from 5 July 2019)
Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V (with effect from 5 July 2019)
Sona Comstar eDrive Private Limited (with effect from 12 November 2020)

(vii) Ultimate holding Company

BCP Topco I Pte Ltd.

(b) Transactions with related parties :

(i) Individual/entity exercising control

Transactions For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Reimbursement of expenses
Sona Autocomp Holding Private Limited - 0.80 0.30 -

Dividend paid
Singapore VII Topco III pte Ltd. 304.89 - - -
Sona Autocomp Holding Private Limited 155.11 - - -

Director sitting fee

Mrs. Rani Kapur - 0.17 0.28 0.17

Purchase of shares of Comstar Automotive Technologies Private Limited

Singapore VII Topco III Pte Ltd. (refer note 56) - 8,293.31 - -

Purchase of shares of Comstar Automotive Hongkong Limited

Singapore VII Topco III Pte Ltd. (refer note 56) - 227.27 - -

Sale of shares of Sona Holding B.V. The Netherlands

Sona Autocomp Holding Private Limited (refer note 49) - 1,399.50 - -

Sale of shares of Sona Skill Development Centre Limited

Sona Autocomp Holding Private Limited - - 7.51 -

Loan received
Sona Autocomp Holding Private Limited - 500.00 - -

Loan repaid
Sona Autocomp Holding Private Limited - 500.00 - -

Interest on loan paid

Sona Autocomp Holding Private Limited - 33.05 - -

Relinquihsment of right of put option (refer note 49 and 52)

Sona Autocomp Holding Private Limited 19.00 - - -

Relinquihsment of right of call option (refer note 52)

Sona Autocomp Holding Private Limited - - - -

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(ii) Key Management Personnel *

Transactions For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Managerial remuneration
Mr. Sunjay Kapur - 9.70 40.08 66.82
Mr. Vivek Vikram Singh 16.43 27.60 14.46 10.04
Mr.Vadapalli Vikram Verma 13.55 19.44 19.46 16.82
Mr. Rohit Nanda 14.27 18.48 - -
Mr. Raajesh Gupta 1.30 10.07 10.21 8.67
Mr. Ajay Pratap Singh 3.77 0.52 - -
Mr. Munish Sapra - - 8.48 9.15
Mr. Sat Mohan Gupta 13.00 15.67 - -
Mr. Hariprasath K 1.00 1.56 - -
Mr. Tanay Gupta 1.00 1.07 - -

Director Sitting Fee

Non-executive director 1.84 1.95 1.42 0.17

Commission
Non-executive director 20.90 17.74 - -

(iii) Entities over which key management personnel are able to exercise significant influence and with whom transactions have taken place during the year/previous year

Transactions For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Sale of goods
SKAP Forging Private Limited - - 0.05 1.89
JTEKT India Limited - - - 15.99
Mandira Marketing Private Limited 0.14 2.53 5.18 2.85
Sona Management Services Limited - 3.48 11.96 -

Purchase of goods
Mandira Marketing Private Limited - - 0.88 0.55
JTEKT India Limited - - - 8.53
Sona Management Services Limited - 0.16 0.01 -
SKAP Forging Private Limited - - 0.12 -

Sales of scrap
Mandira Marketing Private Limited - 0.02 - -

Purchase of brands
Sona Management Services Limited (refer note 57) - - 650.00 -

Services received
JTEKT India Limited - - - 1.49
Sona Management Services Limited - - 68.16 175.76
SKAP Forging Private Limited - 3.16 13.68 9.47

Lease rent income

SKAP Forging Private Limited - - 0.13 -

CSR payment
Sona Charitable Trust - 1.00 1.26 1.50

(iv) Associates
Transactions For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Purchase of capital goods

Sona Skill Development Centre Limited - - - 3.12

Receiving of services
Sona Skill Development Centre Limited - - - 0.46

* Break- up of Key management personnel remuneration

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Short-term employee benefits 64.32 104.12 92.69 111.50

* Including provident fund, leave encashment and any other benefit.

* Share based payment to Key Managerial Personnel for the period ended 31 December 2020 is ₹ 14.64 million (refer note 53)
# Gratuity and leave encashment amounts accrued attributable to key management personnel cannot be separately determined and hence not included in trsansactions above

286
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(c) Details of balances with related parties at year end

(i) Key Management Personnel

Balances as at year end As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Payables
Mr. Sunjay Kapur - - - 26.00
Mr.Vivek Vikram Singh 3.79 3.03 - -
Mr. Rohit Nanda 2.30 1.47 - -
Mr. Vikram Verma Vedapalli 3.00 2.40 5.50 5.00
Mr. Ajay Pratap Singh 0.08 - - -
Total payables to related parties 9.16 6.90 5.50 31.00

(ii) Entities over which key management personnel are able to exercise significant influence and with whom transactions have taken place during the year/previous year
Balances as at year end As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Payables
Sona Management Services Limited - 0.18 587.05 43.90
SKAP Forging Private Limited - - 6.82 6.82
Mandira Marketing Private Limited - - 0.05 0.19

Total payables to related parties - 0.18 593.92 50.92

Receivables
Mandira Marketing Private Limited-Trade receivable - 1.69 0.93 0.35
SKAP Forging Private Limited-Trade receivable - - - 0.21

Total receivables from related parties - - 1.69 0.93 0.56

(iii) Entity exercising control

Balances as at year end As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Receivables
Sona Autocomp Holding Private Limited- Other financial assets - 0.30 0.30 -

Terms and conditions

All the transactions were made on normal commercial terms and conditions and at market rates except as disclosed in note 52. All outstanding balances are unsecured and settled in cash.

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287
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(v) Intra-group transactions eliminated upon consolidation

Transactions for the year ended 31 March 2018:

Particulars Entity name Sona BLW Precision Sona Holding BV Sona Autocomp Sona BLW SONA BLW Hungary PHT Beteiligungs Sona BLW Driveline
Forgings Limited Netherlands Germany GmBh Prazisionsschmiede Ltd. GmbH and Co. KG LLC
GmBh
Sales of goods and services to Sona BLW Precision Forgings Limited - - 19.26 51.79 - - -
Sona Autocomp Germany GmBh 32.05 - - 281.42 - - -
Sona BLW Prazisionsschmiede GmBh 9.89 - 4,781.48 - 100.20 - 23.28
SONA BLW Hungary Ltd. - - 8.14 16.62 - - -
Interest income from Sona Holding BV Netherlands 18.02 - - - - 0.80 -
Sona Autocomp Germany GmBh 3.18 - - 16.67 - - -
Sona BLW Prazisionsschmiede GmBh - 12.03 74.19 - - - -
SONA BLW Hungary Ltd. - - - - - 5.32 -
PHT Beteiligungs GmbH and Co. KG - - 0.11 - - - -
Corporate guarantee fees from Sona Autocomp Germany GmBh 4.37 - - - - - -
Loans given (net) to Sona Holding BV Netherlands 188.46 - - - - - -
Investment in shares of Sona Holding BV Netherlands 116.39 - - - - - -

Transactions for the year ended 31 March 2019:

Particulars Entity name Sona BLW Precision Sona Holding BV Sona Autocomp Sona BLW SONA BLW Hungary PHT Beteiligungs SONA AutoComp USA Sona BLW Driveline
Forgings Limited Netherlands Germany GmBh Prazisionsschmiede Ltd. GmbH and Co. KG LLC LLC
GmBh
Sales of goods and services to Sona Autocomp Germany GmBh 2.48 - 1.47 332.73 - - - -
Sona BLW Prazisionsschmiede GmBh - - 6,254.86 - 186.58 - - 33.85
SONA BLW Hungary Ltd. - - 4.96 13.99 - - - -
Sona BLW Precision Forgings Limited - - 4.10 9.64 - - - -
Interest income from Sona BLW Precision Forgings Limited - - - - - - - -
Sona Holding BV Netherlands 18.32 - - - - 1.39 0.04 -
Sona Autocomp Germany GmBh 2.43 - - 21.07 - 0.00 - -
Sona BLW Prazisionsschmiede GmBh - 6.73 - - - - - -
SONA BLW Hungary Ltd. - - - - - 1.29 - -
PHT Beteiligungs GmbH and Co. KG - - (0.00) - - - - -
Corporate guarantee fees from Sona Autocomp Germany GmBh 3.70 - - - - - - -
Loans given (net) to Sona Holding BV Netherlands - - - 172.22 - - 1.66 -
SONA BLW Hungary Ltd. - 6.65 - - - 8.20 - -
Recovery of loans (net) from Sona Autocomp Germany GmBh - - - 1,703.36 - 1.63 - -
Sona Holding BV Netherlands 295.82 - - - - 12.65 - -
Sona BLW Prazisionsschmiede GmBh - 145.82 - - - - - -

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288
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Transactions for the year ended 31 March 2020:

Particulars Entity name Sona BLW Precision Comstar Automotive Comstar Automotive Comstar Automotive Comstar Automotive Comestel Automotive Comestel Automotive Sona BLW
Forgings Limited Technologies Private USA LLC Technology Services Hong Kong Ltd. Technologies Mexicana Technologies Prazisionsschmiede
Limited Private Limited (Holding Company) Ltd. Mexicana, S. DE R.L. GmBh
DE C.V
Sales of goods and services to Comstar Automotive USA LLC - 508.86 - 19.87 - - - -
Comstar Automotive Technologies Private Limited 0.49 - - - - - - -
Comestel Automotive Technologies Mexicana Ltd. - 408.84 - 2.87 - - 103.14 -
Comstar Automotive (Hangzhou) Co., Ltd. - 23.38 - - - - - -
Sona Autocomp Germany GmbH 0.29 - - - - - - -
Sona BLW Precision Forgings Limited - - - - - - - 0.59
Interest income from Comestel Automotive Technologies Mexicana, S. DE R.L. DE - - - - - 0.44 - -
C.V
Comenergia Automotive Technologies Mexicana, S. De R.L. - - - - 0.01 - - -
DE C.V
Comestel Automotive Technologies Mexicana Ltd. - - 3.14 - 1.39 - - -
Comstar Automotive (Hangzhou) Co., Ltd. - - - - 1.72 - - -
Comstar Automotive Hong Kong Ltd. (Holding Company) - - 7.62 - - - - -

Corporate guarantee fees from Sona BLW Precision Forgings Limited 0.93 - - - - - - -
Purchase of brand from Sona BLW Precision Forgings Limited - - - - - - - 17.37
Loans given (net) to Comestel Automotive Technologies Mexicana Ltd. - - 81.47 - - - - -
Comstar Automotive (Hangzhou) Co., Ltd. - - - - 42.51 - - -
Comenergia Automotive Technologies Mexicana, S. De R.L. - - - - 1.77 - - -
DE C.V
Comestel Automotive Technologies Mexicana, S. DE R.L. DE - - - - - 56.67 - -
C.V
Dividend paid to Comstar Automotive Technologies Private Limited - - 34.45 - - - - -

Transactions for the period ended 31 December 2020:

Particulars Entity name Comstar Automotive Comstar Automotive Comstar Automotive Comstar Automotive Comestel Automotive Comestel Automotive Sona BLW Precision
Technologies Private USA LLC Technology Services Hong Kong Ltd. Technologies Mexicana Technologies Forgings Limited
Limited Private Limited (Holding Company) Ltd. Mexicana, S. DE R.L.
DE C.V
Sales of goods and services to Comstar Automotive USA LLC 419.72 - 22.46 - - - -
Comestel Automotive Technologies Mexicana Ltd. 240.04 - 3.55 - - 57.84 -
Comstar Automotive (Hangzhou) Co., Ltd. 37.02 - - - - - -
Interest income on loans given to Comstar Automotive Hong Kong Ltd. (Holding Company) - 2.94 - - - - -

Comestel Automotive Technologies Mexicana Ltd. - 1.94 - 0.40 - - -

Comenergia Automotive Technologies Mexicana, S. De R.L. - - - 0.09 - - -
DE C.V
Comstar Automotive (Hangzhou) Co., Ltd. - - - 1.37 - - -
Comestel Automotive Technologies Mexicana, S. DE R.L. DE - - - - 0.75 - -
C.V
Recovery of loans (net) from Comestel Automotive Technologies Mexicana Ltd. - - - - - 29.51 -
Dividend paid to Comstar Automotive Technologies Private Limited - 124.55 - - - - -
Sona BLW Precision Forgings Limited 459.92 - - - - - -
Investment in Sona Comstar eDrive Private Limited - - - - - - 0.10

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289
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

(iv) Intra-group balances eliminated upon consolidation

Balance outstanding as at 31 March 2018:

Particulars Entity name Sona BLW Precision Sona Holding BV Sona Autocomp Sona BLW SONA BLW Hungary PHT Beteiligungs Sona BLW Driveline
Forgings Limited Netherlands Germany GmBh Prazisionsschmiede Ltd. GmbH and Co. KG LLC
GmBh
Trade and other receivables from Sona BLW Precision Forgings Limited - - - 33.40 - - -
Sona Autocomp Germany GmBh 85.46 - - 0.07 - 17.73 -
Sona BLW Prazisionsschmiede GmBh 8.08 - 10.25 - 3.35 - -
SONA BLW Hungary Ltd. - - 32.34 44.47 - - -
Loan balance receivable from Sona Holding BV Netherlands 295.82 - - - - 44.51 -
Sona Autocomp Germany GmBh - - - 2,124.69 - 1.63 -
Sona BLW Prazisionsschmiede GmBh - 145.82 - - - - -
SONA BLW Hungary Ltd. - - - - - 25.35 -

Balance outstanding as at 31 March 2019:

Particulars Entity name Sona BLW Precision Sona Holding BV Sona Autocomp Sona BLW SONA BLW Hungary PHT Beteiligungs SONA AutoComp USA Sona BLW Driveline
Forgings Limited Netherlands Germany GmBh Prazisionsschmiede Ltd. GmbH and Co. KG LLC LLC
GmBh
Trade and other receivables from Sona Holding BV Netherlands - - - - - - - -
Sona Autocomp Germany GmBh 2.16 - - - - 17.17 - 4.78
Sona BLW Prazisionsschmiede GmBh - - 16.69 - 5.20 - - -
SONA BLW Hungary Ltd. - - 32.78 55.00 - - - -
Loan balance receivable from Sona Holding BV Netherlands - - - 172.22 - 31.86 1.66 -
Sona Autocomp Germany GmBh - - - 421.33 - - - -
SONA BLW Hungary Ltd. - 6.65 - - - 33.55 - -

Balance outstanding as at 31 March 2020:

Particulars Entity name Sona BLW Precision Comstar Automotive Comstar Automotive Comstar Automotive Comstar Automotive Comestel Automotive Comestel Automotive Sona BLW
Forgings Limited Technologies Private USA LLC Technology Services Hong Kong Ltd. Technologies Mexicana Technologies Prazisionsschmiede
Limited Private Limited (Holding Company) Ltd. Mexicana, S. DE R.L. GmBh
DE C.V
Trade and other receivables from Comstar Automotive USA LLC - 43.06 - 2.24 - - - -
Comestel Automotive Technologies Mexicana Ltd. - 249.17 - 2.87 - - 38.53 -
Comstar Automotive (Hangzhou) Co., Ltd. - 23.28 - - - - - -
Comstar Automotive Technologies Private Limited 0.10 - - - - - - -
Loan balance receivable from Comstar Automotive Hong Kong Ltd. (Holding Company) - - 311.58 - - - - -

Comestel Automotive Technologies Mexicana Ltd. - - 206.69 - 156.53 - - -

Comenergia Automotive Technologies Mexicana, S. De R.L. - - - - 5.24 - - -
DE C.V
Comstar Automotive (Hangzhou) Co., Ltd. - - - - 76.64 - - -
Comestel Automotive Technologies Mexicana, S. DE R.L. DE - - - - - 61.38 - -
C.V

Balance outstanding as at 31 December 2020:

Particulars Entity name Comstar Automotive Comstar Automotive Comstar Automotive Comstar Automotive Comestel Automotive Comestel Automotive
Technologies Private USA LLC Technology Services Hong Kong Ltd. Technologies Mexicana Technologies
Limited Private Limited (Holding Company) Ltd. Mexicana, S. DE R.L.
DE C.V
Trade and other receivables from Comstar Automotive USA LLC 16.33 - 2.76 - - -
Comestel Automotive Technologies Mexicana Ltd. 139.47 14.72 1.66 - - 43.46
Comstar Automotive (Hangzhou) Co., Ltd. 36.59 - - - - -
Loan balance outstanding Comstar Automotive Hong Kong Ltd. (Holding Company) - 303.82 - - - -

Comestel Automotive Technologies Mexicana Ltd. - 187.83 - 152.02 - -

Comenergia Automotive Technologies Mexicana, S. De R.L. - - - 6.64 - -
DE C.V
Comstar Automotive (Hangzhou) Co., Ltd. - - - 76.25 - -
Comestel Automotive Technologies Mexicana, S. DE R.L. DE - - - - 30.26 -
C.V

290
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

41 Earnings per share

31 December 2020 31 March 2020 31 March 2019 31 March 2018
Profit from continuing operations 1,554.69 3,603.43 1,001.14 861.30
Profit/(loss) from discontinuing operations - - 728.57 (87.06)
Total profit attributable to the equity holders of the Company used for basic and diluted earnings per 1,554.69 3,603.43 1,729.71 774.24
share (A)
Original number of equity shares 47,153,944 47,153,944 27,718,376 27,718,376
Original number of compulsory convertible preference shares 594,436 594,436 - -
Weighted average number of equity shares used as the denominator in calculating basic 47,748,380 42,549,335 27,718,376 27,718,376
earnings per share (B)
Effect of exercise of share options (refer note 53) 2,867 - - -
Weighted average number of equity shares used as the denominator in calculating diluted 47,751,247 42,549,335 27,718,376 27,718,376
earnings per share (C)

Nominal Value per share (in ₹) 10.00 10.00 10.00 10.00

Impact of bonus issue (refer note 52)

47,748,380 42,549,335 27,718,376 27,718,376
Weighted average number of equity shares used as the denominator in calculating basic earnings per share
Bonus shares issued subsequent to 31 December 2020 525,232,180 468,042,685 304,902,136 304,902,136
Weighted average number of equity shares used as the denominator in calculating basic 572,980,560 510,592,020 332,620,512 332,620,512
earnings per share (D)
Effect of exercise of share options 2,867 - - -
Impact of bonus on share options 31,539 - - -
Weighted average number of equity shares used as the denominator in calculating diluted 573,014,966 510,592,020 332,620,512 332,620,512
earnings per share (E)

(a) Basic earnings/(loss) per share (in ₹)

From continuing operations attributable to the equity holders 2.71 7.06 3.01 2.59
From discontinuing operations attributable to the equity holders - - 2.19 (0.26)
Total basic earning per share attributable to the equity holders (A/D) 2.71 7.06 5.20 2.33

(b) Diluted earnings/(loss) per share (in ₹)

From continuing operations attributable to the equity holders 2.71 7.06 3.01 2.59
From discontinuing operations attributable to the equity holders - - 2.19 (0.26)
Total diluted earning per share attributable to the equity holders (A/E) 2.71 7.06 5.20 2.33

Earning per share (both basic and diluted) has been restated for all the period/years presented on account of issue of bonus shares (refer note 52)

42 Employee Benefits

A Defined contribution plans:

Particulars For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
a) Provident fund 33.95 41.54 22.04 19.16
b) Super annuation fund - 7.91 12.15 10.23
c) Employees state insurance corporation 0.35 0.76 1.24 1.30
d) Punjab/Haryana labour welfare fund 0.17 0.22 0.09 0.08
e) National Pension Scheme 5.56 2.48 - -
40.02 52.90 35.52 30.77

B Defined benefit plans:

(i) Gratuity
The Holding Company operates post retirement defined benefit plan for retirement gratuity, which is funded. The Holding Company through the gratuity trust has taken group gratuity policy of Life Insurance
Corporation of India Gratuity Scheme.

Details of changes and obligation under the defined benefit plan is given as below:-

I Expense recognised in the statement of profit and loss

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
(i) Current service cost 14.74 16.39 6.23 6.22
(ii) Past service cost 3.00 - - -
(iii) Interest cost 8.82 10.76 4.37 3.34
(iv) Expected return on plan assets (10.92) (9.09) (3.78) (3.72)

Net expense recognised in the statement of profit and loss 15.65 18.06 6.82 5.84

II Remeasurement (gain)/loss recognised in other comprehensive income

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

(i) Actuarial changes arising from changes in demographic assumptions 1.75 (3.99) - -
(i) Actuarial changes arising from changes in financial assumptions
5.17 (3.37) 11.33 (14.07)
(ii) Actuarial changes arising from changes in experience adjustments (0.02) (4.74) (9.31) 30.88
(iii) Return on plan assets greater than discount rate 1.71 (0.18) (1.00) 0.26

Net expense recognised in other comprehensive income 8.62 (12.28) 1.02 17.06

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

III Changes in obligation

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

(i) Opening balance 193.54 82.17 74.51 48.97

(ii) Acquired through business combination - 103.00 - -
(iii) Current service cost 14.74 16.39 6.23 6.22
(iii) Past service cost 3.00 - - -
(iv) Interest cost 8.82 10.76 4.37 3.34
(v) Benefit payments directly by employer 0.17 (0.27) - (0.70)
(vi) Transfer of employees from erstwhile related party - - - 0.95
(vii) Actuarial (gain)/loss (8.62) (11.10) 2.02 16.81
(viii) Benefit payments from plan assets (1.30) (7.41) (4.96) (1.08)

Present value of obligation as at year end 210.36 193.54 82.17 74.51

IV Changes in plan assets

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

(i) Fair value of plan assets as at the beginning of the period 162.60 80.74 50.47 46.52
(ii) Acquired through business combination - 71.00 - -
(iii) Interest income 10.92 9.09 3.78 3.72
(iii) Actuarial gain / (loss) - - - -
(iv) Contributions by employer 1.43 9.00 30.45 0.61
(v) Benefit payments from plan assets (1.30) (7.41) (4.96) (1.08)
(vi) Transfer of employees from erstwhile related party - - - 0.95
(vii) Actuarial gain/(loss) on plan assets 0.04 0.18 1.00 (0.25)
Fair value of plan assets 173.68 162.60 80.74 50.47

V Net assets / liabilities

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

(i) Present value of obligation at the end of the year 210.36 193.54 82.17 74.51
(ii) Fair value of plan assets at the end of the year 173.68 162.60 80.74 50.47
(iii) Net liabilities recognised in the balance sheet
- Non current 19.00 14.00 - -
- Current 28.57 16.94 1.43 24.04

VI Experience adjustment
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Experience adjustment loss on plan liabilities (0.02) (4.74) (9.31) 30.88

VII Investment details

The Parent Company has invested in gratuity funds which is administered through Life Insurance Corporation of India. The detail of investment maintained by Life Insurance Corporation are not made available to
the Parent Company and have therefore not been disclosed.

VIII Principal actuarial assumptions

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Discount rate (per annum) 5.90% 6% 7% 7%
Expected return on plan assets (per annum) 5.90% 6% 7% 7%
Expected increase in salary costs (per annum) 8.00% 8% 9% 6%
Attrition rate 15.00% 15% 15% 15%
Mortality IALM 2012-14 Ultimate IALM 2012-14 Ultimate IALM 2006-08 Ultimate IALM 2006-08 Ultimate
Retirement age 58 years 58 years 58 years 58 years

IX Quantitative sensitivity analysis for significant assumptions is as below:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions are:

Impact on defined benefit obligation

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Delta effect of +1% change in rate of discounting 91.94 187.10 78.68 72.33
Delta effect of -1% change in rate of discounting 102.09 205.10 86.63 77.49
Delta effect of +1% change in rate of salary increase 101.91 204.59 86.52 77.51
Delta effect of -1% change in rate of salary increase 92.00 187.41 78.70 72.28

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

X Maturity profile of defined benefit obligation (undiscounted)

Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Within the next 12 months (next annual reporting period) 25.51 22.11 12.09 32.27
Between 2 and 5 years 105.36 83.43 46.34 29.07
Between 6 and 10 years 79.58 193.65 29.56 21.55
Total expected payments 210.45 299.19 87.99 82.89

XI The average duration of the defined benefit plan obligation at the end of the reporting period is 6.28 - 9 years (31 March 2020: 6.29 - 9.1 years, 31 March 2019: 6.33 years, 31 March 2018: 6.30 years)

XII The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment
market. The above information is as certified by the Actuary. The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of
reasonable changes in key assumptions occurring at the end of the reporting period.

(ii) Pension plans of subsidiary companies (disposed off on 4 July 2019 (also refer note 49)):
The Group maintains defined benefit pension plans and defined contribution plans for its subsidiary companies in Germany, namely Sona BLW Prazisionsschmiede GmBh and Sona Autocomp Germany GmBh,
Germany, that cover the majority of the employees in Germany.

In Germany provisions for pension obligations are established due to pension plans for commitments for retirement, disability and survivor benefits. As a rule, the amount of the commitments depends on the
employee's length of service and remuneration.

The majority of Group pension schemes at German companies are based on benefit obligations. The benefit obligations at SONA AutoComp Germany GmbH are financed through provisions. The benefit
obligations at SONA BLW Präzisionsschmiede GmbH are financed through provisions, and to a lesser extent, through trust assets (contractual trust arrangement).

The following pension plans of substantial scope exist:

Direct commitments: These are various defined benefit and defined contribution plans. Some of these plans grant a higher benefit. The plans based on final salary are all closed, and for the most part are also
maintained for the remaining active plan participants only in the form of vested rights.
There are open direct commitments for both senior executives and for all other employees.

Thyssen Industries PO
The amount of the pension payment is determined by the number of creditable years of service, the base amount for each year of service and the personal measurement ratio. The personal measurement ratio is
calculated from the individual gross monthly income of the last two calendar years divided by the general gross monthly income of all insured participants in the employee retirement insurance plan. The Thyssen
Industry PO is closed to new hires. New hires normally receive the combination package commitment described below.

Combination package

Pension Plan I (PP I):

When designing PP I, the Group was guided by the idea of the defined contribution retirement pension. The amount of the benefit is measured based on the contributions provided. However, this so-called pension
contribution is not actually paid, but instead only serves as a measurement basis for calculating the benefits. For each beneficiary under PP I, the amount of the pension contribution is determined each year
depending on the classification of his personal eligible earnings in the stipulated pay class. Using a contribution table, this pension contribution is converted into a "capital component" and credited to the employee's
"retirement pension account".

Pension Plan II (PP II):

When designing PP II, the Group was guided by the idea of the defined contribution retirement pension financed by deferred compensation. For each beneficiary under PP II, the amount of the pension contribution
resulting from his deferred compensation is determined each year. This pension contribution, which must be at least as high as the employer's pension contribution under PP I, is converted into a "capital
component" using a contribution table and credited to the employee's "retirement pension account".

Pension Plan III (PP III):

When designing PP III, the Group was guided by the idea of the additional defined contribution pension for those employees who participate in PP II. In PP III, an additional pension contribution is provided for
those employees who make a pension contribution under PP II. The amount of this additional contribution depends on the pension contribution under PP I. This additional employer-funded pension contribution is
converted into a "capital component" using a contribution table and credited to the employee's "retirement pension account".

Essener Verband
Benefit Directives A & B
The pension payment is determined by the individual groups for which the employee has been registered. For each year of service to be considered, the payment is 4.00% of the group amount. Correspondingly, a
maximum of 25 years of service may be factored in. In general, benefit schemes A and B are closed. Employees who receive a commitment from the Essener Verband receive the BoLo commitment described below.

BoLo
The pension components are the basis for determining the pension payment. The measurement bases for the pension components are the contributions amounts determined by the employer, the employee's age in
the year the contributions are allocated, and the actuarial pension tables.
The employees acquire pension components annually from pension contributions. The value of these pension components is calculated by multiplying the annual pension contribution by the pertinent pension factor
for the respective age based on the actuarial pension tables in question. The total of the pension components accumulated until retirement is the annual old-age pension.
Occupational pension fund: The occupational pension fund is an open plan in Munich for new hires. The employee receives a defined lump sum benefit upon retirement depending on the length of employment.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Details of changes and obligation under the defined benefit plan is given as below (relates to discontinued operations):-

I Changes in obligation during the year

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
(i) Opening balance - - 3,394.22 2,878.61
(ii) Current service cost * - - 112.29 141.07
(iv) Interest cost * - - 54.32 49.72
(v) Benefit payments directly by employer - - (134.47) (127.04)
(vii) Actuarial (gain)/loss ** - - 21.21 (0.45)
(viii) Divestitures - - - (3.47)
(ix) Foreign currency translation difference - - (110.40) 455.79
(x) Present value of obligation as at year end - - 3,337.17 3,394.23
* Charged to statement of profit and loss
** Charged to Other comprehensive income

II Changes in plan assets during the year

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
(i) Fair value of plan assets as at the beginning of the period - - 52.81 45.58
(ii) Expected return on plan asssets - - (0.24) 0.08
(iii) Currency difference - - (1.70) 7.15
(iv) Fair value of plan assets - - 50.87 52.81

III Net assets / liabilities recognised in the balance sheet

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
(i) Present value of obligation - - 3,337.18 3,394.22
(ii) Fair value of plan assets - - 50.87 52.81
(iii) Net liabilities recognised in the balance sheet - - - -
- Current - - - -
- Non current * - - 3,286.31 3,341.41

* Amount of provision outstading as at 31 March 2019 has been classified under 'Liabilities of disposal group classified as held for sale' (refer note 49)

IV Experience adjustment
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Experience adjustment loss on plan liabilities - - (125.81) -

V Investment details

The reported plan assets associated with the funded pension plans are located in Germany. The Group invests in diversified portfolios consisting of an array of asset classes that attempt to maximize returns while
minimizing volatility. The asset classes include national and international stocks, fixed income government and non-government securities and property, plant and equipment. Plan assets do not include any direct
investments in the Group debt securities, equity securities or real estate.

The pension plan asset allocation and target allocation are as follows:

Plan assets as at Plan assets as at Plan assets as at Plan assets as at

31 December 2020 31 March 2020 31 March 2019 31 March 2018
Equity Securities - - 6.37 33.32
Debt Securities - - 43.13 13.25
Real Estate/Other - - 1.36 6.25
Total - - 50.86 52.82

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

VI Assumptions
The assumptions for discount rates and the rates of compensation increase on which the calculation of the obligations are based were derived in accordance with standard principles. Discount rates are generally
determined based on market yields of high quality corporate bonds with terms corresponding to the estimated terms of the post-employment benefit obligations. The expected return on plan assets is determined
based on detailed studies conducted by the plans´ third party investment and actuarial advisors. The studies take into consideration the long-term historical returns and the future estimates of long-term investment
returns based on the target asset allocation. The Group applied the following weighted average assumptions to determine benefit obligations:

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Discount rate (per annum) - - 1.30% 1.65%
Expected return on plan assets (per annum) - - 1.30% 1.65%
Expected increase in salary costs (per annum) - - 2.25% 2.25%
Pension increase rate - - 1.75% 1.75%

VII Quantitative sensitivity analysis for significant assumptions is as below:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions are:

For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Delta Effect of +0.5% Change in rate of discounting - - 273.15 250.91
Delta Effect of -0.5% Change in rate of discounting - - (242.22) (222.40)
Delta Effect of +1% Change in rate of pension - - (52.06) (49.87)
Delta Effect of -1% Change in rate of pension - - 53.59 51.37

VIII The average duration of the defined benefit plan obligation at the end of the reporting period 31 March 2019: 13.40 years, 31 March 2018: 13.20 years.

IX The estimates of rate of escalation in salary considered in actuarial valuation are after taking into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment
market. The above information is as certified by the Actuary.

X The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the
reporting period.

295
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

43 Contingent liabilities
As at As at As at As at As at
31 31 December 2020 31 March 2020 31 March 2019 31 March 2018
D
a) Claims against the Group not acknowledged as debts
i) Service tax
Cases pending before Appellate authorities in respect of which the Parent Company - 0.47 0.47 0.47 0.47
has filed appeals/show cause notices. (FY 2005-06 to 2007-08)
ii) Income Tax *
Cases pending before Appellate Authorities in respect of which the Parent - 2.12 2.12 3.35 3.35
Company has filed appeal (AY-2013-14)
Cases pending before Appellate Authorities in respect of which the Parent - 3.18 3.18 3.18 3.18
Company has filed appeal (AY-2012-13)
Cases pending before Appellate Authorities in respect of which the Parent - 4.21 4.21 4.21 4.21
Company has filed appeal (AY-2011-12)
Cases pending before CIT in respect of which the Company has filed appeal (AY- - 69.63 64.93 - -
2017-18)**
(iii) Central Excise Act, 1944
Case pending before Directorate General of Goods And Service Tax Intelligence in - 14.85 14.85 - -
respect of which the Group has filed appeals/show cause notices. (FY 2014-15 to
FY 2017-18)

*Amount paid under protest of ₹ 23.71 million (31 March 2020: ₹ 23.71 million, 31 March 2019: ₹ 10.74 million, 31 March 2018: ₹ 10.74 million)
** Total disputed amount of the case is ₹ 77.54 million(including interest liability) out of which ₹ 7.91 million (including interest liability) has been provided as a provision and balance amount of ₹ 69.63 million (including interest
liability) is being disclosed as a contingent liability.

b) There are labour cases pending before High Court and Labour Commissioner/Officer. The Parent Company has been legally advised that the cases filed by the employees are not sustainable in law and
accordingly no provision has been made therefor. Moreover no monetary claim was filed or is pending.

c) Duty paid and related export obligation status with respect to EPCG licenses which is six times of the duty saved, obtained by the Group are as under :

Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
(₹ million)
Export obligation pending
1,863.99 1,290.94 625.98 303.31

44 Commitments
(a) Capital commitments As at As at As at As at As at
31 31 December 2020 31 March 2020 31 March 2019 31 March 2018
D
Estimated amount of contracts to be executed on capital account not provided for (net of 1,159.96 1,154.22 916.69 1,056.93
advances)
- 1,159.96 1,154.22 916.69 1,056.93

45 Dues to micro and small enterprises

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Principal amount due to suppliers registered under the Micro Small and Medium Enterprises 501.87 164.10 75.17 0.62
Development Act, 2006 (MSMED) and remaining unpaid as at year end
the amount of interest paid by the buyer in terms of section 16, along with the amounts of - - - -
the payment made to the supplier beyond the appointed day during each accounting year;

the amount of interest due and payable for the period of delay in making payment (which - - - -
have been paid but beyond the appointed day during the year) but without adding the
interest specified under MSMED Act, 2006;
Interest paid, under Section 16 of MSMED Act, to suppliers registered under the MSMED - - - -
Act, beyond the appointed day during the year
the amount of interest accrued and remaining unpaid at the end of each accounting year; 2.94 2.89 1.60 -
the amount of further interest remaining due and payable even in the succeeding years, until 2.94 2.89 1.60 -
such date when the interest dues as above are actually paid to the small enterprise, for the
purpose of disallowance as a deductible expenditure under Section 23.

296
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

46 Additional information as required by Paragraph 2 of the general instruction for the preparation of Consolidated financial statements as per Schedule III of Companies Act 2013:
31 December 2020
Name of entity Net assets i.e. total assets minus total liabilities Share in profit and (loss) Share in other comprehensive income Share in total comprehensive income
As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million)
consolidated net consolidated net consolidated other consolidated total
assets profit comprehensive comprehensive
income income
Holding Company
Sona BLW Precision Forgings Limited 93.85% 12,092.62 79.47% 1,235.51 177.15% (20.21) 78.75% 1,215.30

Subsidiaries- India
Comstar Automotive Technologies Private Limited 53.20% 6,854.70 50.97% 792.50 43.83% (5.00) 51.03% 787.50
Comstar Automotive Technologies Services Private Limited 0.34% 43.40 0.87% 13.60 0.00% - 0.88% 13.60

Subsidiaries- Foreign
Comstar Automotive USA LLC 9.11% 1,174.50 12.16% 189.00 281.37% (32.10) 10.17% 156.90
Comstar Automotive Hongkong Limited 0.44% 57.30 -0.09% (1.40) -173.55% 19.80 1.19% 18.40
Comestel Automotive Technologies Mexicana Ltd -0.02% (2.30) 3.56% 55.40 -29.80% 3.40 3.81% 58.80
Comstar Automotive (Hangzhou) Co., Ltd 0.49% 62.80 -0.06% (0.90) -120.96% 13.80 0.84% 12.90
Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V -0.03% (4.50) -0.04% (0.60) -7.01% 0.80 0.01% 0.20
Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V 0.83% 107.50 -0.56% (8.70) -74.51% 8.50 -0.01% (0.20)
Comstar Hong Kong Mexico No. 1, LLC 0.00% - 0.00% - 0.00% - 0.00% -
Sona Comstar eDrive Private Limited 0.00% 0.10 0.00% - 0.00% - 0.00% -

Consolidation adjustments -58.21% (7,500.61) -46.29% (719.72) 3.49% (0.40) -46.66% (720.12)

Total 100% 12,885.51 100% 1,554.69 100% (11.41) 100% 1,543.28

31 March 2020
Name of entity Net assets i.e. total assets minus total liabilities Share in profit and (loss) Share in other comprehensive income Share in total comprehensive income
As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million)
consolidated net consolidated net consolidated other consolidated total
assets profit comprehensive comprehensive
income income
Holding Company
Sona BLW Precision Forgings Limited 96.05% 11,314.56 23.33% 840.78 107.33% (307.57) 16.08% 533.21

Subsidiaries- India
Comstar Automotive Technologies Private Limited (with effect from 5 July 2019) 26.23% 3,090.00 17.57% 633.00 -2.44% 7.00 19.30% 640.00
Comstar Automotive Technologies Services Private Limited (with effect from 5 July 2019 0.20% 24.00 0.25% 9.00 0.00% - 0.27% 9.00

Subsidiaries- Foreign
Comstar Automotive Hongkong Limited (with effect from 5 July 2019) 0.58% 68.00 0.28% 10.00 3.14% (9.00) 0.03% 1.00
Comstar Automotive USA LLC (with effect from 5 July 2019) 7.82% 921.00 6.19% 223.00 0.00% - 6.72% 223.00
Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V (with effect from 5 -0.02% (2.00) 0.03% 1.00 -0.35% 1.00 0.06% 2.00
Comstar Automotive (Hangzhou) Co., Ltd (with effect from 5 July 2019) 0.78% 92.00 -0.39% (14.00) 0.00% - -0.42% (14.00)
Comstar Hong Kong Mexico No. 1, LLC (with effect from 5 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Comestel Automotive Technologies Mexicana Ltd (with effect from 5 July 2019) -0.52% (61.00) 0.42% 15.00 4.19% (12.00) 0.09% 3.00
Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V (with effect from 5 Ju 0.70% 83.00 0.58% 21.00 1.40% (4.00) 0.51% 17.00
Sona Holding B.V. The Netherlands (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona Autocomp Germany GmBh, Germany (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona Autocomp Usa Llc, USA (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona BLW Prazisionsschmiede GmBh (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona BLW Precision Forging Inc, USA (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona BLW Kft, Hungary (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona BLW Driveline LLC (till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -
Sona BLW-Hilfe GmbH, München, Germany ( till 4 July 2019) 0.00% - 0.00% - 0.00% - 0.00% -

Consolidation adjustments -31.84% (3,750.15) 51.75% 1,864.65 -13.26% 38.00 57.36% 1,902.65

Total 100% 11,779.41 100% 3,603.43 100% (286.57) 100% 3,316.86

297
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

31 March 2019
Name of entity Net assets i.e. total assets minus total liabilities Share in profit and (loss) Share in other comprehensive income Share in total comprehensive income
As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million)
consolidated net consolidated net consolidated other consolidated total
assets profit comprehensive comprehensive
income income
Holding Company
Sona BLW Precision Forgings Limited 143.18% 2,522.83 57.36% 993.38 -11.55% (0.67) 57.13% 992.71

Subsidiaries- Foreign
Sona Holding B.V Amsterdam, The Netherlands -11.40% (200.84) -2.02% (34.93) 40.12% 2.33 -1.88% (32.60)
SONA AutoComp Germany GmbH, München, Germany -143.75% (2,532.86) 49.71% 860.88 -0.03% (0.00) 49.54% 860.88
SONA BLW Präzisionsschmiede GmbH, München, Germany 93.83% 1,653.32 -6.21% (107.48) 110.74% 6.42 -5.82% (101.06)
PHT Beteiligungs GmbH and Co. KG, München, Germany 12.96% 228.42 0.13% 2.26 0.00% - 0.13% 2.26
SONA AutoComp USA LLC, Wilmington, Delaware, USA 0.05% 0.96 0.07% 1.25 0.00% - 0.07% 1.25
SONA BLW-Hilfe GmbH, München, Germany 0.00% - 0.00% - 0.00% - 0.00% -
SONA BLW Hungary Ltd., Budapest, Hungary 0.34% 5.95 -0.64% (11.15) 0.00% - -0.64% (11.15)
SONA BLW Driveline LLC, Troy, Michigan, USA 0.62% 10.97 0.40% 6.85 0.00% - 0.39% 6.85
0.00% - 0.00% 0.00% -
Minority interest in all subsidiaries 1.38% 24.23 0.12% 2.09 -9.00% (0.52) 0.09% 1.57

Associate (investment as per equity method)

Indian Associate
Sona Skill Development Centre Ltd. 0.00% - 0.13% 2.17 0.00% - 0.12% 2.17

Consolidation adjustments 2.78% 49.02 0.95% 16.48 -30.28% (1.76) 0.85% 14.72

Total 100% 1,762.00 100% 1,731.80 100% 5.80 100% 1,737.60

31 March 2018
Name of entity Net assets i.e. total assets minus total liabilities Share in profit and (loss) Share in other comprehensive income Share in total comprehensive income
As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million) As a % of Amount (₹ million)
consolidated net consolidated net consolidated other consolidated total
assets profit comprehensive comprehensive
income income
Holding Company
Sona BLW Precision Forgings Limited 10084.53% 2,739.95 111.87% 867.83 -150.65% 336.29 217.94% 1,204.12

Subsidiaries- Foreign
Sona Holding B.V Amsterdam, The Netherlands -635.69% (172.72) -6.90% (53.52) 0.00% - -9.69% (53.52)
SONA AutoComp Germany GmbH, München, Germany -12746.38% (3,463.17) 1.64% 12.75 0.21% (0.47) 2.22% 12.28
SONA BLW Präzisionsschmiede GmbH, München, Germany 6678.10% 1,814.43 2.04% 15.83 -0.34% 0.77 3.00% 16.60
PHT Beteiligungs GmbH and Co. KG, München, Germany 882.75% 239.84 0.71% 5.47 0.00% - 0.99% 5.47
SONA AutoComp USA LLC, Wilmington, Delaware, USA -0.85% (0.23) -0.20% (1.58) 0.00% - -0.29% (1.58)
SONA BLW-Hilfe GmbH, München, Germany 0.00% - 0.00% - 0.00% - 0.00% -
SONA BLW Hungary Ltd., Budapest, Hungary 63.45% 17.24 -12.03% (93.28) 0.00% - -16.88% (93.28)
SONA BLW Driveline LLC, Troy, Michigan, USA 15.06% 4.09 0.90% 6.99 0.00% - 1.27% 6.99
- -
Minority interest in all subsidiaries 93.48% 25.40 0.19% 1.48 0.00% 0.00 0.27% 1.48

Associate (investment as per equity method)

Indian Associate
Sona Skill Development Centre Ltd. 0.00% - -0.28% (2.17) 0.00% - -0.39% (2.17)
Consolidation adjustments -4334.44% (1,177.66) 2.05% 15.92 250.78% (559.82) -98.45% (543.90)

Total 100% 27.17 100% 775.72 100% (223.23) 100% 552.49

(This space has been intentionally left blank)

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

47 Leases

i) The Group has entered into lease arrangements for land, building and plant and machinery that are renewable on a periodic basis with approval of both lessor and lessee.

ii) The Group does not have any lease commitments towards variable rent as per the contract.

iii) Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can only be used by the Group. The Group is prohibited from
selling or pledging the underlying leased assets as security. For leases over land and building the Group must keep those properties in a good state of repair and return the properties in their original condition, except for
normal wear and tear, at the end of the lease. Further, the Group shall insure items owned by it and incur maintenance fees on such items in accordance with the lease contracts.

iv) Lease liabilities are presented in the statement of financial position as follows:
As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Current 98.63 71.73 24.06 335.88
Non-current 733.17 532.33 156.84 928.46
Lease liabilities classified under asset held for sale
Current - - 358.01 -
Non-current - - 720.83 -
831.80 604.06 1,259.74 1,264.34

v) Future minimum lease payments are as follows:

Particulars As at

31 December 2020
Minimum lease payments due Lease payments Finance charges Net present values
Within 1 year 104.48 8.35 96.13
1-5 years 473.39 125.61 347.78
More than 5 years 939.24 551.35 387.89
1,517.11 685.31 831.80

Particulars As at 31 March 2020

Minimum lease payments due Lease payments Finance charges Net present values
Within 1 year 78.62 6.76 71.86
1-5 years 352.61 92.39 260.22
More than 5 years 668.21 396.23 271.98
1,099.44 495.38 604.06

Particulars As at 31 March 2019

Minimum lease payments due Lease payments Finance charges Net present values
Within 1 year 398.62 15.53 383.09
1-5 years 835.34 49.52 785.82
More than 5 years 166.18 75.35 90.83
1,400.14 140.40 1,259.74

Particulars As at 31 March 2018

Minimum lease payments due Lease payments Finance charges Net present values
Within 1 year 349.00 10.36 338.64
1-5 years 832.35 38.85 793.50
More than 5 years 231.70 99.50 132.20
1,413.05 148.71 1,264.34

vi) Reconciliation of total lease commitments as on 31 March 2017 to the lease liabilities recognised at 01 April 2017:

Amount
Total operating lease commitments disclosed at 31 March 2017 1,015.74
Recognition exemption:
- Leases with remaining term of less than 12 months 25.79
Operating lease liabilities before discounting 989.95
Discounted using incremental borrowing rate 54.40
Discounted using the lessee’s incremental borrowing rate of at the date of initial application 935.55
Reasonably certain extension options/ other adjustments 26.56
Total lease liabilities recognised under Ind AS 116 at 01 April 2017 908.99

vii) The following are amounts recognised in profit or loss:-

Particulars For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Depreciation expense of right-of-use assets * 54.59 45.16 16.03 9.96
Interest expense on lease liabilities * 51.92 42.67 17.44 11.35
Rent expense (relating to short term leases on which lease liability is not recognised) * 17.46 18.63 27.80 25.79
Total 123.97 106.46 61.27 47.10
* These expense does not include the expense pertaining to discontinued operations

viii) Total cash outflow pertaining to leases

Particulars For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Total cash outflow pertaining to leases during the period/year ended * 86.72 75.51 51.11 40.38
* Pertaining to continuing operations

ix) Disclosures under Ind AS 17 for the year ended 31 March 2017
Operating leases- Assets taken on lease
Non cancellable operating lease rental payable (minimum lease payments) under these leases are as follows:
Particulars Amount

Less than one year 206.98

One to five years 627.67
More than five years 181.09
Total 1,015.74

The Group determines the leases term as either the non-cancellable period of the lease and any additional periods when there is an enforceable option to extend the lease and it is reasonably certain that the Group will extend
the term, or a lease period in which it is reasonably certain that the Group will not exercise a right to terminate. The lease term is reassessed if there is a significant change in circumstances.

299
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

48 Revenue from contracts with customers

(a) Disaggregation of revenue

The Group has performed a disaggregated analysis of revenues considering the nature, amount, timing and uncertainty of revenues. This includes disclosure of revenues by geography and timing of recognition.

Revenue from operations For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
Revenue by geography
Domestic 3,208.47 4,312.86 4,706.22 4,104.34
Export 6,476.20 5,717.24 1,882.53 1,870.35

Total 9,684.67 10,030.10 6,588.75 5,974.69

Revenue (timing)
Revenue recognised at point in time 9,684.67 10,030.10 6,588.75 5,974.69
Total 9,684.67 10,030.10 6,588.75 5,974.69

(b) Liabilities related to contracts with customers

Particulars As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Opening balance 53.05 43.69 50.73 20.76

Income recognised from advance (23.58) (10.20) (27.82) (9.94)
Advance received from customers during the period 55.66 19.56 20.78 39.91
Advance from customers 85.13 53.05 43.69 50.73

(c) Reconciliation of revenue recognised in Statement of Profit and Loss with Contract price

There are insginificant discounts offered by the Company to its customers for the period ended 31 December 2020 ₹ 0.87 million (31 march 2020: ₹ 3.19 million, 31 march 2019: ₹ 4.43 million, 31 March 2018: ₹ 4.44 million)

(This space has been intentionally left blank)

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

49 Loss of control over Sona Holding B.V. The Netherlands ("Sona BV")
The Parent Company had executed an agreement dated 16 October 2018 to sell 81% stake in its wholly owned subsidiary, Sona Holding BV Netherlands (Sona BV), to Sona Autocomp
Private Limited, for a sale consideration of Rs. 1,399.48 million. Accordingly, in the consolidated financial statements for the year ended 31 March 2019, the consolidated assets and
liabilities of Sona BV were presented as “Assets of disposal group classified as held for sale” and “Liabilities of disposal group classified as held for sale”, respectively and the consolidated
profit of Sona BV was presented as “Discontinued Operations” for the year ended 31 March 2019 and 31 March 2018, in accordance with the requirement of Ind AS 105, Non-current
Assets Held for Sale and Discontinued Operations. Sona BV alongwith its subsidiaries and step down subsidiaries as stated below, have historically been consolidated into the Parent
Company –

• SONA BLW Präzisionsschmiede GmbH, SONA AutoComp Germany GmbH

• SONA AutoComp Germany GmbH, München, Germany
• SONA BLW Präzisionsschmiede GmbH, München, Germany
• PHT Beteiligungs GmbH and Co. KG, München, Germany
• SONA AutoComp USA LLC, Wilmington, Delaware, USA
• SONA BLW-Hilfe GmbH, München, Germany
• SONA BLW Hungary Ltd., Budapest, Hungary
• SONA BLW Driveline LLC, Troy, Michigan, USA

Assets and liabilities of disposal group classified as held for sale

The following asset and liabilities are reclassified as held for sale in relation to the discontinued operation as at 31 March 2019
As at
31 March 2019
Property, plant and equipment 2,895.29
Capital work-in-progress 48.16
Right-of-use assets 814.92
Intangible Asset 1,550.43
Financial assets- Loans 280.96
Other non-current assets 380.88
Deferred tax asset(net) 250.70
Total non-current assets 6,221.34

Current assets
Inventories 2,103.30
Financial assets
i. Trade receivables 1,256.25
ii. Cash and cash equivalents 388.36
iii. Loans 112.46
iv. Other Financial assets 4.83
Income tax assets (net) 9.79
Other current assets 410.60
Total current assets 4,285.59

Total asset held for sale (A) 10,506.93

Non-current liabilities
Financial liabilities
i) Borrowings 738.90
ii) Lease liability 720.83
Provisions 4,624.00
Total non-current liabilities 6,083.73

Current liabilities
Financial liabilities
i. Borrowings 126.68
ii. Lease liability 358.01
iii. Trade payables 2,450.98
iv. Other financial liabilities 763.05
Other current liabilities 152.90
Provisions 889.04
Current tax liabilities (net) 443.45
Total current liabilities 5,184.11

Total liabilities directly linked with asset held for sale (B) 11,267.84
Net liabilities (B-A) 760.91

Assets pledged as security for borrowings As at

31 March 2019
Non-current
Non financial assets 2,833.48

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Financial performance and Cash flow Information

The financial performance and cash flow information are presented for the year ended 31 March 2019 and 31 March 2018
For the year ended For the year ended
31 March 2019 31 March 2018

Income
Revenue from operations 20,263.47 18,299.32
Other income 3,519.99 0.53
Total income 23,783.46 18,299.85

Expenses
Cost of materials consumed 8,966.36 7,567.63
Changes in inventories of finished goods and work-in-progress (90.27) (161.64)
Employee benefits expense 8,934.66 6,406.41
Finance costs 258.97 213.57
Depreciation and amortisation expense 751.70 750.39
Other expenses 3,834.72 3,287.39
Total expenses 22,656.14 18,063.75

Profit before tax 1,127.32 236.10

Tax expense
- Current tax 448.79 24.35
- Tax related to previous years (7.60) -
- Current deferred tax charge (44.53) 297.33
Total tax expense 396.66 321.68

Profit/(loss) for the year from discontinued operation 730.66 (85.58)

Other comprehensive income
Items that will be reclassified to profit or loss:
Exchange differences on translation of foreign operations 20.07 (212.43)

Items that will not be reclassified to profit or loss:

Remeasurements of defined benefit obligations (13.61) 0.30
Other comprehensive income/(loss) for the year, net of tax 6.46 (212.13)

Total comprehensive income for the year 737.12 (297.71)

Cash Flow Information for asset held for sale

For the year ended For the year ended
31 March 2019 31 March 2018
Net cash flow (used in)/generated from operating activities (405.55) 309.35
Net cash generated /(used in) investing activities 3,674.77 (363.85)
Net cash flow (used in)/generated from financing activities (3,124.17) 39.30
Net increase/(decrease) in cash and cash equivalents 145.05 (15.20)
Cash and cash equivalents at the beginning of the year 243.31 258.51
Cash and cash equivalents at the end of the year 388.36 243.31

Gain on loss of control

On 4 July 2019, the Parent Company completed the aforementioned transaction and accordingly, with effect from that date, Sona Holding BV Netherlands ceased to be Company’s
subsidiary.The sale of investment by the Company to SAHPL was carried out at a total consideration of ₹ 1,399.48 million as per the valuation report obtained from an independent expert.
As per the aforementioned agreement, the Company has a put option to sell all the securities (19%) held in Sona Holding B.V, The Netherlands, by the Company along with its subsidiaries
to SAHPL.

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Computation for gain on loss of control over subsidiary company (refer note below) For the year ended
31 March 2020

Cash consideration 1,399.48

Less: Cash and cash equivalent 388.36
Net cash received 1,011.12 1,011.12
Net liabilities directly linked with asset held for sale (excluding cash and cash equivalent) 1,149.27
Fair value of investment retained at the date when control is lost 328.28
Carrying amount of non-controlling interests in the former subsidiary at the date when control is lost 24.23
FCTR released to statement of profit and loss (192.37)

Profit on disposal of subsidiary 2,320.53

Subsequent to the completion of the said transaction, due to their ongoing financial difficulties, two of Sona BV’s German subsidiaries (Sona Autocomp Germany GmbH, Subsidiary and
SONA BLW Präzisionsschmiede GmbH, Step down subsidiary) filed for insolvency proceedings in self-administration on 28 January 2020. On 01 April 2020, Local Court of Wuppertal
passed order for opening of insolvency proceedings in self-administration and appointed a custodian for the same. Further, due to subsequent lockdowns and business slowdown caused by
spread of COVID-19 pandemic, the self-administration order was terminated and an insolvency administrator was appointed on 29 June 2020 by the Local Court. Businesses of the
aforementioned two German subsidiaries have subsequently been sold by the insolvency administrator to a third party with economic effect from 1 October 2020.
Owing to the insolvency proceedings and acquisition of the businesses by a third party, despite the best efforts of the management of the Company, substantiated by multiple
communications over electronic mail, it has not been able to obtain audited consolidated financial statements of Sona BV for the period 1 April 2019 to 4 July 2019. Accordingly, these
consolidated financial statements have been prepared without consolidating the financial statements of Sona BV (along with its subsidiaries and step down subsidiaries) for the period it
remained a subsidiary of the Parent Company i.e. 1 April 2019 to 4 July 2019 as required under Ind AS 110, Consolidated Financial Statements. Further, as a result, the disclosures made
pursuant to the requirements of Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations, presented under Note 49 do not include the financial information pertaining
to aforesaid discontinued operations for the period from 1 April 2019 to 4 July 2020.

Had the Parent Company been able to obtain the consolidated financial statements of Sona Holding BV Netherlands for the period 1 April 2019 to 4 July 2019, the consolidated profit or
loss of Sona Holding BV The Netherlands (“Sona BV”) for the said period would have been presented as “Profit or Loss from Discontinued Operations” in the consolidated statement of
profit and loss of the Parent Company for the year ended 31 March 2020, and there would have been a corresponding impact on “Gain on loss of control” included in “Exceptional item”
of the Group for the year ended 31 March 2020.

The Parent Company has till date not been able to arrange the consolidated financial statements of Sona BV for the aforementioned period and accordingly, the modification in the auditors
report dated 29 December 2020, could not be adjusted in these restated consolidated financial statements for the year ended 31 March 2020.

However, the non-consolidation of the financial statements of Sona BV for the period 1 April 2019 to 4 July 2019 does not have any effect on the consolidated profit of the Group for the
year ended 31 March 2020 and its equity attributable to the owners as on that date. Similarly, the said non-consolidation does not have any effect on the consolidated profit of the Group or
any of the balances for periods subsequent to 31 March 2020.

50 Write off of the investment in subsidiary

The Parent Company had made a provision of impairment in value of investment in Sona Holding B.V.,Netherlands amounting to Euro 6.90 million (equivalent to approx. ₹ 407.65
million) in its audited financial statements for the year ended 31 March 2016 as “Exceptional item” on account of bankruptcy application filed by Sona BLW Precision Forge Inc., USA, a
step down subsidiary. After the consent of Board of Directors to write off the investment in Sona Holding B.V. Netherlands, Parent Company had filed an application to Reserve Bank of
India through State Bank of India (i.e. authorized dealer) to obtain the approval on write off of the partial equity investment in Sona Holding B.V. Netherlands amounting to Euros 6.90
million. On 28 June 2019, Parent Company has received NOC for writing off equity investment of Euro 6.90 million vide RBI Letter (reference no. FE.CO.OID./7659/19.19.832/2018-
19) and thereafter Parent Company has written off investment of ₹ 407.65 million in books of accounts.

51 Proposed merger with Comstar Automotive Technologies Private Limited

The Parent Company had filed a Scheme of Amalgamation under sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromise, Arrangements and
Amalgamations) Rules, 2016 before the NCLT Chandigarh (the “Scheme”) on 10 January 2020. Pursuant to the Scheme, Comstar Automotive Technologies Private Limited is proposed to
merge with the Parent Company from 5 July 2019, being the appointed date. The Scheme was approved by Board on 20 December 2019. The rationale for the proposed merger is for
consolidation and simplification of existing structure and more focussed operational efforts, realising synergies in terms of compliance, governance, administration and costs, among other
things. The first motion order was passed on 22 December 2020 dispensing with the requirement to convene the meeting of the equity shareholders, preference shareholder, secured
creditors and unsecured creditors of both Companies. The Second motion petition has been filed on 27 December 2020. The Scheme is pending approval by the NCLT and is subject to
receipt of requisite approvals and third party consents

52 Events after reporting date

a. Conversion of Compulsorily Convertible Preference Shares
In the board meeting on 27 January 2021 the board has approved the conversion of the compulsorily convertible preference shares (CCPS) into the equity shares of the Company in
accordance with the Share Subscription and Share Purchase Agreement dated 16 October 2018 executed between inter alia, the Company and the Investor. Number of equity shares issued
against conversion of CCPS : 594,436.
These shares are considered for the computation of basic EPS for the year ended 31 March 2020 and period enede 31 December 2020.
b. Issue of Bonus Shares
The Board of Directors has also approved the issuance of 11 (Eleven) bonus shares of face value ₹ 10 (Rupees Ten) each for every 1 (One) existing fully paid up equity share of face value ₹
10 (Rupees Ten) each (including the equity shares issued upon conversion of the Compulsorily Convertible Preference Shares (CCPS) and accordingly 525,232,180 bonus shares were
issued, which were alloted on 10 February 2020. Bonus shares are retrospectively considered for the computation of EPS.
c. Relinquishment of right
In the board meeting on 12 Feb 2021 the board has approved waiver of the right to sell 19% shares in Sona Holding BV (put option) to Sona Autocomp at a pre-agreed consideration of
Rs.19 million and a waiver of the right to buy 81% shares in Sona Holding BV (call option) from Sona Autocomp at a pre-agreed formula based price defined in ESA. The decision was
made taking cognizance of the situation that Sona Holding B.V, The Netherlands now has no business operations left in any of its subsidiaries. Put option waiver was approved as a
transaction not at arm's length whereas waiver of call option was approved as a transaction at arm's length. Accordingly, the carrying value for 19% investment in Sona B.V. of Rs.19 million
as on 31st March 2020, has been taken as ₹ Nil as at 31 December 2020 and the resultant fair value loss has been booked under other comprehensive income.

303
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

53 Share based payments

Sona BLW Precision Forging Limited Employee Stock Option Plan ('Sona BLW ESOP Plan') was approved by the Board of Directors and the shareholders of the Holding Company on 30 September 2020. The plan entitles
employees of the Group to purchase shares in the Company at the stipulated exercise price, subject to compliance with vesting conditions. A description of the share based payment arrangement of the Group is given below:

Particulars Sona BLW Precision Forging Limited Employee Stock Option Plan
Exercise Price ₹ 460.03

Grant date 01 October 2020

Vesting schedule 90,645 options 12 months after the grant date (‘First vesting’)
90,645 options 24 months after the grant date (‘Second vesting’)
90,645 options 36 months after the grant date (‘Third vesting’)

Exercise period Stock options can be exercised within a period of 3 years from vesting date.

Number of share options granted (refer note 52) 271,935

The maximum number of shares that can granted under the ESOP Plan shall be 273,427 (Two hundred seventy three thousand four hundred
twenty seven) Shares out of which 271,935 (Two Hundred Seventy One Nine Hundred Thirty Five) options were granted to the employees.

Method of settlement Equity

Stock options will be settled by issue of equity shares of the Company. As per the plan, holders of vested options are entitled to purchase one equity share for every option at an exercise price of ₹ 460.03 per option which
against the fair market value of ₹ 950.00 per share determined on the date of grant, i.e. 1 October 2020.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. The fair values of options granted were determined using Black-Scholes option pricing model that
takes into account factors specific to the share incentive plans along with other external inputs. Expected volatility has been determined by reference to the average volatility for comparable companies for corresponding option
term. The total expense recognised in the statements of profit and loss for the period ended 31 December 2020 was ₹ 22.81 million. The following principal assumptions were used in the valuation: Expected volatility was
determined by comparison with peer companies, as the Company’s shares are not presently publicly traded. The expected option life and average expected period to exercise, is assumed to be equal to the contractual maturity of
the option. Dividend yield is taken as 1.6% based on the the expected dividend payout by the management. The risk-free rate is the rate associated with a risk-free security with the same maturity as the option. At each balance
sheet date, the Group reviewed its estimates of the number of options that are expected to vest. The Group recognizes the impact of the revision to original estimates, if any, in the profit or loss in consolidated statement of
comprehensive income, with a corresponding adjustment to ‘retained earnings’ in equity. The fair value of option using Black Scholes model and the inputs used for the valuation for options that have been granted during the
reporting period are summarized as follows:

Particulars First vesting Second vesting Third vesting

Grant date 01 October 2020 01 October 2020 01 October 2020

Vesting date 01 October 2021 01 October 2022 01 October 2023
Expiry date 01 October 2024 01 October 2025 01 October 2026
Fair value of option at grant date using Black Scholes model 532.60 555.30 572.60
Exercise price 460.03 460.03 460.03
Expected volatility of returns 46.19% 46.63% 46.51%
Term to expiry 2.5 years 3.5 years 4.5 years
Expected dividend yield 1.60% 1.60% 1.60%
Risk free interest rate 4.64% 5.04% 5.23%

The total outstanding and exercisable share options and weighted average exercise prices for the various categories of option holders during the reporting periods are as follows:

Particulars Details
Options outstanding at the beginning of the period Nil
Options vested Nil
Options exercised Nil
Options forfeited/ lapsed/ cancelled Nil
Options outstanding (including vested and unvested options) Unvested: 271,935
Total number of Equity Shares that would arise as a result of full exercise of options granted (net Nil
of forfeited/ lapsed/ cancelled options) (only for vested options)
Variation in terms of options Per ESOP scheme
Money realised by exercise of options (in ₹ million) Nil
Options outstanding at the period end 271,935
Options exercisable at the period end Nil
Total number of options in force (excluding options not granted) 271,935
Weighted average remaining contractual life of outstanding options (in years) 4.75
Method used for accounting of share-based payment plans The employee compensation cost has been calculated using the fair value method of accounting for Options issued under the
Sona BLW ESOP Plan. The employee compensation cost as per fair value method for the period ended 31 December 2020 is
₹ 22.81 million.
Nature and extent of employee share based payment plans that existed during the period Each Option entitles the holder thereof to apply for and be allotted one Ordinary Shares of the Company upon payment of
including the general terms and conditions of each plan the exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and
expires at the end of three years from grant date
Employee wise details of options granted to
(i) Key Managerial Personnel Mr. Vivek Vikram Singh
Mr. Rohit Nanda
Mr. Ajay Pratap Singh
Mr. Kiran Manohar Deshmukh
Mr. Vikram Verma Vadaapalli
Mr. Sat Mohan Gupta

Share based payment to Key Managerial Personnel for the period ended 31 December 2020 is ₹ 14.64 million

(ii) Any other employee who received a grant in any one year of options amounting to 5% or None
more of the options granted during the year
(iii) Identified employees who are granted options, during any one year equal to or exceeding 1% No options were granted to any identified during any one year equal to or exceeding 1% of the issued capital (excluding
of the issued capital (excluding outstanding warrants and conversions) of our Company at the outstanding warrants and conversions) of our Company at the time of grant.
time of grant

304
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

54 Reconciliation between audited profit, total comprehensive income & total equity attributable to owners and restated profit, total comprehensive income & total equity
attributable to owners

Reconciliation between audited profit and restated profit For the year ended For the year ended For the year ended
31 March 2020 31 March 2019 31 March 2018
Profit as per audited financial statements 3,651.12 1,718.50 765.93

Ind As 116 related adjustments (refer note A below)

Interest cost - (22.01) (15.30)
Amortisation of right to use - (228.01) (187.49)
Rent - 270.02 217.44
Deferred tax charge / (credit) - (6.70) (4.86)
Impact of Ind AS 116 on discontinued operations included under exceptional items (47.69) - -
Impact on profit (47.69) 13.30 9.79

Restated profit 3,603.43 1,731.80 775.72

Reconciliation between audited total comprehensive income and restated total comprehensive For the year ended For the year ended For the year ended
income 31 March 2020 31 March 2019 31 March 2018

Total comprehensive income as per audited financial statements 3,366.27 1,726.06 539.65

Ind AS 116 related adjustments in profit (47.69) 13.30 9.79

Impact of foreign currency translation reserve on account of Ind AS 116 adjustments - (1.76) 3.05
Impact on total comprehensive income (47.69) 11.54 12.84

Restated total comprehensive income 3,316.86 1,737.60 552.49

Reconciliation between audited equity attributable to owners and restated equity attributable to As at As at As at
owners 31 March 2020 31 March 2019 31 March 2018

Audited equity attributable to owners 11,779.41 1,700.77 (23.69)

Impact of Ind AS 116 in the beginning of the year (net of tax) - 25.46 12.62
Impact of Ind AS 116 for the year (net of tax) - 11.54 12.84
Impact on equity attributable to owners - 37.00 25.46

Restated equity attributable to owners 11,779.41 1,737.77 1.77

Note A: Changes in accounting policies:

Ind AS 116 - Leases replaced the erstwhile accounting standard on lease accounting Ind AS 17 with effect from 01 April 2019. To ensure consistency of accounting policies in the restated
consolidated financial statements, the Group has considered adoption of this revised accounting standard w.e.f 01 April 2017. The impact of Ind AS 116 has been adjusted in the
respective years

Note B: There is no difference between audited profit, total comprehensive income and total equity and restated profit, total comprehensive income and total equity for the period ended
and as at 31 December 2020.

305
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

55 Business Combinations
Pursuant to terms of the Comstar Share Purchase Agreement and the approval of the Board of Directors and the shareholders in their meetings held on 5 July 2019, the
Holding Company had acquired 100% equity shares (representing 100% voting interest) of Comstar Automotive Technologies Pvt. Ltd. (Comstar India) and Comstar
Automotive Hong Kong Limited (Comstar HK) (together referred as “Comstar entities”), from Singapore VII Topco III Pte. Ltd., Singapore, as per details given below
for expanding its product portfolio and capabilities to develop and integrate the powertrain and the drivetrain components.

Name of the Company No. of Equity shares Consideration Consideration

(USD in million) (₹ in million)
Comstar Automotive Technologies Private Limited 64,527,564 120.69 8,290.00
Comstar Automotive Hong Kong Limited 1,878,801 3.31 227.00

The Company allocated purchase price in accordance with Ind AS 103 on business combinations. The fair value of net assets acquired was determined based on an
appraisal of such net assets determined by an external expert on behalf of the management.
( ₹ in million)
Particulars Comstar Automotive Comstar Automotive Hong Kong
Technologies Private Limited Limited
Cash paid 8,355.53 229.45
Less: transaction cost incurred (65.53) (2.45)
Total purchase consideration (A) 8,290.00 227.00
Cash and cash equivalents acquired 192.00 107.00
Net cash outflow 8,098.00 120.00

ASSETS As at As at
5 July 2019 5 July 2019
Non-current assets
Property, plant and equipment 579.00 95.00
Capital work-in-progress 44.00 2.00
Right-of-use assets 634.59 49.00
Other intangible assets (refer note a) 3,773.00 249.00
Intangible assets under development 160.00 -
Financial assets:
(i) Other financial assets 8.00 -
Income tax assets (net) 220.00 -
Other non-current assets 48.00 -
Total non-current assets 5,466.59 395.00

Current assets
Inventories 1,307.00 159.00
Financial assets
Investments 59.00 -
(i) Trade receivables 1,087.00 111.00
(ii) Cash and cash equivalents 192.00 107.00
(iii) Loans 368.00 -
(iv) Other financial assets 45.38 2.00
Other current assets 200.74 91.01
Total current assets 3,259.12 470.01

Total assets 8,725.71 865.01

LIABILITIES
Non-current liabilities
Financial liabilities
(i) Lease liabilities 12.00 49.00
Provisions 34.00 -
Deferred tax liabilities (net) (refer note a) 1,015.01 45.79
Total non-current liabilities 1,061.01 94.79

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SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

ASSETS As at As at
5 July 2019 5 July 2019
Current liabilities
Financial liabilities
(i) Borrowings 200.00 383.00
(ii) Trade payables
-Total outstanding dues of micro enterprises and small enterprises 165.00 -
-Total outstanding dues of creditors other than micro enterprises and small enterprises 505.00 237.00
(iii) Lease liabilities 3.00 -
(iv) Other financial liabilities 47.00 -
Other current liabilities 65.00 3.00
Provisions 67.00 1.00
Total current liabilities 1,052.00 624.00

Total liabilities 2,113.01 718.79

Net assets acquired (B) 6,612.70 146.22

Goodwill (A-B) 1,677.30 80.79

Note:
a) Customer relationships amounting to ₹ 3,760.00 million pertaining to Comstar Automotive Technologies Private Limited and ₹ 249.00 million pertaining to Comstar
Automotive Hong Kong Limited has been identified as a part of purchase price allocation. Further, deferred tax liability on customer relationship amounting to ₹ 961.60
million (Comstar Automotive Technologies Private Limited ) and ₹ 44.34 million (Comstar Automotive Hong Kong Limited) is also recognised.

b) Goodwill amounting to ₹ 1,758.09 million is on account of acquisition of Comstar Automotive Technologies Private Limited and Comstar Automotive Hong Kong
Limited on 5 July 2019

The results of these subsidiaries, after elimination of inter company transactions and balances, as included in the consolidated statement of profit and loss for the period 5
July 2019 to 31 March, 2020 are given below :

For the period 5 July 2019 to 31 March 2020

Comstar Automotive Comstar Automotive Hong Kong
Technologies Private Limited Limited

Total Revenue 4,165.00 828.00

Total Expenses 3,551.23 876.55
Profit before tax 644.77 (31.55)
Tax 167.03 2.36
Profit after tax 477.74 (33.91)
Total comprehensive income 562.74 (97.91)

Had the business combination been consummated on 1 April, 2019, the revenue and profit after tax would have changed as below:
Comstar Automotive Comstar Automotive Hong Kong
Technologies Private Limited Limited
Revenue Increase 1,684.00 137.00
Profit after tax (Increase/(Decrease)) 357.91 (12.27)

56 Foreign Direct Investment made by Singapore VII Topco III Pte Ltd
During the year ended 31 March 2020, pursuant to the terms of the Shares Subscription and Share Purchase Agreement dated 16 October 2018 entered into by the Parent
Company with Singapore VII Topco III Pte Ltd and the approval of the Board of Directors and the shareholders in their meetings held on 5 July 2019, the Parent
Company has issued 22,028,503 equity shares having a face value of ₹ 10 per share and 594,436 compulsorily convertible preference shares having a face value of ₹ 10 per
share at ₹ 374.83 per share. Pursuant to this, Company has recorded ₹ 220.29 million as equity share capital, ₹ 5.94 million as compulsorily convertible preference shares
capital and ₹ 8,479.83 million under Securities Premium Account

57 Goodwill and brand impairment testing

Goodwill
As mentioned in Note 55 above, as on 5 July 2019, the Group acquired two entities, Comstar Automotive Technologies Private Limited ("Comstar India") and Comstar
Automotive Hong Kong Limited ("Comstar Hongkong"), wherein the Group had recognised an amount of Rs 1,758.09 million as Goodwill. Annual test for impairment
of goodwill was carried out as at 31 March 2020, details of which are outlined below. The outcome of the test indicated that the value in use of business was higher than
its carrying value in those CGU’s (Cash generating unit). Accordingly, no impairment charge has been recognised in the consolidated statement of profit and loss.

The recoverable amount of each CGU was determined based on value-in-use calculations using a discount rate ranging between 12.00%-14.00% reflecting current market
assessments of the time value of money and risks specific to the business, covering a detailed four-year forecast with a compounded annual growth rate ranging between
1.50%-2.50%, followed by an extrapolation of expected cash flows using a terminal growth rate of approximately 3% as determined by the management.

307
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

Brand

On 1 August 2018, the Parent Company acquired SONA Intellectual property rights ("Sona IP") and all intellectual property rights thereto from SONA Management
Services Limited ("SMSL") having indefinite useful lives. This was due to the expectation of permanent use of acquired brand. The Group tests on an annual basis
whether the brand is impaired based on the value-in-use concept of the entity basis certain inputs outlined below. In March 2020 and March 2019, there was no
impairment identified for the brand.
The recoverable amount of the entity was determined on the basis of value in use based on the present value of the expected future cash flows.This calculation uses cash
flow projections based on the financial planning covering a five-year period in total. The management believes that any reasonable possible changes in the key
assumptions would not cause the Brand's carrying amount to exceed its recoverable amount.

The recoverable amount of the brand was determined based on value-in-use calculations for the Parent company using a discount rate ranging between 14.00%-17.00%
reflecting current market assessments of the time value of money and risks specific to the business as at the respective dates, covering a detailed five-year forecast with a
growth rate ranging between 16.00%-18.00%, followed by an extrapolation of expected cash flows using a terminal growth rate ranging between 1.50%-3.00% as
determined by the management.

Growth rates
The growth rates used are in line with the growth rate of the industry and the countries in which the entities operates and are consistent with the internal/external
sources of information.

Discount rates
The discount rates take into the consideration market risk and specific risk factors of the entity. The cash flow projections are based on the forecasts made by the
management.

Terminal growth rate

The terminal growth rate is the constant rate at which an entity is expected to grow at the end of the last forecasted cash flow period in a discounted cash flow model and
goes into perpetuity.

Sensitivity
The management believes that any reasonable possible changes in the key assumptions would not cause the cash generating unit's carrying amount to exceed its
recoverable amount.

58 In March 2020, the World Health Organisation declared the COVID-19 to be a pandemic. Consequent to this, Government of India declared a nationwide lockdown on
25 March 2020, which has impacted the business activities of the Group. The Group has assessed the impact that may result from this pandemic on its liquidity position,
carrying amount of receivables, inventories, tangible and intangible assets, investment and other assets / liabilities. In developing the assumptions relating to the possible
future uncertainties in the global economic condition because of this pandemic, the Group has considered internal and external information available till the date of
approval of these restated consolidated financial statements and has assessed its situation. Given the uncertainties of the pandemic, the final impact on the Group’s
assets in future may differ from that estimated as at the date of approval of these financial results, and the Group will continue to closely monitor any material changes to
future economic conditions.

(This space has been intentionally left blank)

308
SONA BLW PRECISION FORGINGS LIMITED
Summary of significant accounting policies and other explanatory information
(Figures in Million ₹, unless stated otherwise)

59 Authorisation of restated consolidated financial information

The restated consolidated financial information were approved by the Board of Directors on 12 February 2021.

The accompanying notes form an integral part of these restated consolidated financial information.

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group
Membership No: 517273 DIN: 00145529 Chief Executive Officer
DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

309
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

(The remainder of this page is intentionally left blank)

310
 Independent Practitioner’s report on the compilation of Pro-forma Consolidated Financial
Information to be included in the Draft Red Herring Prospectus (‘DRHP’) in connection with
proposed Initial Public Offer of equity shares (‘proposed IPO’) by Sona BLW Precision Forgings
Limited

To,
The Board of Directors,
Sona BLW Precision Forgings Limited
Sona Enclave Village Begumpur Khatola,
Sector 35, Gurugram, Haryana, India

Dear Sirs,

1. We have completed our assurance engagement to report on the compilation of Pro-forma Consolidated
Financial Information of Sona BLW Precision Forgings Limited (‘the Holding Company’) and its
subsidiaries (the Holding Company and its subsidiaries together referred to as ‘the Group’) (Refer
Annexure – I for the list of subsidiaries included in the Pro-forma Consolidated Financial Information).
The Pro-forma Consolidated Financial Information consists of the Pro-forma Consolidated Balance
Sheet as at 31 December 2020, 31 March 2020, 31 March 2019 and 31 March 2018, the Pro-forma
Consolidated Statement of Profit and Loss for the period ended 31 December 2020 and the years ended
31 March 2020, 31 March 2019 and 31 March 2018 and related notes (hereinafter referred as ‘Pro-
forma Consolidated Financial Information’). The applicable criteria on the basis of which the
management has compiled the Pro-forma Consolidated Financial information are specified in the
“Basis of preparation paragraph” as described in note 2 to the Pro-forma Consolidated Financial
Information.

2. The Pro-forma Consolidated Financial Information has been compiled by Management to illustrate
the impact of a significant acquisition made during year ended 31 March 2020 as set out in Note 1, on
the Company’s financial position as at 31 March 2019 and 31 March 2018 and its financial performance
and cash flows for the years ended 31 March 2020, 31 March 2019 and 31 March 2018 as if the
acquisition had taken place at a date prior to the first period presented. Further, the erstwhile subsidiary
of the Holding Company, Sona Holding B.V. The Netherlands, along with its subsidiaries and step down
subsidiaries, which were disposed off with effect from 4 July 2019 and the erstwhile associate of the
Holding Company, Sona Skill Development Centre Limited, which was disposed off with effect from 6
December 2018, have not been considered for consolidation by Management in the accompanying Pro-
forma Consolidated Financial information.

As a part of this process, information about the Group’s financial position and financial performance
has been extracted by Management from the following financial statements / financial information:

a) Audited standalone financial statements of the Holding Company for the years ended and as at 31
March 2020, 31 March 2019 and 31 March 2018, on which we have issued unmodified audit
opinions dated 14 August 2020, 5 July 2019 and 21 May 2018, respectively;
b) Audited consolidated special purpose financial statements of the Holding Company for the period
ended and as at 31 December 2020 on which we have issued unmodified audit opinion dated 12
February 2021;
c) Audited consolidated financial statements of Comstar Automotive Technologies Private Limited for
the years ended and as at 31 March 2020, 31 March 2019 and 31 March 2018, on which we have
issued unmodified audit opinions dated 14 August 2020, 30 May 2019 and 20 July 2018,
respectively; and
d) Audited consolidated special purpose financial information of Comstar Automotive Hong Kong
Limited for the years ended and as at 31 March 2020, 31 March 2019 and 31 March 2018, on
which we have issued unmodified audit opinions dated 12 February 2021.

Management’s Responsibility for the Pro-forma Consolidated Financial Information

3. The Management is responsible for compiling the Pro-forma Consolidated Financial Information on the
basis stated in note 2 to the Pro-forma Consolidated Financial Information and the same has been
approved by the Board of Directors of the Company. Management’s responsibility includes the
responsibility for designing, implementing and maintaining internal control relevant for compiling the

311
 Independent Practitioner’s report on the compilation of Pro-forma Consolidated Financial
Information to be included in the Draft Red Herring Prospectus (‘DRHP’) in connection with
proposed Initial Public Offer of equity shares (‘proposed IPO’) by Sona BLW Precision Forgings
Limited (Contd.)

Pro-forma Consolidated Financial Information on the basis stated in note 2 to the Pro-forma
Consolidated Financial Information that is free from material misstatement, whether due to fraud or
error. The Management is also responsible for identifying and ensuring that the Company complies with
the laws and regulations applicable to its activities, including compliance with the provisions of the laws
and regulations for the compilation of Pro-forma Consolidated Financial Information.

Practitioner’s Responsibilities

4. Our responsibility is to express an opinion, about whether the Pro-forma Consolidated Financial
Information of the Group has been compiled, in all material respects, by the Management on the basis
stated in note 2 to the Pro-forma Consolidated Financial Information.

5. We conducted our engagement in accordance with Standard on Assurance Engagements (SAE) 3420,
Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in
a Prospectus, issued by the Institute of Chartered Accountants of India. This Standard requires that the
practitioner comply with ethical requirements and plan and perform procedures to obtain reasonable
assurance about whether the Management has compiled, in all material respects, the Pro-forma
Consolidated Financial Information on the basis stated in note 2 to the Pro-forma Consolidated Financial
Information.

6. For purposes of this engagement, we are not responsible for updating or reissuing any reports or
opinions on any historical financial information used in compiling the Pro-forma Consolidated Financial
Information, nor have we, in the course of this engagement, performed an audit or review of the financial
information used in compiling the Pro-forma Consolidated Financial Information. For this engagement,
we have placed reliance on standalone/consolidated audited financial statements / financial information
as referred to in paragraph 2 above.

7. The purpose of Pro-forma Consolidated Financial Information included in a DRHP is solely to illustrate
the impact of a significant event or transaction on unadjusted financial information of the entity as if the
event had occurred or the transaction had been undertaken at an earlier date selected for purposes of
the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or
transaction at 1 April 2017 with consequential impact during the years ended 31 March 2020, 31 March
2019 and 31 March 2018 would have been as presented.

8. A reasonable assurance engagement to report on whether the Pro-forma Consolidated Financial

Information has been compiled, in all material respects, on the basis stated in note 2 to the Pro-forma
Consolidated Financial Information, involves performing procedures to assess whether the applicable
criteria used by the Management in the compilation of the Pro-forma Consolidated Financial Information
provide a reasonable basis for presenting the significant effects directly attributable to the event or
transaction, and to obtain sufficient appropriate evidence about whether:

• The related pro-forma adjustments give appropriate effect to those criteria; and
• The Pro-forma Consolidated Financial Information reflects the proper application of those
adjustments to the unadjusted financial information.

9. The procedures selected depend on the practitioner’s judgment, having regard to the practitioner’s
understanding of the nature of the company, the event or transaction in respect of which the pro-forma
financial information has been compiled, and other relevant engagement circumstances. The
engagement also involves evaluating the overall presentation of the pro-forma financial information. We
believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

10. Our work has not been carried out in accordance with auditing or other standards and practices
generally accepted in other jurisdictions and accordingly should not be relied upon as if it had been
carried out in accordance with those standards and practices.

312
 Independent Practitioner’s report on the compilation of Pro-forma Consolidated Financial
Information to be included in the Draft Red Herring Prospectus (‘DRHP’) in connection with
proposed Initial Public Offer of equity shares (‘proposed IPO’) by Sona BLW Precision Forgings
Limited (Contd.)

Opinion

11. In our opinion, the Pro-forma Consolidated Financial Information has been compiled, in all material
respects, on the basis stated in note 2 to the Pro-forma Consolidated Financial Information.

Restrictions on Use

12. This report should not in any way be construed as a re-issuance or re-dating of any of the previous
audit report issued by us.

13. We have no responsibility to update our report for events and circumstances occurring after the date of
the report.

14. Our report is intended solely for use of the Board of Directors for inclusion in the DRHP to be filed with
Securities Exchange Board of India, BSE Limited, National Stock Exchange of India Limited and the
Registrar of Companies, Delhi in connection with the proposed IPO of the Company. Our report should
not be used, referred to, or distributed for any other purpose except with our prior consent in writing.
Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to
any other person to whom this report is shown or into whose hands it may come without our prior
consent in writing.

For Walker Chandiok & Co LLP

Chartered Accountants
Firm Registration No.: 001076N/N500013

Arun Tandon
Partner
Membership No.: 517273
UDIN: 21517273AAAABB9040

Place: New Delhi

Date: 12 February 2021

313
Independent Practitioner’s report on the compilation of Pro-forma Consolidated Financial
Information to be included in the Draft Red Herring Prospectus (‘DRHP’) in connection with
proposed Initial Public Offer of equity shares (‘proposed IPO’) by Sona BLW Precision Forgings
Limited (Contd.)

Annexure - I

List of entities included in Pro-forma Consolidated Financial Information

Name of the company

1. SONA BLW Precision Forgings Limited

Name of the subsidiaries

1. Comstar Automotive Technologies Private Limited

2. Comstar Automotive USA LLC (subsidiary of Comstar Automotive Technologies Private
Limited)
3. Comstar Automotive Technologies Services Private Limited (subsidiary of Comstar
Automotive Technologies Private Limited)
4. Comstar Automotive Hong Kong Limited
5. Comestel Automotive Technologies Mexicana Ltd (subsidiary of Comstar Automotive Hong
Kong Limited)
6. Comstar Automotive (Hangzhou) Co., Ltd (subsidiary of Comstar Automotive Hong Kong
Limited)
7. Comstar Hong Kong Mexico No. 1, LLC (subsidiary of Comstar Automotive Hong Kong
Limited)
8. Comenergia Automotive Technologies Mexicana, S. DE R.L. DE C.V (subsidiary of
Comstar Automotive Hong Kong Limited)
9. Comestel Automotive Technologies Mexicana, S. DE R.L. DE C.V (subsidiary of Comestel
Automotive Technologies Mexicana Limited)

314
SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated balance sheet
(Figures in Million ₹, unless stated otherwise)
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Notes Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
ASSETS
Non-current assets
Property, plant and equipment 4 3,218.88 - 3,218.88 2,845.07 - 2,845.07 2,698.98 (239.56) 2,459.42 2,184.65 (13.92) 2,170.73
Capital work-in-progress 820.67 - 820.67 581.37 - 581.37 180.67 - 180.67 194.00 - 194.00
Right-of-use assets 4 1,607.69 - 1,607.69 1,419.41 - 1,419.41 - 1,049.20 1,049.20 - 837.39 837.39
Goodwill on consolidation 5 1,758.09 - 1,758.09 1,758.09 - 1,758.09 - 1,758.09 1,758.09 - 1,758.09 1,758.09
Intangible assets 5 4,450.99 - 4,450.99 4,629.18 - 4,629.18 735.92 4,078.51 4,814.43 71.06 4,345.60 4,416.66
Intangible assets under development 910.21 - 910.21 315.00 - 315.00 85.00 - 85.00 - - -
Financial assets
Investments 6(A) - - - 19.00 - 19.00 328.27 - 328.27 1,217.56 - 1,217.56
Loans 7 54.02 - 54.02 50.79 - 50.79 30.14 - 30.14 23.64 - 23.64
Other financial assets 8 - - - 0.87 - 0.87 38.11 - 38.11 26.79 - 26.79
Income tax assets (net) 9 243.09 - 243.09 291.42 - 291.42 280.24 - 280.24 275.66 - 275.66
Other non-current assets 10 209.57 - 209.57 278.49 - 278.49 179.98 (20.57) 159.41 39.13 (16.03) 23.10
Total non-current assets 13,273.21 - 13,273.21 12,188.69 - 12,188.69 4,557.31 6,625.67 11,182.98 4,032.49 6,911.13 10,943.62

Current assets
Inventories 11 2,838.40 - 2,838.40 1,962.36 - 1,962.36 1,838.11 - 1,838.11 1,884.76 - 1,884.76
Financial assets
Investments 6(B) - - - - - - 129.00 - 129.00 202.00 - 202.00
Trade receivables 12 3,938.98 - 3,938.98 2,336.28 - 2,336.28 2,732.98 - 2,732.98 2,382.06 - 2,382.06
Cash and cash equivalents 13 333.38 - 333.38 1,049.85 - 1,049.85 360.94 - 360.94 434.70 - 434.70
Bank balances other than cash and cash equivalents 14 2.57 - 2.57 623.08 - 623.08 254.12 - 254.12 - - -
Loans 7 1.52 - 1.52 4.92 - 4.92 1.19 - 1.19 301.17 - 301.17
Other financial assets 8 159.90 - 159.90 5.30 - 5.30 35.93 121.08 157.01 67.69 121.08 188.77
Income tax assets (net) 9 - - - - - - - - - 16.00 - 16.00
Other current assets 10 572.46 - 572.46 336.34 - 336.34 350.08 (0.30) 349.78 318.54 (2.13) 316.41
Total current assets 7,847.21 - 7,847.21 6,318.13 - 6,318.13 5,702.35 120.78 5,823.13 5,606.92 118.95 5,725.87

Assets held for sale (Investment in Sona BV) - - - - - - 1,399.48 - 1,399.48 - - -

Total assets 21,120.42 - 21,120.42 18,506.82 - 18,506.82 11,659.14 6,746.45 18,405.59 9,639.41 7,030.08 16,669.49

EQUITY AND LIABILITIES

Equity
Equity share capital 15(A) 471.54 - 471.54 471.54 - 471.54 1,043.18 (766.00) 277.18 1,043.18 (766.00) 277.18
Instruments entirely equity in nature 15(B) 5.94 - 5.94 5.94 - 5.94 - - - - - -
Equity and convertible preference shares to be issued 15(C) - - - - - - - 8,706.06 8,706.06 - 8,706.06 8,706.06
Other equity 16 12,408.03 - 12,408.03 11,301.93 - 11,301.93 6,417.74 (2,801.68) 3,616.06 4,583.75 (2,623.49) 1,960.26
Total equity 12,885.51 - 12,885.51 11,779.41 - 11,779.41 7,460.92 5,138.38 12,599.30 5,626.93 5,316.57 10,943.50

315
SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated balance sheet
(Figures in Million ₹, unless stated otherwise)
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Notes Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 17(i) 1,698.15 - 1,698.15 1,768.22 - 1,768.22 733.07 - 733.07 680.56 - 680.56
Lease liabilities 18 733.17 - 733.17 532.33 - 532.33 - 180.61 180.61 - 178.35 178.35
Other financial liabilities 19 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24
Provisions 20 103.93 - 103.93 66.78 - 66.78 56.82 - 56.82 46.38 - 46.38
Deferred tax liabilities (net) 21 1,195.05 - 1,195.05 1,076.71 - 1,076.71 121.93 1,401.31 1,523.24 31.84 1,512.10 1,543.94

Total non-current liabilities 3,731.54 - 3,731.54 3,445.28 - 3,445.28 913.06 1,581.92 2,494.98 760.02 1,690.45 2,450.47

Current liabilities
Financial liabilities
Borrowings 17(ii) 603.74 - 603.74 846.09 - 846.09 620.10 - 620.10 650.51 - 650.51
Trade payables 22
-Total outstanding dues of micro enterprises and 504.81 - 504.81 166.99 - 166.99 269.77 - 269.77 0.62 - 0.62
small enterprises
-Total outstanding dues of creditors other than 1,916.64 - 1,916.64 995.26 - 995.26 1,123.44 - 1,123.44 1,613.59 - 1,613.59
micro enterprises and small enterprises
Lease liabilities 18 98.63 - 98.63 71.73 - 71.73 - 26.15 26.15 - 23.06 23.06
Other financial liabilities 19 938.79 - 938.79 922.65 - 922.65 1,056.44 - 1,056.44 757.11 - 757.11
Other current liabilities 23 159.01 - 159.01 110.35 - 110.35 143.94 - 143.94 114.25 - 114.25
Provisions 20 71.26 - 71.26 51.06 - 51.06 70.76 - 70.76 90.70 - 90.70
Current tax liabilities (net) 24 210.49 - 210.49 118.00 - 118.00 0.71 - 0.71 25.68 - 25.68

Total current liabilities 4,503.37 - 4,503.37 3,282.13 - 3,282.13 3,285.16 26.15 3,311.31 3,252.46 23.06 3,275.52
Total liabilities 8,234.91 - 8,234.91 6,727.41 - 6,727.41 4,198.22 1,608.07 5,806.29 4,012.48 1,713.51 5,725.99
Total equity and liabilities 21,120.42 - 21,120.42 18,506.82 - 18,506.82 11,659.14 6,746.45 18,405.59 9,639.41 7,030.08 16,669.49

The accompanying notes form an integral part of these pro-forma consolidated financial information
As per our report of even date attached

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

316
SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated statement of profit and loss
(Figures in Million ₹, unless stated otherwise)
For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Notes Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Income
Revenue from operations 25 10,269.56 - 10,269.56 12,200.91 - 12,200.91 14,277.20 - 14,277.20 12,241.05 - 12,241.05
Other income 26 26.72 - 26.72 75.83 - 75.83 57.81 - 57.81 91.03 - 91.03
Total income 10,296.28 - 10,296.28 12,276.74 - 12,276.74 14,335.01 - 14,335.01 12,332.08 - 12,332.08

Expenses
Cost of materials consumed 4,707.39 - 4,707.39 5,368.30 (251.00) 5,117.30 5,616.41 - 5,616.41 5,059.38 - 5,059.38
Changes in inventories of finished goods and work-in-progress 27 (566.68) - (566.68) 22.05 - 22.05 168.92 - 168.92 (330.72) - (330.72)
Employee benefits expense 28 1,015.53 - 1,015.53 1,222.30 - 1,222.30 1,238.04 - 1,238.04 1,120.74 - 1,120.74
Finance costs 29 230.85 - 230.85 268.75 - 268.75 177.19 20.67 197.86 199.30 14.72 214.02
Depreciation and amortisation expense 30 688.62 - 688.62 710.31 71.54 781.85 428.54 293.91 722.45 324.30 287.78 612.08
Other expenses 31 2,110.06 - 2,110.06 2,653.69 (67.98) 2,585.71 3,157.02 (25.62) 3,131.40 2,956.25 (19.59) 2,936.66
Total expenses 8,185.77 - 8,185.77 10,245.40 (247.44) 9,997.96 10,786.12 288.96 11,075.08 9,329.25 282.91 9,612.16
Profit before tax 2,110.51 - 2,110.51 2,031.34 247.44 2,278.78 3,548.89 (288.96) 3,259.93 3,002.83 (282.91) 2,719.92

Tax expense 33
- Current tax 435.08 - 435.08 506.08 - 506.08 1,145.35 - 1,145.35 1,035.90 - 1,035.90
- Tax related to previous years - - - 5.97 - 5.97 5.17 - 5.17 14.26 - 14.26
- Deferred tax charge 120.74 - 120.74 (110.98) (339.51) (450.49) 91.45 (110.79) (19.34) 50.85 (95.99) (45.14)
Total tax expense 555.82 - 555.82 401.07 (339.51) 61.56 1,241.97 (110.79) 1,131.18 1,101.01 (95.99) 1,005.02

Profit for the period / year 1,554.69 - 1,554.69 1,630.27 586.95 2,217.22 2,306.92 (178.17) 2,128.75 1,901.82 (186.92) 1,714.90

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obligations (8.62) - (8.62) 6.28 - 6.28 1.98 - 1.98 (19.06) - (19.06)
Income tax relating to above mentioned item 2.41 - 2.41 (1.57) - (1.57) (0.64) - (0.64) 6.96 - 6.96
Changes in fair values of equity instruments carried at fair value through (19.00) - (19.00) (309.28) - (309.28) 517.71 - 517.71 347.39 - 347.39
other comprehensive income
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign subsidiaries 13.80 - 13.80 5.00 - 5.00 40.00 - 40.00 (6.00) - (6.00)

Other comprehensive income/(loss) for the period / year, net of tax (11.41) - (11.41) (299.57) - (299.57) 559.05 - 559.05 329.29 - 329.29

Total comprehensive income for the period / year 1,543.28 - 1,543.28 1,330.70 586.95 1,917.65 2,865.97 (178.17) 2,687.80 2,231.11 (186.92) 2,044.19

Pro-forma Earnings per equity share of face value of ₹ 10 each

Basic earnings per share (in ₹) 37 2.71 3.87 3.72 2.99
Diluted earnings per share (in ₹) 37 2.71 3.87 3.72 2.99

The accompanying notes form an integral part of these pro-forma consolidated financial information
As per our report of even date attached

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

317
SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated cash flow statement (0.00) (0.00) 0.00
(Figures in Million ₹, unless stated otherwise) 0.01 (0.00) (0.00) 0.00
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018
A. Cash flows from operating activities
Profit before income tax 2,110.51 2,278.78 3,259.93 2,719.92
Adjustments for:
Depreciation and amortisation expense 688.62 781.85 722.45 612.08
(Profit) / Loss on sale of property plant and equipment (net) (6.02) 5.25 3.67 1.41
Allowance for doubtful receivables and advances - 3.52 2.01 1.07
Unwinding of discount on fair valuation of security deposits (0.67) (0.84) 0.10 0.08
Amortisation of transaction cost based on effective interest rate (0.91) (0.68) 0.61 1.96
Unwinding of discount on deferred payment liabilities 0.36 4.02 4.76 0.62
Provision for slow moving inventory 25.49 0.80 7.92 -
Provision for warranty - (10.00) 6.00 5.00
Liabilities/ provisions no longer required written back - - (4.62) -
Fair value (gain)/loss on derivatives (159.84) 254.62 (16.47) 28.17
Profit on sale of investments - (24.00) (13.00) (59.00)
Finance costs 230.85 268.75 197.86 214.02
Interest income (26.11) (30.91) (30.33) (23.70)
Unrealised foreign exchange (gain) (158.80) (44.25) (39.91) (23.11)
Share based payments 22.81 - - -
Operating profit before working capital changes 2,726.29 3,486.91 4,100.98 3,478.52

Changes in operating assets and liabilities

Movement in inventories (901.53) (100.44) 59.72 (487.87)
Movement in trade receivables (1,450.42) 611.55 (345.92) (312.95)
Movement in other financial asset (46.62) (58.61) 352.84 (301.18)
Movement in other assets (211.17) 3.02 (66.74) 173.38
Movement in trade payable 1,178.01 (390.72) (233.94) 285.05
Movement in financial liabilities (157.12) (26.16) (32.60) 66.80
Movement in provision 109.82 12.54 (13.52) 19.51
Movement in other liabilities 111.74 (47.58) 32.68 53.72

Cash generated from operations 1,359.00 3,490.51 3,853.50 2,974.98

Direct taxes paid (280.93) (398.09) (1,164.07) (1,052.61)
Net cash flow generated from operating activities - Total (A) 1,078.07 3,092.42 2,689.43 1,922.37

B. Cash flows from investing activities

Payments for acquisition of property, plant and equipment, intangibles and (1,520.04) (2,240.59) (1,163.88) (1,130.00)
capital work in progress including capital advances
Proceeds from sale of property, plant and equipment 8.33 1.19 3.67 1.64
Movement in bank deposits (net) 621.38 (331.72) (265.45) 9.13
Amount received on sale of investment in subsidiary - 1,399.48 - -
Purchase of current investments (net) - 163.00 85.51 392.05
Purchase of long term investments (0.10) - - -
Acquisition of subsidiaries (Comstar Group) - (8,517.00) - -
Interest received 21.27 38.91 33.33 24.70
Net cash used in investing activities - Total (B) (869.16) (9,486.73) (1,306.82) (702.48)

C. Cash flows from financing activities

Proceeds from short term borrowings, net (242.32) 225.99 39.59 (35.19)
Proceeds from long term borrowings 323.39 1,607.55 693.18 578.16
Repayment of long term borrowings (290.74) (373.66) (954.76) (417.23)
Repayment of deferred payment liabilities (11.61) (86.44) (1.57) 80.40
Repayment of Lease liabilities (69.26) (53.88) (25.62) (19.59)
Dividends (460.70) (1,532.09) (1,032.00) (1,257.00)
Dividend Tax - (198.99) - -
Proceeds from issue of equity shares - 8,477.30 - -
Proceeds from issue of compulsorily convertible preference shares - 228.76 - -
Buyback of shares - (814.21) - -
Fees paid for increase in authorised share capital - (8.72) - -
Tax paid on buy back of shares - (183.64) - -
Interest paid (174.14) (204.75) (175.19) (198.30)
Net cash generated from/(used in) financing activities - Total (C) (925.38) 7,083.22 (1,456.37) (1,268.75)

D. Net increase/(decrease) in cash and cash equivalents (A)+(B)+(C) (716.47) 688.91 (73.76) (48.86)

E. Cash and cash equivalents at the beginning of the period / year 1,049.85 360.94 434.70 483.56

F. Cash and cash equivalents at the end of the period / year (D)+(E) 333.38 1,049.85 360.94 434.70

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SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated cash flow statement
(Figures in Million ₹, unless stated otherwise)
For the period ended For the year ended For the year ended For the year ended
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Reconciliation of cash and cash equivalents as per the cash flow statement
Cash and cash equivalents as per above comprise of the following:
Balances in current accounts 310.46 445.43 360.84 434.62
Cash on hand 0.12 0.14 0.10 0.08
Bank deposits with original maturity of less than three months 22.80 604.28 - -

Balances per statement of cash flows 333.38 1,049.85 360.94 434.70

The accompanying notes form an integral part of these pro-forma consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

319
 SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated statement of changes in equity
(Figures in Million ₹, unless stated otherwise)

A. Equity share capital

Amount
Balance as at 1 April 2017 277.18
Changes in equity share capital during the year -
Balance as at 31 March 2018 277.18
Changes in equity share capital during the year -
Balance as at 31 March 2019 277.18
Issue of shares 220.29
Buyback of shares (25.93)
Balance As at
31 March 2020 471.54
Changes in equity share capital during the period -
Balance As at 31 December 2020 471.54

B. Instruments entirely equity in nature

Amount
Balance as at 1 April 2017 -
Issue of compulsory convertible preference shares during the year -
Balance as at 31 March 2018 -
Issue of compulsory convertible preference shares during the year -
Balance as at 31 March 2019 -
Issue of compulsory convertible preference shares during the year 5.94
Balance As at

31 March 2020 5.94

Changes in equity share capital during the period -
Balance As at 31 December 2020 5.94

C. Equity and preference shares to be issued

Amount
Balance as at 1 April 2017 8,706.06
Issue of compulsory convertible preference shares during the year -
Balance as at 31 March 2018 8,706.06
Issue of compulsory convertible preference shares during the year -
Balance as at 31 March 2019 8,706.06
Less: Issuance of equity share (220.29)
Less: Issuance of preference share (5.94)
Less: Transferred to security premium (8,479.83)
Balance As at
31 March 2020 -
Changes in equity share capital during the period -
Balance As at 31 December 2020 -

D. Other equity

General reserve Securities premium Foreign currency Equity instruments Capital redemption Employee’s stock Roll back reserve (refer Retained earnings Total
translation reserve through other reserve options outstanding note 3(c)(iii) & (iv))
comprehensive income reserve

Balance as at 1 April 2017 120.00 382.14 - (865.10) - - (256.12) 1,793.27 1,174.19

Profit for the year - - - - - - - 1,714.90 1,714.90
Remeasurements of defined benefit obligations, net of tax - - - - - - - (12.10) (12.10)
Ind-AS 116 transition adjustments, net of tax - - - - - - - (1.12) (1.12)
Dividend paid - - - - - - - (1,100.00) (1,100.00)
Tax on dividend paid - - - - - - - (157.00) (157.00)
Net changes in fair values of equity instruments carried at fair value through other - - - 347.39 - - - - 347.39
comprehensive income
Foreign currency translation reserve - - (6.00) - - - - - (6.00)
Balance as at 31 March 2018 120.00 382.14 (6.00) (517.71) - - (256.12) 2,237.95 1,960.26
Profit for the year - - - - - - - 2,128.75 2,128.75
Remeasurements of defined benefit obligations, net of tax - - - - - - - 1.34 1.34
Dividend paid - - - - - - - (896.00) (896.00)
Tax on dividend paid - - - - - - - (136.00) (136.00)
Net changes in fair values of equity instruments carried at fair value through other - - - 517.71 - - - - 517.71
comprehensive income
Foreign currency translation reserve - - 40.00 - - - - - 40.00
Balance as at 31 March 2019 120.00 382.14 34.00 - - - (256.12) 3,336.04 3,616.06

320
SONA BLW PRECISION FORGINGS LIMITED
Pro-forma consolidated statement of changes in equity
(Figures in Million ₹, unless stated otherwise)

General reserve Securities premium Foreign currency Equity instruments Capital redemption Employee’s stock Roll back reserve (refer Retained earnings Total
translation reserve through other reserve options outstanding note 3(c)(iii) & (iv))
comprehensive income reserve

Balance as at 1 April 2019 120.00 382.14 34.00 - - - (256.12) 3,336.04 3,616.06

Profit for the year - - - - - - - 2,217.22 2,217.22
Remeasurements of defined benefit obligations, net of tax - - - - - - - 4.71 4.71
Premium on fresh issue of equity shares - 8,479.83 - - - - - - 8,479.83
Premium on buy back of shares - (788.28) - - - - - - (788.28)
Tax paid on buy back of shares - (183.64) - - - - - - (183.64)
Stamp duty paid for increase in authorised share capital - (8.72) - - - - - - (8.72)
Dividend paid - - - - - - - (1,442.00) (1,442.00)
Tax on dividend - - - - - - - (288.97) (288.97)
Net changes in fair values of equity instruments carried at fair value through other - - - (309.28) - - - - (309.28)
comprehensive income
Foreign currency translation reserve - - 5.00 - - - - - 5.00
Transfer to Capital redemption reserve from retained earnings - - - - 25.93 - - (25.93) -
Transferred to retained earnings upon acquisition - - (25.00) - - - 256.12 (231.12) -
Balance as at 31 March 2020 120.00 7,881.33 14.00 (309.28) 25.93 - - 3,569.95 11,301.93

Profit for the period - - - - - - - 1,554.69 1,554.69

Remeasurements of defined benefit obligations, net of tax - - - - - - - (6.21) (6.21)
Dividend paid - - - - - - - (459.99) (459.99)
Foreign currency translation reserve - - 13.80 - - - - - 13.80
Employee stock option charge for the period - - - - - 22.81 - - 22.81
Net changes in fair values of equity instruments carried at fair value through other - - - (19.00) - - - - (19.00)
comprehensive income

Balance as at 31 December 2020 120.00 7,881.33 27.80 (328.28) 25.93 22.81 - 4,658.44 12,408.03

The accompanying notes form an integral part of these pro-forma consolidated financial information

As per our report of even date attached

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group Chief Executive Officer
Membership No: 517273 DIN: 00145529 DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

321
1) Background

a) Sona BLW Precision Forgings Limited (the “Parent Company” or “Holding Company or “Sona BLW”),
a public limited company was incorporated on 27 October 1995 and began commercial production in
November 1998. Sona BLW and its subsidiaries and associate (together referred to as “the Group”) are
engaged in the manufacturing of precision forged bevel gears, differential case assemblies, conventional
and micro-hybrid starter motors, EV traction motors etc., for automotive and other applications.

b) During the year ended 31 March 2019, the investment in associate company (Sona Skill Development
Centre Limited) had been disposed off by the Group. Further, the Parent Company had executed an
agreement dated 16 October 2018 to sell 81% stake in its wholly owned subsidiary, Sona Holding BV
Netherlands and its subsidiaries (collectively “Sona BV”), to Sona Autocomp Holding Private Limited.
On 4 July 2019, the Parent Company completed the aforementioned transaction and accordingly, with
effect from that date, Sona BV ceased to be Parent Company’s subsidiary.

c) Pursuant to approval of the Board of Directors and the shareholders in their meetings held on 16 October
2018, the Parent Company executed Share Purchase Agreement with Singapore VII Topco III Pte. Ltd
and consequently, the Parent Company on 5 July 2019 had acquired 100% equity shares (representing
100% voting interest) of Comstar Automotive Technologies Private Limited and its subsidiaries
(collectively “Comstar India”) and Comstar Automotive Hong Kong Limited and its subsidiaries
(collectively “Comstar HK”) (Comstar India and Comstar HK together referred to as “Comstar Group”).

2) Basis of preparation

The pro-forma consolidated financial information of the Group comprising the pro-forma consolidated balance
sheet as at 31 December 2020, 31 March 2020, 31 March 2019 and 31 March 2018 and the pro-forma
consolidated statement of profit and loss and the pro-forma consolidated cash flow statement for the period
ended 31 December 2020 and years ended 31 March 2020, 31 March 2019 and 31 March 2018, read with the
notes to the pro-forma consolidated financial information (hereinafter referred as ‘pro-forma consolidated
financial information’), has been prepared to reflect the acquisition of Comstar India and Comstar HK as if the
acquisition had taken place at a date prior to the first period presented. Because of their nature, the pro-forma
financial information addresses a theoretical situation and therefore, does not represent Group’s factual financial
position or results. They purport to indicate the results and the financial position that would have resulted had
the acquisition been completed at the date prior to the first period presented but are not intended to be indicative
of expected results or operations in the future periods or the future financial position of the Group.

The pro-forma adjustments are based upon available information and assumptions that the management of the
Parent Company believes to be reasonable. Such pro-forma consolidated financial information has been
prepared on the bases as stated in the following section “Pro-forma adjustments” and accordingly should not
be relied upon as if it had been prepared in accordance with the generally accepted accounting principles.

In addition, the rules and regulations related to the preparation of pro-forma consolidated financial information
in other jurisdictions may also vary significantly from the basis of preparation as set out in paragraphs below.

The pro-forma financial information for the period and years presented has been prepared by combining the
following financial information prepared as per generally accepted accounting principles in India and after
making the adjustments as detailed in the following section “Pro-forma adjustments” –

a) the audited standalone financial statements of the Parent Company for the years ended and as at 31 March
2020, 31 March 2019 and 31 March 2018, on which the auditors have expressed unmodified audit opinion
vide their reports dated 14 August 2020, 5 July 2019 and 21 May 2018. Further, the erstwhile subsidiary
company namely Sona Holding B.V., The Netherlands along with its subsidiaries and step down subsidiaries
and the erstwhile associate namely Sona Skill Development Centre Limited, have not been considered for
consolidation in this pro-forma consolidated financial information for the abovementioned periods (also refer
note 39) and hence, the same is included under the head “Investments” / “Assets held for sale” in the pro-
forma consolidated financial information at its carrying value in the books of account of Sona BLW;

322
 b) the audited consolidated special purpose financial statements of the Parent Company and its subsidiary
companies for the period ended and as at 31 December 2020, on which the auditors have expressed an
unmodified audit opinion vide their report dated 12 February 2021;

c) the audited consolidated financial statements of Comstar India for the years ended and as at 31 March
2020, 31 March 2019 and 31 March 20218 on which the auditors have expressed unmodified audit opinion
vide their reports dated 14 August 2020, 30 May 2019 and 20 July 2018;

d) the audited consolidated special purpose financial information of Comstar HK for the years ended and as
at 31 March 2020, 31 March 2019 and 31 March 2018 on which the auditors have expressed an unmodified
audit opinion vide their reports dated 12 February 2021.

Further, the pro-forma consolidated financial information for all the periods consist of three columns wherein:

a) Column 1 represents sum of standalone balances of the Parent Company and Comstar Group after
adjusting the following intra-group eliminations between Comstar India entities and Comstar HK entities
(refer note 3(a)) :

• Sales, purchases and corresponding trade payables and trade receivables between the entities;
• Loans given and taken (i.e. borrowings) and corresponding interest income and interest expense; and
• Unrealised profits on unsold inventories

b) Column 2 represents reclassification adjustments (refer note 3(b)), sum of GAAP adjustments (refer note
3(c)) and acquisition related adjustments (refer note 3(d))

c) Column 3 represents the total of column 1 and column 2

3) Pro-forma adjustments

The consolidated financial information of Comstar Group has been prepared as per Ind AS and adjusted to
comply with the Group’s accounting policies in all material aspects (collectively referred to as “Group accounting
policies” as appearing in restated consolidated financial information). The following adjustments have been made
to the historical financial information (as mentioned above) to present the Comstar Group consistently with the
post-acquisition group structure.

a) Consolidated financial information of the Parent Company and Comstar Group

Details of amounts related to financial information of the Parent Company and the Comstar Group included
in column 1 of consolidated pro-forma financial information is provided below:

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SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)
Details of amounts included in column 1 of Pro-forma consolidated financial information in respect of Sona BLW and Comstar Group:
As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
ASSETS Sona BLW Comstar Group Adjustment on Total Sona BLW Comstar Group Total Sona BLW Comstar Group Total
acquisition of
Comstar Group
Non-current assets
Property, plant and equipment 2,138.42 706.65 - 2,845.07 2,022.98 676.00 2,698.98 1,582.65 602.00 2,184.65
Capital work-in-progress 500.37 81.00 - 581.37 131.67 49.00 180.67 122.00 72.00 194.00
Right-of-use assets 748.52 72.99 597.90 1,419.41 - - - - - -
Goodwill on consolidation - - 1,758.09 1,758.09 - - - - - -
Intangible assets 752.48 66.00 3,810.70 4,629.18 723.92 12.00 735.92 56.06 15.00 71.06
Intangible assets under development - 315.00 - 315.00 - 85.00 85.00 - - -
Financial assets
Investments 8,603.98 - (8,584.98) 19.00 328.27 - 328.27 1,217.56 - 1,217.56
Loans 43.79 7.00 - 50.79 23.14 7.00 30.14 16.64 7.00 23.64
Other financial assets 0.87 - - 0.87 38.11 - 38.11 26.79 - 26.79
Income tax assets (net) 40.42 251.00 - 291.42 11.24 269.00 280.24 13.66 262.00 275.66
Other non-current assets 224.38 54.11 - 278.49 86.98 93.00 179.98 25.13 14.00 39.13
Total non-current assets 13,053.23 1,553.75 (2,418.29) 12,188.69 3,366.31 1,191.00 4,557.31 3,060.49 972.00 4,032.49
Current assets
Inventories 614.14 1,348.22 - 1,962.36 677.84 1,160.27 1,838.11 723.76 1,161.00 1,884.76
Financial assets
Investments - - - - - 129.00 129.00 - 202.00 202.00
Trade receivables 1,334.38 1,001.90 - 2,336.28 1,520.98 1,212.00 2,732.98 1,418.06 964.00 2,382.06
Cash and cash equivalents 344.85 705.00 - 1,049.85 1.94 359.00 360.94 20.70 414.00 434.70
Bank balances other than cash and cash equivalents 240.08 383.00 - 623.08 254.12 - 254.12 - - -
Loans 0.92 4.00 - 4.92 0.19 1.00 1.19 300.17 1.00 301.17
Other financial assets 0.30 5.00 - 5.30 8.93 27.00 35.93 58.69 9.00 67.69
Income tax assets (net) - - - - - - - - 16.00 16.00
Other current assets 71.99 264.35 - 336.34 154.08 196.00 350.08 37.54 281.00 318.54
Total current assets 2,606.66 3,711.47 - 6,318.13 2,618.08 3,084.27 5,702.35 2,558.92 3,048.00 5,606.92
Assets held for sale (Investment in Sona BV) - - - - 1,399.48 - 1,399.48 - - -
Total assets 15,659.89 5,265.22 (2,418.29) 18,506.82 7,383.87 4,275.27 11,659.14 5,619.41 4,020.00 9,639.41
EQUITY AND LIABILITIES
Equity
Equity share capital 471.54 766.00 (766.00) 471.54 277.18 766.00 1,043.18 277.18 766.00 1,043.18
Instruments entirely equity in nature 5.94 - - 5.94 - - - - - -
Other equity 10,837.08 3,073.33 (2,608.48) 11,301.93 3,985.47 2,432.27 6,417.74 2,462.75 2,121.00 4,583.75
Total equity 11,314.56 3,839.33 (3,374.48) 11,779.41 4,262.65 3,198.27 7,460.92 2,739.93 2,887.00 5,626.93
LIABILITIES
Non-current liabilities
Financial liabilities
Borrowings 1,768.22 - - 1,768.22 733.07 - 733.07 680.56 - 680.56
Lease liabilities 480.33 52.00 - 532.33 - - - - - -
Other financial liabilities 1.24 - - 1.24 1.24 - 1.24 1.24 - 1.24
Provisions 29.78 37.00 - 66.78 23.82 33.00 56.82 18.38 28.00 46.38
Deferred tax liabilities (net) 84.52 36.00 956.19 1,076.71 116.93 5.00 121.93 38.84 (7.00) 31.84
Total non-current liabilities 2,364.09 125.00 956.19 3,445.28 875.06 38.00 913.06 739.02 21.00 760.02

324
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)
Details of amounts included in column 1 of Pro-forma consolidated financial information in respect of Sona BLW and Comstar Group:
As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
ASSETS Sona BLW Comstar Group Adjustment on Total Sona BLW Comstar Group Total Sona BLW Comstar Group Total
acquisition of
Comstar Group
Current liabilities
Financial liabilities
Borrowings 545.09 301.00 - 846.09 389.10 231.00 620.10 349.51 301.00 650.51
Trade payables
-Total outstanding dues of micro enterprises and small 55.99 111.00 - 166.99 76.77 193.00 269.77 0.62 - 0.62
enterprises
-Total outstanding dues of creditors other than micro 492.37 502.89 - 995.26 615.44 508.00 1,123.44 939.59 674.00 1,613.59
enterprises and small enterprises
Lease liabilities 61.73 10.00 - 71.73 - - - - - -
Other financial liabilities 739.65 183.00 - 922.65 1,027.44 29.00 1,056.44 713.11 44.00 757.11
Other current liabilities 66.35 44.00 - 110.35 120.94 23.00 143.94 75.25 39.00 114.25
Provisions 20.06 31.00 - 51.06 15.76 55.00 70.76 36.70 54.00 90.70
Current tax liabilities (net) - 118.00 - 118.00 0.71 - 0.71 25.68 - 25.68
Total current liabilities 1,981.24 1,300.89 - 3,282.13 2,246.16 1,039.00 3,285.16 2,140.46 1,112.00 3,252.46
Total liabilities 4,345.33 1,425.89 956.19 6,727.41 3,121.22 1,077.00 4,198.22 2,879.48 1,133.00 4,012.48
Total equity and liabilities 15,659.89 5,265.22 (2,418.29) 18,506.82 7,383.87 4,275.27 11,659.14 5,619.41 4,020.00 9,639.41

Note:
No reconciliation for the period ended and as at 31 December 2020 has been provided since the amounts have been taken from restated consolidated financial information (refer note e)

(This space has been intentionally left blank)

325
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)
Details of amounts included in column 1 of Pro-forma consolidated financial information in respect of Sona BLW and Comstar Group:
Year ended 31 March 2020 Year ended 31 March 2019 Year ended 31 March 2018
Sona BLW Comstar Group Adjustment on Total Sona BLW Comstar Group Total Sona BLW Comstar Group Total
acquisition of Comstar
Group
Income
Revenue from operations 5,386.91 6,814.00 - 12,200.91 6,992.20 7,285.00 14,277.20 6,120.05 6,121.00 12,241.05
Other income 9.83 66.00 - 75.83 32.81 25.00 57.81 28.03 63.00 91.03
Total income 5,396.74 6,880.00 - 12,276.74 7,025.01 7,310.00 14,335.01 6,148.08 6,184.00 12,332.08

Expenses
Cost of materials consumed 1,492.30 3,625.00 251.00 5,368.30 1,928.41 3,688.00 5,616.41 1,759.38 3,300.00 5,059.38
Changes in inventories of finished goods and work-in-progress 37.00 (14.95) - 22.05 122.19 46.73 168.92 (84.72) (246.00) (330.72)
Employee benefits expense 493.30 729.00 - 1,222.30 490.04 748.00 1,238.04 417.74 703.00 1,120.74
Finance costs 231.75 37.00 - 268.75 160.19 17.00 177.19 179.30 20.00 199.30
Depreciation and amortisation expense 342.20 164.00 204.11 710.31 293.54 135.00 428.54 223.30 101.00 324.30
Other expenses 1,863.72 721.99 67.98 2,653.69 2,475.02 682.00 3,157.02 2,335.25 621.00 2,956.25
Total expenses 4,460.27 5,262.04 523.09 10,245.40 5,469.39 5,316.73 10,786.12 4,830.25 4,499.00 9,329.25
Profit before tax 936.47 1,617.96 (523.09) 2,031.34 1,555.62 1,993.27 3,548.89 1,317.83 1,685.00 3,002.83

Tax expense
- Current tax 118.08 388.00 - 506.08 466.35 679.00 1,145.35 424.90 611.00 1,035.90
- Tax related to previous years 5.97 - - 5.97 5.17 - 5.17 (1.74) 16.00 14.26
- Deferred tax charge (28.37) 30.00 (112.61) (110.98) 78.45 13.00 91.45 26.85 24.00 50.85

Total tax expense 95.68 418.00 (112.61) 401.07 549.97 692.00 1,241.97 450.01 651.00 1,101.01

Profit for the year 840.79 1,199.96 (410.48) 1,630.27 1,005.65 1,301.27 2,306.92 867.82 1,034.00 1,901.82

Other comprehensive income

Items that will not be reclassified to profit or loss
Remeasurements of defined benefit obligations 2.28 4.00 - 6.28 (1.02) 3.00 1.98 (17.06) (2.00) (19.06)
Income tax relating to above mentioned item (0.57) (1.00) - (1.57) 0.36 (1.00) (0.64) 5.96 1.00 6.96
Changes in fair values of equity instruments carried at fair value (309.28) - - (309.28) 517.71 - 517.71 347.39 - 347.39
through other comprehensive income
Items that will be reclassified to profit or loss
Exchange difference on translation of foreign subsidiaries - 5.00 - 5.00 - 40.00 40.00 - (6.00) (6.00)

Other comprehensive income/(loss) for the year, net of tax (307.57) 8.00 - (299.57) 517.05 42.00 559.05 336.29 (7.00) 329.29
- -
Total comprehensive income for the year 533.22 1,207.96 (410.48) 1,330.70 1,522.70 1,343.27 2,865.97 1,204.11 1,027.00 2,231.11

No reconciliation for the period ended and as at 31 December 2020 has been provided since the amounts have been taken from restated consolidated financial information (refer note e)

326
b) Reclassifications:

There are no material reclassification adjustments. The excise duty on sales has been reduced from revenue
from operations being more representative of the net revenues of the Group.

c) GAAP adjustments:

Transition date for Ind AS 116 for entire group is 1 April 2019. In order to make accounting policies aligned
for all periods presented, the impact of Ind AS 116 has been adjusted for the years ended 31 March 2018 and
31 March 2019 as well, with the assumption that transition date for implementation of Ind AS 116 is 1 April
2017.

d) Acquisition related adjustments:

i) Pro-forma adjustments have been made to reflect the estimated fair value of identified intangible assets
acquired based on the purchase price allocation and the amortization thereon. These intangible assets
represent Customer Relationships the carrying value of which has been grossed up based on the fair value
of ₹ 4,009.00 million and remaining life of 15 years as at 4 July 2019. The carrying value so calculated is
₹ 4,078.52 million, ₹ 4,345.60 million and ₹ 4,612.68 million as at 31 March 2019, 31 March 2018 and 1
April 2017 respectively and change in balance of Customer Relationships from 4 July 2019 till 1 April
2017 has been adjusted in opening retained earnings as at 1 April 2017. The amortisation charged on the
aforesaid carrying values amounts to ₹ 69.51 million, ₹ 267.08 million and ₹ 267.08 million for the years
ended 31 March 2020 (till date of acquisition of Comstar Group), 31 March 2019 and 31 March 2018.

ii) Pro-forma adjustments have also been made to reflect the estimated fair value of Right of Use assets
acquired based on the purchase price allocation and the amortization thereon. The carrying value of these
assets which have been grossed up based on the fair value of ₹ 603.71 million and remaining life of 77
years as on 4 July 2019. The carrying value so calculated is ₹ 605.74 million, ₹ 613.58 million and ₹ 621.42
million as at 31 March 2019, 31 March 2018 and 1 April 2017 respectively and change in balance of Right
of Use assets from 4 Jul 2019 till 1 April 2017 has been adjusted in opening retained earnings as at 1 April
2017. The amortisation charged on the aforesaid carrying values amounts to ₹ 2.03 million, ₹ 7.84 million
and ₹ 7.84 million for the years ended 31 March 2020 (till date of acquisition of Comstar Group), 31
March 2019 and 31 March 2018.

iii) Transaction cost amounting to ₹ 67.98 million incurred for investment in Comstar Group has been
adjusted from Other Equity as on 1 April 2017 through ‘Roll Back Reserve Account’ since, this was a
specific acquisition related cost with no impact on the regular operations of the Group.

iv) Increase in Cost of Goods Sold during the year ended 31 March 2020, on account of fair valuation of
Inventory of Comstar Group acquired by the Parent Company on 4 July 2019 amounting to ₹ 251.00
million (net of deferred tax of ₹ 62.86 million) has been adjusted from Other Equity as on 1 April 2017
through ‘Roll Back Reserve Account’ since, this was a specific acquisition related adjustment with no
impact on the regular operations of the Group.

v) An amount of ₹ 1,758.09 million, being the excess of the aggregate of the purchase consideration for the
acquisition over the fair value of net assets of Comstar Group acquired as on 4 July 2019, has been
recognized as Goodwill on consolidation. Goodwill calculated as at the acquisition date is kept consistent
in all periods of pro-forma consolidated financial information (as at 31 March 2018, 31 March 2019 and
31 March 2020), since there is no amortization required for Goodwill.

vi) Amount of equity and convertible preference share capital issued as on 4 July 2019 (including securities
premium) has been rolled back as ‘Equity and convertible preference share capital to be issued’ as on 1
April 2017, 31 March 2018 and 31 March 2019. Accordingly, for the purposes of computing basic and
327
 diluted earnings per share, the equity and convertible preference shares issued on 4 July 2019 have been
considered to have been issued on 1 April 2017. Further, amount receivable against issue of equity and
preference share capital and amount to be invested for acquisition of Comstar Group have been netted
off against each other and the balance net consideration receivable of ₹ 121.08 million has been included
as financial asset under ‘Other financial assets – current’, however, time value of money of the
aforementioned financial asset has not been considered.

vii) All tax adjustments emanating from the above adjustments have been made at the rates as applicable to
the Parent Company for the relevant periods.

e) The impact of pro-forma adjustments nullifies on the date of acquisition of Comstar Group i.e. when legal
Group structure is formed. Accordingly, there is no difference between the pro-forma consolidated financial
information and restated consolidated financial information after the date of acquisition (4 July 2019) i.e.,
Balance Sheets as at 31 March 2020 and 31 December 2020 and Statement of Profit and Loss for the period
ended 31 December 2020.

328
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

4 Property, plant and equipment and Right-of-use assets

Right-of-use assets
Freehold Leasehold Buildings Plant and Furniture Office Computers Vehicles Leasehold Total Leasehold Building Total
land land equipment and fixtures equipment improvement land

Deemed cost as at 1 April 2017 28.10 14.16 493.27 833.91 40.89 39.08 18.49 40.77 12.26 1,520.93 - - -
Reclassified on account of adoption of Ind AS 116 'Leases' - (14.16) - - - - - - - (14.16) 14.16 719.59 733.75
Additions - - 5.19 801.72 9.26 25.90 44.98 62.70 27.19 976.94 - 124.58 124.58
Disposals - - - (3.03) - - - (1.74) - (4.77) - - -
Foreign currency translation adjustment - - - - - - (1.00) (4.00) - (5.00) - - -
Gross block as at 31 March 2018 28.10 - 498.46 1,632.60 50.15 64.98 62.47 97.73 39.45 2,473.94 14.16 844.17 858.33
Additions - - 15.43 596.18 4.08 14.00 19.36 8.41 40.52 697.98 227.68 13.00 240.68
Disposals - - (1.32) (1.92) (1.21) - - (5.03) - (9.48) - - -
Gross block as at 31 March 2019 28.10 - 512.57 2,226.86 53.02 78.98 81.83 101.11 79.97 3,162.44 241.84 857.17 1,099.01
Additions - - 17.78 741.12 6.34 11.08 24.05 19.11 18.87 838.35 - 423.23 423.23
Disposals - - - (12.19) (5.92) (0.14) (3.65) (1.26) - (23.16) - (4.67) (4.67)
Foreign currency translation adjustment - - - - - - - (4.00) - (4.00) - 3.06 3.06
Gross block as at 31 March 2020 28.10 - 530.35 2,955.79 53.44 89.92 102.23 114.96 98.84 3,973.63 241.84 1,278.79 1,520.63
Additions - - 5.83 683.83 2.08 7.24 17.00 9.20 9.70 734.88 - 242.87 242.87
Transfer on capitalisation - - - 34.00 - - - - - 34.00 - - -
Disposals (1.86) - (66.49) - - - - (8.31) - (76.66) - - -
Foreign currency translation reserve - - - 9.00 - - - - - 9.00 - - -
Gross block as at 31 December 2020 26.24 - 469.69 3,682.62 55.52 97.16 119.23 115.85 108.54 4,674.85 241.84 1,521.66 1,763.50

Accumulated Depreciation as at 1 April 2017

Depreciation charge for the year - 0.24 26.51 228.12 6.72 13.27 14.00 15.48 4.84 309.18 - 20.70 20.70
Reclassified on account of adoption of Ind AS 116 'Leases' - (0.24) - - - - - - - (0.24) 0.24 - 0.24
Disposals - - - (0.79) - - - (0.74) - (1.53) - - -
Foreign currency translation adjustment - - - - - - (0.70) (3.50) - (4.20) - - -
Accumulated Depreciation as at 31 March 2018 - - 26.51 227.33 6.72 13.27 13.30 11.24 4.84 303.21 0.24 20.70 20.94
Depreciation charge for the year - - 27.25 300.52 8.13 15.19 22.13 17.65 12.07 402.94 2.04 26.83 28.87
Disposals - - (0.11) (1.36) (0.57) - - (1.09) - (3.13) - - -
Accumulated Depreciation as at 31 March 2019 - - 53.65 526.49 14.28 28.46 35.43 27.80 16.91 703.02 2.28 47.53 49.81
Depreciation charge for the year - - 26.85 336.50 7.41 15.74 23.27 18.53 8.27 436.57 2.64 49.68 52.32
Disposals - - - (0.19) (5.79) (0.14) (3.65) (1.26) - (11.03) - (0.91) (0.91)
Accumulated Depreciation as at 31 March 2020 - - 80.50 862.80 15.90 44.06 55.05 45.07 25.18 1,128.56 4.92 96.30 101.22
Depreciation charge during the year - - 21.02 320.98 6.02 11.24 19.16 14.15 7.33 399.90 16.55 38.04 54.59
Disposals - - (66.33) - - - - (8.16) - (74.49) - - -
Foreign currency translation reserve - - - 2.00 - - - - - 2.00 - - -
Accumulated Depreciation as at 31 December 2020 - - 35.19 1,185.78 21.92 55.30 74.21 51.06 32.51 1,455.97 21.47 134.34 155.81

Net carrying amount as at 31 March 2018 28.10 - 471.95 1,405.27 43.43 51.71 49.17 86.49 34.61 2,170.73 13.92 823.47 837.39
Net carrying amount as at 31 March 2019 28.10 - 458.92 1,700.37 38.74 50.52 46.40 73.31 63.06 2,459.42 239.56 809.64 1,049.20
Net carrying amount as at 31 March 2020 28.10 - 449.85 2,092.99 37.54 45.86 47.18 69.89 73.66 2,845.07 236.92 1,182.49 1,419.41
Net carrying amount as at 31 December 2020 26.24 - 434.50 2,496.84 33.60 41.86 45.02 64.79 76.03 3,218.88 220.37 1,387.32 1,607.69

329
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

5 Intangible assets
Other intangible assets
Computer Technical Brand Customer Total Goodwill on
software knowhow relationship consolidation

Deemed cost as at 1 April 2017 28.48 - - 4,612.68 4,641.16 1,758.09

Additions 30.52 27.18 - - 57.70 -
Gross block as at 31 March 2018 59.00 27.18 - 4,612.68 4,698.86 1,758.09
Additions 18.38 - 670.03 - 688.41 -
Gross block as at 31 March 2019 77.38 27.18 670.03 4,612.68 5,387.27 1,758.09
Additions 92.66 - 17.37 - 110.03 -
Disposals (7.95) - - - (7.95) -
Gross block as at 31 March 2020 162.09 27.18 687.40 4,612.68 5,489.35 1,758.09
Additions 55.94 - - - 55.94 -
Disposals - - - - - -
Gross block as at 31 December 2020 218.03 27.18 687.40 4,612.68 5,545.29 1,758.09

Accumulated amortisation as at 1 April 2017 - - - - - -

Amortisation charge for the year 11.72 3.40 - 267.08 282.20 -
Accumulated amortisation as at 31 March 2018 11.72 3.40 - 267.08 282.20 -
Amortisation charge for the year 19.03 4.53 - 267.08 290.64 -
Accumulated amortisation as at 31 March 2019 30.75 7.93 - 534.16 572.84 -
Amortisation charge for the year 20.62 4.53 - 267.81 292.96 -
Disposals (5.63) - - - (5.63) -
Accumulated amortisation as at 31 March 2020 45.74 12.46 - 801.97 860.17 -
Amortisation charge for the year 29.51 3.40 - 201.22 234.13 -
Disposals - - - - - -
Accumulated amortisation as at 31 December 2020 75.25 15.86 - 1,003.19 1,094.30 -

Net carrying amount as at 31 March 2018 47.28 23.78 - 4,345.60 4,416.66 1,758.09
Net carrying amount as at 31 March 2019 46.63 19.25 670.03 4,078.52 4,814.43 1,758.09
Net carrying amount as at 31 March 2020 116.35 14.72 687.40 3,810.71 4,629.18 1,758.09
Net carrying amount as at 31 December 2020 142.78 11.32 687.40 3,609.49 4,450.99 1,758.09

This space has been intentionally left blank.

330
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

6 Non-current investments

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018

Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
(A) Non-trade (unquoted) investments

Unquoted equity instruments, fully paid up

Nil (31 March 2020: Nil ; 31 March 2019: Nil ; 31 March 2018: 2,257,591) equity
shares of ₹ 10 each in Sona Skill Development Centre Limited
Cost of acquisition - - - - - - - - - 24.04 - 24.04
Less: Provision for impairment - - - - - - - - - (16.53) - (16.53)

9,953 (31 March 2020: 9,953; 31 March 2019; 50,280, 31 March 2018: 50,280) equity - - - 19.00 - 19.00 1,113.98 - 1,113.98 596.28 - 596.28
shares of Euro 500 each in Sona Holding B.V. The Netherlands
Nil (31 March 2020: 392,647; 31 March 2019: 2,066,565, 31 March 2018: 2,066,565) - - - - - - 613.77 - 613.77 613.77 - 613.77
16% cumulative preference share of Euro 5 each in Sona Holding B.V. The
Netherlands

Less: Assets held for sale (refer note 39) - - - - - - (1,399.48) - (1,399.48) - - -

- - - 19.00 - 19.00 328.27 - 328.27 1,217.56 - 1,217.56

Current investments
(B) Other investments

Investments in Mutual funds measured at Fair value through profit and loss
Birla Floating Rate Short Term - Regular- Growth plan - - - - - - 52.00 - 52.00 60.00 - 60.00
HDFC Liquid Fund - Growth plan - - - - - - 1.00 - 1.00 2.00 - 2.00
Kotak Floater Short Term Fund-Daily Dividend Reinvestment - - - - - - 76.00 - 76.00 70.00 - 70.00
Birla Cash Plus Fund - Regular - growth plan - - - - - - - - - 70.00 - 70.00

- - - - - - 129.00 - 129.00 202.00 - 202.00

7 Loans
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non current
(Unsecured, considered good)
Security deposits 54.02 - 54.02 50.79 - 50.79 30.14 - 30.14 23.64 - 23.64
Total loans - non current 54.02 - 54.02 50.79 - 50.79 30.14 - 30.14 23.64 - 23.64

Current
(Unsecured, considered good, unless stated otherwise)
Security deposits 1.52 - 1.52 4.92 - 4.92 1.19 - 1.19 4.51 - 4.51
Loan to related party - - - - - - - - - 295.82 - 295.82
Others - - - - - - - - - 0.84 - 0.84
Total loans - current 1.52 - 1.52 4.92 - 4.92 1.19 - 1.19 301.17 - 301.17

331
8 Other financial assets
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non current
(Unsecured, considered good)
Fixed deposits with banks with maturity period for more than 12 months - - - 0.87 - 0.87 38.11 - 38.11 26.79 - 26.79
Total other financial assets- non current - - - 0.87 - 0.87 38.11 - 38.11 26.79 - 26.79

Current
(Unsecured, considered good)
Receivable from related parties - - - 0.30 - 0.30 2.46 - 2.46 21.09 - 21.09
Forward contract receivables 157.69 - 157.69 - - - 28.47 - 28.47 6.00 - 6.00
Royalty income receivable 2.00 - 2.00 5.00 - 5.00 1.00 - 1.00 3.00 - 3.00
Others 0.21 - 0.21 - - - 4.00 121.08 125.08 37.60 121.08 158.68
Total other financial assets- current 159.90 - 159.90 5.30 - 5.30 35.93 121.08 157.01 67.69 121.08 188.77

9 Income tax assets (net)

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non current
Prepaid taxes 243.09 - 243.09 291.42 - 291.42 280.24 - 280.24 275.66 - 275.66
243.09 - 243.09 291.42 - 291.42 280.24 - 280.24 275.66 - 275.66

Current
Prepaid taxes - - - - - - - - - 16.00 - 16.00
- - - - - - - - - 16.00 - 16.00

10 Other assets
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non current
Prepaid expenses 11.70 - 11.70 11.41 - 11.41 35.02 (20.57) 14.45 16.03 (16.03) -
Capital advances 162.87 - 162.87 219.08 - 219.08 93.96 - 93.96 20.10 - 20.10
Balance with government authorities - - - - - - 3.00 - 3.00 3.00 - 3.00
Un-adjusted consideration for revenue contract 35.00 - 35.00 48.00 - 48.00 48.00 - 48.00 - - -

Total other assets- non current 209.57 - 209.57 278.49 - 278.49 179.98 (20.57) 159.41 39.13 (16.03) 23.10

Current `
Prepaid expenses 16.49 - 16.49 46.65 - 46.65 42.91 (0.30) 42.61 47.22 (2.13) 45.09
Loans and advances to employees 14.00 - 14.00 4.49 - 4.49 7.42 - 7.42 6.33 - 6.33
Advance to suppliers for goods and services 171.87 - 171.87 88.48 - 88.48 88.51 - 88.51 63.55 - 63.55
Balance with government authorities 312.13 - 312.13 168.53 - 168.53 176.07 - 176.07 168.46 - 168.46
Un-adjusted consideration for revenue contract 13.00 - 13.00 - - - - - - - - -
Other advances 44.87 - 44.87 28.19 - 28.19 35.17 - 35.17 32.98 - 32.98
Advance payment for energy tax - - - - - - - - - - - -
Other receivables- considered doubtful 22.28 - 22.28 22.18 - 22.18 19.52 - 19.52 19.52 - 19.52
Less: Allowance for doubtful advances (22.18) - (22.18) (22.18) - (22.18) (19.52) - (19.52) (19.52) - (19.52)

Total other assets- current 572.46 - 572.46 336.34 - 336.34 350.08 (0.30) 349.78 318.54 (2.13) 316.41

332
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

11 Inventories
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Raw materials and components 866.28 - 866.28 572.41 - 572.41 426.09 - 426.09 372.76 - 372.76
Work-in-progress 239.56 - 239.56 163.30 - 163.30 162.68 - 162.68 251.66 - 251.66
Finished goods 1,385.60 - 1,385.60 895.18 - 895.18 917.85 - 917.85 997.79 - 997.79
Stores and spares 164.44 - 164.44 174.36 - 174.36 189.81 - 189.81 147.99 - 147.99
Loose tools 35.21 - 35.21 17.91 - 17.91 17.15 - 17.15 14.81 - 14.81
Dies, jigs and fixtures 136.68 - 136.68 122.89 - 122.89 119.22 - 119.22 99.75 - 99.75
Scrap 10.63 - 10.63 16.31 - 16.31 5.31 - 5.31 - - -
Total 2,838.40 - 2,838.40 1,962.36 - 1,962.36 1,838.11 - 1,838.11 1,884.76 - 1,884.76

12 Trade receivables
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Trade receivables
Trade receivables considered good - unsecured 3,938.98 - 3,938.98 2,336.28 - 2,336.28 2,732.98 - 2,732.98 2,382.06 - 2,382.06
Trade receivables - credit impaired 3.93 - 3.93 3.94 - 3.94 3.08 - 3.08 1.07 - 1.07
Less: Allowances for expected credit loss (3.93) - (3.93) (3.94) - (3.94) (3.08) - (3.08) (1.07) - (1.07)
Total trade receivables 3,938.98 - 3,938.98 2,336.28 - 2,336.28 2,732.98 - 2,732.98 2,382.06 - 2,382.06

13 Cash and cash equivalents

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Balance with banks
- in current accounts 310.46 - 310.46 445.43 - 445.43 360.84 - 360.84 434.62 - 434.62
Cash on hand 0.12 - 0.12 0.14 - 0.14 0.10 - 0.10 0.08 - 0.08
Bank deposits with original maturity of less than three months 22.80 - 22.80 604.28 - 604.28 - - - - - -
Total cash and cash equivalents 333.38 - 333.38 1,049.85 - 1,049.85 360.94 - 360.94 434.70 - 434.70

14 Bank balances other than cash and cash equivalents

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Bank deposits with original maturity of more than three months but less than 12 2.57 - 2.57 623.08 - 623.08 254.12 - 254.12 - - -
months

Total bank balances others than cash and cash equivalents 2.57 - 2.57 623.08 - 623.08 254.12 - 254.12 - - -

333
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

15 (A) Equity share capital (refer note 38)

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Authorised share capital
50,500,000 (31 March 2020: 50,500,000; 31 March 2019: 50,500,000; 31 March 2018: 30,000,000) 505.00 - 505.00 505.00 - 505.00 505.00 - 505.00 300.00 - 300.00
equity shares of ₹ 10 each
Issued, subscribed and paid up share capital
47,153,944 (31 March 2020: 47,153,944; 31 March 2019: 27,718,376; 31 March 2018: 27,718,376) 471.54 - 471.54 471.54 - 471.54 277.18 - 277.18 277.18 - 277.18
equity shares of ₹ 10 each fully paid up

i) Reconciliation of shares outstanding at the beginning and at the end of the reporting period

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018

Number of shares Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Equity shares outstanding at the beginning of the period / year 47,153,944 - 47,153,944 27,718,376 - 27,718,376 27,718,376 - 27,718,376 27,718,376 - 27,718,376
Less: Buyback of shares - - - (2,592,935) - (2,592,935) - - - - - -
Add : Issue of shares - - - 22,028,503 - 22,028,503 - - - - - -
Equity shares outstanding at the end of the period / year 47,153,944 - 47,153,944 47,153,944 - 47,153,944 27,718,376 - 27,718,376 27,718,376 - 27,718,376

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018

Amount Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Equity share capital outstanding at the beginning of the period / year 471.54 - 471.54 277.18 - 277.18 1,043.18 (766.00) 277.18 1,043.18 (766.00) 277.18
Less: Buyback of shares - - - (25.93) - (25.93) - - - - - -
Add : Issue of shares - - - 220.29 - 220.29 - - - - - -
Equity share capital outstanding at the end of the period / year 471.54 - 471.54 471.54 - 471.54 1,043.18 (766.00) 277.18 1,043.18 (766.00) 277.18

ii) Rights, preferences and restrictions attached to equity shares

Equity shares
The Group has only one class of equity shares having a par value of ₹10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation,
the equity share holders are eligible to receive the remaining assets of the Group after distribution of all preferential amounts, in proportion to their shareholding.

iii) Shares of the Parent Company held by Holding Company

As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 31,053,190 31,053,190 - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) - - 18,693,677 18,693,677

334
 iv) Details of shareholders holding more than 5% of the total number of equity shares in the Group

Number of shares As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 31,053,190 31,053,190 - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) 16,100,742 16,100,742 18,693,677 18,693,677
JM Financial Trustee Company Private Limited- JM Financial India Fund - - 9,024,687 9,024,687

Percentage As at As at As at As at
31 December 2020 31 March 2020 31 March 2019 31 March 2018

Singapore VII Topco III Pte. Ltd 65.85% 65.85% - -

Sona Autocomp Holding Private Limited (formerly known as Sona Autocomp Holding Limited) 34.15% 34.15% 67.44% 67.44%
JM Financial Trustee Company Private Limited- JM Financial India Fund - - 32.56% 32.56%

(v) The shareholders of the Parent Company approved the buyback of 2,592,935 equity shares on 3 July 2019 and subsequently on 5 July 2019, Group has bought back 2,592,935 equity shares. Capital Redemption Reserve has been created in accordance with provision of the Companies Act, 2013 for the buy
back of equity shares. Other than this, the Parent Company has not bought back any shares during the period of five years immediately preceding the year ended 31 March 2020.

(vi) The Parent Company has not issued any shares pursuant to contracts without payment being received in cash, or allotted as fully paid up by way of bonus shares during the period of five years immediately preceding the year ended 31 March 2020.

15 (B) Instruments entirely equity in nature (refer note 38)

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Authorised share capital
1,500,000 (31 March 2020: Nil; 31 March 2019: Nil; 31 March 2018:Nil) preference shares of ₹ 10 each 15.00 - 15.00 15.00 - 15.00 - - - - - -

Issued, subscribed and paid up share capital

594,436 (31 March 2020: 594,436; 31 March 2019: Nil; 31 March 2018: Nil) Compulsorily convertible 5.94 - 5.94 5.94 - 5.94 - - - - - -
preference shares of ₹ 10 each fully paid up

i) Reconciliation of shares outstanding at the beginning and at the end of the reporting period
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Number of shares Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Compulsorily convertible preference shares outstanding at the beginning of the period / year 594,436 - 594,436 - - - - - - - - -
Add : Issue of shares - - - 594,436 - 594,436 - - - - - -
Compulsorily convertible preference shares outstanding at the end of the period / year 594,436 - 594,436 594,436 - 594,436 - - - - - -

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018

Amount Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Compulsorily convertible preference shares outstanding at the beginning of the period / year 5.94 - 5.94 - - - - - - - - -
Add: Issue of preference shares of ₹ 10 each fully paid up - - - 5.94 - 5.94 - - - - - -
Compulsorily convertible preference shares outstanding at the end of the period / year 5.94 - 5.94 5.94 - 5.94 - - - - - -

335
 ii) Rights, preferences and restrictions attached to compulsorily convertible preference shares

Each compulsorily convertible preference shares (CCPS) has a par value of ₹10 and would be converted into equity shares of the Parent Company on the date falling five years from the date of issue of such CCPS or the last date of conversion under applicable laws, whichever is earlier. The preference
shareholders shall receive a dividend of 0.01% per annum and carry a preferential right vis-à-vis equity shares of the Parent Company with respect to payment of dividend or repayment of capital. Each CCPS shall have the same voting as that given to the equity shareholders in the shareholders’ meeting, to the
extent of their respective ownership of equity shares (assuming the CCPS have been converted into equity shares in accordance with their terms).The preference shares shall have preferential rights vis-a-vis the equity shares, with respect to interest and other distribution rights and rights on liquidation,
dissolution and winding up of the affairs of the Proforma Company.

iii) Shares held by Holding Company

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Singapore VII Topco III Pte. Ltd 594,436 - 594,436 594,436 - 594,436 - - - - - -

iv) Details of shareholders holding more than 5% of the total number of equity shares in the Group
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Number of shares Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Singapore VII Topco III Pte. Ltd 594,436 - 594,436 594,436 - 594,436 - - - - - -

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018

Percentage Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Singapore VII Topco III Pte. Ltd 100.00% - 100.00% 100.00% - 100.00% - - - - - -

v) No shares have been issued for consideration other than cash or as bonus shares and no shares have been bought back in the five years immediately preceding the balance sheet date.

15 (C) Equity and preference shares to be issued (refer note 3 (c) (vi))

This represent shares to be issued by the Parent Company in year ended 31 March 2020
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Amount Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

19,435,568 equity shares and 594,436 Compulsorily convertible preference shares - - - - 8,706.06 8,706.06 - 8,706.06 8,706.06 - 8,706.06 8,706.06
Less: Issuance of equity share - - - - (220.29) (220.29) - - - - - -
Less: Issuance of preference share - - - - (5.94) (5.94) - - - - - -
Less: Transferred to security premium - - - - (8,479.83) (8,479.83) - - - - - -
Total equity and preference shares (including securities premium) to be issued - - - - - - - 8,706.06 8,706.06 - 8,706.06 8,706.06

336
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

16 Other equity As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Retained earnings 4,658.44 - 4,658.44 3,569.95 - 3,569.95 5,643.60 (2,307.56) 3,336.04 4,367.32 (2,129.37) 2,237.95
General reserve 120.00 - 120.00 120.00 - 120.00 120.00 - 120.00 120.00 - 120.00
Securities premium 7,881.33 - 7,881.33 7,881.33 - 7,881.33 382.14 - 382.14 382.14 - 382.14
Capital redemption reserve 25.93 - 25.93 25.93 - 25.93 215.00 (215.00) - 215.00 (215.00) -
Foreign currency translation reserve 27.80 - 27.80 14.00 - 14.00 57.00 (23.00) 34.00 17.00 (23.00) (6.00)
Other comprehensive income/(loss) (328.28) - (328.28) (309.28) - (309.28) - - - (517.71) - (517.71)
Roll back reserve - - - - - - - (256.12) (256.12) - (256.12) (256.12)
Employee’s stock options outstanding reserve 22.81 - 22.81 - - - - - - - - -
Total reserves and surplus 12,408.03 - 12,408.03 11,301.93 - 11,301.93 6,417.74 (2,801.68) 3,616.06 4,583.75 (2,623.49) 1,960.26

a) Retained earnings
Retained earnings represent the undistributed profits that the Group has till date and it includes remeasurements of defined benefit obligation.

b) General reserve
The Group transferred a portion of the net profit before declaring dividend to general reserve pursuant to the earlier provision of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013. This reserve is available for distribution to shareholders in

c) Securities premium
Securities premium represents share issued at premium less share issue expenses. The balance is utilised in accordance with the provisions of the Companies Act, 2013.

d) Capital redemption reserve

Companies Act, 2013 requires that where a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the
balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to the buyback of shares in the year in which the
transaction occurred.

e) Foreign currency translation reserve

Exchange differences arising on translation of the foreign operations are recognised in other comprehensive income as described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off.

f) Other comprehensive income / (loss)

The Group has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. Such fair value changes are not reclassified to profit or loss even upon disposal of the investment, but are transferred to retained earnings.

g) Employee’s stock options outstanding reserve

This reserve represents the shared based compensation expense recorded with the respect to options granted to employees as and when the related grant conditions are met and is adjusted on exercise/ forfeiture of options.

h) Roll back reserve

Roll back reserve represents specific pro-forma adjustments as explained in note 3(c)(iii) & (iv).

17 (i) Borrowings
Long term borrowings As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Term loans - Secured
Indian rupee loans
-from banks 2,222.84 - 2,222.84 2,190.19 - 2,190.19 658.65 - 658.65 696.28 - 696.28
-from others - - - - - - 298.33 - 298.33 451.67 - 451.67
Deferred payment liabilities 19.92 - 19.92 31.54 - 31.54 113.96 - 113.96 110.77 - 110.77
Less: Amount disclosed under "other financial liabilities" (included in note 19) (544.61) - (544.61) (453.51) - (453.51) (337.87) - (337.87) (578.16) - (578.16)
Total non-current borrowings 1,698.15 - 1,698.15 1,768.22 - 1,768.22 733.07 - 733.07 680.56 - 680.56

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SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)
17 (ii) Short term borrowings
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Indian Rupee loans repayable on demand (from banks) - Secured 511.49 - 511.49 846.09 - 846.09 620.10 - 620.10 650.51 - 650.51

Bills discounted from financial institution - unsecured 92.25 - 92.25 - - - - - - - - -

Total current borrowings 603.74 - 603.74 846.09 - 846.09 620.10 - 620.10 650.51 - 650.51

18 Lease liabilities
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non-current
Lease liabilities 733.17 - 733.17 532.33 - 532.33 - 180.61 180.61 - 178.35 178.35
Total 733.17 - 733.17 532.33 - 532.33 - 180.61 180.61 - 178.35 178.35

Current
Lease liabilities 98.63 - 98.63 71.73 - 71.73 - 26.15 26.15 - 23.06 23.06
Total 98.63 - 98.63 71.73 - 71.73 - 26.15 26.15 - 23.06 23.06

19 Other financial liabilities

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Non current
Security deposits 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24

Total other financial liabilities - non current 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24 1.24 - 1.24

Current
Current maturities of long-term borrowings (refer note 17) 529.67 - 529.67 409.06 - 409.06 243.77 - 243.77 546.59 - 546.59
Current maturities of deferred payment liabilities (refer note 17) - - - 31.54 - 31.54 86.69 - 86.69 31.57 - 31.57
Interest accrued but not due on borrowings (refer note 17) 14.94 - 14.94 12.91 - 12.91 7.41 - 7.41 - - -
Employee benefits payable 164.42 - 164.42 95.80 - 95.80 90.90 - 90.90 117.27 - 117.27
Capital creditors 184.59 - 184.59 98.83 - 98.83 621.57 - 621.57 50.90 - 50.90
Other payables 45.17 - 45.17 48.36 - 48.36 6.10 - 6.10 8.61 - 8.61
Forward contract payables - - - 226.15 - 226.15 - - - 2.17 - 2.17
Total other financial liabilities - current 938.79 - 938.79 922.65 - 922.65 1,056.44 - 1,056.44 757.11 - 757.11

20 Provisions
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Non current
Provision for compensated absences 61.93 - 61.93 43.78 - 43.78 38.82 - 38.82 29.38 - 29.38
Provision for defined benefit plans 19.00 - 19.00 14.00 - 14.00 - - - - - -
Provision for warranty 23.00 - 23.00 9.00 - 9.00 18.00 - 18.00 17.00 - 17.00
Total provisions - non current 103.93 - 103.93 66.78 - 66.78 56.82 - 56.82 46.38 - 46.38
Current
Provision for defined benefit plans 28.57 - 28.57 16.94 - 16.94 25.43 - 25.43 55.04 - 55.04
Provision for compensated absences 33.39 - 33.39 16.12 - 16.12 20.33 - 20.33 14.66 - 14.66
Provision for warranty 9.30 - 9.30 18.00 - 18.00 25.00 - 25.00 21.00 - 21.00
Total provisions - current 71.26 - 71.26 51.06 - 51.06 70.76 - 70.76 90.70 - 90.70

338
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

21 Deferred tax assets/(liabilities) (net)

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Deferred tax liabilities
# Property, plant and equipment and intangible assets 1,044.11 - 1,044.11 1,094.43 - 1,094.43 164.57 1,401.31 1,565.88 94.01 1,512.10 1,606.11
# R&D expense capitalised in books allowed as expenditure per 218.00 - 218.00 69.00 - 69.00 4.00 - 4.00 - - -
Income Tax
Others 22.56 - 22.56 4.02 - 4.02 3.60 - 3.60 11.84 - 11.84
Foreign currency forward contracts - - - - - - 8.00 - 8.00 - - -

Total deferred tax liabilities 1,284.67 - 1,284.67 1,167.45 - 1,167.45 180.17 1,401.31 1,581.48 105.85 1,512.10 1,617.95

Deferred tax assets

Expenditure allowed for tax purposes on payment basis 19.21 - 19.21 13.51 - 13.51 15.25 - 15.25 14.58 - 14.58
# Provision for employee benefits obligation 11.00 - 11.00 18.00 - 18.00 21.00 - 21.00 26.00 - 26.00
# Foreign currency forward contracts 40.00 - 40.00 31.00 - 31.00 - - - - - -
# Others 14.41 - 14.41 28.23 - 28.23 21.99 - 21.99 33.43 - 33.43

Total deferred tax assets 89.62 - 89.62 90.74 - 90.74 58.24 - 58.24 74.01 - 74.01

Net deferred tax (liabilities)/assets (1,195.05) - (1,195.05) (1,076.71) - (1,076.71) (121.93) (1,401.31) (1,523.24) (31.84) (1,512.10) (1,543.94)

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339
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

22 Trade payables
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3
Trade payables
- micro enterprises and small enterprises 504.81 - 504.81 166.99 - 166.99 269.77 - 269.77 0.62 - 0.62
- other than micro enterprises and small enterprises 1,916.64 - 1,916.64 995.26 - 995.26 1,123.44 - 1,123.44 1,613.59 - 1,613.59
Total trade payables 2,421.45 - 2,421.45 1,162.25 - 1,162.25 1,393.21 - 1,393.21 1,614.21 - 1,614.21

23 Other current liabilities

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Statutory dues payable 59.48 - 59.48 57.30 - 57.30 100.25 - 100.25 69.25 - 69.25
Advance from customers 85.13 - 85.13 53.05 - 53.05 43.69 - 43.69 45.00 - 45.00
Others 14.40 - 14.40 - - - - - - - - -
Total current liabilities 159.01 - 159.01 110.35 - 110.35 143.94 - 143.94 114.25 - 114.25

24 Current tax liabilities (net)

As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Income tax liabilities (net of income tax assets of ₹ Nil, 31 March 210.49 - 210.49 118.00 - 118.00 0.71 - 0.71 25.68 - 25.68

Total current tax liabilities 210.49 - 210.49 118.00 - 118.00 0.71 - 0.71 25.68 - 25.68

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SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

25 Revenue from operations

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Sale of goods (net of excise duty) 9,684.67 - 9,684.67 11,804.19 - 11,804.19 13,649.75 - 13,649.75 11,916.53 - 11,916.53

Other operating revenue

Scrap sales 141.87 - 141.87 140.94 - 140.94 226.22 - 226.22 167.04 - 167.04
Export incentive 107.05 - 107.05 210.78 - 210.78 284.54 - 284.54 146.62 - 146.62
Liabilities and provisions written back - - - 18.00 - 18.00 4.62 - 4.62 - - -
Royalty income 15.00 - 15.00 8.00 - 8.00 26.00 - 26.00 8.00 - 8.00
Foreign exchange gain, net 314.97 - 314.97 - - - 86.07 - 86.07 2.86 - 2.86
Others 6.00 - 6.00 19.00 - 19.00 - - - - - -

Total revenue form operations 10,269.56 - 10,269.56 12,200.91 - 12,200.91 14,277.20 - 14,277.20 12,241.05 - 12,241.05

26 Other income
For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Interest income 20.50 - 20.50 30.91 - 30.91 27.23 - 27.23 25.62 - 25.62
Profit on sale of investments at FVTPL (net) - - - 24.00 - 24.00 13.00 - 13.00 59.00 - 59.00
Other non- operating income 0.20 - 0.20 20.92 - 20.92 17.58 - 17.58 6.41 - 6.41
Profit on sale of Property, Plant & Equipment 6.02 - 6.02 - - - - - - - - -

Total other income 26.72 - 26.72 75.83 - 75.83 57.81 - 57.81 91.03 - 91.03

27 Changes in inventories of finished goods and work-in-progress

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Inventories at the beginning of the period / year

Work-in-progress 163.30 - 163.30 162.68 - 162.68 251.66 - 251.66 169.86 - 169.86
Finished goods 895.18 - 895.18 917.85 - 917.85 997.79 - 997.79 748.87 - 748.87
1,058.48 - 1,058.48 1,080.53 - 1,080.53 1,249.45 - 1,249.45 918.73 - 918.73

Inventories at the end of the period / year

Work-in-progress 239.56 - 239.56 163.30 - 163.30 162.68 - 162.68 251.66 - 251.66
Finished goods 1,385.60 - 1,385.60 895.18 - 895.18 917.85 - 917.85 997.79 - 997.79
1,625.16 - 1,625.16 1,058.48 - 1,058.48 1,080.53 - 1,080.53 1,249.45 - 1,249.45

Changes in inventories (566.68) - (566.68) 22.05 - 22.05 168.92 - 168.92 (330.72) - (330.72)

341
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

28 Employee benefits expense

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Salaries, wages and allowances 849.99 - 849.99 1,039.76 - 1,039.76 1,056.05 - 1,056.05 945.23 - 945.23
Contribution to provident and other funds 55.67 - 55.67 80.97 - 80.97 74.34 - 74.34 71.61 - 71.61
Staff welfare expenses 87.06 - 87.06 101.57 - 101.57 107.65 - 107.65 103.90 - 103.90
Share based payment to employees 22.81 - 22.81 - - - - - - - - -
Total employee benefits expense 1,015.53 - 1,015.53 1,222.30 - 1,222.30 1,238.04 - 1,238.04 1,120.74 - 1,120.74

29 Finance costs
For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Interest on loans 162.08 - 162.08 188.35 - 188.35 145.07 - 145.07 165.92 - 165.92
Other borrowing costs 3.41 - 3.41 6.33 - 6.33 8.08 - 8.08 6.42 - 6.42
Interest on lease liabilities 57.11 - 57.11 38.67 - 38.67 - 20.67 20.67 - 14.72 14.72
Bank and other finance charges 6.38 - 6.38 25.40 - 25.40 24.04 - 24.04 24.96 - 24.96
Interest expenses- others 1.87 - 1.87 10.00 - 10.00 - - - 2.00 - 2.00

Total finance costs 230.85 - 230.85 268.75 - 268.75 177.19 20.67 197.86 199.30 14.72 214.02

30 Depreciation and amortisation expense

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Depreciation of property, plant and equipment 399.90 - 399.90 436.57 - 436.57 402.94 - 402.94 309.18 - 309.18
Amortisation of intangible assets 234.13 - 234.13 223.45 69.51 292.96 23.56 267.08 290.64 15.12 267.08 282.20
Amortisation of right-of-use assets 54.59 - 54.59 50.29 2.03 52.32 2.04 26.83 28.87 - 20.70 20.70

Total depreciation and amortisation expense 688.62 - 688.62 710.31 71.54 781.85 428.54 293.91 722.45 324.30 287.78 612.08

342
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)
31 Other expenses For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Stores and spares consumed 411.61 - 411.61 398.07 - 398.07 503.18 - 503.18 425.86 - 425.86
Consumption of packing materials 126.32 - 126.32 114.41 - 114.41 121.81 - 121.81 114.28 - 114.28
Power and fuel 262.70 - 262.70 329.72 - 329.72 444.15 - 444.15 382.97 - 382.97
Repairs and maintenance
- plant and machinery 149.80 - 149.80 184.86 - 184.86 210.69 - 210.69 220.95 - 220.95
- buildings 10.15 - 10.15 7.39 - 7.39 16.08 - 16.08 12.04 - 12.04
- others 88.36 - 88.36 89.69 - 89.69 84.19 - 84.19 77.36 - 77.36
Sub contracting cost 372.44 - 372.44 490.76 - 490.76 660.75 - 660.75 571.92 - 571.92
Manpower hiring on contract 196.28 - 196.28 169.35 - 169.35 200.92 - 200.92 182.05 - 182.05
Rent 17.46 - 17.46 19.63 - 19.63 54.11 (25.62) 28.49 43.38 (19.59) 23.79
Rates and taxes 5.69 - 5.69 26.51 - 26.51 14.80 - 14.80 11.12 - 11.12
Insurance 22.26 - 22.26 24.81 - 24.81 22.70 - 22.70 25.28 - 25.28
Travelling, conveyance and vehicle expenses 58.02 - 58.02 119.79 - 119.79 162.02 - 162.02 134.01 - 134.01
Communication and stationery expenses 11.82 - 11.82 16.31 - 16.31 20.78 - 20.78 18.27 - 18.27
Legal and professional charges 98.50 - 98.50 222.03 (67.98) 154.05 267.43 - 267.43 356.55 - 356.55
Security charges 11.25 - 11.25 13.41 - 13.41 13.34 - 13.34 11.80 - 11.80
Fair value loss on derivatives - - - 25.56 - 25.56 8.00 - 8.00 2.17 - 2.17
Freight, clearing and forwarding charges 162.15 - 162.15 203.46 - 203.46 257.46 - 257.46 241.83 - 241.83
Directors sitting fees 18.94 - 18.94 19.74 - 19.74 1.42 - 1.42 1.35 - 1.35
Foreign exchange loss, net - - - 93.00 - 93.00 - - - - - -
Corporate social responsibility expense 35.82 - 35.82 16.79 - 16.79 21.10 - 21.10 16.11 - 16.11
Miscellaneous expenses 50.49 - 50.49 68.40 - 68.40 72.09 - 72.09 106.95 - 106.95

Total other expenses 2,110.06 - 2,110.06 2,653.69 (67.98) 2,585.71 3,157.02 (25.62) 3,131.40 2,956.25 (19.59) 2,936.66

32 Research and development

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Revenue expenditure charge to statement of profit and loss 178.54 - 178.54 97.49 - 97.49 151.52 - 151.52 158.39 - 158.39
Capital expenditure 521.00 521.00 307.00 - 307.00 92.52 - 92.52 60.01 - 60.01

Total 699.54 - 699.54 404.49 - 404.49 244.04 - 244.04 218.40 - 218.40

33 Income tax expense

For the period ended 31 December 2020 For the year ended 31 March 2020 For the year ended 31 March 2019 For the year ended 31 March 2018
Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total Consolidated Adjustments Total
amount (refer note 3) amount (refer note 3) amount (refer note 3) amount (refer note 3)
(refer note 2) (refer note 2) (refer note 2) (refer note 2)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Current tax 435.08 - 435.08 506.08 - 506.08 1,145.35 - 1,145.35 1,035.90 - 1,035.90
Tax related to previous years - - - 5.97 - 5.97 5.17 - 5.17 14.26 - 14.26
Deferred tax - -
Current deferred tax charge 120.74 - 120.74 (65.82) 45.50 (20.32) 91.45 (97.09) (5.64) 50.85 (95.99) (45.14)
Deferred tax charge - change in tax rate - - - (45.16) (385.01) (430.17) - (13.70) (13.70) - - -

Total income tax expense 555.82 - 555.82 401.07 (339.51) 61.56 1,241.97 (110.79) 1,131.18 1,101.01 (95.99) 1,005.02

343
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

34 Capital commitments
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Acquisition Total Consolidated Acquisition Total Consolidated Acquisition Total Consolidated Acquisition Total
amount adjustments amount adjustments amount adjustments amount adjustments
(refer note 1) (refer note 2) (refer note 2) (refer note 3) (refer note 2) (refer note 3) (refer note 2) (refer note 3)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

Estimated amount of contracts remaining to be executed on capital account not 1,159.96 - 1,159.96 1,154.22 - 1,154.22 838.36 - 838.36 336.52 - 336.52
provided for (net of advances)
Total 1,159.96 - 1,159.96 1,154.22 - 1,154.22 838.36 - 838.36 336.52 - 336.52

35 Contingent liabilities
As at 31 December 2020 As at 31 March 2020 As at 31 March 2019 As at 31 March 2018
Consolidated Acquisition Total Consolidated Acquisition Total Consolidated Acquisition Total Consolidated Acquisition Total
amount adjustments amount adjustments amount adjustments amount adjustments
(refer note 1) (refer note 2) (refer note 2) (refer note 3) (refer note 2) (refer note 3) (refer note 2) (refer note 3)
Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3 Column 1 Column 2 Column 3

a) Claims against the Group not acknowledged as debts

i) Service tax 0.47 - 0.47 0.47 - 0.47 20.47 - 20.47 20.47 - 20.47
ii) Income tax 79.14 - 79.14 74.43 - 74.43 10.74 - 10.74 10.74 - 10.74
ii) Central Excise Act, 1944 14.85 - 14.85 14.85 - 14.85 - - - - - -
Total 94.46 - 94.46 89.75 - 89.75 31.21 - 31.21 31.21 - 31.21

b) The Parent Company has given a corporate guarantee (on behalf of Sona Autocomp Germany GmbH (Subsidiary till 4 July 2019)) to banks of ₹ Nil (31 March 2020: Nil, 31 March 2019: ₹ 620.8 million equivalent to Euro 8 million, 31 March 2018: ₹ 655.12 million equivalent to Euro 8
million). Utilised amount is Nil as at 31 December 2020 (31 March 2020: Nil; 31 March 2019: Euro 8 million; 31 March 2018: Euro 8 million).

c) There are labour cases pending before High Court and Labour Commissioner/Officer. The Holding Company has been legally advised that the cases filed by the employees are not sustainable in law and accordingly no provision has been made therefor. Moreover no monetary claim was
filed or is pending.

d) Duty paid and related export obligation status with respect to EPCG licenses which is six times of the duty saved, obtained by the Group are as under :

Period / Year ended Export

obligation
pending
(₹ million)
As at 31 March 2018 303.31
As at 31 March 2019 625.98
As at 31 March 2020 1,290.94
As at 31 December 2020 1,863.99

e) The Company has given a stand by letter of credit of ₹ Nil (31 March 2020: Nil; 31 March 2019: Nil; 31 March 2018: ₹ 131.28 million equivalent to USD 2 million;) from a bank (as at 31 December 2020 utilised limit is USD Nil; 31 March 2020 utilised limit is USD Nil; 31 March 2019:
Nil; 31 March 2018: Nil) on behalf of Sona Autocomp Germany GmbH (Subsidiary).

36 For the purposes of preparation of these pro-forma consolidated financial information, the Group adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on 1 April, 2017 using the modified retrospective method. Consequently, the Group recorded the lease
liability at the present value of the lease payments discounted at the incremental borrowing rate and the right-of-use assets are recognised at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the balance
sheet immediately before the date of initial application. On transition, the adoption of the new standard resulted in recognition of 'Right of Use' asset of ₹ 112.33 million (including ₹ 28.92 million on account of reclassification of leasehold land and prepaid rent), and a lease liability of ₹ 83.58
million. On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and finance cost for interest accrued on lease liability.

344
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

37 Earnings per share

31 December 31 March 31 March 31 March 2018
2020 2020 2019

Profit attributable to the equity holders (A) 1,554.69 2,217.22 2,128.75 1,714.90
Original number of equity shares 47,153,944 47,153,944 27,718,376 27,718,376
Original number of compulsory convertible preference shares (refer note 38) 594,436 594,436 - -

Weighted average number of equity shares used as the denominator in calculating basic earnings per share (refer note 3(c)(vi)) 47,748,380 47,748,380 47,748,380 47,748,380

Bonus shares issued subsequent to 31 December 2020 (refer note 38) 525,232,180 525,232,180 525,232,180 525,232,180
Total weighted average number of equity shares used as the denominator in calculating basic earnings per share (B) 572,980,560 572,980,560 572,980,560 572,980,560

Effect of exercise of share options 2,867 - - -

Bonus shares issued subsequent to 31 December 2020 (refer note 38) 31,539 - - -

Total weighted average number of equity shares used as the denominator in calculating diluted earnings per share (C) 573,014,966 572,980,560 572,980,560 572,980,560

Total basic earning per share (in ₹) (A/B)* 2.71 3.87 3.72 2.99
Total diluted earning per share (in ₹) (A/C)* 2.71 3.87 3.72 2.99

*Earnings per share for the period ended 31 December 2020 has not been annualised

38 Events after reporting date

a. Conversion of Compulsorily Convertible Preference Shares
In the board meeting on 27 January 2021 the board has approved the conversion of the compulsorily convertible preference shares (CCPS) into the equity shares of the Company in accordance with the Share Subscription and Share Purchase Agreement dated 16 October 2018 executed
between inter alia, the Company and the Investor. Number of equity shares issued against conversion of CCPS : 594,436.
These shares are considered for the computation of basic EPS for the year ended 31 March 2020 and period ended 31 December 2020.

b. Issue of Bonus Shares

The Board of Directors has also approved the issuance of 11 (Eleven) bonus shares of face value ₹ 10 (Rupees Ten) each for every 1 (One) existing fully paid up equity share of face value ₹ 10 (Rupees Ten) each (including the equity shares issued upon conversion of the Compulsorily
Convertible Preference Shares (CCPS) and accordingly 525,232,180 bonus shares were issued, which were allotted on 10 February 2020. Bonus shares are retrospectively considered for the computation of EPS.

39 The Parent Company had executed a Share Purchase and Shareholder's Agreement dated 16 October 2018, to sell the 81% stake in the Sona Holding B.V. The Netherlands to Sona Autocomp Holding Private Limited for the sale consideration amounting to ₹ 1,399.48 million. Accordingly,
as on 31 March 2019, the investment had been classified as held for sale in these pro-forma consolidated financial information.

Pursuant to the terms of the aforesaid agreement and the approval of the Board of Directors and the shareholders in their meetings held on 3 July 2019, the Parent Company had disposed off on 4 July 2019 (a) 40,727 Equity Shares, representing 81% (eighty one percent) of the Equity Shares
on a Fully Diluted Basis, and (b) 1,673,918 Redeemable Preference Shares , representing 81% of investment held in Sona Holding B.V. as on 31 March 2019 to Sona Autocomp Holding Private Limited (“SAHPL”). The sale of investment by the Company to SAHPL was carried out at a
total consideration of ₹ 1,399.48 million as per the valuation report obtained by the management from an independent expert. As per the aforementioned agreement, the Parent Company has a put option to sell the remaining securities held in Sona Holding B.V, The Netherlands, by the
Parent Company to SAHPL for the put consideration of ₹ 19 million.

Further, during the year ended 31 March 2019, the Parent Company had sold its investment in Sona Skill Development Centre Limited (associate) to Sona Autocomp Holding Private Limited on 6 December 2018 at its carrying value.

345
SONA BLW PRECISION FORGINGS LIMITED
Notes to pro-forma consolidated financial information
(Figures in Million ₹, unless stated otherwise)

40 Authorisation of pro-forma consolidated financial information

The pro-forma consolidated financial information were approved by the Board of Directors on 12 February 2021.

The accompanying notes form an integral part of these pro-forma consolidated financial information

As per our report of even date

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors of
Chartered Accountants SONA BLW PRECISION FORGINGS LIMITED
Firm Registration No. : 001076N/N500013

Arun Tandon Sunjay Kapur Vivek Vikram Singh

Partner Non Executive Chairman Managing Director and Group
Membership No: 517273 DIN: 00145529 Chief Executive Officer
DIN: 07698495

Rohit Nanda Ajay Pratap Singh

Group Chief Financial Officer Company Secretary
M.No. - ACS-5253

Place: New Delhi Place: Gurugram

Date: 12 February 2021 Date: 12 February 2021

346
 OTHER FINANCIAL INFORMATION

The audited standalone and consolidated financial statements of our Company as at and for the year ended March 31, 2020,
March 31, 2019, and March 31, 2018 respectively (“Audited Financial Statements”) are available at
https://sonacomstar.com/financial-information. Our Company is providing a link to this website solely to comply with the
requirements specified in the SEBI ICDR Regulations. The Audited Financial Statements do not constitute, (i) a part of this Draft
Red Herring Prospectus; or (ii) a prospectus, a statement in lieu of a prospectus, an offering circular, an offering memorandum,
an advertisement, an offer or a solicitation of any offer or an offer document to purchase or sell any securities under the
Companies Act, the SEBI ICDR Regulations, or any other applicable law in India or elsewhere in the world. The Audited
Financial Statements should not be considered as part of information that any investor should consider to subscribe for or
purchase any securities of our Company, or any entity in which it or its shareholders have significant influence (collectively, the
“Group”) and should not be relied upon or used as a basis for any investment decision. None of the Group or any of its advisors,
nor any Book Running Lead Managers or the Selling Shareholder, nor any of their respective employees, directors, affiliates,
agents or representatives accept any liability whatsoever for any loss, direct or indirect, arising from any information presented
or contained in the Audited Financial Statements, or the opinions expressed therein.

Set forth below are the details of accounting ratios as of December 31, 2020, March 31, 2020, March 31, 2019 and March 31,
2018 calculated on the basis of the Restated Consolidated Financial Information:

Particulars As at and for As at and for As at and for As at and for

the nine months the Financial the Financial the Financial
ended Year ended Year ended Year ended
December 31, March 31, 2020 March 31, 2019 March 31, 2018
2020
Total Equity (attributable to the owners) 12,885.51 11,779.41 1,737.77 1.77
Profit attributable to owners of the company 1,554.69 3,603,43 1,729.71 774.24
Weighted average no. of Equity Shares outstanding
during the period/ year

- For basic earnings per Equity Share (in million) 572.98 510.59 332.62 332.62
- For diluted earnings per Equity Share (in million) 573.01 510.59 332.62 332.62
Basic and diluted earnings per share (₹ / share)
- Restated basic earnings per share (in ₹) 2.71 7.06 5.20 2.33
- Restated diluted earnings per share (in ₹) 2.71 7.06 5.20 2.33
Return on net worth 12.1% 30.6% 99.5% 43,742.4%
Net asset value per Equity Share (basic) (in ₹) 22.49 23.07 5.22 0.01
Net asset value per Equity Share (diluted) (in ₹) 22.49 23.07 5.22 0.01
EBITDA 3,003.26 2,422.77 2,002.02 1,704.84

Note:
(1)
The above ratios are calculated as under:
a. Basic earnings per share = Net profit attributable to equity shareholders/ weighted average number of shares outstanding during the year/ period
b. Diluted earnings per share = Net profit attributable to equity shareholders/ weighted average number of diluted potential shares outstanding during
the year/ period
c. Return on net worth (%) = Net profit attributable to equity shareholders / net worth (total equity net of minority interest)
d. Net asset value per equity share (basic) (Rs.) = Total equity (net of minority interest)/ weighted average number of equity shares outstanding during
the period/year
e. Net asset value per equity share (diluted) (Rs.) = Total equity (net of minority interest)/ weighted average number of diluted equity shares outstanding
during the period/year
(2)
Earnings per share (EPS) calculation is in accordance with Indian Accounting Standard (Ind AS 33 - earnings per share)
(3)
Bonus shares issued subsequent to December 31, 2020 have been reckoned for the purpose of computing EPS and net asset value per share for the entire
reporting period
(4)
Basic earnings per equity share, Diluted earnings per equity share and return on net worth for the nine month period ended December 31, 2020 are not
annualised
(5)
EBITDA = (profit/ (loss) for the year/ period from continuing operations - other income – exceptional items (non-operating nature) + tax expense +
Finance costs + depreciation and amortization)
(6)
The above table has been computed for the impact of conversion of Preference Shares and issue of bonus shares.

347
 CAPITALISATION STATEMENT

The following table sets forth our Company’s capitalization as at December 31, 2020, on the basis of our Restated Consolidated
Financial Information, and as adjusted for the Offer. This table should be read in conjunction with the sections titled “Risk
Factors”, “Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations”, beginning on pages 25, 230 and 351, respectively.

(₹ in million)
Particulars Pre-Offer as at 31 Adjusted for the
December 2020 Proposed Offer*
(A) (B)
Total borrowings^
Current borrowings# (A) 603.74 [●]
Non-current borrowings (including current maturities of long-term borrowings) #(B) 2,242.76 [●]
Total borrowings (C) 2,846.50 [●]

Total equity
Equity share capital# 471.54 [●]
Instruments entirely equity in nature# 5.94 [●]
Other equity# 12,408.03 [●]
Total equity (D) 12,885.51 [●]

Total non-current borrowings (including current maturities of long- term 17.41% [●]
borrowings)/ Total equity (B)/(D)
Total borrowings/ total equity (C) / (D) 22.09% [●]
* The corresponding post IPO capitalisation data for each of the amounts given in the above table is not determinable at this stage pending the completion of
the Book Building Process and hence, the same have not been provided in this statement.
#These terms carry the same meaning as per Schedule III of the Companies Act.
^Includes accrued interest.

Notes:

– The amounts disclosed above are based on the Restated Consolidated Financial Information of the Group for the period ended and as at December 31,
2020.
– In their meeting on January 27, 2021 the Board of Directors approved the conversion of the Preference Shares into the Equity Shares in the ratio of 1:1
and accordingly, 594,436 Equity Shares were issued upon conversion of the Preference Shares.
– The Board has also approved the issuance of 11 bonus shares of face value ₹ 10 each for every 1 existing fully paid up equity share of face value ₹ 10
each (including the equity shares issued upon conversion of Preference Shares and accordingly 525,232,180 bonus shares were issued, which were
allotted on February 10, 2020.

348
 FINANCIAL INDEBTEDNESS

As of January 31, 2021, our outstanding borrowings on a consolidated basis aggregated to ₹ 3,573.30 million.

The following table sets forth details of the aggregate consolidated outstanding borrowings of our Company and our Subsidiaries
as of January 31, 2021:
(in ₹ million)
Category of Borrowing Sanctioned Amount Principal amount outstanding as on
(to the extent applicable) January 31, 2021(2)
Working capital facilities
Secured
Fund based 1,975.00 727.08
Non-fund based(3) 250.00 46.69
Unsecured
Fund based 297.10 100.76
Total working capital facilities (A) 2,522.10 874.53
Term loan facilities
Secured term loans and capex letters of credit 3,750.00 2,690.16
(B) (1)(3)
Vehicle loans (C) 14.11 8.61
Total borrowings (A+B+C) 6,286.21 3,573.30
* As certified by SCV & Co. LLP, Chartered Accountants pursuant to their certificate dated February 22, 2021.
(1) Includes letter of credit facilities for import of capital goods to the extent of ₹ 400.32 million availed by our Company.
(2) Excludes interest accrued but not due.
(3) Outstanding amounts in respect of borrowings which were in a foreign currency have been mentioned above by reinstating such a mounts in Rupees, based on

the closing rate for the month of January 2021 received from HDFC Bank Limited.

Principal terms of the borrowings availed by us:

A summary of the principal terms of our borrowings are as set out below. The details provided below are indicative and there
may be additional terms, conditions and requirements under the various borrowing arrangements entered into by us:

1. Tenor: The tenor of the working capital facilities and term loans typically ranges from six months to 7 years.

2. Interest: The interest rate for the term loans and some of the working capital facilities availed by us is typically linked
to marginal cost of funds-based lending rate plus the spread of the respective lenders. In terms of some of the cash credit
facilities availed by us, the interest rate is typically on a fixed or floating rate basis.

3. Security: Our borrowings, where applicable, are typically secured by first or second pari-passu charge on, as applicable:

(a) current assets of the Company and Subsidiaries including stock, book debts and receivables;

(b) immovable fixed assets of the Company; or

(c) movable fixed assets of the Company.

4. Prepayment*: We have the option to prepay the lenders, subject to payment of prepayment charges at such rate as may
be stipulated by the lenders which typically ranges from 0.5% to 2%. Further, the loans in certain instances can be
prepaid without any prepayment charge subject to fulfilment of conditions including prior notice to the lender.
* HDFC Bank Limited has issued a letter dated February 19, 2021 to our Company waiving the pre-payment penalty on the term loans sanctioned
to our Company.

5. Repayment: Other than some of the cash credit and export packing credit facilities, which are repayable on demand,
we are required to repay our borrowings in such instalments as stipulated in the repayment schedules under the relevant
loan documentation. The repayment period for facilities availed by us typically ranges from six months to 7 years.

6. Restrictive covenants: The borrowing arrangements entered into by us require the relevant lender’s prior written consent
and/or we are required to intimate the relevant lender, as applicable, for carrying out certain actions, including:

(a) to alter its capital structure or on occurrence of any adverse changes;

(b) to formulate or effect any scheme of amalgamation or merger or reconstruction;

(c) for any transfer of the controlling interest or the change in management set up;

349
 (d) to undertake guarantee obligations on behalf of any other person;

(e) to undertake any material change in business;

(f) to permit creation of security interest on the assets secured with the existing lenders;

(g) to pledge shares beyond the prescribed threshold for securing any loan;

(h) to make any amendments in the memorandum of association and articles of association; and

(i) to declare any dividend if any instalment towards outstanding dues remains unpaid on its due date.

7. Events of default: The terms of our borrowings contain certain standard events of default, including:

(a) failure and inability to pay amounts on the due date;

(b) failure in performance of any covenant, condition or agreement;

(c) misrepresentation/ incorrect or misleading information provided;

(d) cessation or change in business;

(e) change in control of our Company or the Subsidiaries or of any other person who controls our Company without
the approval of the lenders;

(f) the occurrence of any cross-default;

(g) upon occurrence of any event that may have a material adverse effect;

(h) downgrading in our credit rating below the specified limit or deterioration in the credit worthiness in the sole
opinion of lenders; and

(i) declaring the Company, the Subsidiaries, their promoters, directors as Wilful Defaulters.

8. Consequences of occurrence of events of default: Upon the occurrence of an event of default, lenders are entitled to,
among other things:

(a) cease the commitment of disbursing the undrawn facility and the outstanding amounts will require to be payable
forthwith on demand;

(b) enforce their security over the secured assets;

(c) review the management set up or organisation of our Company and Subsidiaries and may require our Company
to restructure inter alia the management of our Company and Subsidiaries; and

(d) exercise such other right, power or remedy permitted by law.

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 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion is intended to convey the management’s perspective on our financial condition and results of operations
for Fiscals 2018, 2019 and 2020 and the nine months ended December 31, 2020.

We have included in this section a discussion of our financial statements on a restated consolidated basis as well as on a pro
forma basis.

The Restated Consolidated Financial Information included in this Draft Red Herring Prospectus are prepared and presented in
accordance with Ind AS, in each case restated in accordance with the requirements of Section 26 of the Companies Act, 2013
read with Rule 4 of Companies (Prospectus and Allotment of Securities) Rules 2014, as amended, the SEBI ICDR Regulations
and the Guidance Note on “Reports in Company Prospectus (Revised 2019)” issued by the ICAI (the “Guidance Note”).

In Fiscal 2020 our Company completed the acquisition of Comstar Entities. We have included in this Draft Red Herring
Prospectus, the Pro Forma Consolidated Financial Information (to be read in conjunction with “Basis of Preparation of the
Pro Forma Consolidated Financial Information” on page 372) as at and for the years ended March 31, 2018, 2019 and 2020
and the nine months ended December 31, 2020, to show the impact of the acquisition of Comstar Entities on our Company,
including the results of operations and the financial position that would have resulted had the acquisition of Comstar Entities
been completed at a date prior to the first period presented in the Pro Forma Financial Information. Further, the erstwhile
subsidiary, SONA BV, and its subsidiaries, and the erstwhile associate, Sona Skill Development Centre Limited, have not been
considered for consolidation in the Pro Forma Consolidated Financial Information. For further details, see “Financial
Information – Pro Forma Consolidated Financial Information” on page 310; “History and Certain Corporate Matters –
Material acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation of assets in the last
10 years” on page 199; and “Risk Factors - The Pro Forma Consolidated Financial Information included in this DRHP to
reflect the acquisition of Comstar Entities is not indicative of our future financial condition or factual financial position or results
of operations” on page 33.

Unless otherwise stated, or the context otherwise requires, the financial information used in this section is derived from our Pro
Forma Consolidated Financial Information included in this Draft Red Herring Prospectus on page 310.

Ind AS differs in certain respects from Indian GAAP, IFRS and US GAAP and other accounting principles with which prospective
investors may be familiar. Please also see “Risk Factors — Significant differences exist between Ind AS and other accounting
principles, such as Indian GAAP, IFRS and US GAAP, which may be material to investors’ assessments of our financial
condition, result of operations and cash flows” on page 49.

This discussion contains certain 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, such as the risks set forth in
the chapters entitled “Risk Factors” and “Forward-Looking Statements” on pages 25 and 18, respectively.

Overview

We are one of India’s leading automotive technology companies, designing, manufacturing and supplying highly engineered,
mission critical automotive systems and components such as differential assemblies, differential gears, conventional and micro-
hybrid starter motors, BSG systems, EV traction motors (BLDC and PMSM) and motor control units to automotive OEMs across
US, Europe, India and China, for both electrified and non-electrified powertrain segments. According to the Ricardo Report, in
calendar year 2020, we were among the top 10 players globally in the differential bevel gear market. We are also expected to be
among the top 10 global starter motor suppliers based on our exposure to the PV segment in calendar year 2020, according to
the Ricardo Report. We have been gaining global market share across products to reach a share of approximately 5.0% for
differential bevel gears, 3.0% for starter motors and 8.7% for BEV differential assemblies, in calendar year 2020, according to
the Ricardo Report. We have nine manufacturing and assembly facilities across India, China, Mexico and USA, of which six are
located in India, from where we supply our products to six out of the top 10 global passenger vehicle (“PV”) OEMs, three out
of the top 10 global commercial vehicle (“CV”) OEMs and seven out of the top eight global tractor OEMs by volume, according
to the Ricardo Report. We are a global supplier and we derived 75.4% of our income from sale of goods with end-use in the
overseas markets, including 40.2% in North America, 25.3% in Europe and 5.3% in China and 24.6% of our income was derived
from sale of goods with end-use in India, for the nine months ended December 31, 2020. We are also one of the two largest
exporters of starter motors from India, according to the Ricardo Report.

We are a technology and innovation driven company. With a strong focus on research and development (“R&D”), we develop
mechanical and electrical hardware systems, components as well as base and application software solutions, to meet the evolving
demands of our customers. We are one of a few companies globally, with the ability to design high power density EV systems
handling high torque requirements with a lightweight design, while meeting stringent durability, performance and NVH
specifications, enabling EV manufacturers to enhance the vehicle range, acceleration and the overall efficiency. While BEV sales

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as a percentage of total global vehicle sales was 3.3% in calendar year 2020, according to the Ricardo Report, 13.7% of our
income from sale of goods was derived from the BEV market for the nine months ended December 31, 2020. Among the available
propulsion technologies, BEV has been the fastest growing segment at a CAGR of approximately 46% between calendar years
2015 to 2020 and is expected to grow at a CAGR of approximately 36% between calendar years 2020 to 2025 with increased
market penetration, according to the Ricardo Report. We have increased our sales to the EV market at a CAGR of 35.8% from
Fiscal 2018 to Fiscal 2020. We currently supply differential assemblies, differential gears, EV Traction Motors to customers in
US, China and India, for use in hybrid and battery electric passenger vehicles, hybrid and battery electric light commercial
vehicles, electric two-wheelers and electric three-wheelers.

According to the CRISIL Report, our total operating income has grown at a CAGR of 10.9% from Fiscal Years 2016 to 2020,
as compared to the average CAGR of 8.1% for the top 10 listed auto-component manufacturers in India by market capitalization,
in the same period. For Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, we had EBITDA
margin of 28.2%, 28.9%, 26.7% and 29.2%, respectively, average ROE of 36.0%, 35.6%, 35.2% and 35.9%, respectively, and
ROCE of 39.4%, 40.3%, 29.0% and 32.5%, respectively.

The chart below describes our products and their end-use application across various powertrains and vehicle segments.

With our product offerings spanning across all types of conventional and electrified powertrains, we are one of the few
automotive technology manufacturers that are well-positioned to gain from high growth industry trends as well as various
initiatives introduced by the GoI to facilitate the growth of the automotive industry in India, including the recently announced
₹570.42 billion production-linked incentive scheme, which is likely to increase exports resulting in increased demand for
differential gears in India, according to the CRISIL Report.

Some of the key high growth industry trends from which we expect to benefit are set forth below.

• BEVs are expected to grow at a CAGR of approximately 36% between calendar years 2020 to 2025 with increased market
penetration, according to the Ricardo Report, which will be positive for us as we supply EV differential assemblies,
differential gears, BSG systems and EV traction motors into this market. According to the Ricardo Report, BEV global
vehicle production volume is expected to grow by five times in the next five years from 2.3 million units in calendar year
2020 to 11.2 million units in calendar year 2025. Further, revenue realization of various components is expected to change
according to various degrees of electrification as stated in the Ricardo Report.

Revenue realization analysis for various components, according the Ricardo Report is set forth below. For further details,
see “Industry Overview” on page 100.

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 Source: Ricardo Report

Note: The components which are a part of the base ICE vehicle are depicted with 100 to indicate the starting point and subsequently a “+” indicates an
increase in revenue realization and a “=” indicates that the revenue realization is not expected to change going forward. (Source: Ricardo Report)

• Demand for electric two-wheelers is expected to grow at a CAGR of 72% to 74% between Fiscals 2021 to 2026, according
to the CRISIL Report and the electric three-wheeler segment is expected to grow at a CAGR of approximately 46% between
calendar years 2021 to 2025 to reach 400,000 units in sales, according to the Ricardo Report. We supply e-axles, BLDC
motors and motor control units for use in the electric two-wheeler and three-wheeler segments.

• According to the Ricardo Report, 2030 targets for India indicate that 70% of all commercial PV, 30% of private PV, 40%
of buses, 80% of two-wheeler and 80% of three-wheeler sales would be electric.

• According to the CRISIL Report, Indian CV and PV sales are expected to increase 9% to 10% CAGR and 12% to 14%
CAGR, respectively, over Fiscals 2021 to 2026, with growth of 38% and 23%, respectively in Fiscal 2022. This will be
positive for our differential gears business as our estimated market share of the Indian CV and PV markets is approximately
80% to 90% and 55% to 60%, respectively, according to the CRISIL Report.

• The mix of SUVs, CUVs, multi axle trucks and high powered EVs in the Indian and global PV and CV market is expected
to increase according to the CRISIL Report and the Ricardo Report, leading to higher usage of differential gears per vehicle
as these vehicles are AWD/4WD/multi-axle. We expect this trend to be positive for revenue growth of our differential gear
business.

For further details on the growth trends and key growth drivers in the automotive industry, including government initiatives, see
“Industry Overview” on page 100.

Acquisition of the Comstar Entities and Divestment of Sona BV and its Subsidiaries

In Fiscal 2020, our Company completed the acquisition of the Comstar Entities, pursuant to which, the Comstar Entities became
subsidiaries of our Company with effect from July 5, 2019. Further, in Fiscal 2020, our Company completed the transfer of 81%
of the issued and outstanding share capital of SHBV on a fully diluted basis to Sona Autocomp, our Corporate Promoter for an
aggregate consideration of ₹1,399.48 million. Pursuant to the completion of this transfer, Sona BV Group ceased to be
subsidiaries of our Company with effect from July 5, 2019. We have included in this Draft Red Herring Prospectus the Pro
Forma Consolidated Financial Information (to be read in conjunction with “Basis of Preparation of the Pro Forma Consolidated
Financial Information” on page 372) as at and for the years ended March 31, 2018, 2019 and 2020, to show the impact of the
acquisition of the Comstar Entities on our Company, as if such transactions had occurred prior to the first period presented. For
further details, see “Financial Information – Pro Forma Consolidated Financial Information” on page 310; “History and Certain
Corporate Matters – Material acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation
of assets in the last 10 years” on page 199; and see “Risk Factors - The Pro Forma Consolidated Financial Information included
in this DRHP to reflect the acquisition of Comstar Entities is not indicative of our future financial condition or factual financial
position or results of operations” on page 33.

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Proposed Merger of Comstar Automotive Technologies Private Limited (“Comstar Automotive”) with our Company

Our Company has filed a scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013, read with the
Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 before the NCLT Chandigarh (the “Scheme”). The
Scheme was approved by our Board on December 20, 2019. The rationale for the proposed merger is for consolidation and
simplification of existing structure and more focussed operational efforts, realizing synergies in terms of compliance,
governance, administration and costs, among other things. Pursuant to the Scheme, Comstar Automotive is proposed to merge
with our Company. July 5, 2019 is the appointed date. With effect from the appointed date, the entire business of Comstar
Automotive, including all its properties and assets (whether movable/ immovable or tangible/ intangible) and all nature of
liabilities is proposed to stand transferred to our Company on a going concern basis. The Scheme is pending approval by the
NCLT Chandigarh and is subject to receipt of requisite approvals.

The diagram below sets forth the manner in which the Restated Consolidated Financial Information and Pro Forma Consolidated
Financial Information (to be read in conjunction with “Basis of Preparation of the Pro Forma Consolidated Financial
Information” on page 372) has been prepared.

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Principal Factors Affecting Our Financial Condition and Results of Operations

Our financial condition and results of operations are affected by numerous factors and uncertainties, including those discussed
in the section titled “Risk Factors” beginning on page 25. The following is a discussion of certain factors that have had, and we
expect will continue to have, a significant effect on our financial condition and results of operations.

Economic conditions in the markets in which we operate

Our results of operations are dependent on the overall economic conditions in the markets in which we operate, including India,
US, China and Europe. Any change in macro-economic conditions in these markets, including changes in interest rates,
government policies or taxation and political, economic or other developments could affect our business and results of operations.
The automotive market in India may perform differently and be subject to market and regulatory developments that are dissimilar
to the automotive markets in other parts of the world. While stronger macro-economic conditions tend to result into higher
demand for automotive vehicles, weaker macro-economic conditions tend to result into lower demand for automotive vehicles.
Change in demand in the market segments we currently supply or improvement/deterioration in the automotive market or a
change in regulations, customs, taxes or other trade barriers or restrictions could affect our operations and financial condition.

According to the CRISIL Report, in Fiscal 2020, the CV, PV and tractor markets in India experienced an aggregate decrease in
sales volumes by 29%, 18% and 10%, respectively. Further, according to the Ricardo Report, in calendar year 2019, the light
vehicle market experienced decreased production volume in North America by 4.4% and Europe by 4.1%. In addition, the
COVID-19 pandemic has also led to a significant downturn in the global economy, which is adversely affecting, and is expected
to continue to adversely affect the global economy in Fiscal 2022. Due to the impact of the COVID-19 pandemic, our restated
consolidated income from sale of goods was ₹2,968.28 million and ₹1,355.06 million during the quarters ended March 31, 2020
and June 30, 2020 respectively. Our restated consolidated income from sale of goods increased to ₹3,648.27 million during the
quarter ended September 30, 2020 and further to ₹4,681.34 million during the quarter ended December 31, 2020, which showed
a year on year growth of 64.6% in our restated consolidated income from sale of goods of ₹2,844.00 million for the quarter ended
December 31, 2019. Despite the slowdown in the automotive industry globally, we were awarded 14 development programs for
our EV systems and components by 10 different customers until December 31, 2020, of which, active production process has
commenced for eight programs. According to CRISIL, as a result of multiple vaccinations receiving approvals in December
2020, commencement of vaccination in some countries and better than expected data on economic activity from various parts of
the world, the IMF expects the global economy to grow at 5.5% in calendar year 2021 as compared to (3.5)% in calendar year
2020. For calendar year 2021, the IMF has estimated GDP growth of 5.1%, 4.2% and 8.1% for US, EU and China, respectively
and India’s GDP growth is estimated to be 11% in Fiscal 2022. Further, according to the CRISIL Report domestic PV, CV and
tractor sales are expected to grow at 23%, 38% and 1.1%, respectively in Fiscal 2022 and according to the Ricardo Report, light
vehicle market is expected to experience increased production volume in North America by 5.0% and Europe by 4.9% in calendar
year 2021.

However, a continued escalation of the COVID-19 pandemic may have an adverse impact on our results of operations, financial
condition and cash flows. The resultant disruptions to the supply chain, consumer spending and industrial production in the
affected countries has precipitated an economic slowdown in those economies which, if prolonged, could cause a global
recession. See “Risk Factor - The COVID-19 pandemic, or a similar public health threat, could adversely affect our business,
financial condition, and results of operations” for risks of the COVID-19 outbreak on our operations and financial condition;
and see “Our Business – Impact of COVID-19” for more details regarding the impact of COVID-19 on our operations.

Ability to adapt to the evolving technological and market trends in the automotive industry towards electrification of vehicles

The automotive industry is undergoing significant technological changes, with increasing focus on, among other things,
hybridization and electrification of vehicles. According to the Ricardo Report, BEV has been the fastest growing segment at a
CAGR of approximately 46% between calendar years 2015 to 2020 and is expected to grow at a CAGR of approximately 36%
between calendar years 2020 to 2025 with increased market penetration. While BEV sales as a percentage of total global vehicle
sales was 3.3% in calendar year 2020, according to the Ricardo Report, 13.7% of our income from sale of goods was derived
from the BEV market for the nine months ended December 31, 2020. We have been supplying differential gears in the global
EV market since April 2016 and differential assemblies since 2018. According to the Ricardo Report, our global market share
of BEV differential assemblies in calendar year 2020 was 8.7%. We have increased our sales to the EV market at a CAGR of
35.8% from Fiscal 2018 to Fiscal 2020. We also design and manufacture traction motors and motor control units for electric
vehicles, with PMSM motors for EVs and hybrid PVs and BLDC motors for electric two-wheelers and electric three-wheelers.
Continued growth in the EV market driven by willingness of consumers to adopt electric vehicles and favorable government
policies and initiatives that result in shift in consumer preference towards electric vehicles will enable us to increase our market
share in both the Indian and overseas EV markets and achieve our growth strategy to establish market leadership in the Indian
EV segment. However, the market for electric vehicles is relatively new and rapidly evolving. While, we expect to benefit from
the growing global trend in the automotive industry towards hybridization and electrification of vehicles we also have a well-
diversified portfolio of systems and components designed to cater to both electrified and non-electrified powertrain segments.
For the nine months ended December 31, 2020, 72.8% of our income from sale of goods was derived from sales to BEV, hybrid,

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micro-hybrid and power source neutral products. Accordingly, we are well-positioned to adapt our business to the changing
consumer demands and behavior, adoption of new technologies, evolving government regulation and industry standards, policy
and economic dynamics associated with the growing trends in the automotive industry, both in the EV and non-EV segments.
For risks related to the EV market, see “Risk Factor – Our growth strategy to capture market opportunity in the growing EV
market may not be successful.” on page 29.

Innovation and R&D

To increase our market share, especially in the growing EV market and maintain our margins, we plan to continue to invest in
research and development capabilities to develop technologically advanced automotive components designed to assist our
customers in meeting the market demands for power density, higher torque, light weighting, durability, quality and economical
cost. We believe that our growth from medium to long term will significantly depend on the effectiveness of our investments to
design and introduce innovative new products and enhance existing products, in particular develop and manufacture innovative
systems and components for the EV market. As at December 31, 2020, we have been awarded 14 development programs for EV
systems and components by 10 different customers, of which active production process has commenced for eight programs and
regular production is yet to commence for six programs. Successful development of these programs will be a key factor for our
growth prospects and for expanding our market share in the EV market. See “Business – Our Competitive Strengths – One of the
leading manufacturers and suppliers to global EV markets” on page 161 for details on our development programs for EV systems
and components. For Fiscal Years 2018, 2019 and 2020 and the nine months ended December 31, 2020, our total expenditure
on R&D amounted to ₹218.40 million, ₹244.04 million, ₹404.49 million and ₹699.54 million, respectively. Our R&D
expenditures as a percentage of revenue from operations were 1.8%, 1.7%, 3.3% and 6.8% for Fiscal Years 2018, 2019 and 2020
and the nine months ended December 31, 2020, respectively. As at December 31, 2020, we had 175 on-roll employees engaged
in R&D activities, representing approximately 15% of our total on-roll manpower, with 14 software engineers focused on R&D.
Although we spend significant amounts on our R&D capabilities, we strive to do so in a cost effective, targeted manner in line
with our goal of making new technologies available to our customers and expanding our customer base.

New Business Development

Our ability to continuously win new product development programs enhances our competitiveness and market share. A
substantial amount of the new business we are awarded by OEMs is granted well in advance of a program launch. The launch of
new business is a complex process, the success of which depends on a wide range of factors, including the production readiness
of our manufacturing facilities and manufacturing processes and those of our suppliers, as well as factors related to tooling,
equipment, employees, initial product quality and other factors. Accordingly, we continually seek business development
opportunities and participate in a lengthy and rigorous vendor selection process with our customers, which can take up to two to
three years from the date of issue of a request for quote (“RFQ”) for securing business. We estimate future sales from new
product development programs awarded to us using the projected volume under these programs. As at December 31, 2020, we
have been awarded 50 programs from 26 customers across our product portfolio, from customers in India and overseas, where
the start of production is either during Fiscal 2021 or a period subsequent to Fiscal 2021. For further details, see the table under
the heading “Our Business – Program Pipeline” on page 178. We expect to continue to benefit from the new development
programs awarded to us as additional key customer programs are expected to commence production in Fiscal 2022.

Managing supply chain and operating expenses

Our profitability depends on our ability to manage our supply chain and operating costs. According to the CRISIL Report, as
compared to the top 10 listed auto-component manufacturers in India by market capitalization, we were the highest in terms of
operating EBITDA margin, PAT margin, ROCE and ROE and one of the top 10 auto-component manufacturers in India in terms
of operating EBITDA and profit before tax in Fiscal 2020. For Fiscals 2018, 2019 and 2020 and the nine months ended December
31, 2020, we achieved an EBITDA margin of 28.2%, 28.9%, 26.7% and 29.2%, respectively. We achieved this through a
combination of control measures on input raw material costs with price-adjustment arrangements with our customers that enable
us to pass-through fluctuations in prices of some of our raw material costs to our customer base, efficiency in manufacturing,
making continuous improvement in our production processes and quality standards through our advanced R&D and technological
capabilities and maintaining low overhead costs. As a result, we have achieved single digit PPM level for over seven years. Our
focus on shifting our product mix towards higher margin products also enabled us to maintain our EBITDA margins for Fiscal
Years 2018, 2019 and 2020 and the nine months ended December 31, 2020.

We are dependent upon our suppliers’ ability to meet quality specifications and delivery schedules. We also procure certain key
components such as drive assemblies, solenoid assemblies, machined steel components, carbon brushes assemblies, magnets,
required for manufacturing our starter and BLDC motors, from limited suppliers in China. As of December 31, 2020, four out
of our top ten suppliers were located in China. The inability of a supplier to meet these requirements, the loss of a significant
supplier, or work stoppages could have an adverse effect on our ability to meet our customers’ delivery requirements. We are in
the process of implementing a strategy to reduce this dependence.

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Further, the cost of our key raw materials and commodity is susceptible to future volatility in commodity prices. Most of our
contracts with customers are structured to pass-through market fluctuations in steel and certain alloy prices for the differential
gears and differential assemblies and in copper prices for the conventional and micro-hybrid starter motors. Other than the
foregoing, our costs may be susceptible to fluctuation in commodity prices like aluminium and steel for components used in
starter motors. We are constantly working on value addition and value engineering initiatives and procurement of components,
which go into our products from local suppliers, in order to reduce costs and maintain our margins.

As a percentage of total income our cost of materials consumed and changes in inventories of finished goods and work-in progress
was 38.3%, 40.4%, 41.9% and 40.2% in Fiscal Years 2018, 2019, 2020 and in the nine months ended December 31, 2020. Given
the nature of our business, spreading of fixed production costs over higher production volumes, management of our operating
costs and efficiencies helps us maintain our competitiveness and profitability. We continually undertake efforts to reduce our
costs in order to protect our margins, such as by engaging with a diversified set of suppliers, outsourcing non-critical processes,
improving operational efficiencies and manufacturing processes and negotiating volume discounts.

Our Products and Customers

Our financial performance has largely been driven by, and a key factor to our future success will be, our ability to continue to
diversify our business through maintaining a diversified mix of our products offered to continue to deliver value for our
customers, an increase in our customer base in a cost-effective manner and deepening our relationships with our existing
customers. We are one of India’s leading automotive technology companies, designing, manufacturing and supplying highly
engineered, mission critical automotive systems and components such as differential assemblies, differential gears, conventional
and micro-hybrid starter motors, BSG systems, EV traction motors (BLDC and PMSM) and motor control units to automotive
OEMs across US, Europe, India and China, for both electrified and non-electrified powertrain segments. Our systems and
components are supplied for use across all types of vehicle segments. For example, we design, develop, manufacture and supply
differential assemblies and precision forged differential bevel gears for both electrified and non-electrified PVs, CVs, OHVs and
three-wheelers, conventional and micro-hybrid starter motors for PVs and light commercial vehicles (LCVs), BSG systems, EV
traction motors for hybrid and battery electric PVs, hybrid and battery electric LCVs, electric two-wheelers and electric three-
wheelers. According to the Ricardo Report, we supply our systems and components to six out of the top 10 global PV OEMs,
three out of the top 10 global CV OEMs and seven out of the top eight global tractor OEMs by volume. We are also one of the
leading suppliers of BLDC motors in India for the two-wheeler and three-wheeler EV market, according to the Ricardo Report.

For the nine months ended December 31, 2020, 13.7% of our income from sale of goods was derived from the BEV market.
Further, according to the CRISIL Report, we are the largest manufacturer of differential gears for PV, CV and tractor OEMs in
India, with an estimated market share of approximately 55% to 60%, 80% to 90% and 75% to 85%, respectively. With our
product offerings spanning all types of conventional and electrified powertrains, we are one of the few automotive technology
manufacturers well-positioned to gain from the high growth industry trends in both the EV and non-EV markets.

Further, through our strong focus on R&D, we have built the capabilities to develop technologically advanced automotive
systems and components, which assist our customers to meet the market demands for high power density systems handling
higher torque requirements with a lightweight design, while meeting stringent durability, performance and NVH specifications.

Our systems and components are designed and manufactured in accordance with international quality standards and customized
to specific customer requirements, which has enabled us to establish long-standing relationships of 15 years and more with 13
of our top 20 customers. For details, see “Our Business – Our Operations – Customers” on page 171. Some of our key OEM
customers (in alphabetical order) include a Global OEM of EVs, a North American OEM of PVs and CVs, Ampere Vehicles, an
Indian OEM of PVs, CVs and EVs, Ashok Leyland, CNH, Daimler, Escorts, Escorts Kubota, Geely, Jaguar Land Rover, John
Deere, Mahindra and Mahindra, Mahindra Electric, Maruti Suzuki, Renault Nissan, Revolt Intellicorp, TAFE, Volvo Cars and
Volvo Eicher. We also serve selected leading Tier 1 automotive system suppliers such as Carraro, Dana, Jing-Jin Electric,
Linamar and Maschio. In several instances, we engage closely with our customers from concept to delivery and aim to have all
our systems and components to be industry leading in their respective categories.

Thus, our future results of operations are dependent upon, among other factors, our ability to continue to produce our systems
and components more efficiently by using our extensive in-house technology and application software and integration
capabilities and to continue to innovate and invest in product development to drive sales of additional and/or improved products
to existing and/or new customers. Changes in the outsourcing strategy of our customers or increased competition from other
auto-component manufacturers as they develop differentiated and innovative products that compete with our systems and
components could have an adverse impact on our business, results of operations, financial condition and cash flows. See “Risk
Factor – Our business faces substantial competition.” on page 34.

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Acquisitions and divestments

Our business strategies are focused on enhancing our market position by continuously improving the competitive differentiation
of our product portfolio, focusing on our strengths and core competencies, and growing the businesses that offer the most
attractive returns. We have historically expanded our business through a combination of organic growth and acquisitions. For
example, we expanded our product portfolio and capabilities to develop and integrate the powertrain and the drivetrain
components through acquisition of the Comstar Entities in Fiscal 2020. Although the core of our strategy is to continue to achieve
growth organically through investment in our technological capabilities, business development skills and customer relationships,
we continue to evaluate inorganic growth opportunities such as acquisitions and strategic alliances that may provide us with
complementary technologies. Each new acquisition that we complete may materially affect the overall results of our operations
and financial profile. For further details on the divestments and the acquisition, see “History and Certain Corporate Matters –
Material acquisitions or divestments of business or undertakings, mergers, amalgamations or revaluation of assets in the last
10 years” on page 199.

Global operations and foreign exchange

Our company has a well-diversified revenue profile with North America, Europe, India and China contributing 40.2%, 25.3%,
24.6% and 5.3% of our total income from sale of goods in the nine months ended December 31, 2020, respectively. Accordingly,
a large portion of our revenue and some part of costs are denominated in US Dollars. As a result of our substantial international
operations, we are exposed to foreign currency risks that arise from our business transactions that are denominated in foreign
currencies and investments made in foreign jurisdictions. However, in case of some of our customers, the fluctuation in foreign
currency is passed through by way of price adjustment with a time lag. We employ financial instruments, primarily forward
contracts to hedge certain of our foreign currency exchange risks relating to our business.

Since our reporting currency is Indian rupee, all foreign currency transactions including sales, purchases and expenses are
translated into Indian rupees. We are also required to translate the financial statements of our foreign subsidiary in the U.S. to
Indian Rupees for the purposes of our consolidated financial statements.

To mitigate foreign currency fluctuation risk, our Company currently has a policy to hedge a significant part of its net foreign
currency exposure on a rolling 12 months’ basis. Due to its inherent net dollar long position, depreciation of the Indian rupee
against these foreign currencies will generally have a positive effect on our reported revenues and operating income and
appreciation of the Indian rupee against US Dollar will generally have a negative impact on our reported revenues and operating
income.

Our business and the industry in which we operate is subject to substantial government regulation, including tax laws in foreign
jurisdictions in which we have a presence which may differ by state, region and country. Changes in tax laws and treaties or tax
rates, the resolution of tax assessments or audits by various tax authorities could adversely affect our results of operations. These
government regulatory changes may also support or impede the business of our customers and consequently impact our business.
Any of these outcomes could affect our financial condition and results of operations.

Our overseas business and growth initiatives are also exposed to changes in international tariffs, trade relations and policies,
including renegotiated trade agreements and imposition of tariffs that make unjustified, unreasonable or discriminatory trade
actions impacting the countries in which we have a presence. Our sales may also be impacted by changes in tariffs applicable on
our products or on our customers’ products containing content sourced from us.

Key Performance Indicators and Certain Non-GAAP Measures

In evaluating our business, we consider and use certain non-GAAP financial measures and key performance indicators that are
presented below as supplemental measures to review and assess our operating performance. The presentation of these non-GAAP
financial measures and key performance indicators are not intended to be considered in isolation or as a substitute for the Pro
Forma Consolidated Financial Information or the Restated Consolidated Financial Information. We present these non-GAAP
financial measures and key performance indicators because they are used by our management to evaluate our operating
performance. These non-GAAP financial measures are not defined under Ind AS and are not presented in accordance with Ind
AS. The non-GAAP financial measures and key performance indicators have limitations as analytical tools. Further, these non-
GAAP financial measures and key performance indicators may differ from the similar information used by other companies,
including peer companies, and hence their comparability may be limited. Therefore, these matrices should not be considered in
isolation or construed as an alternative to Ind AS measures of performance or as an indicator of our operating performance,
liquidity, profitability or results of operation.

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Based on our Pro Forma Consolidated Financial Information

EBITDA and EBITDA margin

EBITDA is defined as our profit for the period/year less other non-operating income before depreciation and amortization,
finance costs and income tax expense. EBITDA margin is defined as our EBITDA as a percentage of revenue from operations.

The table below reconciles our profit / loss for the year to EBITDA on a pro forma basis for the periods indicated.

Nine months Fiscal

ended December
31, 2020 2020 2019 2018

(₹ in millions)
Profit for the period/year 1,554.69 2,217.22 2,128.75 1,714.90
Less:
Other income 26.72 75.83 57.81 91.03
Add:
Depreciation and amortization 688.62 781.85 722.45 612.08
Finance costs 230.85 268.75 197.86 214.02
Income tax expense 555.82 61.56 1,131.18 1,005.02
EBITDA 3,003.26 3,253.55 4,122.43 3,454.99
EBITDA margin (in %) 29.2% 26.7% 28.9% 28.2%

In Fiscal 2020, we maintained our EBITDA margin despite a decrease in our total income by 14.4% from Fiscal 2019 primarily
due to improved efficiencies in our manufacturing processes. Our focus on shifting our product mix towards higher margin
products in Fiscal 2020 also enabled us to maintain our EBITDA margins at 28.2%, 28.9%, 26.7% and 29.2% for Fiscal Years
2018, 2019 and 2020 and the nine months ended December 31, 2020.

ROCE

ROCE is defined as Operating EBIT (EBITDA less depreciation and amortization) divided by adjusted capital employed (total
assets less goodwill on consolidation, intangible assets, intangible assets under development and current liabilities at the end of
the period). For the nine months ended December 31, 2020, Operating EBIT is annualized for purpose of the calculation.

Nine months Fiscal

ended December
2020 2019 2018
31, 2020
(₹ in millions)
EBITDA 3,003.26 3,253.55 4,122.43 3,454.99
Less:
Depreciation and amortisation 688.62 781.85 722.45 612.08
Operating EBIT 2,314.64 2,471.70 3,399.98 2,842.91
Total assets 21,120.42 18,506.82 18,405.59 16,669.49
Less:
Goodwill on consolidation 1,758.09 1,758.09 1,758.09 1,758.09
Intangible assets 4,450.99 4,629.18 4,814.43 4,416.66
Intangible assets under development 910.21 315.00 85.00 -
Adjusted total assets 14,001.13 11,804.55 11,748.07 10,494.74
Less:
Current liabilities 4,503.37 3,282.13 3,311.31 3,275.52
Adjusted capital employed 9,497.76 8,522.42 8,436.76 7,219.22
Return on capital employed (“ROCE”) * 32.5% 29.0% 40.3% 39.4%
*For the nine months ended December 31, 2020, Operating EBIT is annualized for purpose of the calculation of ROCE.

ROE

ROE is defined as profit after tax (excludes deferred tax adjustment due to change in tax rate) divided by tangible net worth (total
equity less goodwill on consolidation, intangible assets and intangible assets under development at the end of the period). For
Fiscals 2020 and 2019, profit after tax is considered without deferred tax adjustment due to change in tax rate. For the nine
months ended December 31, 2020, adjusted profit after tax is annualized for purpose of the calculation.

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 Nine months ended Fiscal
December 31, 2020 2020 2019 2018
(₹ in millions)
Profit for the year (PAT) 1,554.69 2,217.22 2,128.75 1,714.90
Less:
Deferred tax - change in tax rate - (430.17) (13.70) -
Adjusted Profit for the year 1,554.69 1,787.05 2,115.05 1,714.90
Total Equity 12,885.51 11,779.41 12,599.30 10,943.50
Less:
Goodwill on consolidation 1,758.09 1,758.09 1,758.09 1,758.09
Intangible assets 4,450.99 4,629.18 4,814.43 4,416.66
Intangible assets under development 910.21 315.00 85.00 -
Adjusted Equity Capital 5,766.22 5,077.14 5,941.78 4,768.75
Return on Equity (“ROE”)* 35.9% 35.2% 35.6% 36.0%
*For the nine months ended December 31, 2020, adjusted profit for the year is annualized for purpose of the calculation of ROE.

The table below sets forth the breakdown of our sale of goods across geographic markets for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December 31,
2020
(₹ in millions)
North America 5,776.35 5,791.49 4,730.98 3,893.30
Europe 1,889.73 2,479.88 2,766.93 2,447.65
India 3,645.32 4,301.53 3,229.59 2,383.48
China 77.95 264.97 257.73 509.32
Others 527.18 811.88 818.96 450.92

Total 11,916.53 13,649.75 11,804.19 9,684.67

The table below sets forth the breakdown of our sale of goods across our vehicle segments for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months ended
2018 2019 2020 December 31, 2020
(₹ in millions)
Passenger Vehicle (PV)
7,464.87 8,459.56 7,698.36 6,659.11
Commercial Vehicle (CV)
2,453.75 2,933.77 2,138.11 1,322.86
Off Highway Vehicle (OHV)
1,985.69 2,234.77 1,946.30 1,697.95
Others
12.22 21.64 21.43 4.74

Total 11,916.53 13,649.75 11,804.19 9,684.67

The table below sets forth the breakdown of our sale of goods across our systems and components for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020
(₹ in millions)
Differential Assembly 513.52 611.00 657.85 1,699.84
Differential Gears 5,061.31 5,657.86 4,111.20 2,703.07
Micro Hybrid Starter Motors 1,230.56 2,325.25 3,480.40 2,407.87
Conventional Starter Motors 4,703.93 4,613.28 3,054.50 2,516.29
Other Gears 288.22 317.78 387.31 258.58
Others 118.98 124.58 112.93 99.02

Total 11,916.53 13,649.75 11,804.19 9,684.67

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The table below sets forth the breakdown of our sale of goods across powertrain for the periods indicated.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020
(₹ in millions)
Battery EV 126.67 174.19 233.59 1,327.31
Micro Hybrid / Hybrid 1,230.56 2,325.25 3,480.40 2,393.65
Power Source Neutral 5,736.86 6,414.56 4,923.60 3,334.29
ICE Dependent 4,822.44 4,735.75 3,166.61 2,629.41

Total 11,916.53 13,649.75 11,804.19 9,684.67

The table below sets forth the breakdown of our sale of goods across our top ten customers for the periods indicated. The order
of our top ten customers in the table below is based on information as at December 31, 2020.

For Fiscal Year For Fiscal Year For Fiscal Year For nine months
2018 2019 2020 ended December
31, 2020
(₹ in millions)
Customer 1 - North American OEM of PVs
and CVs 3,673.91 3,643.34 2,765.62 1,755.31
Customer 2 - European OEM of PVs and
CVs 1,449.05 2,067.80 2,373.71 1,670.42
Customer 3 - Global OEM of EVs 1.39 21.92 163.54 1,248.75
Customer 4 - Global Tier 1 Supplier for PVs,
CVs, OHVs and EVs 728.26 838.27 766.67 520.46
Customer 5 - Global OEM of OHVs - 1 604.05 667.89 541.30 491.91
Customer 6 - North American Tier 1
Supplier for PVs and EVs 1,354.94 1,343.36 953.65 455.91
Customer 7 - Indian OEM of PVs, CVs,
OHVs and EVs 603.17 688.24 588.38 437.26
Customer 8 - Indian OEM of PVs, CVs and
EVs 807.11 983.93 631.56 421.98
Customer 9 - Global OEM of PVs, CVs and
EVs 169.90 190.98 280.54 374.16
Customer 10 - Asian OEM of PVs and CVs 38.61 348.30 471.76 360.83
Customer 11 to Customer 20 1,644.00 2,139.02 1,721.03 1,444.82
Others 842.14 716.71 546.43 502.86

Total 11,916.53 13,649.75 11,804.19 9,684.67

Significant Accounting Policies

The significant accounting policies adopted in the preparation of our Restated Consolidated Financial Information is set forth
below. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Basis of preparation

The Restated Consolidated Financial Information relates to the Company together with its Subsidiaries, on a consolidated basis
(the “Group”) and has been specifically prepared for inclusion in the document to be filed by the Company with the SEBI in
connection with the proposed Offer. The Restated Consolidated Financial Information comprise of the Restated Consolidated
Balance Sheet as at December 31, 2020, March 31, 2020, March 31, 2019 and March 31, 2018, the Restated Consolidated
Statement of Profit and Loss (including Other Comprehensive Income), the Restated Consolidated Cash Flow Statement, the
Restated Consolidated Statement of Changes in Equity and Statement of Significant Accounting Policies and other explanatory
information for the nine months ended December 31, 2020 and the Fiscals 2020, 2019 and 2018 (hereinafter collectively referred
to as “Restated Consolidated Financial Information”).

The Restated Consolidated Financial Information has been prepared to comply in all material respects with the requirements of
Section 26 of Part I of Chapter III of the Companies Act, 2013, as amended (the “Act") read with the Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time, in pursuance
of provisions of Securities and Exchange Board of India Act, 1992 (the “ICDR Regulations”).

The Restated Consolidated Financial Information has been compiled by the management from:

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a. The audited special purpose interim consolidated financial statements as at and for the nine months ended December 31,
2020, prepared in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies
Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015 (as amended) and other relevant provisions of
the Act, which have been approved by the Board of Directors at their meeting held on 12 February 2021.

b. The audited consolidated financial statements as at and for the Fiscals 2020, 2019 and 2018 prepared in accordance with the
Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Companies Act, 2013, read with Companies
(Indian Accounting Standards) Rules, 2015 (as amended) and other relevant provisions of the Act, which have been
approved by the Board of Directors at their meeting held on December 29, 2020, November 20, 2019 and August 29, 2018,
respectively.

The Restated Consolidated Financial Information have been prepared so as to contain information / disclosures and incorporating
adjustments set out below in accordance with the ICDR Regulations:

a. Adjustments to the profits or losses of the earlier periods and of the period in which the change in the accounting policy has
taken place is recomputed to reflect what the profits or losses of those periods would have been if a uniform accounting
policy was followed in each of these periods, if any;

b. Adjustments for reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring them
in line with the groupings as per the audited consolidated financial statements of the Group for the nine months period ended
31 December 2020 and the requirements of the SEBI Regulations, if any; and

c. The resultant impact of tax due to the aforesaid adjustments, if any.

b) Current versus non-current classification

The Group presents assets and liabilities in the Balance Sheet based on the current/non-current classification.

An asset is treated as current when:

• It is expected to be realized or intended to be sold or consumed in normal operating cycle;

• It is held primarily for the purpose of trading;
• It is expected to be realized within twelve months after the reporting period; or
• It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.

Current assets include the current portion of non-current financial assets. The Group classifies all other assets as non-current.

A liability is treated current when:

• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;
• It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

Current liabilities include current portion of non-current financial liabilities. The Group classifies all other liabilities as non-
current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents.
The Group has identified twelve months as its operating cycle for the purpose of current / non-current classification of assets and
liabilities.

c) Business combinations

The Group applies the acquisition method in accounting for business combinations. The cost of acquisition is the aggregate of
the consideration transferred measured at fair value at the acquisition date. Acquisition costs are charged to the Statement of
Profit and Loss in the period in which they are incurred.

At the acquisition date, identifiable assets acquired and liabilities assumed are measured at fair value. Goodwill is measured as
excess of the aggregate of the fair value of the consideration transferred over the fair value of the net of identifiable assets
acquired and liabilities assumed. If the fair value of the net of identifiable assets acquired and liabilities assumed is in excess of
the aggregate mentioned above, the resulting gain on bargain purchase is recognized.

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Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognized. Goodwill is carried at cost less accumulated impairment losses.

d) Property, plant and equipment

Freehold land is carried at cost. All other items of property, plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items. The present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for
a provision are met.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any component accounted for as a separate asset is de-recognized when replaced. All other
repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

The cost of an item of property, plant and equipment is the cash price equivalent at the recognition date. If payment is deferred
beyond normal credit terms, the property, plant and equipment is capitalized at discounted value. The difference between the
discounted value and the total payment is recognized as interest over the period of credit.

Depreciation methods, estimated useful lives and residual value

Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives (as
set out below) as prescribed in Schedule II of the Act: -

Asset category Useful life (in years)

Factory Buildings 30
Roads 10
Sheds 3
Plant and equipment 15
Furniture and fixtures 10
IT equipment 6
Computers 3
Vehicles 4-8
Office equipment 5
Leasehold improvements Over the effective term of lease

In case of subsidiaries, the following useful lives have been used by the Group:

Asset category Useful life (in years)

Buildings 10 to 50 years
Buildings and land improvements 15 to 25 years
Technical machinery and equipment 8 to 25 years
Other equipment, factory and office equipment 3 to 10 years

The assets’ residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period.

Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded,
demolished or destroyed, or significant components replaced; depreciation on such assets is calculated on a pro rata basis as
individual assets with specific useful life from the month of such addition or, as the case may be, up to the month on which such
asset has been sold, discarded, demolished or destroyed or replaced.

De-recognition

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated
as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement
when the asset is derecognised.

e) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets
are carried at cost less accumulated amortization and accumulated impairment losses, if any. Cost comprises the purchase price
and any attributable cost of bringing the asset to its working condition for its intended use.

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Expenditure on the research phase of projects is recognized as an expense as incurred.

Costs that are directly attributable to a project’s development phase are recognized as intangible assets, provided the Group can
demonstrate the following:

• the technical feasibility of completing the intangible asset so that it will be available for use.
• its intention to complete the intangible asset and use or sell it.
• its ability to use or sell the intangible asset.
• how the intangible asset will generate probable future economic benefits.
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset.
• its ability to measure reliably the expenditure attributable to the intangible asset during its development. Development
costs not meeting these criteria for capitalization are expensed as incurred.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which
it relates.

Amortization methods and periods.

The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the
end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate and are treated as
changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognised in the Statement
of Profit and Loss.

Asset class Useful life (in years)

Computer software 6
Technical know-how 6

In case of subsidiaries, the following useful lives have been used by the Group:

Intangible assets with finite useful lives are capitalized at cost and amortized on a straight-line basis generally over a period of
3 to 15 years, depending on their estimated useful lives. Useful lives are examined on an annual basis and adjusted when
applicable on a prospective basis.

Intangible assets - Customer relationships

Customer relationships acquired in a business combination are recognized at fair value at the acquisition date. Customer
relationships have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the
straight-line method to allocate the cost of customer relationships over their estimated useful lives of 15 years.

f) Leases

Transition to Ind AS 116 – Leases:

For the purposes of this restated consolidated financial information, effective April 1, 2017, we have adopted Ind AS 116
“Leases” and applied the standard to all lease contracts existing on April 1, 2017 using the modified retrospective method. the
Group adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on 1 April 2017 using the modified
retrospective method with the cumulative effect of adopting Ind AS 116 being recognized in equity as an adjustment to the
opening balance of retained earnings.

Ind AS 116 will result in an increase in cash inflows from operating activities and an increase in cash outflows from financing
activities on account of lease payments. On application of Ind AS 116, the nature of expenses has changed from lease rent in
previous periods to depreciation cost for the right-of-use asset, and finance cost for interest accrued on lease liability.

The following is the summary of practical expedients elected on initial application:

1. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term
on the date of initial application

2. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

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3. Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is
applied only to contracts that were previously identified as leases under Ind AS 17.

The Group lease asset classes primarily consist of leases for land, buildings and plant and machinery. The Group assesses whether
a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right
to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset (ii)
the Group has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Group
has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognizes a right-of-use asset (“ROU”) and a corresponding lease liability
for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and
low value leases. For these short-term and low value leases, the Group recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.

Certain lease arrangements include the right to extend the lease. ROU assets and lease liabilities includes these options when it
is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and
useful life of the underlying asset.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates
in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right
of use asset if the Group changes its assessment if whether it will exercise an extension or a termination option.

g) Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net realizable value.
Cost of raw materials and traded goods comprises cost of purchases. Cost of work in progress and finished goods comprises
direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated
on the basis of normal operating capacity.

Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Cost
are assigned to individual items of inventory on the basis of weighted average method. Costs of purchased inventory are
determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs necessary to make the sale.

h) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposit accounts, margin deposit money and highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts. Bank overdrafts, if any, are shown within borrowings in current
liabilities in the balance sheet.

i) Impairment of non-financial assets

Intangible assets that have an indefinite useful life (including Goodwill and Brands) are not subject to amortization and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. At each reporting date, the Group assesses whether there is any indication based on internal/external factors, that
an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset. An impairment
loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash-generating units).

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In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken into account, if available. If no such transactions can be identified, an
appropriate valuation model is used. After impairment, depreciation is provided on the revised carrying amount of asset over its
remaining useful life.

Non-financial assets that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting
period.

j) Impairment of financial assets

All financial assets except for those at fair value through profit and loss (FVTPL) are subject to review for impairment at least
at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is
impaired. Different criteria to determine impairment are applied for each category of financial assets. In accordance with Ind-
AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial
assets carried at amortized cost. ECL is the weighted average of difference between all contractual cash flows that are due to the
Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective
interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Group is required
to consider:

• All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

Trade receivables

The Group applies approach permitted by Ind AS 109 Financial Instruments, which requires lifetime expected credit losses to
be recognized upon initial recognition of receivables. Lifetime ECL are the expected credit losses resulting from all possible
default events over the expected life of a financial instrument. The Group uses the expected credit loss model to assess any
required allowances and uses a provision matrix to compute the expected credit loss allowance for trade receivables. Life time
expected credit losses are assessed and accounted based on Group historical collection experience for customers and forecast of
macroeconomic factors.

Other financial assets

For recognition of impairment loss on other financial assets and risk exposure, the Group determines whether there has been a
significant increase in the credit risk since initial recognition. If the credit risk has not increased significantly since initial
recognition, the Group measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount
equal to the lifetime expected credit losses. When making this assessment, the Group uses the change in the risk of a default
occurring over the expected life of the financial asset. To make that assessment, the Group compares the risk of a default
occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the
date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort,
that is indicative of significant increases in credit risk since initial recognition. The Group assumes that the credit risk on a
financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk
at the balance sheet date.

k) Financial instruments

Financial instruments are recognized when we become a party to the contractual provisions of the instrument and are measured
initially at fair value adjusted for transaction costs, except for those carried at FVTPL which are measured initially at fair value.

If the Group determines that the fair value at initial recognition differs from the transaction price, the Group accounts for that
instrument at that date as follows:

a) at the measurement basis mentioned above if that fair value is evidenced by a quoted price in an active market for an
identical asset or liability (i.e. a Level 1 input) or based on a valuation technique that uses only data from observable
markets. The Group recognizes the difference between the fair value at initial recognition and the transaction price as a gain
or loss.

b) in all other cases, at the measurement basis mentioned above, adjusted to defer the difference between the fair value at
initial recognition and the transaction price. After initial recognition, the Group recognizes that deferred difference as a gain

366
 or loss only to the extent that it arises from a change in a factor (including time) that market participants would take into
account when pricing the asset or liability.

Subsequent measurement of financial assets and financial liabilities is described below:

Financial assets

Classification and subsequent measurement

For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:

Financial assets at amortized cost

A financial instrument is measured at amortized cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest
(SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest method.

Financial assets at fair value

Investments in equity instruments (other than subsidiaries / associates) – All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are held for trading are generally classified at FVTPL. For all other equity
instruments, the Group decides to classify the same either at fair value through other comprehensive income (FVOCI) or FVTPL.
The Group makes such election on an instrument by instrument basis. The classification is made on initial recognition and is
irrevocable.

If the Group decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding
dividends, are recognized in the other comprehensive income (OCI). There is no recycling of the amounts from OCI to P&L,
even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity. Dividends on such
investments are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement
of profit and loss.

De-recognition of financial assets

A financial asset is primarily de-recognized when the rights to receive cash flows from the asset have expired or the Group has
transferred its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement

After initial recognition, the financial liabilities are subsequently measured at amortized cost using effective interest method.
Amortized cost is calculated after considering any discount or premium on acquisition and fees or costs that are an integral part
of the EIR. The effect of EIR amortization is included as finance costs in the statement of profit and loss.

De-recognition of financial liabilities

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and
the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and
loss.

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Derivative financial instruments

The Group enters into derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks,
including foreign exchange forward contracts.

Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in consolidated
statement of profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously

l) Fair value measurement

The Group measures certain financial instruments, such as, investments at fair value at each balance sheet date. Fair value is the
price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.

m) Provisions, contingent liabilities and contingent assets

A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation, it is probable
that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are
measured at the present value of best estimate of the expenditure required to settle the present obligation at the balance sheet
date.

The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value
of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest
expense. Expected future operating losses are not provided for.

Contingencies

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not wholly within the control of the Group; or
• Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle
the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are not recognised. However, when inflow of economic benefits is probable, related asset is disclosed.

n) Revenue recognition

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on
behalf of third parties. The Group recognizes revenue when it transfers control over a product or service to a customer.

Revenue from sale of goods

Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the contract,
in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods. Control of goods
refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods.

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Revenue is measured at fair value of the consideration received or receivable and are accounted for net of returns and discounts.
Sales, as disclosed, are exclusive of goods and services tax.

Other incomes

Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable. For all
financial assets measured at amortized cost, interest income is recorded using the effective interest rate (EIR) i.e. the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the
financial assets. The future cash flows include all other transaction costs paid or received, premiums or discounts if any, etc.

Dividend is recognized as and when the right of the Group to receive payment is established.

Export benefit entitlements under various schemes notified by the government are recognized in the statement of profit and loss
when the right to receive credit as per terms of the scheme is established in respect of the exports made and no significant
uncertainties exist as to the amount of consideration and its ultimate collection.

o) Employee benefits

i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service are recognised in respect of employees' services
up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.

ii) Post-employment benefits

Defined contribution plan: A defined contribution plan is a post-employment benefit plan under which the Group pays
specified contributions to a separately entity. The Group has defined contribution plans for provident fund and employees’
state insurance scheme. The Group’s contribution in the above plans is recognised as an expense in the Statement of Profit
and Loss during the year in which the employee renders the related service.

Defined benefit plans: The Group has defined benefit plan namely Gratuity for employees. The liability in respect of gratuity
plans is calculated annually by independent actuary using the projected unit credit method. The Group recognises the
following changes in the net defined benefit obligation under employee benefits expense in statement of profit or loss:

- Service costs comprising current service costs, past service costs, gains and losses on curtailment and non-routine
settlements
- Net interest expense

Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised
in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the
statement of changes in equity and in the balance sheet. Re-measurements are not reclassified to profit or loss in subsequent
periods.

iii) Other long-term employee benefits

Compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit
credit method at the end of the year. Actuarial gains/losses are immediately recognised to the Statement of Profit and Loss.

iv) Termination benefits are recognized as an expense immediately.

p) Employee share based payments

The Company has equity-settled share-based remuneration plans for its employees. None of the Company’s plans are cash-
settled. Where employees are rewarded using share-based payments, the fair value of employees’ services is determined
indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date. All share-
based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to equity. If vesting
periods or other vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate
of the number of share options expected to vest. Upon exercise of share options, the proceeds received, net of any directly
attributable transaction costs, are allocated to share capital up to the nominal (or par) value of the shares issued with any excess
being recorded as share premium.

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q) Foreign currency transactions

Items included in the financial statements are measured using the currency of the primary economic environment in which the
Group operates (‘the functional currency’). The financial statements are presented in Indian rupee (INR), which is the Group’s
functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets
and liabilities denominated in foreign currencies at year end exchange rates are recognised in profit or loss.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis
within other gains/(losses). Non-monetary items denominated in foreign currency are reported at the exchange rate ruling on the
date of transaction.

Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those
at which they were initially recorded, are recognised in the statement of profit and loss in the year in which they arise.

r) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs
are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in
connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an
adjustment to the borrowing costs. Eligible transaction/ancillary costs incurred in connection with the arrangement of borrowings
are adjusted with the proceeds of the borrowings.

s) Income taxes

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period in the country where the Group operate and generate taxable income. Management periodically evaluates positions taken
in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial
recognition of Goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable
profit (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted by the end of the reporting
period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is
settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the Group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in
equity, respectively.

t) Earnings per share

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Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Group;

• by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in
equity shares issued during the year.

Dilute earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any
share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.

u) Non-current assets held for sale and discontinued operations

An entity shall classify a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available
for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is
highly probable. Management must be committed to sale which should be expected to qualify for recognition as a completed
sale within one year from the date of classification. Non-current assets classified as held for sale are presented separately and
measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less
costs to sell. However, some held for sale assets such as financial assets, assets arising from employee benefits and deferred tax
assets, continue to be measured in accordance with the Company’s relevant accounting policy for those assets. Once classified
as held for sale, the assets are not subject to depreciation or amortization. A discontinued operation is a component of the
Company that either has been disposed of, or is classified as held for sale. Profit or loss from discontinued operations comprise
the post-tax profit or loss of discontinued operations and the post-tax gain or loss resulting from the measurement and disposal
of assets classified as held for sale. Any profit or loss arising from the sale or re-measurement of discontinued operations is
presented as part of a single line item, profit or loss from discontinued operations.

Standards issued but not yet effective

All the Ind AS issued and notified by the Ministry of Corporate Affairs (‘MCA’) under the Companies (Indian Accounting
Standards) Rules, 2015 (as amended) till the financial statements are authorised have been considered in preparing these financial
statements.

Standards Issued But Not Effective

The Ministry of Corporate Affairs (“MCA”) has notified new standards or amendments to the existing standards. However, there
are no such notifications which have been issued but are not yet effective or applicable from January 1, 2021.
Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and
disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and
expenses for the years presented. Actual results may differ from the estimates. Estimates and underlying assumptions are
reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are
revised and future periods affected. In particular, information about significant areas of estimation uncertainty and critical
judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial
statements includes:

• measurement of defined benefit obligations;

• estimation of useful lives of property, plant and equipment;
• provision and contingent liabilities;
• carrying values of inventories;
• expected credit loss on receivables;
• impairment of non-financial assets (goodwill and brands);
• measurement of share based payments;

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• cash flow projections and liquidity assessment with respect to Covid-19 (refer note 58).

Basis of Preparation of the Pro Forma Consolidated Financial Information

The pro-forma consolidated financial information of the Group comprising the Pro Forma Consolidated Balance Sheet as at
December 31, 2020, March 31, 2020, March 31, 2019 and March 31, 2018 and the Pro Forma Consolidated Statement of Profit
and Loss and the Pro Forma Consolidated Cash Flow Statement for the nine months ended December 31, 2020 and Fiscals 2020,
2019 and 2018, read with the notes to the Pro Forma Consolidated Financial Information (hereinafter referred as “Pro Forma
Consolidated Financial Information”), has been prepared to reflect the acquisition of Comstar Automotive and Comstar
Automotive HK as if the acquisition had taken place at a date prior to the first period presented. Because of their nature, the Pro
Forma Consolidated Financial Information addresses a theoretical situation and therefore, does not represent the Group’s factual
financial position or results. They purport to indicate the results and the financial position that would have resulted had the
acquisition been completed at the date prior to the first period presented but are not intended to be indicative of expected results
or operations in the future periods or the future financial position of the Group.

The pro forma adjustments are based upon available information and assumptions that the management of the Company believes
to be reasonable. Such Pro Forma Consolidated Financial Information has been prepared on the basis as stated in the section
“Pro-forma adjustments” and accordingly should not be relied upon as if it had been prepared in accordance with the generally
accepted accounting principles.

In addition, the rules and regulations related to the preparation of Pro Forma Consolidated Financial Information in other
jurisdictions may also vary significantly from the basis of preparation as set out in paragraphs below.

The Pro Forma Consolidated Financial Information for the period and years presented has been prepared by combining the
following financial information prepared as per generally accepted accounting principles in India and after making the
adjustments as detailed under “Pro-forma adjustments” below:

a) the audited standalone financial statements of the Company for Fiscals 2020, 2019 and 2018, on which the auditors have
expressed unmodified audit opinion vide their reports dated August 14, 2020, July 5, 2019 and May 21, 2018. Further, the
erstwhile subsidiary company namely Sona Holding B.V., The Netherlands along with its subsidiaries and step down subsidiaries
and the erstwhile associate namely Sona Skill Development Centre Limited, have not been considered for consolidation in this
pro-forma consolidated financial information for the abovementioned periods (also refer note 39) and hence, the same is included
under the head “Investments” / “Assets held for sale” in the pro-forma consolidated financial information at its carrying value in
the books of account of the Company;

b) the audited consolidated special purpose financial statements of the Company and its subsidiary companies for the period
ended and as at December 31, 2020, on which the auditors have expressed an unmodified audit opinion vide their report
dated February 12, 2021;

c) the audited consolidated financial statements of Comstar Automotive for Fiscals 2020, 2019 and 2018, on which the
auditors have expressed unmodified audit opinion vide their reports dated August 14, 2020, May 30, 2019 and July 20,
2018;

d) the audited consolidated special purpose financial information of Comstar Automotive HK for Fiscals 2020, 2019 and
2018, on which the auditors have expressed an unmodified audit opinion vide their reports dated February 12, 2021.

Further, the Pro Forma Consolidated Financial Information for all the periods consist of three columns wherein:

a) Column 1 represents sum of standalone balances of Comstar Automotive and Comstar Automotive HK (together, the
“Comstar Group” or Comstar Entities”) after adjusting the following intra-group eliminations between the Comstar Entities
(refer note 3(a)) :

• Sales, purchases and corresponding trade payables and trade receivables between the entities;
• Loans given and taken (i.e. borrowings) and corresponding interest income and interest expense; and
• Unrealized profits on unsold inventories.

b) Column 2 represents reclassification adjustments (refer note 3(b)), sum of GAAP adjustments (refer note 3(c)) and
acquisition related adjustments (refer note 3(d)).

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c) Column 3 represents the total of column 1 and column 2.

Pro Forma Adjustments

The consolidated financial information of Comstar Group has been prepared as per Ind AS and adjusted to comply with the
Group’s accounting policies in all material aspects (collectively referred to as “Group accounting policies” as appearing in
restated consolidated financial information). The following adjustments have been made to the historical financial information
(as mentioned above) to present the Comstar Group consistently with the post-acquisition group structure.

a) Consolidated Financial Information Of The Company And Comstar Group

Details of amounts related to financial information of the Company and the Comstar Group included in column 1 of Pro
Forma Consolidated Financial Information is provided below:

b) Reclassifications

There are no material reclassification adjustments. The excise duty on sales has been reduced from revenue from operations
being more representative of our net revenues.

c) GAAP adjustments:

Transition date for Ind AS 116 for entire group is April 1, 2019. In order to make accounting policies aligned for all periods
presented, the impact of Ind AS 116 has been adjusted for the years ended March 31, 2018 and March 31, 2019 as well, with
the assumption that transition date for implementation of Ind AS 116 is April 1, 2017.

d) Acquisition related adjustments:

i) Pro-forma adjustments have been made to reflect the estimated fair value of identified intangible assets acquired based
on the purchase price allocation and the amortization thereon. These intangible assets represent Customer Relationships
the carrying value of which has been grossed up based on the fair value of ₹4,009.00 million and remaining life of 15
years as at July 4, 2019. The carrying value so calculated is ₹4,078.52 million, ₹4,345.60 million and ₹4,612.68 million
as at March 31, 2019, March 31, 2018 and April 1, 2017 respectively and change in balance of Customer Relationships
from July 4, 2019 till April 1, 2017 has been adjusted in opening retained earnings as at April 1, 2017. The amortization
charged on the aforesaid carrying values amounts to ₹ 69.51 million, ₹ 267.08 million and ₹ 267.08 million for the years
ended March 31, 2020 (till date of acquisition of Comstar Group), March 31, 2019 and March 31, 2018.

ii) Pro-forma adjustments have also been made to reflect the estimated fair value of Right of Use assets acquired based on
the purchase price allocation and the amortization thereon. The carrying value of these assets which have been grossed
up based on the fair value of ₹ 603.71 million and remaining life of 77 years as on July 4, 2019. The carrying value so
calculated is ₹ 605.74 million, ₹ 613.58 million and ₹ 621.42 million as at March 31, 2019, March 31, 2018 and April
1, 2017 respectively and change in balance of Right of Use assets from Jul 4, 2019 till April 1, 2017 has been adjusted
in opening retained earnings as at April 1 2017. The amortization charged on the aforesaid carrying values amounts to
₹ 2.03 million, ₹ 7.84 million and ₹ 7.84 million for the years ended March 31, 2020 (until the date of acquisition of
Comstar Group), March 31, 2019 and March 31, 2018.

iii) Transaction cost amounting to ₹ 67.98 million incurred for investment in Comstar Group has been adjusted from Other
Equity as on April 1, 2017 through ‘Roll Back Reserve Account’ since, this was a specific acquisition related cost with
no impact on our regular operations.

iv) Increase in Cost of Goods Sold during the year ended March 31, 2020, on account of fair valuation of Inventory of
Comstar Group acquired by the Company on July 4, 2019 amounting to ₹251.00 million (net of deferred tax of ₹ 62.86
million) has been adjusted from Other Equity as on April 1, 2017 through ‘Roll Back Reserve Account’ since, this was
a specific acquisition related adjustment with no impact on our regular operations.

v) An amount of ₹1,758.09 million, being the excess of the aggregate of the purchase consideration for the acquisition
over the fair value of net assets of Comstar Group acquired as on July 4, 2019, has been recognized as Goodwill on
consolidation. Goodwill calculated as at the acquisition date is kept consistent in all periods of pro-forma consolidated
financial information (as at March 31, 2018, March 31, 2019 and March 31, 2020), since there is no amortization
required for Goodwill.

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 vi) Amount of equity and convertible preference share capital issued as on July 4, 2019 (including securities premium) has
been rolled back as ‘Equity and convertible preference share capital to be issued’ as on April 1, 2017, March 31, 2018
and March 31, 2019. Accordingly, for the purposes of computing basic and diluted earnings per share, the equity and
convertible preference shares issued on July 4, 2019 have been considered to have been issued on April 1, 2017. Further,
amount receivable against issue of equity and preference share capital and amount to be invested for acquisition of
Comstar Group have been netted off against each other and the balance net consideration receivable of ₹ 121.08 million
has been included as financial asset under ‘Other financial assets – current’, however, time value of money of the
aforementioned financial asset has not been considered.

vii) All tax adjustments emanating from the above adjustments have been made at the rates as applicable to the Company
for the relevant periods.

e) The impact of pro-forma adjustments nullifies on the date of acquisition of Comstar Group i.e. when the legal group structure
is formed. Accordingly, there is no difference between the Pro Forma Consolidated Financial Information and Restated
Consolidated Financial Information after the date of acquisition (July 4, 2019) i.e., Balance Sheets as at March 31, 2020 and
December 31, 2020 and Statement of Profit and Loss for the period ended December 31, 2020.

Principal Components of Statement of Profit and Loss

Income

Our total income comprises revenue from operations and other income. We generate majority of our revenue from the sale of
highly engineered automotive systems and components such as differential gears, differential assemblies, conventional starter
motors, micro hybrid starter motors mostly to global automotive OEMs across US, Europe, India and China.

Expenses

Cost of Materials Consumed and Changes in Inventories of Finished Goods and Work-in Progress

Cost of materials consumed primarily includes the cost of raw materials, such as special steel alloy bars, iron castings, steel
blanks and bolts for manufacturing differential gears and differential assemblies and steel forgings, copper enamelled wires,
machined aluminium pressure die castings, bearings, magnets, plastic moulded components and other proprietary parts for
manufacturing starter motors and BLDC motors.

Changes in inventories of finished goods and work-in-progress denotes increase/decrease in inventories of finished goods and
work in progress between opening and closing dates of a reporting period.

Employee Benefit Expense

Employee benefit expenses primarily include salaries, wages, bonus paid to our employees and employee welfare expenses.

Depreciation and Amortization expenses

Depreciation and amortization expenses primarily include depreciation expenses on our property, plant and equipment and
amortization expenses on our intangibles and right of use assets.

Finance Cost

Finance cost includes interest on term loans and working capital borrowings, finance charges for sanction/renewal of credit
facilities and bank charges for various banking and/or trade finance transactions done with the banks.

Other Expenses

Other expenses primarily comprise of manufacturing, administrative and selling and distribution expenses.

Manufacturing expenses mainly consist of expenses in relation to sub-contracting costs, stores and spares consumed, power and
fuel, repairs and maintenance towards plant and machinery and manpower hiring on contract.

Administrative expenses mainly consist of legal and professional charges, travelling, conveyance and vehicle expenses,
insurance, repair and maintenance – others.

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Selling and distribution expenses mainly comprise of freight, clearing and forwarding charges and consumption of packing
material .

Tax Expense

Our tax expense or credit for the period represents the tax payable on the current period’s taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.

Profit for the year

Profit for the year represents profit after tax.

Results of Operations Based on Our Pro Forma Consolidated Financial Information

The following table sets forth select financial data from our statement of consolidated pro forma profit and loss for the nine
months ended December 31, 2020 and Fiscals 2020, 2019 and 2018, the components of which are also expressed as a percentage
of total income for such periods.
Nine months ended Fiscal
December 31, 2020 2020 2019 2018
(₹ in millions, except percentages)
Income
Revenue from operations 10,269.56 99.7% 12,200.91 99.4% 14,277.20 99.6% 12,241.05 99.3%
Other income 26.72 0.3% 75.83 0.6% 57.81 0.4% 91.03 0.7%
Total income 10,296.28 100.0% 12,276.74 100% 14,335.01 100.0% 12,332.08 100.0%

Expenses
Cost of materials consumed 4,707.39 45.7% 5,117.30 41.7% 5,616.41 39.2% 5,059.38 41.0%
Changes in inventories of finished
(566.68) (5.5%) 22.05 0.2% 168.92 1.2% (330.72) (2.7%)
goods and work-in-progress
Employee benefits expense 1,015.53 9.9% 1,222.30 10.0% 1,238.04 8.6% 1,120.74 9.1%
Finance costs 230.85 2.2% 268.75 2.2% 197.86 1.4% 214.02 1.7%
Depreciation and amortisation
688.62 6.7% 781.85 6.4% 722.45 5.0% 612.08 5.0%
expense
Other expenses 2,110.06 20.5% 2,585.71 21.1% 3,131.40 21.8% 2,936.66 23.8%
Total expenses 8,185.77 79.5% 9,997.96 81.4% 11,075.08 77.3% 9,612.16 77.9%

Profit before tax 2,110.51 20.5% 2,278.78 18.6% 3,259.93 22.7% 2,719.92 22.1%
Tax Expense
Current tax 435.08 4.2% 506.08 4.1% 1,145.35 8.0% 1,035.90 8.4%
Tax related to previous years - - 5.97 0.0% 5.17 0.0% 14.26 0.1%
Deferred tax charge 120.74 1.2% (450.49) (3.7%) (19.34) (0.1%) (45.14) (0.4%)
Total tax expense 555.82 5.4% 61.56 0.5% 1,131.18 7.9% 1,005.02 8.1%
Profit for the year/period 1,554.69 15.1% 2,217.22 18.1% 2,128.75 14.9% 1,714.90 13.9%

Nine Months Ended December 31, 2020

Income

Our total income was ₹10,296.28 million in the nine months ended December 31, 2020, which primarily included revenue from
operations of ₹10,269.56 million and other income of ₹26.72 million.

Revenue from operations

Our revenue from operations was ₹10,269.56 million in the nine months ended December 31, 2020, which primarily included
revenue from sale of goods of ₹9,684.67 million and foreign exchange gain (net) of ₹314.97 million.

Other Income

Our other income was ₹26.72 million in the nine months ended December 31, 2020, which primarily included interest income
of ₹20.50 million and profit on sale of property plant and equipment of ₹6.02 million.

Expenses

Our total expenses was ₹8,185.77 for the nine months ended December 31, 2020, which primarily included cost of materials

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consumed and changes in inventories of finished goods and work-in progress (“cost of materials”), employee benefit expenses
and other expenses.

Cost of Materials

Our cost of materials was ₹4,140.71 million, representing 40.2% of our total income for the nine months ended December 31,
2020 which primarily included cost of raw materials and components for the manufacture of our products.

Employee Benefit Expense

Our employee benefit expense was ₹1,015.53 million for the nine months ended December 31, 2020 which primarily included
salaries and other benefits paid to employees engaged by us. As of December 31, 2020, our total on-roll employee count was
1,167.

Finance Costs

Our finance costs was ₹230.85 million for the nine months ended December 31, 2020 which primarily included interest on loans
and other finance charges.

Depreciation and Amortization Expense

Our depreciation and amortization expense was ₹688.62 million for the nine months ended December 31, 2020 which primarily
included depreciation of plant and equipment of ₹399.90 million and amortization expenses of ₹234.13 million on intangible
assets.

Other Expenses

Our other expenses was ₹2,110.06 million for the nine months ended December 31, 2020 which primarily included expenses
such as stores and spares consumed, power and fuel, repairs and maintenance to plant and machinery, sub-contracting cost,
manpower hiring on contract, freight, clearing and forwarding charges, consumption of packing materials aggregating to
₹1,681.30 million. Other expenses such as legal and professional and travelling, conveyance and vehicle expenses amounted to
₹156.52 million.

Tax Expense

Our tax expense was ₹555.82 million for the nine months ended December 31, 2020 which primarily included current tax of
₹435.08 million and deferred tax charge of ₹120.74 million.

Profit for the Nine Months Ended December 31, 2020

As a result of the foregoing factors, our profit for the period was ₹1,554.69 million.

Fiscal 2020 Compared to Fiscal 2019

Income

Our total income decreased by 14.4% to ₹12,276.74 million for Fiscal 2020 from ₹14,335.01 million for Fiscal 2019, primarily
due to a decrease in our revenue from operations which was partially offset by an increase in our other income as discussed
below:

Revenue from operations

Our revenue from operations decreased by 14.5% to ₹12,200.91 million for Fiscal 2020 from ₹14,277.20 million for Fiscal 2019,
primarily due to a decrease in the sale of goods by 13.5% to ₹11,804.19 million for Fiscal 2020 from ₹13,649.75 million for
Fiscal 2019. This decrease was caused by a global slowdown in the automotive industry in Fiscal 2020. According to the CRISIL
Report, in Fiscal 2020, the CV, PV and tractor markets in India experienced a decrease in sales volumes by 29%, 18% and 10%,
respectively. Further, according to the Ricardo Report, in calendar year 2019, the light vehicle market experienced decreased
production volume in North America by 4.4% and Europe by 4.1%, which resulted in decreased demand for automotive vehicles
and consequently reduced demand for our automotive systems and components. In addition, due to the outbreak of the COVID-
19 pandemic and the lockdown restrictions in India and various countries across the world towards the end of Fiscal 2020 to
contain the spread of the COVID-19 pandemic, including restricted road transportation and industrial activity, the automotive
industry was severely affected which resulted in further decrease in demand for automotive systems and components, in

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particular, components which cater to the CV segment within India.

Other Income

Our other income increased by 31.2% to ₹75.83 million in Fiscal 2020 from ₹57.81 million in Fiscal 2019, primarily as a result
of increase in interest income, and profit on sale of investments.

Expenses

Our total expenses, which primarily included cost of materials consumed and changes in inventories of finished goods and work-
in progress (“cost of materials”), employee benefit expenses and other expenses, decreased by 9.7% to ₹9,997.96 million for
Fiscal 2020 from ₹11,075.08 million for Fiscal 2019.

Cost of Materials

Our cost of materials accounted for 41.9% and 40.4% of our total income for Fiscal 2020 and 2019, respectively.

Our cost of materials decreased by 11.2% to ₹5,139.35 million for Fiscal 2020 from ₹5,785.33 million for Fiscal 2019 in
proportion with the decrease in the sales of our systems and components during this period primarily due to the global slowdown
in the automotive industry in Fiscal 2020 and the outbreak of the COVID-19 pandemic, which resulted in movement restrictions
in India and globally and change in our product mix in Fiscal 2020.

Employee Benefit Expenses

Our employee benefit expenses represent costs related to on-roll employees and therefore are largely fixed in nature. Our
employee benefit expenses decreased marginally by 1.3% to ₹1,222.30 million for Fiscal 2020 from ₹1,238.04 million for Fiscal
2019, primarily due to cost control measures implemented by us in Fiscal 2020 to mitigate the impact of the cyclical downturn
in the automotive industry and the outbreak of the COVID-19 pandemic and to ensure that we continue to maintain our efficiency
and manage any increases in overhead costs during this period.

Finance Costs

Our finance costs increased by 35.8% to ₹268.75 million for Fiscal 2020 from ₹197.86 million for Fiscal 2019 primarily due to
an increase in our interest on loans by 29.8% to ₹188.35 million in Fiscal 2020 from ₹145.07 million in Fiscal 2019 and increase
in interest on lease liabilities by ₹18.00 million.

Interest expenses increased primarily due to increase in borrowings (excluding deferred payment liabilities and lease liabilities)
by ₹1,459.88 million to finance capital expenditure for setting up of a new unit to manufacture differential assemblies in Manesar
and also to partly finance the acquisition of the Comstar Entities. Interest expense also includes interest on lease liabilities which
increased due to the new lease agreement for the Manesar plant.

Depreciation and Amortization Expense

Our depreciation and amortization expense increased by 8.2% to ₹781.85 million for Fiscal 2020 from ₹722.45 million for Fiscal
2019, of which, 4.7% increase was due to additions to our property, plant and equipment resulting into higher depreciation and
3.3% was due to increase in amortization of right-of-use assets, in both cases, primarily on account of the addition of the new
facility in Manesar.

Other Expenses

Our other expenses accounted for 21.1% and 21.8% of our total income for Fiscal 2020 and 2019, respectively.

Our other expenses decreased by 17.4% to ₹2,585.71 million for Fiscal 2020 compared to ₹3,131.40 million for Fiscal 2019, in
aggregate, primarily due to decrease of ₹508.34 million, a reduction of 21.2%, in expenses such as stores and spares consumed,
power and fuel, repairs and maintenance to plant and machinery, sub-contracting cost, manpower hiring on contract, freight,
clearing and forwarding charges and consumption of packing materials. Other expenses such as legal and professional charges
and travelling, conveyance and vehicle expenses also decreased by ₹155.61 million, a decline of 36.2%. While some of the
decrease in other expenses was a result of a decrease in our revenue from operations on account of the cyclical downturn in the
automotive industry and the outbreak of the COVID-19 pandemic in Fiscal 2020, such decrease in other expenses was in line
with our measures focused on reducing overhead costs and improving efficiency during Fiscal 2020. This decrease was partially
offset by an increase in foreign exchange loss which increased to ₹93.00 million for Fiscal 2020 compared to compared to nil
foreign exchange loss for Fiscal 2019. The higher foreign exchange loss was primarily due to sudden depreciation of INR against

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USD towards the end of Fiscal 2020 resulting into mark to market loss on hedging contracts outstanding at that point of time.

Tax Expense

Our tax expense decreased by 94.6% to ₹61.56 million for Fiscal 2020 from ₹1,131.18 million for Fiscal 2019, primarily due to
reduced profits before tax, adoption of lower tax rate and adjustment in the accumulated deferred tax liabilities on account of
adoption of a lower corporate tax rate.

Profit for the Year

As a result of the foregoing factors, our profit for the year for Fiscal 2020 increased by 4.2% to ₹2,217.22 million from a profit
for the year of ₹2,128.75 million for Fiscal 2019.

Fiscal 2019 Compared to Fiscal 2018

Income

Our total income increased by 16.2% to ₹14,335.01 million for Fiscal 2019 from ₹12,332.08 million for Fiscal 2018, primarily
due to an increase in our revenue from operations which was partially offset by a decrease in our other income as discussed
below.

Revenue from Operations

Our revenue from operations increased by 16.6% to ₹14,277.20 million for Fiscal 2019 from ₹12,241.05 million for Fiscal 2018,
primarily due to an increase in the sale of goods by 14.5% to ₹13,649.75 million for Fiscal 2019 from ₹11,916.53 million (net
of excise duty) for Fiscal 2018. This increase was primarily due to new product development programs won by us in Fiscal 2019
as a result of an increased growth in the automotive industry and consequently an increased demand for our automotive systems
and components.

Other Income

Our other income decreased by 36.5% to ₹57.81 million in Fiscal 2019 from ₹91.03 million in Fiscal 2018, primarily as a result
of decrease in profit on sale of investments.

Expenses

Our total expenses, which primarily included cost of materials consumed and changes in inventories of finished goods and work-
in progress (“cost of materials”), employee benefit expenses and other expenses, increased by 15.2% to ₹11,075.08 million for
Fiscal 2019 from ₹9,612.16 million for Fiscal 2018.

Cost of Materials

Our cost of materials accounted for 40.4% and 38.3% of our total income for Fiscal 2019 and 2018, respectively.

Our cost of materials increased by 22.3% to ₹5,785.33 million for Fiscal 2019 from ₹4,728.66 million for Fiscal 2018, primarily
due to increase in our revenue from operations. In addition, there was a decrease in inventories of finished goods and work in
progress in Fiscal 2019 as compared to an increase in inventories of finished goods and work in progress in Fiscal 2018. This
increase in our cost of materials and decrease in inventories of finished goods and work in progress was primarily attributable to
an upturn in the automotive industry in Fiscal 2019 resulting in an increased demand for our systems and components leading to
increase in our production and sales.

Employee Benefit Expense

Our employee benefit expenses increased by 10.5% to ₹1,238.04 million for Fiscal 2019 compared to ₹1,120.74 million for
Fiscal 2018, primarily due to increased scale of operations and an increase in annual salaries paid to employees because of
increase in number of employees and annual increments paid to employees in Fiscal 2019.

Finance Costs

Our finance costs decreased by 7.6% to ₹197.86 million for Fiscal 2019 from ₹214.02 million for Fiscal 2018, primarily due to
a net reduction of ₹221.99 million in outstanding borrowings (excluding deferred payment liabilities and lease liabilities) on
account of repayment of part of the existing debt.

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Depreciation and Amortization Expense

Our depreciation and amortization expense increased by 18.0% to ₹722.45 million for Fiscal 2019 from ₹612.08 million for
Fiscal 2018, due to an increase in depreciation on our property, plant and equipment by 30.3% to ₹402.94 million for Fiscal 2019
from ₹309.18 million for Fiscal 2018. Depreciation on property, plant and equipment increased primarily as a result of capital
expenditure on enhancement of capacities at existing plants.

Other Expenses

Our other expenses accounted for 21.8% and 23.8% of our total income for Fiscal 2019 and 2018, respectively.

Our other expenses increased by 6.6% to ₹3,131.40 million for Fiscal 2019 from ₹2,936.66 million for Fiscal 2018, in aggregate,
primarily due to an increase of ₹259.10 million, an increase of 12.1%, in expenses such as stores and spares consumed, power
and fuel, repairs and maintenance to plant and machinery, sub-contracting cost, manpower hiring on contract, freight, clearing
and forwarding charges and consumption of packing materials, which is in line with the increase in our revenue from operations.
Our other expenses such as legal and professional charges and travelling, conveyance and vehicle expenses decreased by ₹61.11
million due to discontinuation of revenue linked payment of marketing fees by us.

Tax Expense

Our tax expense increased by 12.6% to ₹1,131.18 million for Fiscal 2019 from ₹1,005.02 million for Fiscal 2018, primarily due
to higher profit before tax during Fiscal 2019 compared to Fiscal 2018.

Profit For The Year

As a result of the foregoing factors, our profit for the year increased by 24.1% to ₹2,128.75 million for Fiscal 2019 compared to
a profit for the year of ₹1,714.90 million for Fiscal 2018.

Results of Operations Based on Our Restated Consolidated Financial Information

The following table sets forth select financial data from our restated consolidated statement of profit and loss for the nine months
ended December 31, 2020 and for Fiscals 2020, 2019 and 2018, the components of which are also expressed as a percentage of
total income for such periods.

Nine months ended Fiscal

December 31, 2020 2020 2019 2018
(₹ in millions, except percentages)
Income
Revenue from operations 10,269.56 99.7% 10,379.82 99.4% 6,992.20 99.5% 6,231.20 99.6%
Other Income 26.72 0.3% 57.83 0.6% 32.81 0.5% 28.03 0.4%
Total income 10,296.28 100% 10,437.65 100% 7,025.01 100% 6,259.23 100%

Expenses
Cost of materials consumed 4,707.39 45.7% 4,424.22 42.4% 1,928.41 27.5% 1,759.38 28.1%
Changes in inventories of (566.68) (5.5%) 31.78 0.3% 122.19 1.7% (84.72) (1.4%)
finished goods and work-in-
progress
Excise duty - - - - - - 111.17 1.8%
Employee benefits expense 1,015.53 9.9% 1,027.30 9.8% 490.04 7.0% 417.74 6.7%
Finance costs 230.85 2.2% 259.75 2.5% 177.63 2.5% 190.64 3.0%
Depreciation and 688.62 6.7% 671.20 6.4% 309.57 4.4% 233.26 3.7%
amortisation expense
Other expenses 2,110.06 20.5% 2,473.75 23.7% 2,451.71 34.9% 2,320.62 37.1%
Total expenses 8,185.77 79.5% 8,888.00 85.2% 5,479.55 78.0% 4,948.09 79.1%
Profit before profit/(loss) 2,110.51 20.5% 1,549.65 14.8% 1,545.46 22.0% 1,311.14 20.9%
in associates, tax and
exceptional items
Share of profit/(loss) in - - - - 2.17 0.0% (2.17) (0.0%)
associate
Profit before exceptional 2,110.51 20.5% 1,549.65 14.8% 1,547.63 22.0% 1,308.97 20.9%
items and tax
Exceptional Items - - 2,320.53 22.2% - - - -
Profit before tax 2,110.51 20.5% 3,870.18 37.1% 1,547.63 22.0% 1,308.97 20.9%
Tax Expense
Current tax 435.08 4.2% 365.04 3.5% 471.52 6.7% 423.16 6.8%
Deferred tax 120.74 1.2% (98.29) (0.9%) 74.97 1.1% 24.51 0.4%
Total tax expense 555.82 5.4% 266.75 2.6% 546.49 7.8% 447.67 7.2%
Profit for the year from 1,554.69 15.1% 3,603.43 34.5% 1,001.14 14.3% 861.30 13.8%

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 Nine months ended Fiscal
December 31, 2020 2020 2019 2018
(₹ in millions, except percentages)
continuing operations
Profit from discontinued - - - - 730.66 10.4% (85.58) (1.4%)
operations (net of taxes)
Profit for the year 1,554.69 15.1% 3,603.43 34.5% 1,731.80 24.7% 775.72 12.4%

Nine Months Ended December 31, 2020

Income

Our total income was ₹10,296.28 million in the nine months ended December 31, 2020, which primarily included revenue from
operations of ₹10,269.56 million and other income of ₹26.72 million.

Revenue from operations

Our revenue from operations was ₹10,269.56 million in the nine months ended December 31, 2020, which primarily included
revenue from sale of goods of ₹9,684.67 million and foreign exchange gain (net) of ₹314.97 million.

Other Income

Our other income was ₹26.72 million in the nine months ended December 31, 2020, which primarily included interest income
of ₹20.50 million and profit on sale of property plant and equipment of ₹6.02 million.

Expenses

Our total expenses were ₹8,185.77 million for the nine months ended December 31, 2020, which primarily included cost of
materials consumed and changes in inventories of finished goods and work-in progress (“cost of materials”), employee benefit
expenses and other expenses.

Cost of Materials

Our cost of materials was ₹4,140.71 million, representing 40.2% of our total income for the nine months ended December 31,
2020 which primarily included cost of raw materials and components for the manufacture of our products.

Employee Benefit Expense

Our employee benefit expense was ₹1,015.53 million for the nine months ended December 31, 2020 which primarily included
salaries and other benefits paid to employees engaged by us. As of December 31, 2020, our total on-roll employee count was
1,167.

Finance Costs

Our finance costs were ₹230.85 million for the nine months ended December 31, 2020 which primarily included interest on loans
and other finance charges.

Depreciation and Amortization Expense

Our depreciation and amortization expense was ₹688.62 million for the nine months ended December 31, 2020 which primarily
included depreciation of plant and equipment of ₹399.90 million and amortization expenses of ₹234.13 million on intangible
assets.

Other Expenses

Our other expenses were ₹2,110.06 million for the nine months ended December 31, 2020 which primarily included expenses
such as stores and spares consumed, power and fuel, repairs and maintenance to plant and machinery, sub-contracting cost,
manpower hiring on contract, freight, clearing and forwarding charges, consumption of packing materials aggregating to
₹1,681.30 million. Other expenses such as legal and professional charges and travelling, conveyance and vehicle expenses
amounted to ₹156.52 million.

Tax Expense

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Our tax expense was ₹555.82 million for the nine months ended December 31, 2020 which primarily included current tax of
₹435.08 million and deferred tax charge of ₹120.74 million.

Profit for the Nine Months Ended December 31, 2020

As a result of the foregoing factors, our profit for the period was ₹1,554.69 million.

Fiscal 2020 Compared to Fiscal 2019

On July 5, 2019, our Company completed the acquisition of the Comstar Entities, pursuant to which, Comstar Entities became
subsidiaries of our Company with effect from July 5, 2019. Consequently, our results for the Fiscal 2020 are not comparable to
those of the earlier periods/years.

Income

Our total income increased by 48.6% to ₹10,437.65 million for Fiscal 2020 from ₹7,025.01 million for Fiscal 2019, on account
of the factors discussed below.

Revenue from operations

Our revenue from operations increased by 48.4% to ₹10,379.82 million for Fiscal 2020 from ₹6,992.20 million for Fiscal 2019,
primarily due to an increase in our sale of goods by 52.2% to ₹10,030.10 million for Fiscal 2020 from ₹6,588.75 million for
Fiscal 2019 due to the acquisition of the Comstar Entities with effect from July 5, 2019 which has been consolidated in the
financials for Fiscal 2020. With the acquisition of the Comstar Entities, we expanded our portfolio of systems and components
which resulted in an increase in the demand of our products and consequently an increase in our volume of operations. This
increase on account of acquisition of the Comstar Entities was partially offset by a decrease in the sale of goods caused by the
cyclical downturn in the automotive industry in Fiscal 2020 which resulted in reduced demand for our automotive systems and
components. There was a further decrease in the demand for our systems and components due to the outbreak of the COVID-19
pandemic towards the end of Fiscal 2020 and the lockdown measures in India and globally, imposing movement restrictions to
curb the spread of the COVID-19 pandemic, which resulted in general slowdown in the global economy, including the
automotive industry.

Other Income

Our other income increased by 76.3% to ₹ 57.83 million for Fiscal 2020 from ₹32.81 million for Fiscal 2019, primarily due to
an increase in the profit on the sale of investments at fair value and other non-operating income related to the acquisition of the
Comstar Entities.

Expenses

Our total expenses, which primarily included cost of materials consumed and changes in inventories of finished goods and work-
in progress (“cost of materials”), employee benefit expenses and other expenses, increased by 62.2% to ₹8,888.00 million for
Fiscal 2020 from ₹5,479.55 million for Fiscal 2019 on account of the factors discussed below.

Cost of Materials

Our cost of materials accounted for 42.7% and 29.2% of our revenue from operations for Fiscal 2020 and 2019, respectively.
Our cost of materials consumed increased by 117.3% to ₹4,456.00 million for Fiscal 2020 from ₹2,050.60 million for Fiscal
2019 primarily due to increase in revenue resulting from the acquisition of the Comstar Entities. As a result of the acquisition of
the Comstar Entities in Fiscal 2020, we expanded and diversified our portfolio of systems and products which resulted in increase
in production volumes and sales and consequently an increase in the cost of materials.

Employee Benefit Expense

Our employee benefit expenses represent costs related to on-roll employees and therefore is largely fixed in nature. Our employee
benefit expense increased by 109.6% to ₹1,027.30 million for Fiscal 2020 from ₹490.04 million for Fiscal 2019, primarily as a
result of the impact of the acquisition of the Comstar Entities, which significantly increased our headcount resulting in increase
in salaries of employees.

Finance Costs

Our finance costs increased by 46.2% to ₹259.75 million for Fiscal 2020 from ₹177.63 million for Fiscal 2019 primarily due to

381
an increase in our interest on loans by 32.3% to ₹ 177.35 million in Fiscal 2020 from ₹ 134.07 million in Fiscal 2019 and increase
in interest on lease liabilities by ₹25.23 million due to the new leased asset taken for setting up plant in Manesar for manufacturing
differential assemblies.

Depreciation and Amortization Expense

Our depreciation and amortization expense increased by 116.8% to ₹671.20 million for Fiscal 2020 from ₹309.57 million for
Fiscal 2019 primarily as a result of an increase in our asset base on account of acquisition of the Comstar Entities, amortization
of intangibles generated upon consolidation of the Comstar Entities and addition to our property plant and equipment for the new
facility in Manesar plant.

Other Expenses

Our other expenses marginally increased by 0.9% to ₹2,473.75 million for Fiscal 2020 compared to ₹2,451.71 million for Fiscal
2019.

Exceptional item:

During Fiscal 2020, the company sold 81% stake in its wholly owned subsidiary, Sona Holding BV Netherlands (Sona BV), to
Sona Autocomp Private Limited, for a sale consideration of ₹1,399.48 million and recognized gain on loss of control of ₹2,320.53
million.

Tax Expense

Our tax expense decreased by 51.2% to ₹266.75 million for Fiscal 2020 from ₹546.49 million for Fiscal 2019, due to adoption
of lower tax rate and adjustment in the accumulated deferred tax liabilities due to adoption of new lower tax rate. This was offset
partially by tax on increased aggregate profit before tax as a result of acquisition of the Comstar Entities.

Profit From Discontinued Operations:

For Fiscal 2019, our company had profit from discontinued operations of ₹730.66 million (net of taxes), which comprised
consolidation of profits for the year from Sona B.V. and its subsidiaries which were classified as assets and liabilities of disposal
group classified as Held for Sale.

Profit for the Year

As a result of the foregoing factors, our profit for the year for Fiscal 2020 increased by 108.1% to ₹3,603.43 million from a profit
of ₹1,731.80 million for Fiscal 2019.

Fiscal 2019 Compared to Fiscal 2018

Income

Our total income increased by 12.2% to ₹7,025.01 million for Fiscal 2019 from ₹6,259.23 million for Fiscal 2018, on account
of the factors discussed below:

Revenue from Operations

Our revenue from operations increased by 12.2% to ₹6,992.20 million for Fiscal 2019 from ₹6,231.20 million for Fiscal 2018,
primarily due to an increase in sale of goods by 12.4% to ₹6,588.75 million for Fiscal 2019 from ₹5,863.52 million (net of excise
duty) for Fiscal 2018. This was primarily due to an upturn in the automotive industry resulting in an increase in the demand for
our systems and components and consequently an increase in our production volume and sales, particularly in the Indian PV,
CV and OHV segments.

Other Income

Our other income increased by 17.1% to ₹32.81 million in Fiscal 2019 from ₹ 28.03 million in Fiscal 2018 on account of an
increase in interest income.

Expenses

Our total expenses, which primarily included cost of materials consumed and changes in inventories of finished goods and work-

382
in progress (“cost of materials”), employee benefit expenses and other expenses, increased by 10.7% to ₹5,479.55 million for
Fiscal 2019 from ₹4,948.09 million for Fiscal 2018, primarily due to an increase in cost of materials.

Cost of Materials

Our cost of materials accounted for 29.2% and 26.7% of our Revenue from Operations for the Fiscal Year 2019 and 2018,
respectively.

Our cost of materials increased by 22.4% to ₹2,050.60 million for Fiscal 2019 from ₹1,674.66 million for Fiscal 2018, primarily
due to increase in revenue from operations and due to a decrease in proportion of exports revenue as a percentage of total revenue
as compared to Fiscal 2018.

Employee Benefit Expense

Our employee benefit expenses increased by 17.3% to ₹490.04 million for Fiscal 2019 compared to ₹417.74 million for Fiscal
2018, primarily due to increased scale of operations and annual salary increments given to the employees.

Finance Costs

Our finance costs decreased by 6.8% to ₹177.63 million for Fiscal 2019 from ₹190.64 million for Fiscal 2018, primarily due to
a net reduction of ₹151.99 million in outstanding borrowings (excluding lease liabilities and deferred payment liabilities) on
account of repayment of part of the existing debt.

Depreciation and Amortization Expense

Our depreciation and amortization expense increased by 32.7% to ₹309.57 million for Fiscal 2019 from ₹233.26 million for
Fiscal 2018, primarily due to an increase in depreciation of our property, plant and equipment by 30.1% in Fiscal 2019 compared
to Fiscal 2018. Depreciation on property, plant and equipment increased primarily as a result of capital expenditure on
enhancement of capacities at existing plants.

Other Expenses

Our other expenses accounted for 34.9% and 37.1% of our total income for Fiscal 2019 and 2018, respectively.

Our other expenses increased by 5.6% to ₹2,451.71 million for Fiscal 2019 from ₹2,320.62 million for Fiscal 2018, primarily
due to increase of ₹228.50 million in expenses such as consumption of stores, spares and tool, power and fuel, freight, clearing
and forwarding charges, packing material and sub-contracting cost, which is in line with the increase in our revenue. This increase
was primarily due to growth in the automotive industry resulting in increased sales of our systems and components. Also, other
expenses by like legal and professional charges and travelling, conveyance and vehicle expenses were lower due to
discontinuation of revenue linked payment of marketing fees by the company.

Tax Expense

Our tax expense increased by 22.1% to ₹546.49 million for Fiscal 2019 from ₹447.67 million for Fiscal 2018, primarily due to
higher profit before tax during Fiscal 2019 as compared to Fiscal 2018.

Profit From Discontinued Operations:

For Fiscal 2019, our company had profit from discontinued operations of ₹730.66 million (net of taxes), as against loss of ₹
(85.58) million for Fiscal 2018 which comprised consolidation of profits/(loss) for the year from Sona B.V. and its subsidiaries
being disposal group.

Profit For The Year

As a result of the foregoing factors, our profit for the year for Fiscal 2019 increased by 123.3% to ₹1,731.80 million from a profit
of ₹775.72 million for Fiscal 2018.

Liquidity and Capital Resources

Historically, our primary liquidity requirements have been to finance our working capital needs for our operations. We have met
these requirements through cash flows from operations, equity infusions from shareholders and borrowings. As of December 31,
2020, we had ₹333.38 million in cash and cash equivalents, ₹2.57 million as bank balances, ₹603.74 million in short term

383
borrowings and ₹2,222.83 million in term loans from banks (excluding deferred payment liabilities). We believe that, after taking
into account the expected cash to be generated from operations, our borrowings and the proceeds from the Offer, we will have
sufficient liquidity for our present requirements and anticipated requirements for capital expenditure and working capital for 12
months following the date of this Draft Red Herring Prospectus.

On February 19, 2021, India Ratings and Research upgraded our long-term rating to “IND AA-” with stable outlook from “IND
A+” and also assigned a short term rating of “IND A1+”. According to the rating agency, the upgrade in our long-term rating
reflects, among other things, improving business profile with increasing revenue from sales of EV components, healthy order
book, continued strong EBITDA margins, strong consolidated credit profile and established market position.

In order to mitigate the impact of the COVID-19 pandemic on our operations, we have proactively taken various steps such as
reducing some of our administrative and other fixed expenses and arranging for additional liquidity through working capital
loans to manage our expenses and liquidity.

Cash Flows Based on Our Pro Forma Consolidated Financial Information

The table below summarizes the statement of cash flows, as per our pro forma consolidated cash flow statements, for the periods
indicated:

Nine months ended Fiscal

December 31, 2020 2020 2019 2018
(₹ in millions)
Net cash generated from operating 1,078.07 3,092.42 2,689.43 1,922.37
activities
Net cash (used in)/generated from (869.16) (9,486.73) (1,306.82) (702.48)
investing activities
Net cash (used in)/generated from (925.38) 7,083.22 (1,456.37) (1,268.75)
financing activities
Cash and cash equivalents at the end 333.38 1,049.85 360.94 434.70
of the year

Operating Activities

Net cash generated from operating activities for the nine months ended December 31, 2020 was ₹1,078.07 million, while our
operating profit before working capital changes was ₹2,726.29 million. The difference was primarily attributable to cash outflows
on account of increase in net working capital (consisting of changes in inventories, trade receivables and trade payable) of
₹1,173.94 million, increase in other assets of ₹211.17 million, decrease in financial liabilities of ₹157.12 million and tax outflow
of ₹280.93 million.

Net cash generated from operating activities for Fiscal 2020 was ₹3,092.42 million, while our operating profit before working
capital changes was ₹3,486.91 million. This difference was primarily attributable to a tax outflow of ₹ 398.09 million during the
period. This was partially offset by ₹120.39 million due to change in net working capital consisting of change in inventories,
trade receivables and trade payable.

Net cash generated from operating activities for Fiscal 2019 was ₹2,689.43 million, while our operating profit before working
capital changes was ₹4,100.98 million. This difference was primarily on account of cash outflow of ₹520.14 million due to an
increase in net working capital (consisting of changes in inventories, trade receivables and trade payable) and ₹1,164.07 million
due to payment of tax. This outflow was partially offset by ₹352.84 million decrease in other financial assets.

Net cash from operating activities for Fiscal 2018 was ₹1,922.37 million, while our operating profit before working capital
changes was ₹3,478.52 million. The difference was primarily on account of cash outflow due to change in net working capital
(consisting of changes in inventories, trade receivables and trade payable) of ₹515.77 million and tax paid of ₹1,052.61 million.

Investing Activities

Net cash used in investing activities in the nine months ended December 31, 2020 was ₹869.16 million, primarily due to payments
made for acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances, of
₹1,520.04 million, partly funded by proceeds from bank deposits amounting to ₹621.38 million.

Net cash used in investing activities for Fiscal 2020 was ₹9,486.73 million, primarily consisting of cost of acquisition of Comstar
entities of ₹8,517.00 million and payments made for acquisition of property, plant and equipment, intangibles and capital work
in progress including capital advances, of ₹2,240.59 million. This was partially offset by a cash inflow on account of sale of 81%
stake in subsidiary Sona B.V., Netherlands for ₹1,399.48 million.

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Net cash used in investing activities for Fiscal 2019 was ₹1,306.82 million, which primarily included payments made for
acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances, of ₹1,163.88
million for our operations.

Net cash used in investing activities for Fiscal 2018 was ₹702.48 million, which primarily included payments made for
acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances, of ₹1,130.00
million for our operations. This was primarily offset by net proceeds from sale of current investments of ₹ 392.05 million.

Financing Activities

Net cash used in financing activities in the nine months ended December 31, 2020 was ₹925.38 million, and primarily included
dividend paid of ₹460.70 million, net repayment of short-term borrowings of ₹242.32 million and interest payment of ₹174.14
million.

Net cash generated from financing activities for Fiscal 2020 was ₹7,083.22 million, which primarily included proceeds from
issue of equity shares and compulsorily convertible preference shares of ₹ 8,706.06 million and proceeds from long-term
borrowings of ₹ 1,607.55 million. This was partially offset by cash outflows for financing activities on account of repayment of
long-term borrowings of ₹373.66 million, dividend and dividend tax paid of ₹1,731.08 million, buyback of shares and tax paid
on buyback of ₹997.85 million and interest payment of ₹204.75 million.

Net cash used in financing activities for Fiscal 2019 was ₹1,456.37 million, which primarily included payments of dividend and
dividend tax of ₹1,032.00 million, repayment of long-term borrowings of ₹954.76 million and interest payment of ₹ 175.19
million. This was partially offset by cash inflows from new long-term borrowings of ₹693.18 million for capital expenditure.

Net cash used in financing activities for Fiscal 2018 was ₹1,268.75 million, which primarily included payment of dividend and
dividend tax of ₹1,257.00 million, repayment of long-term borrowings of ₹417.23 million and interest payment of ₹198.30
million. This was partially offset by cash inflows from long-term borrowings of ₹578.16 million for capital expenditure.

Cash Flows Based on Our Restated Consolidated Financial Information

The table below summarizes the statement of cash flows, as per our restated consolidated cash flow statements, for the periods
indicated:

Nine months ended Fiscal

December 31, 2020 2020 2019 2018
(₹ in millions)
Net cash generated from operating 1,078.07 2,533.41 1,546.05 1,488.72
activities
Net cash (used in)/generated from (869.16) (9,542.10) 2,041.47 (1,379.33)
investing activities
Net cash (used in)/generated from (925.38) 7,668.24 (3,461.23) (128.44)
financing activities
Cash and cash equivalents at the 333.38 1,049.85 390.30 264.01
end of the year

Operating Activities

Net cash generated from operating activities for the nine months ended December 31, 2020 was ₹1,078.07 million, while our
operating profit before working capital changes was ₹2,726.29 million. The difference was primarily attributable to cash outflows
on account of increase in net working capital (consisting of changes in inventories, trade receivables and trade payable) of
₹1,173.94 million, increase in other assets of ₹211.17 million, decrease in financial liabilities of ₹157.12 million and tax outflow
of ₹280.93 million.

Net cash generated from operating activities for Fiscal 2020 was ₹2,533.41 million, while our operating profit before working
capital changes was ₹2,647.74 million. The difference was primarily attributable to tax paid (cash outflow) of ₹278.09 million.
This was partially offset by changes in net working capital consisting of changes in inventories, trade receivables and trade
payables leading to cash inflow of ₹214.52 million.

Net cash from operating activities for Fiscal 2019 was ₹1,546.05 million, while our operating profit before working capital
changes was ₹2,008.85 million. The difference was primarily attributable to tax payment of ₹494.07 million and net outflow of
₹405.55 million from operating activities from discontinued operations. This was partially offset by an increase in financial
liabilities of ₹554.63 million.

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Net cash from operating activities for Fiscal 2018 was ₹1,488.72 million, while our operating profit before working capital
changes was ₹1,727.94 million. This difference was primarily attributable to cash outflows on account of an increase in net
working capital (consisting of changes in inventories, trade receivables and trade payables) of ₹189.77 million and tax payment
of ₹411.61 million. Further, there was cash flow generated from operating activities from discontinued operations of ₹272.12
million.

Investing Activities

Net cash used in investing activities in the nine months ended December 31, 2020 was ₹869.16 million, primarily due to payments
made for acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances, of
₹1,520.04 million, partly funded by proceeds from bank deposits amounting to ₹621.38 million.

Net cash used in investing activities for Fiscal 2020 was ₹9,452.10 million, which primarily included net cash outflow for the
acquisition of Comstar Entities of ₹8,218.00 million and payments made for acquisition of property, plant and equipment,
intangibles and capital work in progress including capital advances of ₹2,120.60 million. This was partially offset by a net cash
inflow on account of sale of 81% stake in subsidiary Sona B.V., Netherlands for ₹1,011.12 million.

Net cash generated from investing activities for Fiscal 2019 was ₹2,041.47 million, which primarily included cash flow generated
from discontinued operations of ₹3,674.77 million. This was partially offset by cash outflows on account of payments made for
acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances of ₹1,417.69
million and amount invested in bank deposits of ₹254.12 million.

Net cash used in investing activities for Fiscal 2018 was ₹1,379.33 million, which primarily included payments made for
acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances of ₹878.00
million, purchase of long-term investments of ₹162.95 million and net cash used in discontinued operations ₹363.85 million.

Financing Activities

Net cash used in financing activities in the nine months ended December 31, 2020 was ₹925.38 million, and primarily included
dividend paid of ₹460.70 million, net repayment of short-term borrowings of ₹242.32 million and interest payment of ₹174.14
million.

Net cash generated from financing activities for Fiscal 2020 was ₹7,668.24 million, which primarily included proceeds from the
issuance of equity shares and compulsorily convertible preference shares of ₹8,706.06 million and proceeds from long-term
borrowings of ₹1,607.55 million availed for capital expenditure. This was partially offset by cash outflows on account of
repayment of long-term borrowings of ₹373.66 million, payment of dividend and dividend tax of ₹1,166.08 million, buyback of
shares and tax paid on buyback of ₹997.85 million and interest payment of ₹212.75 million.

Net cash used in financing activities for Fiscal 2019 was ₹3,461.23 million, which primarily included net cash used in
discontinued operations of ₹3,124.17 million, repayment of long-term borrowings of ₹534.76 million and interest payment of
₹160.19 million. It was partially offset by proceeds from long term borrowings ₹343.18 million.

Net cash used in financing activities for Fiscal 2018 was ₹128.44 million, which primarily included repayment of long-term
borrowings of ₹338.23 million and interest payment of ₹179.29 million. It was partially offset by proceeds from long term
borrowings ₹319.16 million and cash generated from financing activities of discontinued operations ₹39.30 million.

Indebtedness

As of December 31, 2020, we had term loans (excluding deferred payment liabilities) of ₹2,222.83 million and working capital
borrowings of ₹603.74 million, with a debt to equity ratio of 0.22 as per the Restated Consolidated Financial Information. Some
of our financing agreements include various conditions and covenants that require us to obtain lender consents prior to carrying
out certain activities and entering into certain transactions. We cannot assure you that we will be able to obtain these consents
and any failure to obtain these consents could have significant adverse consequences for our business. For further information
on our agreements governing our outstanding indebtedness, see “Financial Indebtedness” on page 349.

Contractual Obligations

The table below sets forth our contractual obligations as of December 31, 2020 as per the Restated Consolidated Financial
Information. These obligations primarily relate to our contractual maturities of financial liabilities such as borrowings, trade
payables, other financial liabilities (which includes current maturities of long-term debt, interest accrued, payables on purchases
of fixed assets and MTM of derivative hedging instruments and finance lease liabilities.

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 Total Less than 1 year 1 year to 5 years More than 5 years
(₹ in millions)

Borrowings 3,268.62 1,312.85 1,894.84 60.93

Trade Payables 2,421.45 2,421.45 - -
Other financial liabilities 395.87 394.63 1.24 -
Finance lease liabilities 1,526.07 105.48 475.87 944.72
Total 7,612.01 4,234.41 2,371.95 1,005.65

Contingent Liabilities

The following table sets forth the principal components of our contingent liabilities as of December 31, 2020 as per the Restated
Consolidated Financial Information:

As of December 31, 2020

(₹ in millions)
1) Claims against the Group not acknowledged as debts
i) Service tax
Cases pending before Appellate Authorities in respect of which the Company has filed appeals / 0.47
show cause notices. (FY 2005-06 to 2007-08)
ii) Income Tax*
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY- 2.12
2013-14)
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY- 3.18
2012-13)
Cases pending before Appellate Authorities in respect of which the Company has filed appeal (AY- 4.21
2011-12)
Cases pending before CIT in respect of which the Company has filed appeal (AY 2017–18)** 69.63

iii) Central Excise Act, 1944

Cases pending before Directorate General of Goods and Service Tax Intelligence in respect of 14.85
which the Group has filed appeals / show cause notices. (FY 2014-15 to FY 2017-18)
______________________
* Amount paid under protest of ₹23.71 million.
** Total disputed amount of the case is ₹77.54 million (including interest liability) out of which ₹7.91 million (including interest liability) has been provided
as a provision and balance amount of ₹69.63 million (including interest liability) is being disclosed as a contingent liability.

Off-Balance Sheet Arrangements

We undertake hedging of our net foreign currency exposure through forward contracts. Other than such forward contracts we do
not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have
been established for the purpose of facilitating off-balance sheet arrangements.

Related Party Transactions

We enter into various transactions with related parties. For further information see “Restated Consolidated Financial Information
– Note 40” on page 284.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market
prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, such as equity price
risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, foreign currency
hedging instruments such as forward contracts and options. We have put in place appropriate risk management policies to limit
the impact of these risks on its financial performance. The company ensures optimization of cash through fund planning and
robust cash management practices.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. Majority of our borrowings, both term and working capital, are floating rate linked borrowings wherein
interest rate is reset at different time intervals. Fluctuation in interest rates will therefore have a bearing on our debt service
obligations.

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The exposure of our borrowings to interest rate changes as per the Restated Consolidated Financial Information at the end of the
reporting period is as follows:

As of December 31, 2020

(₹ in millions)
Variable rate borrowings 2,817.72
Fixed rate borrowings 28.78
Total borrowings 2,846.50

Sensitivity
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.
Impact on profit after tax
Interest rate (increase by 100 basis points)# 21.86
Interest rate (decrease by 100 basis points)# (21.86)
__________
# Holding other variables constant.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our Company’s operating
activities (when revenue or expense is denominated in a foreign currency). We operate internationally and a large portion of the
business is transacted mainly in US$ and consequently we are exposed to foreign exchange risk through our sales and services
in the USA, Europe, China and other countries across the world, and purchases from overseas suppliers in various foreign
currencies. Foreign currency fluctuation will also have an effect on assets and liabilities of our foreign subsidiaries.

The Company’s exposure to foreign currency risk as per the Restated Consolidated Financial Information at the end of the
reporting period indicated is as follows:

Foreign As at December 31, 2020

currency
Trade receivables and others
United States Dollar (USD) 50.76
Euro (EUR) 1.03
Japanese Yen (JPY) -
RMB 8.69
Others 0.15
Trade payables
United States Dollar (USD) 10.58
Euro (EUR) 0.29
Japanese Yen (JPY) 180.02
Canadian Dollar (CAD)^ 0.00
Swiss Franc (CHF) -
RMB 11.92
Others -
^Rounded off to Nil

*Total forward contracts of the Company as at December 31, 2020 was ₹6,966.39 million (USD 92.07 million).

Sensitivity

The sensitivity of profit or loss to changes in the exchange rates arises mainly from foreign currency denominated financial
instrument. Impact on profit after tax as per the Restated Consolidated Financial Information is as follows.

Impact on profit after tax For the period ended

December 31, 2020

USD sensitivity
₹/USD- increase by 1.0%* 21.73
₹/USD- decrease by 1.0%* (21.73)
EUR sensitivity
₹/EURO- increase by 1.0%* 0.47
₹/EURO- decrease by 1.0%* (0.47)
JPY sensitivity

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 Impact on profit after tax For the period ended
December 31, 2020

₹/JPY - increase by 1.0%* (0.96)

₹/JPY - decrease by 1.0%* 0.96
CAD sensitivity
₹/CAD - Increase by 1.0%* (0.00)
₹/CAD - Decrease by 1.0%* 0.00
RMB sensitivity
₹/RMB - Increase by 1.0%* (1.35)
₹/RMB - Decrease by 1.0%* 1.35
________________________________
* Holding other variables constant

Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the Board, which has established an appropriate liquidity risk
management framework for the management of the Company’s short, medium and long-term funding and liquidity management
requirements. The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated
from operations. The Company manages liquidity risk by maintaining adequate cash reserves, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Accordingly, no liquidity
risk is perceived.

The table below sets forth our undrawn borrowings facilities as per the Restated Consolidated Financial Information as at
December 31, 2020.

As at December 31, 2020

(₹ in millions)
Expiring within one year 1,064.33
Expiring beyond one year -

Capital Expenditures

Our historical capital expenditures were, and we expect our future capital expenditures to be, primarily for purchase of plant and
equipment. In Fiscals 2018, 2019 and 2020 and the nine months ended December 31, 2020, our capital expenditures (comprising
of payments for acquisition of property, plant and equipment, intangibles and capital work in progress including capital advances)
were ₹1,130.00 million, ₹1,163.88 million, ₹2,240.59 million, ₹1,520.04 million, respectively as per our Pro Forma Consolidated
Financial Information.

Significant Economic Changes

Other than as described above under the heading titled “Our Business – Impact of the COVID-19 pandemic” and “Principal
Factors Affecting Our Financial Condition and Results of Operations,” to the knowledge of our management, there are no other
significant economic changes that materially affect or are likely to affect income from continuing operations.

Unusual or Infrequent Events of Transactions

Except as described in this Draft Red Herring Prospectus, there have been no other events or transactions that, to our knowledge,
may be described as “unusual” or “infrequent”.

Known Trends or Uncertainties

Our business has been affected and we expect will continue to be affected by the trends identified above in the heading titled
“Principal Factors Affecting Our Financial Condition and Results of Operations” and the uncertainties described in the section
titled “Risk Factors” beginning on page 25. To our knowledge, except as described or anticipated in this Draft Red Herring
Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from
continuing operations.

Future Relationship Between Cost and Income

Other than as described in this Draft Red Herring Prospectus, including disclosure regarding the impact of COVID-19 on our
operations, to the knowledge of our management, there are no known factors that might affect the future relationship between
costs and revenues.

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See “Risk Factor - The COVID-19 pandemic, or a similar public health threat, could adversely affect our business, financial
condition, and results of operations” for risks of the COVID-19 outbreak on our operations and financial condition; and see
“Our Business – Impact of the COVID-19 pandemic” for more details regarding the impact of COVID-19 on our operations.

New Products or Business Segments

Other than as described in “Our Business” on page 159 of this Draft Red Herring Prospectus, there are no new products or
business segments in which we operate.

Seasonality of Business

Our business is not subject to seasonal variations.

Qualification Included by Auditors

Our Statutory Auditors have included an audit qualification in relation to our erstwhile subsidiary, SONA BV, in the Restated
Consolidated Financial Information. The qualification states that the majority shareholding in SONA BV, our erstwhile
subsidiary company, which was classified as a ‘discontinued operation’ in the consolidated financial statements for the previous
year ended March 31, 2019, was sold to Sona Autocomp on July 4, 2019, and consequently, our Company ceased to exercise
control over the erstwhile subsidiary company from July 5, 2019 onwards. Due to the unavailability of the consolidated financial
statements of SONA BV and its subsidiaries (“Sona BV Group”) for the period from April 1, 2019 to July 4, 2019, the
consolidated financial information of the Sona BV Group for the period from April 1, 2019 to July 4, 2019 has not been included
in our consolidated financial statements for Fiscal Year 2020, and the assets and liabilities of Sona BV Group have been
derecognized at their respective carrying values as at March 31, 2019 instead of July 4, 2019. Our Statutory Auditors have stated
in their audit opinion that this accounting treatment is not in compliance with the requirements of Ind AS 110 - Consolidated
Financial Statements and had the consolidated financial statements of the Company been prepared after considering the
consolidated financial statements of Sona BV Group for the period from April 1, 2019 to July 4, 2019, the “Profit or Loss from
discontinued operations” would have been higher and “Exceptional Item” would have been lower by the same amount with no
effect on the consolidated profit of the Group for Fiscal 2020 and its equity attributable to the owners on that date. Further, Note
49 of the Restated Consolidated Financial Information states that owing to the insolvency proceedings and acquisition of the
businesses by a third party, despite the best efforts of management, substantiated by multiple communications over electronic
mail, our Company was unable to obtain the audited consolidated financial statements of SONA BV for the period from April
1, 2019 to July 4, 2019. Our Company has not been able to arrange the consolidated financial statements of SONA BV for the
above mentioned period until the date of the examination report of the Restated Consolidated Financial Information and
accordingly, the modification in the auditor’s report dated December 29, 2020, could not be adjusted in the Restated Consolidated
Financial Information for Fiscal 2020.

Investors should carefully read and understand the audit qualification and its implications while placing reliance on our Restated
Consolidated Financial Statement Information for Fiscal 2020.

For further details concerning the qualification noted in our audit report for the Restated Consolidated Financial Information,
please see “Restated Consolidated Financial Information” on page 230.

Significant Developments After December 31, 2020

Subsequent to December 31, 2020, we have:

• pursuant to a Board resolution dated January 27, 2021, we allotted 594,436 Equity Shares to Singapore VII Topco III Pte.
Ltd. upon conversion of 594,436 Preference Shares held by them in our Company.

• issued bonus shares in the ratio of 11 Equity Shares for every 1 Equity Share held on the record date (i.e., a ratio of 11:1)
pursuant to resolutions passed at the meetings of the Board and Shareholders on January 27, 2021 and January 30, 2021
respectively. The bonus shares are issued from our securities premium (free reserves) balance as of December 31, 2020 of
₹7,881.33 million. We have utilized ₹5,252.32 million out of our securities premium account on December 31, 2020 to issue
525,232,180 Equity Shares.

• adjusted the total number of options granted under ESOP 2020 on account of the bonus issue undertaken by us. Further,
pursuant to a resolution dated February 1, 2021 passed by the Nomination and Remuneration Committee, 2,991,285
additional bonus options were granted to our eligible employees at an exercise price of ₹38.34 per option. The total number
of outstanding options as on the date of this Draft Red Herring Prospectus are 3,263,220.

• declared an interim dividend of ₹9.299 per Equity Share (including Equity Shares issued upon conversion of the Preference
Shares) aggregating to ₹444.01 million to Shareholders of our Company as on January 27, 2021, pursuant to a Board

390
 resolution dated January 27, 2021.

Except as stated above and in this Draft Red Herring Prospectus, including disclosure regarding the impact of COVID-19 on our
operations, to our knowledge, no circumstances have arisen since the date of the Restated Consolidated Financial Information
as disclosed in this Draft Red Herring Prospectus which materially and adversely affect or are likely to affect our operations or
profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months. See “Risk
Factor - The COVID-19 pandemic, or a similar public health threat, could adversely affect our business, financial condition,
and results of operations” for risks of the COVID-19 pandemic on our operations and financial condition.

391
 SECTION VII: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Except as stated in this section, there are no outstanding (i) criminal proceedings, (ii) actions taken by statutory or regulatory
authorities, (iii) claims related to direct and indirect taxes, in a consolidated manner or (iv) material civil litigation, in each
case involving our Company, Subsidiaries, the Sona Promoters, Singapore Topco or our Directors (collectively, the “Relevant
Parties”). Further, there are no disciplinary actions including penalty imposed by SEBI or stock exchanges against the Sona
Promoters or Singapore Topco in the last five Financial Years including outstanding action.

In relation to (iv) above, our Board in its meeting held on February 12, 2021, has considered and adopted a policy of materiality
for identification of material civil litigation (“Materiality Policy”). In terms of the Materiality Policy:

(i) any outstanding civil litigation involving the Relevant Parties (other than the Sona Autocomp and Singapore Topco) which
exceed the amount of ₹ 36.03 million (being 1% of the total profit after tax as per the Restated Consolidated Financial
Information of the Company for the Financial Year 2020) have been considered material;

(ii) any outstanding civil litigation involving Sona Autocomp which exceeds the amount which is ₹ 14.08 million (being 1% of
the total standalone revenue of Sona Autocomp, for the Financial Year 2020) have been considered material; and

(iii) any outstanding civil litigation involving Singapore Topco which exceeds the amount which is ₹ 3 million (being 1% of the
total consolidated revenue of Singapore Topco, for the Financial Year 2020) have been considered material.

Accordingly, disclosures of the following types of litigation involving the Relevant Parties have been considered material and
accordingly disclosed, as applicable, (a) where the aggregate amount involved in such individual civil litigation (including tax
proceedings) exceeds the relevant monetary threshold disclosed above, individually; (b) where the decision in one case is likely
to affect the decision in similar cases, even though the amount involved in an individual litigation may not exceed the relevant
monetary threshold; (c) where the monetary liability is not quantifiable, but where the outcome of such legal proceedings could
have a material adverse effect on the business, operations, financial position, prospects or reputation, results of operations or
cash flows of our Company.

Except as stated in this section, there are no outstanding material dues to creditors of our Company. For this purpose, our Board
has considered and adopted a policy of materiality for identification of material outstanding dues to creditors. In terms of this
materiality policy, outstanding dues to any creditor of our Company having monetary value exceeding ₹ 121.07 million, which
is 5% of the total trade payables of our Company, as per the latest Restated Consolidated Financial Information of our Company
included in this Draft Red Herring Prospectus, shall be considered as ‘material’. Accordingly, as on December 31, 2020, any
outstanding dues exceeding ₹ 121.07 million have been considered as material outstanding dues for the purpose of disclosure
in this section. Further, for outstanding dues to any party which is a micro, small or medium enterprise (“MSME”), the
disclosure will be based on information available with the Company regarding status of the creditor as defined under Section 2
of the Micro, Small and Medium Enterprises Act, 2006, as amended, as has been relied upon by Statutory Auditors.

It is clarified that for the purposes of the above, pre-litigation notices received by the Relevant Parties from third parties
(excluding those notices issued by statutory/regulatory/tax authorities) shall, unless otherwise decided by our Board, not be
considered as material until such time that the Relevant Parties, as applicable, is impleaded as defendant in litigation
proceedings before any judicial forum.

We have also disclosed matters relating to direct and indirect taxes involving the Relevant Parties in a consolidated manner
giving details of number of cases and total amount involved in such claims.

Litigation involving our Company

Litigation against our Company

Material Tax Proceedings

1. The Office of the Assistant Commissioner of Income Tax, Delhi (“ACIT Delhi”) has issued an assessment order dated
December 29, 2019 (“2019 AO Order”) in relation to the income tax returns filed by our Company for AY 2017-18 and
has also issued a demand notice dated December 29, 2019 for a sum of approximately ₹70.85 million payable by our
Company for AY 2017-18. Pursuant to the 2019 AO Order, the ACIT Delhi noted that payments made by our Company
in lieu of a loan availed by an affiliate of our Company aggregating to ₹136.23 million and losses incurred on account of
embezzlement of ₹ 16.60 million were claimed as business expenses and other expenses respectively. The ACIT Delhi
has rejected such claiming of expenses under Sections 36 and 37 of the Income Tax Act, 1961, respectively, and has
included such expenses/losses in the taxable income of the Company for the relevant AY and initiated penalty proceedings
against our Company. Our Company has subsequently filed an appeal dated January 17, 2020 before the Commissioner

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 of Income Tax (Appeals) against the 2019 AO Order on the grounds that, inter alia, (a) giving of guarantee for the loan
taken by a subsidiary is to preserve reputation and maintain credit rating, among others and thus, the disallowance of such
expenses was erroneous and; (b) loss occurring on account of embezzlement is in connection to the business operations
and such risk is inherent to carrying out business activities and thus, disallowance of such revenue expenses was
erroneous. Further, the Company has also filed an application dated February 7, 2020 seeking a stay on the demand notice
by depositing 20% of the total amount demanded. The matter is currently pending.

Litigation by our Company

Material Civil Litigation

1. Our Company, along with Sona Management Services Limited, has filed a suit dated July 20, 2020 (as amended by way
of an application dated September 22, 2020 and allowed by way of an order dated December 8, 2020 passed by the High
Court of Delhi), in the High Court of Delhi against M/s Sona Mandhira Private Limited (“Sona Mandhira”), Mandira
Koirala, Brij Mohan Gupta and Rakesh Kumar Gaind (the “Defendants”), alleging infringement, unauthorised, illegal
and mala fide adoption, usage, misrepresentation, dilution and passing off of the Company’s trademark/ trade name/
device mark/ logo ‘SONA’ by illegally using our Company’s trademark as part of Sona Mandhira’s corporate name in
respect of allied/ cognate goods and services being supplied by Sona Mandhira Private Limited in relation to automobile
parts. Our Company has inter-alia sought for a permanent injunction restraining the Defendants, their family members,
partners, promoters, directors, servants, agents, assignees, franchisees or anyone acting for and on their behalf from using
the trademark/trade name/logo “SONA” either in relation to goods and services or as part of tradename, domain name or
in any other manner. A temporary injunction by way of an application has also been sought in this regard during the
pendency of the suit and the same is pending adjudication. The Company has sought damages of ₹ 20 million from the
Defendants and has also sought that “SONA” be declared a well-known mark in relation to automotive components.
Further, our Company has also sought for a decree directing the defendant, Sona Mandhira Private Limited to alter its
name, by ceasing to use the “SONA” mark. The Defendants have submitted a written statement dated August 5, 2020
read with additional written statements dated August 20, 2020 and January 11, 2021, denying our Company’s allegations.
Our Company along with Sona Management Services Limited has submitted replications to the written statements of the
Defendants on August 11, 2020 along with a rejoinder dated August 11, 2020 to Defendants’ reply to the application for
interim relief, an additional replication to the additional written statement of the Defendants dated September 5, 2020 and
a replication to the comprehensive written statement of the Defendants dated February 21, 2021. The matter is currently
pending before the High Court of Delhi and is listed for hearing on March 22, 2021 for conclusion of pleadings and
arguments in relation to application for temporary injunction.

2. Our Company filed a writ petition dated July 13, 2017 in the High Court of Punjab and Haryana at Chandigarh, impleading
the State of Haryana, the Haryana State Industrial and Infrastructure Development Corporation (the “HSIIDC”) and the
Haryana Urban Development Authority and the Estate Manager, HSIIDC. Our Company was allotted an industrial plot
for establishment of a manufacturing plant and the said allotment was brought under the purview of the Estate
Management Procedure 2015 with effect from October 16, 2015, as amended (“EMP 2015”), which proposed to provide
primary and secondary level of development for allottees. In terms of EMP, 2015, in the event such plot is surrendered
before the offer of possession, HSIIDC is required to refund the entire amount paid by the allottees for price of the plot
without any deduction. Through the writ petition, our Company submitted that the plot priced at ₹ 184.9 million, was
surrendered, due to inadequate basic infrastructure facilities in accordance with the procedure set out in under the EMP
2015. It was further submitted that the HSIIDC refunded an amount of ₹ 165.4 million to the Company after deducting
an amount of ₹ 19.5 million. Furthermore, our Company also claimed independent valuer’s assessment of the construction
carried out on the plot as per the relevant bye-laws. By way of this writ petition, the Company challenged the erroneous
deduction of ₹ 19.5 million by HSIIDC. Further, the Company has claimed a refund of penal interest of ₹ 1 million levied
by HSIIDC and has sought for an assessment from an independent valuer of the construction carried out on the property.
The matter is currently pending.

Litigation involving our Subsidiaries

Litigation involving Comstar Automotive

Litigation against Comstar Automotive

Material Tax Proceedings

1. The Office of the Assistant Commissioner of Income Tax, Chennai (“ACIT Chennai”) has issued an assessment order
dated December 21, 2016 (“2016 AO Order”) in relation to the income tax returns filed by Comstar Automotive for AY
2010-11. Pursuant to 2016 AO Order, the ACIT Chennai, inter alia, noted that an amount aggregating to ₹ 37.90 million
has been claimed as expense in relation to power projects. The ACIT Chennai disallowed such expense as there was no
separate profit and loss statement filed in relation to power projects, and added such amount to the taxable income of
Comstar Automotive and raised a demand of ₹ 27.80 million. Comstar Automotive had filed a rectification application

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 dated January 27, 2017 before the ACIT Chennai which was rejected by the ACIT Chennai by way of an order dated
March 15, 2017 (“Rectification Order”). Comstar Automotive has filed an appeal against the 2016 AO Order and the
Rectification Order on April 25, 2017 before the Commissioner of Income Tax Appeals, Chennai (“CITA Chennai”) on
the grounds, inter alia, that the decision pertaining to expenses in relation to power projects expenses was outside the
jurisdiction of the ACIT Chennai. Our Company has made further submissions in relation to both the aforementioned
appeals on October 9, 2018. The matter is currently pending.

2. The Assistant Commissioner of Income Tax, Chennai (“ACIT Chennai”) passed orders dated December 24, 2019 and
December 26, 2019 (“AO Orders”) computing dividend distribution tax (“DDT”) of ₹ 149,532,928 and ₹ 153,040,096
(including interest) payable by Comstar Automotive for AY 2016-17 and 2017-18, respectively. Subsequently, the
Centralised Processing Centre of Income Tax Department, Bangalore (“CPC Bangalore”) issued intimation letters dated
September 15, 2019 and June 30, 2020 (“CPC Intimation Letters”) indicating the outstanding amount payable by
Comstar Automotive of ₹ 32,867,960 and ₹ 93,148,540 for AY 2016-17 and 2017-18 respectively. Comstar Automotive
filed rectification applications for AY 2016-17 and 2017-18 dated February 10, 2021 and February 9, 2021 respectively
(“Rectification Applications”) whereby Comstar Automotive has claimed that the requisite DDT payable for AY 2016-
17 and 2017-18, have been paid by them before the due date. In the Rectification Applications, Comstar Automotive has
claimed that the demand of outstanding DDT indicated by way of the AO Orders and CPC Intimation Letters (including
interest) are mistakes on record and need to be rectified. Further, by way of the Rectification Applications, Comstar
Automotive has claimed a refund of ₹ 40,268,372 and ₹ 58,789,787 after making adjustments for AY 2016-17 and 2017-
18, respectively.

3. Comstar Automotive has received a letter from the Office of the Commissioner of Customs, Chennai dated September
29, 2020 stating that Comstar Automotive was not eligible to claim integrated goods and services tax refund benefits on
exported goods amounting to approximately ₹ 174 million. Subsequently, Comstar Automotive has received a letter from
the Department of Revenue Intelligence, Kolkata Zonal Unit (“DRI”) dated October 6, 2020 requesting Comstar
Automotive to make a voluntary payment of customs duty to the extent of approximately ₹ 174 million in the form of
integrated tax and/or compensation cess. Comstar Automotive replied to these communications through letters dated
October 23, 2020 and October 28, 2020. Subsequently, Comstar Automotive received a letter dated November 4, 2020
from the DRI wherein Comstar Automotive was requested to furnish the import and export details commencing from
October 23, 2017. Comstar Automotive submitted a response dated November 18, 2020 along with the details of imports
and exports of Comstar Automotive from October 23, 2017 till date thereof. Comstar Automotive may incur additional
tax liability for the period from October 23, 2017 till October 9, 2018. Subsequently, Comstar Automotive filed a writ
petition dated December 4, 2020 (“Writ”) in the High Court of Madras challenging the constitutionality of Rule 96(10)
of the Central Goods and Services Tax Rules, 2017 (“CGST Rules”) on the grounds, inter alia, that due to introduction
of arbitrary restrictions under such rule, the benefit for claiming the refund under section 16(3)(b) of the Integrated Goods
and Services Tax Act, 2017 read with Rule 96 of the CGST Rules have been restricted. Further, Comstar Automotive had
also submitted a letter dated December 18, 2020 for DRI to keep the proceedings in abeyance until the Writ is disposed
of by the High Court of Madras. There has been no further correspondence in this matter. The Writ is currently pending.

Taxation matters

A summary table of the claims relating to direct and indirect taxes involving our Company and Subsidiaries is set forth below:

Particulars Number of cases Amount (in ₹ million)

Company
Direct Tax* 4 84.56
Indirect Tax 2 15.32
Total 6 99.88
Comstar Automotive
Direct Tax* 7 172.57
Indirect Tax* 1 281.97
Total 8 454.54
Comstar Automotive Technology Services Private Limited
Direct Tax 1 0.15
Total 1 0.15
* includes matters specified above.

Material Developments

Other than as stated in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” on page 351, there have not arisen, since the date of the last financial information disclosed in this Draft Red Herring
Prospectus, any circumstances which materially and adversely affect, or are likely to affect, our operations, our profitability
taken as a whole or the value of our consolidated assets or our ability to pay our liabilities within the next 12 months.

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Outstanding dues to creditors

Our Board, in its meeting held on February 12, 2021 has considered and adopted a policy of materiality for identification of
material outstanding dues to creditors. In terms of the materiality policy, creditors of our Company to whom an amount exceeding
5% of our total trade payables as on December 31, 2020 was outstanding, were considered ‘material’ creditors. As per the
Restated Consolidated Financial Information, our total trade payables as on December 31, 2020, was ₹ 2,421.45 million and
accordingly, creditors to whom outstanding dues exceed ₹ 121.07 million have been considered as material creditors for the
purposes of disclosure in this Draft Red Herring Prospectus.

Based on this criteria, details of outstanding dues owed as on December 31, 2020 by our Company are set out below:

Type of Creditors Number of Creditors Amount

(in ₹ million)#
Micro, small and medium enterprises 220.00* 504.08
Material creditors 3.00 592.99
Other creditors 1,015.00* 1,258.65
Total 1,238.00 2,355.72
*
Includes nine creditors who are reported as micro, small and medium enterprises by our Company and our Indian Subsidiaries and who are reported as other
creditor by our Foreign Subsidiaries.
# Outstanding amount of creditors includes amount payable to creditors against purchase of capital assets and excludes amount relate to accruals, provision

and other adjustments recognised in the Restated Consolidated Financial Information at period end.

The details pertaining to outstanding dues to the material creditors along with names and amounts involved for each such material
creditor are available on the website of our Company at https://sonacomstar.com/list-of-material-creditors.

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 GOVERNMENT AND OTHER APPROVALS

Our business requires various approvals, licenses, consents, registrations, and permits issued by relevant regulatory authorities
under various rules and regulations. Set out below is an indicative list of all material approvals, licenses, consents, registrations,
and permits obtained by our Company, our Indian Subsidiaries and our Material Foreign Subsidiary, as applicable, which are
necessary for undertaking our business. In view of such approvals, our Company can undertake the Offer and its current business
activities. Additionally, unless otherwise stated, these material approvals, licenses, consents, registrations, and permits are valid
as on the date of this Draft Red Herring Prospectus. Certain material approvals, licenses, consents, registrations, and permits
may expire periodically in the ordinary course and applications for renewal of such expired material approvals, licenses,
consents, registrations, and permits are submitted in accordance with applicable requirements and procedures.

I. Material approvals in relation to the Offer

For the approvals and authorisations obtained by our Company in relation to the Offer, see “Other Regulatory and
Statutory Disclosures – Authority for the Offer” on page 399.

II. Material approvals in relation to our Company, Indian Subsidiaries and Material Foreign Subsidiary

We have received the following material approvals, licenses, consents, registrations, and permits pertaining to our
business:

A. Material approvals in relation to our incorporation

For details in relation to incorporation of our Company, see “History and Certain Corporate Matters” on page
191.

B. Material approvals in relation to our business operations

The material approvals in relation to our operational manufacturing facilities at (i) Gurugram (three plants);
(ii) Manesar (one plant); (iii) Pune (one plants); and (iv) Chennai (one plant) are set forth below:

1. Consent to operate issued by the respective pollution control board under the Water (Prevention and
Control of Pollution) Act, 1974.

2. Consent to operate issued by the respective pollution control board under the Air (Prevention and
Control of Pollution) Act, 1981.

3. Authorisation for generation, storage and disposal of hazardous wastes issued by the respective
pollution control boards, wherever applicable, under the Hazardous and Other Waste (Management
and Transboundary Movement) Rules, 2016.

4. License to work a factory issued by the relevant State Government under the Factories Act, 1948.

5. No objection certificate issued by the fire department of the local municipal corporations of the
respective states where our manufacturing facility is located.

6. Letter of approval for continued operations as 100% export oriented unit issued by the Office
of Development Commissioner, Ministry of Commerce and Industry for our manufacturing facility
at Chennai.

7. Registration Certificate from Department of Science and Industrial Research in relation to our
research and development facility at Gurugram and Chennai.

8. Registrations/ approvals under BIS as provided under the Legal Metrology Act for our
manufacturing facility in Gurugram Unit I and Unit II and Chennai unit.

9. Registration cum membership certificate as a manufacturer exporter issued by the EEPC India
(formerly known as Engineering Export Promotion Council)

10. License to store HSD issued by the Petroleum and Explosives Safety Organization for our
manufacturing facility at Gurugram Unit I.

C. Tax related approvals

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 1. Our permanent account numbers are as provided below:

Name Registration Number

Sona BLW Precision Forgings AABCS4786P
Limited
Comstar Automotive Technologies AAACE2284P
Private Limited
Comstar Automotive Technology AAFCC2827D
Services Private Limited
Sona Comstar eDrive Private Limited ABECS8942H

2. Our TANs are as provided below:

Name Registration Number

Sona BLW Precision Forgings RTKM02382C
Limited (Gurugram)
Sona BLW Precision Forgings PNES29393A
Limited (Pune)
Comstar Automotive Technologies CHEE02139E
Private Limited
Comstar Automotive Technology CHEC09960G
Services Private Limited
Sona Comstar eDrive Private Limited RTKS32883E

3. Our importer-exporter codes are as provided below:

Name Registration Number

Sona BLW Precision Forgings 0597006504
Limited
Comstar Automotive Technologies 3897000211
Private Limited
Comstar Automotive Technology 0413022218
Services Private Limited

4. Our goods and services tax registration numbers, as per the state where our business operations are
spread, are as follows:

State Registration Number

Haryana 06AABCS4786P1ZN
Maharashtra 27AABCS4786P1ZJ
Tamil Nadu 33AAACE2284P1ZG

D. Labour and commercial approvals

1. Certificate of registration issued by the Employees’ Provident Fund Organisation, India under the
Employees Provident Fund and Miscellaneous Provisions Act, 1952 for all manufacturing facilities.

2. Certificate of registration issued by Employees State Insurance Corporation, India under the
Employees State Insurance Act, 1948.

3. Certificate of registration issued by the Contract Labour Regulation Department under the Contract
Labour (Regulation and Abolition) Act, 1970.

E. Intellectual Property Registrations

For details in relation to our intellectual property registrations, see “Our Business – Intellectual Property” on
page 183.

III. Material approvals in relation to our Material Foreign Subsidiary

1. Michigan sales tax license issued by State of Michigan for allowing sales of tangible personal property to the final
consumer.

IV. Material approvals in relation to our other Foreign Subsidiaries

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 Our other Foreign Subsidiaries are located in Hong Kong, Mexico and China. We require various approvals and/or
licenses under various laws, rules and regulations of each jurisdiction in which our Foreign Subsidiaries operate. As on
the date of this Draft Red Herring Prospectus, we have obtained the necessary material permits, licenses and approvals
from the appropriate regulatory and governing authorities required to conduct our operations in such jurisdictions.

V. Material approvals and / or renewal of material approvals applied for by our Company, Indian Subsidiaries or
Material Foreign Subsidiary but not received

Our Company, Indian Subsidiaries and Material Foreign Subsidiary have obtained all material approvals, consents,
licenses, registrations and permits that are required for undertaking their current business activities. Except as disclosed
below, there are no applications for material approvals and/or applications for renewal of material approvals made by
our Company that have not been received.

1. Application dated February 2, 2021 filed before Municipal Corporation for fire NOC certificate of our Manesar
Unit.

2. Application dated January 18, 2021 filed before Directorate of Urban Local Bodies, Haryana for renewal of
fire NOC for our Gurugram Unit III.

3. Application dated November 6, 2020 filed before the Joint Director, Industrial Health and Safety for renewal
of registration certificate of Chennai unit under the Contract Labour (Regulation and Abolition) Act, 1970.

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 OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Offer

The Fresh Issue has been authorised by our Board pursuant to the resolutions passed at its meeting held on January 27, 2021 and
February 22, 2021 and by our Shareholders pursuant to a special resolution passed at their meeting held on January 30, 2021
under section 62(1)(c) of the Companies Act. Further, our Board has taken on record the approval of the Offer for Sale by the
Selling Shareholder and has approved this Draft Red Herring Prospectus pursuant to its resolution dated February 22, 2021.

The Offer for Sale has been authorised by the board of directors of the Selling Shareholder pursuant to a resolution passed at its
meeting held on February 11, 2021 and has consented to participate in the Offer for Sale of such number of Equity Shares
aggregating up to ₹ 57,000 million pursuant to their consent letter dated February 22, 2021.

Our Company received in-principle approvals from BSE and NSE for the listing of the Equity Shares pursuant to letters dated
[●] and [●], respectively.

Prohibition by SEBI or other governmental authorities

Our Company, Promoters, members of their respective Promoter Groups, Directors, the Selling Shareholder, the persons in
control of our Company and the persons in control of our Promoters are not prohibited from accessing the capital market or
debarred from buying, selling or dealing in securities under any order or direction passed by SEBI or any securities market
regulator in any other jurisdiction or any other authority/court.

Our Company, Promoters and Directors have not been declared as Wilful Defaulters by any bank or financial institution or
consortium thereof in accordance with the guidelines on Wilful Defaulters issued by the RBI.

Our Promoters or Directors have not been declared as Fugitive Economic Offenders.

Compliance with the Companies (Significant Beneficial Owners) Rules, 2018

Our Company, Promoters, members of their respective Promoter Groups and the Selling Shareholder, are in compliance with
the Companies (Significant Beneficial Owners) Rules, 2018, as amended, to the extent applicable to each of them as on the date
of this Draft Red Herring Prospectus.

Directors associated with the securities market

None of our Directors, are associated with the securities market in any manner including securities market related business.

No action has been initiated by SEBI against the Directors of our Company in the five years preceding the date of this Draft Red
Herring Prospectus.

Eligibility for the Offer

Our Company is eligible for the Offer in accordance with Regulation 6(2) of the SEBI ICDR Regulations, which states as follows:

“An issuer not satisfying the condition stipulated in sub-regulation (1) shall be eligible to make an initial public offer only if the
issue is made through the book-building process and the issuer undertakes to allot at least seventy five per cent. of the net offer
to qualified institutional buyers and to refund the full subscription money if it fails to do so.”

The Statutory Auditor has issued a certificate on eligibility dated February 22, 2021 (the “Eligibility Certificate”) which
includes the statements of (i) monetary assets as a percentage of net tangible assets; (ii) pre-tax operating profits; and (iii) net
worth, each extracted from the Restated Consolidated Financial Information of our Company as at and for the years ended March
31, 2020, March 31, 2019 and March 31, 2018. As per the Eligibility Certificate, we do not meet the threshold prescribed for (i)
monetary assets as a percentage of net tangible assets; and (ii) net worth, in Regulation 6(1)(a) and Regulation 6(1)(c) of the
SEBI ICDR Regulations, respectively. Accordingly, the Offer is being undertaken under Regulation 6(2) of the SEBI ICDR
Regulations. We are therefore required to allot not less than 75% of the Offer to QIBs to meet the conditions as detailed under
Regulation 6(2) of the SEBI ICDR Regulations. In the event we fail to do so, the full application monies shall be refunded to the
Bidders, in accordance with the SEBI ICDR Regulations.

Further, in terms of Regulation 49(1) of the SEBI ICDR Regulations, our Company shall ensure that the number of Bidders to
whom the Equity Shares will be Allotted will be not less than 1,000.

Further, our Company confirms that it is in compliance with the conditions specified in Regulation 7(1) of the SEBI ICDR
Regulations, to the extent applicable, and will ensure compliance with the conditions specified in Regulation 7(2) of the SEBI
ICDR Regulations, to the extent applicable.

399
Further, our Company confirms that it is not ineligible to make the Offer in terms of Regulation 5 of the SEBI ICDR Regulations,
to the extent applicable. The details of our compliance with Regulation 5 of the SEBI ICDR Regulations are as follows:

(a) Neither our Company, the Promoters, the members of their respective Promoter Groups, the Directors, nor the Selling
Shareholder are debarred from accessing the capital markets by SEBI.

(b) None of the Promoters or Directors are promoters or directors of companies which are debarred from accessing the
capital markets by SEBI.

(c) Neither our Company nor our Promoters or Directors are Wilful Defaulters.

(d) None of our Promoters or Directors is a Fugitive Economic Offender.

(e) Other than the options granted under the ESOP 2020, there are no outstanding warrants, options or rights to convert
debentures, loans or other instruments convertible into, or any other right which would entitle any person any option to
receive Equity Shares, as on the date of this Draft Red Herring Prospectus.

The Selling Shareholder confirms that it is in compliance with Regulation 8 of the SEBI ICDR Regulations, it has held the
Offered Shares for a period of at least one year prior to the filing of this Draft Red Herring Prospectus. Therefore, the Equity
Shares that will be offered by it in the Offer for Sale are eligible to be offered for sale in the Offer.

DISCLAIMER CLAUSE OF SEBI

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS DRAFT RED HERRING PROSPECTUS

TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED
OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL
SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE OFFER IS PROPOSED TO BE MADE OR
FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS DRAFT RED
HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS, KOTAK MAHINDRA CAPITAL
COMPANY LIMITED, CREDIT SUISSE SECURITIES (INDIA) PRIVATE LIMITED, JM FINANCIAL, J.P.
MORGAN INDIA PRIVATE LIMITED AND NOMURA FINANCIAL ADVISORY AND SECURITIES (INDIA)
PRIVATE LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT RED HERRING
PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SECURITIES AND
EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS,
2018, AS AMENDED. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED
DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED OFFER.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE OUR COMPANY IS PRIMARILY

RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT
INFORMATION IN THIS DRAFT RED HERRING PROSPECTUS AND THE SELLING SHAREHOLDER WILL BE
RESPONSIBLE ONLY FOR THE STATEMENTS SPECIFICALLY CONFIRMED OR UNDERTAKEN BY IT IN
THIS DRAFT RED HERRING PROSPECTUS IN RELATION TO ITSELF FOR THE OFFERED SHARES, THE
BOOK RUNNING LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT
OUR COMPANY AND THE SELLING SHAREHOLDER DISCHARGE THEIR RESPONSIBILITY ADEQUATELY
IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS HAVE
FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED FEBRUARY 23, 2021, IN THE FORMAT
PRESCRIBED UNDER SCHEDULE V(A) OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, AS AMENDED.

THE FILING OF THIS DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE OUR
COMPANY FROM ANY LIABILITIES UNDER THE COMPANIES ACT OR FROM THE REQUIREMENT OF
OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF
THE OFFER. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE
BOOK RUNNING LEAD MANAGERS, ANY IRREGULARITIES OR LAPSES IN THIS DRAFT RED HERRING
PROSPECTUS.

Disclaimer from our Company, the Directors, the Selling Shareholder, and the Book Running Lead Managers

Our Company, the Directors, the Selling Shareholder, and the Book Running Lead Managers accept no responsibility for
statements made in relation to the Company or the Offer other than those confirmed by it in relation to itself or its Offered Shares
in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at our Company’s instance and
anyone placing reliance on any other source of information, including our Company’s website, www.sonacomstar.com, or the
respective websites of any of our Promoters, the members of our Promoter Group or the Selling Shareholder would be doing so
at his or her or their own risk. The Selling Shareholder, its partners, directors, key persons, affiliates, associates and officers

400
accept or undertake no responsibility for any statements including without limitation any statement made by or in relation to the
Company or its business, other than those specifically undertaken or confirmed by the Selling Shareholder in relation to itself
and the Offered Shares.

The Book Running Lead Managers accept no responsibility, save to the limited extent as provided in the Offer Agreement and
the Underwriting Agreement to be entered into among the Underwriters, the Selling Shareholder and our Company.

All information shall be made available by our Company, the Selling Shareholder (to the extent that the information pertains to
itself and the Offered Shares), and the Book Running Lead Managers to the public and investors at large and no selective or
additional information would be available for a section of the investors in any manner whatsoever, including at road show
presentations, in research or sales reports, at Bidding Centres or elsewhere.

Bidders will be required to confirm and will be deemed to have represented to our Company, the Selling Shareholder,
Underwriters and their respective directors, officers, agents, affiliates, and representatives that they are eligible under all
applicable laws, rules, regulations, guidelines and approvals to acquire the Equity Shares and will not issue, allot, sell, pledge,
or transfer the Equity Shares to any person who is not eligible under any applicable laws, rules, regulations, guidelines and
approvals to acquire the Equity Shares. Our Company, the Selling Shareholder, Underwriters and their respective directors,
officers, agents, affiliates, and representatives accept no responsibility or liability for advising any investor on whether such
investor is eligible to acquire the Equity Shares.

The Book Running Lead Managers and their respective associates and affiliates may engage in transactions with, and perform
services for, our Company, the Selling Shareholder and their respective group companies, affiliates or associates or third parties
in the ordinary course of business and have engaged, or may in the future engage, in commercial banking and investment banking
transactions with or become customers to our Company, the Selling Shareholder and their respective group companies, affiliates
or associates or third parties, for which they have received, and may in the future receive, compensation.

Disclaimer in respect of Jurisdiction

The Offer is being made in India to persons resident in India (who are competent to contract under the Indian Contract Act, 1872,
as amended, including Indian nationals resident in India, HUFs, companies, other corporate bodies and societies registered under
the applicable laws in India and authorised to invest in equity shares, Mutual Funds registered with SEBI, Indian financial
institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable
trust law and who are authorised under their respective constitution to hold and invest in equity shares, multilateral and bilateral
development financial institutions, state industrial development corporations, insurance companies registered with IRDAI,
provident funds (subject to applicable law) and pension funds, National Investment Fund, insurance funds set up and managed
by army, navy or air force of Union of India, insurance funds set up and managed by the Department of Posts, GoI, Systemically
Important NBFCs registered with the RBI) and permitted Non-Residents including FPIs and Eligible NRIs, AIFs and other
eligible foreign investors, if any, provided that they are eligible under all applicable laws and regulations to purchase the Equity
Shares. This Draft Red Herring Prospectus does not constitute an offer to sell or an invitation to subscribe to Equity Shares
offered hereby, in any jurisdiction other than in India to any person to whom it is unlawful to make an offer or invitation in such
jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself
about, and to observe, any such restrictions. Invitations to subscribe to or purchase the Equity Shares in the Offer will be made
only pursuant to the Red Herring Prospectus if the recipient is in India or the preliminary offering memorandum for the Offer,
which comprises the Red Herring Prospectus and the preliminary international wrap for the Offer, if the recipient is outside India.
No person outside India is eligible to bid for Equity Shares in the Offer unless that person has received the preliminary offering
memorandum for the Offer, which contains the selling restrictions for the Offer outside India. Any dispute arising out of the
Offer will be subject to the jurisdiction of appropriate court(s) in Delhi, India only.

No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that
purpose, except that this Draft Red Herring Prospectus will be filed with SEBI for its observations. Accordingly, the Equity
Shares represented hereby may not be offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be
distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the
delivery of this Draft Red Herring Prospectus nor any offer or sale hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of our Company or the Selling Shareholder since the date hereof or that
the information contained herein is correct as of any time subsequent to this date.

Eligibility and Transfer Restrictions

The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in
the United States, and, unless so registered, may not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable
state securities laws in the United States. Accordingly, the Equity Shares are being offered and sold (a) in the United
States only to “qualified institutional buyers” (as defined in Rule 144A and referred to in this Draft Red Herring
Prospectus as “U.S. QIBs”. For the avoidance of doubt, the term U.S. QIBs does not refer to a category of institutional

401
investor defined under applicable Indian regulations and referred to in this Draft Red Herring Prospectus as “QIBs”),
in transactions exempt from, or not subject to, the registration requirements of the Securities Act, and (b) outside the
United States in offshore transactions in reliance on Regulation S under the Securities Act and the applicable laws of the
jurisdiction where those offers and sales occur.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance
with the applicable laws of such jurisdiction.

Bidders are advised to ensure that any Bid from them does not exceed investment limits or maximum number of Equity Shares
that can be held by them under applicable law. Further, each Bidder where required must agree in the Allotment Advice that
such Bidder will not sell or transfer any Equity Shares or any economic interest therein, including any off-shore derivative
instruments, such as participatory notes, issued against the Equity Shares or any similar security, other than in accordance with
applicable laws.

Disclaimer Clause of BSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to BSE. The disclaimer clause as intimated by BSE
to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus and the
Prospectus prior to the RoC filing.

Disclaimer Clause of NSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to NSE. The disclaimer clause as intimated by NSE
to our Company, post scrutiny of this Draft Red Herring Prospectus, shall be included in the Red Herring Prospectus and the
Prospectus prior to the RoC filing.

Listing

Applications have been made to the Stock Exchanges for permission to deal in and for an official quotation of the Equity Shares.
[●] will be the Designated Stock Exchange with which the Basis of Allotment will be finalised.

If the permission to deal in and for an official quotation of the Equity Shares is not granted by the Stock Exchanges, our Company
shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Red Herring Prospectus in
accordance with applicable law. Our Company shall ensure that all steps for the completion of the necessary formalities for
listing and commencement of trading of Equity Shares at the Stock Exchanges are taken within such time prescribed by SEBI.
If our Company does not allot Equity Shares pursuant to the Offer within such timeline as prescribed by SEBI, it shall repay
without interest all monies received from Bidders, failing which interest shall be due to be paid to the Bidders at the rate of 15%
per annum for the delayed period or such other rate prescribed by SEBI.

The Selling Shareholder undertakes to provide such reasonable assistance as may be requested by our Company, to the extent
such assistance is required from the Selling Shareholder in relation to the Offered Shares to facilitate the process of listing and
commencement of trading of the Equity Shares on the Stock Exchanges within such time prescribed by SEBI.

Consents

Consents in writing of the Selling Shareholder, our Directors, our Statutory Auditor, our Company Secretary and Compliance
Officer, legal counsels to the Company as to Indian Law, legal counsel to the Book Running Lead Managers as to Indian Law,
international legal counsel to the Book Running Lead Managers, the Book Running Lead Managers, the bankers to our Company,
CRISIL, Ricardo, SCV & Co. LLP, Chartered Accountants, Vinay Kumar Wadhwan, Chartered Engineers, ELBI Consultancy
(India) Private Limited, Chartered Engineers and the Registrar to the Offer to act in their respective capacities, have been obtained
and consents in writing of the Syndicate Members, Monitoring Agency, Bankers to the Offer/ Escrow Collection Bank and
Refund Bank to act in their respective capacities, will be obtained, and will be filed along with a copy of the Red Herring
Prospectus with the RoC as required under the Companies Act and such consents shall not be withdrawn up to the time of
delivery of the Red Herring Prospectus for registration with the RoC.

Experts to the Offer

Except as stated below, our Company has not obtained any expert opinions:

Our Company has received written consent dated February 22, 2021 from our Statutory Auditors, Walker Chandiok & Co LLP,
Chartered Accountants, to include their name in this Draft Red Herring Prospectus as required under Section 26(1) of the
Companies Act read with SEBI ICDR Regulations and as “expert” as defined under Section 2(38) and 26(5) of the Companies
Act to the extent and in their capacity as an auditor and in respect of the examination reports on the Restated Consolidated
Financial Information dated February 12, 2021, Pro Forma Consolidated Financial Information February 12, 2021, the statement

402
of special tax benefits dated February 22, 2021 and such consents have not been withdrawn as on the date of this Draft Red
Herring Prospectus.

Our Company has received written consent dated February 17, 2021 from SCV & Co. LLP, Chartered Accountants, to include
their name in this Draft Red Herring Prospectus and as an “expert” as defined under Section 2(38) and 26(5) of the Companies
Act in their capacity as the independent chartered accountants and in respect of the reports and certificates issued by them
included in this Draft Red Herring Prospectus and such consent has not been withdrawn as on the date of this Draft Red Herring
Prospectus.

Our Company has received written consents dated February 6, 2021 and February 4, 2021, from Vinay Kumar Wadhwan,
Chartered Engineers and ELBI Consultancy (India) Private Limited, Chartered Engineers to include their respective names in
this Draft Red Herring Prospectus, and as an “expert” as defined under section 2(38) and 26(5) of the Companies Act in their
capacity as the independent chartered engineers and in respect of the certificates issued by them included in this Draft Red
Herring Prospectus and such consents have not been withdrawn as on the date of this Draft Red Herring Prospectus.

Our Company has also received written consent dated February 15, 2021 from Ricardo, to include their name in this Draft Red
Herring Prospectus and as an “expert” as defined under section 2(38) and 26(5) of the Companies Act, in relation to the Ricardo
Industry Report issued by them with respect to our Company included in this Draft Red Herring Prospectus and such consent
has not been withdrawn as on the date of this Draft Red Herring Prospectus.

The term “expert” shall not be construed to mean an expert as defined under the U.S. Securities Act.

Particulars regarding public or rights issues by our Company during the last five years

Our Company has not undertaken any public issue in the five years immediately preceding the date of this Draft Red Herring
Prospectus.

Our Company has not undertaken any rights issues in the five years immediately preceding the date of this Draft Red Herring
Prospectus.

Capital issue during the preceding three years by our Company

Other than as disclosed in “Capital Structure – Share Capital History of our Company” on page 71, our Company has not made
any capital issues during the three years preceding the date of this Draft Red Herring Prospectus.

Except for JIL, one of our Group Companies, which is listed on the NSE and the BSE, none of our Group Companies, Subsidiaries
or Associates are listed on any stock exchange. JIL has not undertaken any capital issues (public issue, rights issue or composite
issue) during the three years preceding the date of this Draft Red Herring Prospectus.

Performance vis-à-vis Objects

Our Company has not undertaken any public issue in the five years preceding the date of this Draft Red Herring Prospectus.

Stock Market Data of the Equity Shares

This being the initial public offering of the Equity Shares of our Company, the Equity Shares are not listed on any stock exchange
as on the date of this Draft Red Herring Prospectus, and accordingly, no stock market data is available for the Equity Shares.

Commission or brokerage on previous issues in last five years

Since this is the initial public issue of Equity Shares, no sum has been paid or has been payable as commission or brokerage for
subscribing to or procuring or agreeing to procure subscription for the Equity Shares since our Company’s inception.

403
Price information of past issues handled by the Book Running Lead Managers (during the current Financial Year and two Financial Years preceding the current Financial
Year)

A. Kotak

1. Price information of past issues handled by Kotak:

S. Issue name Issue size Issue Listing date Opening price +/- % change in closing price, +/- % change in closing price, +/- % change in
No. (₹ million) price (₹) on listing date [+/- % change in closing [+/- % change in closing closing price, [+/-
(in ₹) benchmark]- 30th calendar days benchmark]- 90th calendar % change in
from listing days from listing closing
benchmark]- 180th
calendar days
from listing
1. Home First Finance Company 11,537.19 518 February 3, 2021 618.80 Not Applicable Not Applicable Not Applicable
India Limited
2. Indigo Paints Limited 11,691.24 1,4901 February 2, 2021 2,607.50 Not Applicable Not Applicable Not Applicable
3. Burger King India Limited 8,100.00 60 December 14, 115.35 +146.50%[+7.41%] Not Applicable Not Applicable
2020
4. Gland Pharma Limited 64,795.45 1,500 November 20, 1,710.00 +48.43%[+7.01%] +57.27% [+18.27%] Not Applicable
2020
5. UTI Asset Management Company 21,598.84 554 October 12, 2020 500.00 -10.43%[+5.87%] -0.60% [+20.25%] Not Applicable
Limited
6. Computer Age Management 22,421.05 1,2302 October 1, 2020 1,518.00 +5.43% [+2.37%] +49.52% [23.04%] Not Applicable
Services Limited

7. SBI Cards And Payment Services 103,407.88 7553 March 16, 2020 661.00 -33.05% [-2.21%] -21.79% [+8.43%] +12.50%[+24.65%]
Limited
8. Ujjivan Small Finance Bank 7,459.46 374 December 12, 58.75 +41.08% [+2.38%] +10.27% [-12.70%] -16.62% [-15.07%]
Limited 2019
9. Polycab India Limited 13,452.60 5385 April 16, 2019 633.00 +15.36% [-5.35%] +14.70% [-1.99%] +23.76% [-4.09%]
10. Metropolis Healthcare Limited 12,042.88 880 April 15, 2019 958.00 +3.75% [-4.01%] +21.39% [-1.18%] +45.93% [-3.30%]
Source: www.nseindia.com and www.bseindia.com

Notes:

1. In Indigo Paints Limited, the issue price to eligible employees was ₹ 1,342 after a discount of ₹ 148 per equity share.
2. In Computer Age Management Services Limited, the issue price to eligible employees was ₹ 1,108 after a discount of ₹ 122 per equity share.
3. In SBI Cards and Payment Services Limited, the issue price to eligible employees was ₹ 680 after a discount of ₹ 75 per equity share.
4. In Ujjivan Small Finance Bank Limited, the issue price to eligible shareholders of Ujjivan Financial Services Limited was ₹ 35 per equity share.
5. In Polycab India Limited, the issue price to employees was ₹ 485 after a discount of ₹ 53 per equity share.
6. In the event any day falls on a holiday, the price/index of the immediately preceding trading day has been considered.
7. The 30th, 90th, 180th calendar days from listed day have been taken as listing day plus 29, 89 and 179 calendar days.
8. Nifty is considered as the benchmark index except for Computer Age Management Services Limited where SENSEX is considered as benchmark index.
9. Restricted to last 10 equity initial public issues.

2. Summary statement of price information of past issues handled by Kotak:

404
 No. of IPOs trading at discount - No. of IPOs trading at premium No. of IPOs trading at discount - No. of IPOs trading at premium -
Total Total amount
Financial 30th calendar days from listing - 30th calendar days from listing 180th calendar days from listing 180th calendar days from listing
no. of of funds raised
Year Over Between Less than Over Between Less than Over Between Less than Over Between Less than
IPOs (₹ million)
50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25% 50% 25-50% 25%
2020-21 6 140,143.77 - - 1 1 1 1 - - - - - -
2019-20 4 136,362.82 - 1 - - 1 2 - - 1 - 1 2
2018-19 6 98,942.90 - - 3 1 1 1 - 1 3 - - 2
Notes:
1. The information is as on the date of this Draft Red Herring Prospectus.
2. The information for each of the financial years is based on issues listed during such financial year.

405
B. Credit Suisse

1. Price information of past issues handled by Credit Suisse:

S. No. Issue Name Issue Size Issue price Listing Date Opening +/- % change in closing +/- % change in closing +/- % change in closing
(₹ million) (₹) Price on price, [+/- % change in price, [+/- % change in price, [+/- % change in
listing date closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
(in ₹) calendar days from listing calendar days from listing calendar days from listing
1. Home First Finance 11,537.19 518.00 February 3, 618.80 NA* NA* NA*
Company India Limited 2021

2. Sterling and Wilson Solar 28,809.42 780.00 August 20, 706.00 -21.88%, [-1.60%] -48.63%, [7.97%] 64.78%, [9.95%]
Limited 2019
3. Metropolis Healthcare 12,042.90 880.00 April 15, 958.00 3.75%, [-4.01%] 21.39%, [-1.18%] 45.93%, [-3.30%]
Limited 2019
4. CreditAccess Grameen 11,311.88 422.00 August 23, 390.00 -21.16%, [-3.80%] -14.91%, [-8.00%] -5.88%, [-8.13%]
Limited 2018
5. Varroc Engineering 19,549.61 967.00 July 6, 2018 1,015.00 1.62%, [5.46%] -7.29%, [0.79%] -24.01%, [1.28%]
Limited
*Data not available

Notes:

(a) 30th, 90th, 180th calendar days from listed day have been taken as listing day plus 29, 89 and 179 calendar days, except wherever 30 th , 90th, 180th calendar day is a holiday, in which case
we have considered the closing data of the previous trading date

(b) % of change in closing price on 30th/ 90th / 180th calendar day from listing day is calculated vs issue price. % change in closing benchmark index is calculated based on closing index on
listing day vs closing index on 30th/ 90th / 180th calendar day from listing day.

(c) NIFTY is considered as the benchmark index.

2. Summary statement of price information of past issues handled by Credit Suisse:

Financial Total no. Total amount No. of IPOs trading at No. of IPOs trading at premium - No. of IPOs trading at discount - No. of IPOs trading at premium -
Year of IPOs of funds discount - 30th calendar days 30th calendar days from listing 180th calendar days from listing 180th calendar days from listing
raised from listing
(₹ million) Over Between Less Over 50% Between Less than Over 50% Between Less than Over 50% Between Less than
50% 25-50% than 25-50% 25% 25-50% 25% 25-50% 25%
25%
2020-21 1 11,537.19 - - - - - - - - - - - -
2019-20 2 40,852.32 - - 1 - - 1 1 - - - 1 -
2018-19 2 30,861.49 - - 1 - - 1 - - 2 - - -

406
C. JM Financial

1. Price information of past issues handled by JM Financial:

Sr. Issue name Issue Size Issue price Listing Opening +/- % change in +/- % change in closing +/- % change in closing
No. (` million) (`) Date price on closing price, [+/- % change in price, [+/- % change in
Listing Date price, [+/- % change closing benchmark] - closing benchmark] -
(in `) in 90th calendar days from 180th calendar days from
closing benchmark] - listing listing
30th calendar days
from listing
1. Stove Kraft Limited 4,126.25 385.00 February 05, 2021 498.00 Not Applicable Not Applicable Not Applicable
2. Burger King India Limited 8,100.00 60.00 December 14, 2020 112.50 146.50% [7.41%] Not Applicable Not Applicable
3. Equitas Small Finance Bank Limited 5,176.00 33.00 November 02, 2020 31.10 5.45% [12.34%] 19.55% [16.84%] Not Applicable
4. UTI Asset Management Company 21,598.84 554.00 October 12, 2020 500.00 -10.43% [5.87%] -0.60% [20.25%] Not Applicable
Limited
5. Mazgaon Dock Shipbuilders Limited 4,436.86 145.00 October 12, 2020 214.90 18.90% [5.87%] 52.90% [20.25%] Not Applicable
6. Prince Pipes and Fittings Limited 5,000.00 178.00 December 30, 2019 160.00 +0.14% [-1.63%] -44.33% [-29.34%] -35.00% [-15.28%]
7. Ujjivan Small Finance Bank Limited7 7,459.46 37.00 December 12, 2019 58.75 +41.08% [+2.38%] +10.27% [-12.70%] -16.62% [-15.07%]
8. Spandana Sphoorty Financial Limited 12,009.36 856.00 August 19, 2019 825.00 -0.56% [-2.14%] +52.76% [+7.61%] +17.32%[+9.59%]
9. Metropolis Healthcare Limited 12,042.88 880.00 April 15, 2019 958.00 +3.75% [-4.01%] +21.39% [-1.18%] +45.93% [-3.30%]
10. Chalet Hotels Limited 16,411.80 280.00 February 7, 2019 294.00 +1.14% [-0.31%] +24.41% [+3.87%] +10.77% [-1.87%]
Source: www.nseindia.com for price information and prospectus/basis of allotment for issue details
Notes:
1. Opening price information as disclosed on the website of NSE.
2. Change in closing price over the issue/offer price as disclosed on NSE.
3. Change in closing price over the closing price as on the listing date for benchmark index viz. NIFTY 50.
4. In case of reporting dates falling on a trading holiday, values for the trading day immediately preceding the trading holiday have been considered.
5. 30th calendar day has been taken as listing date plus 29 calendar days; 90th calendar day has been taken as listing date plus 89 calendar days; 180th calendar day has been taken a listing date
plus 179 calendar days.
6. Restricted to last 10 issues.
7. A discount of Rs. 2 per Equity Share was offered to Eligible Ujjivan Financial Services Limited Shareholders bidding in Ujjivan Financial Services Limited Shareholders Reservation Portion
8. Not Applicable – Period not completed

2. Summary statement of price information of past issues handled by JM Financial:

Financial Total Total funds Nos. of IPOs trading at Nos. of IPOs trading at premium Nos. of IPOs trading at discount Nos. of IPOs trading at premium
Year no. of raised discount on as on 30th calendar on as on 30th calendar days from as on 180th calendar days from as on 180th calendar days from
IPOs (` million) days from listing date listing date listing date listing date
Over Between Less Over Between Less Over Between Less Over Between Less
50% 25% - 50% than 50% 25%-50% than 50% 25%-50% than 50% 25%-50% than
25% 25% 25% 25%
2020-2021 5 43,437.95 - - 1 1 - 2 - - - - - -
2019-2020 4 36,400.83** - - 1 - 1 2 - 1 1 - 1 1
2018-2019 4 68,856.80 - - 1 1 - 2 - 1 - 1 - 2
**Spandana Sphoorty Financial Limited raised Rs. 11,898.49 million as against the issue size of ` 12,009.36 million

407
D. J. P. Morgan

1. Price information of past issues handled by J. P. Morgan:

S. No. Issue Name Issue Size Issue price Listing Date Opening +/- % change in closing +/- % change in closing +/- % change in closing
(₹ million) (₹) Price on price, [+/- % change in price, [+/- % change in price, [+/- % change in
listing date closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
(in ₹) calendar days from listing calendar days from listing calendar days from listing
1. HDFC Asset Management 28,003.3 1,100.00 August 6, 1,726.25 +58.04%, [+1.40%] +30.61%, [-7.11%] +23.78%, [-4.11%]
Company Limited 2018
2. Lemon Tree Hotels 10,386.9 56.00 April 9, 2018 61.60 +30.18%, [+3.74%] +29.91%, [+4.27%] +19.46%, [-0.15%]
Limited
Source: SEBI, Source: www.nseindia.com
a. Price on NSE is considered for all of the above calculation
b. In case 30th/90th/180th day is not a trading day, closing price on NSE of the previous trading day has been considered.
c. Closing price of 30th, 90th, 180th calendar day from listing day has been taken as listing day plus 29, 89 and 179 calendar days respectively
d. Pricing Performance for the company is calculated as per the final offer price
e. Pricing Performance for the benchmark index is calculated as per the close on the day prior to the listing date
f. Issue size as per the basis of allotment

2. Summary statement of price information of past issues handled by J. P. Morgan:

Financial Total no. Total amount No. of IPOs trading at No. of IPOs trading at premium - No. of IPOs trading at discount - No. of IPOs trading at premium -
Year of IPOs of funds discount - 30th calendar days 30th calendar days from listing 180th calendar days from listing 180th calendar days from listing
raised from listing
(₹ million) Over Between Less Over 50% Between Less than Over 50% Between Less than Over 50% Between Less than
50% 25-50% than 25-50% 25% 25-50% 25% 25-50% 25%
25%
2020-21 - - - - - - - - - - - - - -
2019-20 - - - - - - - - - - - - - -
2018-19 2 38,390.2 - - - 1 1 - - - - - - 2
Note: In the event that any day falls on a holiday, the price/ index of the previous trading day has been considered.
The information for each of the financial years is based on issues listed during such financial year.

408
E. Nomura

1. Price information of past issues handled by Nomura:

S. No. Issue Name Issue Size Issue price Listing Date Opening +/- % change in closing +/- % change in closing +/- % change in closing
(₹ million) (₹) Price on price, [+/- % change in price, [+/- % change in price, [+/- % change in
listing date closing benchmark]- 30th closing benchmark]- 90th closing benchmark]- 180th
(in ₹) calendar days from listing calendar days from listing calendar days from listing
1. Gland Pharma Limited November 20,
64,795.45 1,500 1,710.00 +48.43% [+7.01%] +57.27% [+18.27%] Not applicable
2020
2. Computer Age October 1,
Management Services 22,421.05 1,230 2020 1,518.00 +5.52% [+1.97%] +49.25% [+22.03%] Not applicable
Limited1
3. Happiest Minds September 17,
7,020.16 166 350.00 +96.05% [+2.14%] +93.25% [+17.82%] Not applicable
Technologies Limited 2020
4. SBI Cards and Payment March 16, -33.05% [-2.21%] -21.79% [+8.43%]
103,407.88 755 661.00 +12.50% [+24.65%]
Services Limited2 2020
5. Affle (India) Limited August 8, +86.32% [+8.02%]
4,590.00 745 926.00 +12.56% [-0.78%] +135.49% [+6.12%]
2019
6. HDFC Asset Management August 6,
28,003.31 1,100 1,726.25 +58.35% [+1.17%] +30.61% [-7.32%] +23.78% [-4.33%]
Company Limited 2018
7. Indostar Capital Finance May 21, 2018
18,440.00 572 600.00 -0.96% [+1.84%] -16.28% [+9.07%] -39.97% [+1.57%]
Limited
Source: www.nseindia.com

1. Discount of INR122.00 per Equity Share was offered to eligible employees bidding in the Employee Reservation Portion
2. Price for eligible employees bidding in the Employee Reservation Portion was ₹ 680.00 per equity share

Notes:

a. The CNX NIFTY has been considered as the Benchmark Index.

b. Price on NSE is considered for all of the above calculations.
c. In case 30th/90th/180th day is not a trading day, closing price on NSE of the previous trading day has been considered.
d. Not applicable – Period not completed

409
1. Summary statement of price information of past issues handled by Nomura:

Financial Total no. Total amount No. of IPOs trading at No. of IPOs trading at premium - No. of IPOs trading at discount - No. of IPOs trading at premium -
Year of IPOs of funds discount - 30th calendar days 30th calendar days from listing 180th calendar days from listing 180th calendar days from listing
raised from listing
(₹ million) Over Between Less Over 50% Between Less than Over 50% Between Less than Over 50% Between Less than
50% 25-50% than 25-50% 25% 25-50% 25% 25-50% 25%
25%
2020-2021 3 94,236.66 - - - 1 1 1 - - - - - -
2019-2020 2 107,997.88 - 1 - - - 1 - - - 1 - 1
2018-2019 2 46,443.31 - - 1 1 - - - 1 - - - 1
Source: www.nseindia.com

Notes:

a) The information is as on the date of this document.

b) The information for each of the financial years is based on issues listed during such financial year.

410
Track record of past issues handled by the Book Running Lead Managers

For details regarding the track record of the Book Running Lead Managers, as specified in circular bearing number
CIR/MIRSD/1/2012 dated January 10, 2012 issued by SEBI, please see the websites of the Book Running Lead Managers, as
provided in the table below:

S. Name of the Lead Manager Website

No.
1. Kotak Mahindra Capital Company Limited www.investmentbank.kotak.com
2. Credit Suisse Securities (India) Private Limited
www.credit-suisse.com/in/en/investment-banking-apac/investment-banking-in-
india/ipo/track-record.html
3. JM Financial Limited www.jmfl.com
4. J.P. Morgan India Private Limited www.jpmipl.com
5. Nomura Financial Advisory and Securities www.nomuraholdings.com/company/group/asia/india/index.html
(India) Private Limited

Disposal of Investor Grievances by our Company

The Registrar Agreement provides for retention of records with the Registrar to the Offer for a period of at least eight years from
the date of listing and commencement of trading of the Equity Shares to enable the Bidders to approach the Registrar to the Offer
for redressal of their grievances.

All grievances in relation to the Bidding process may be addressed to the Registrar to the Offer with a copy to the relevant
Designated Intermediary to whom the Bid cum Application Form was submitted. The Bidder should give full details such as
name of the sole or first Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN, UPI ID (in case of RIBs
using the UPI Mechanism), date of the submission of Bid cum Application Form, address of the Bidder, number of the Equity
Shares applied for and the name and address of the Designated Intermediary where the Bid cum Application Form was submitted
by the Bidder.

Further, the Bidder shall also enclose a copy of the Acknowledgment Slip duly received from the concerned Designated
Intermediary in addition to the information mentioned hereinabove.

The Registrar to the Offer shall obtain the required information from the SCSBs for addressing any clarifications or grievances
of ASBA Bidders. Our Company, the Book Running Lead Managers and the Registrar to the Offer accept no responsibility for
errors, omissions, commission or any acts of SCSBs including any defaults in complying with its obligations under the SEBI
ICDR Regulations. Bidders can contact the Compliance Officer or the Registrar to the Offer in case of any pre-Offer or post-
Offer related problems such as non-receipt of letters of Allotment, non-credit of Allotted Equity Shares in the respective
beneficiary account, non-receipt of refund intimations and non-receipt of funds by electronic mode.

Anchor Investors are required to address all grievances in relation to the Offer to the Book Running Lead Managers.

Our Company estimates that the average time required by our Company or the Registrar to the Offer or the relevant Designated
Intermediary, for the redressal of routine investor grievances shall be 10 Working Days from the date of receipt of the complaint.
In case of non-routine complaints and complaints where external agencies are involved, our Company will seek to redress these
complaints as expeditiously as possible.

Our Company has also appointed Ajay Pratap Singh, Vice President (Legal) and Company Secretary of our Company, as the
Compliance Officer for the Offer. For details, see “General Information” beginning on page 63.

Our Company has constituted a Stakeholders’ Relationship Committee comprising Shradha Suri, Prasan Abhaykumar Firodia,
Jeff M. Overly and Vivek Vikram Singh as its members which is responsible for redressal of grievances of security holders of
our Company. For further details on the Stakeholders’ Relationship Committee, see “Our Management – Committees of the
Board – Stakeholders’ Relationship Committee” on page 215.

Our Company shall obtain authentication on SEBI SCORES in terms of the SEBI circular bearing number CIR/OIAE/1/2013
dated April 17, 2013 and shall comply with SEBI circular bearing number CIR/OIAE/1/2014 dated December 18, 2014 in
relation to redressal of investor grievances through SCORES.

Our Company has not received any investor complaint during the three years preceding the date of this Draft Red Herring
Prospectus.

Further, no investor complaint in relation to our Company is pending as on the date of this Draft Red Herring Prospectus.

411
 SECTION VIII: OFFER INFORMATION

TERMS OF THE OFFER

The Equity Shares being offered and Allotted and transferred pursuant to the Offer shall be subject to the provisions of the
Companies Act, SEBI ICDR Regulations, SEBI Listing Regulations, SCRA, SCRR, our Memorandum of Association and
Articles of Association, the terms of the Red Herring Prospectus, Red Herring Prospectus, the Prospectus, the abridged
prospectus, the Bid cum Application Form, the Revision Form, the CAN or Allotment Advice and other terms and conditions as
may be incorporated in the Allotment Advices and other documents or certificates that may be executed in respect of the Offer.
The Equity Shares shall also be subject to laws as applicable, guidelines, rules, notifications and regulations relating to the issue
of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchanges,
the RBI, the RoC and/or other authorities, as in force on the date of the Offer and to the extent applicable or such other conditions
as may be prescribed by SEBI, the RBI, the Government of India, the Stock Exchanges, the RoC or any other authorities while
granting its approval for the Offer.

The Offer

The Offer comprises a Fresh Issue by our Company and an Offer for Sale by the Selling Shareholder.

Ranking of the Equity Shares

The Equity Shares being offered/Allotted and transferred pursuant to the Offer shall be subject to the provisions of the Companies
Act, SEBI ICDR Regulations, SEBI Listing Regulations, SCRA, SCRR, our Memorandum of Association and Articles of
Association and shall rank pari passu in all respects with the existing Equity Shares including in respect of the right to receive
dividend, voting and other corporate benefits. For further details, see “Main Provisions of Articles of Association” beginning on
page 436.

Mode of Payment of Dividend

Our Company shall pay dividends, if declared, to the Shareholders in accordance with the provisions of the Companies Act, our
Articles of Association and provisions of the SEBI Listing Regulations and any other guidelines or directions which may be
issued by the Government in this regard. Dividends, if any, declared by our Company after the date of Allotment (pursuant to
the transfer of Equity Shares from the Offer for Sale), will be payable to the Bidders who have been Allotted Equity Shares in
the Offer, for the entire year, in accordance with applicable laws. For further details in relation to dividends, see “Dividend
Policy” and “Main Provisions of Articles of Association” beginning on pages 229 and 436, respectively.

Face Value, Offer Price and Price Band

The face value of each Equity Share is ₹ 10 and the Offer Price is ₹ [●] per Equity Share. The Floor Price is ₹ [●] per Equity
Share and at the Cap Price is ₹ [●] per Equity Share, being the Price Band. The Anchor Investor Offer Price is ₹ [●] per Equity
Share.

The Price Band and the minimum Bid Lot will be decided by our Company and the Selling Shareholder in consultation with the
Book Running Lead Managers and advertised in all editions of [●] and all editions of [●] (which are widely circulated English
daily newspapers and Hindi daily newspapers, Hindi also being the regional language of Haryana, where our Registered and
Corporate Office is located) each with wide circulation, at least two Working Days prior to the Bid/Offer Opening Date and shall
be made available to the Stock Exchanges for the purpose of uploading the same on their websites. The Price Band, along with
the relevant financial ratios calculated at the Floor Price and at the Cap Price, shall be pre-filled in the Bid cum Application
Forms available on the websites of the Stock Exchanges. The Offer Price shall be determined by our Company and Selling
Shareholder, in consultation with the Book Running Lead Managers, after the Bid/Offer Closing Date.

At any given point of time there shall be only one denomination of Equity Shares.

Compliance with disclosure and accounting norms

Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time.

Rights of the Equity Shareholders

Subject to applicable laws, rules, regulations and guidelines and our Articles of Association, our Shareholders shall have the
following rights:

• Right to receive dividends, if declared;

• Right to attend general meetings and exercise voting rights, unless prohibited by law;

412
• Right to vote on a poll either in person or by proxy or “e-voting”, in accordance with the provisions of the Companies
Act;

• Right to receive offers for rights shares and bonus shares, if announced;

• Right to receive surplus on liquidation, subject to any statutory and preferential claim being satisfied;

• Right of free transferability of Equity Shares, subject to applicable laws; and

• Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the SEBI
Listing Regulations and our Articles of Association.

For a detailed description of the main provisions of the Articles of Association of our Company relating to voting rights, dividend,
forfeiture and lien, transfer, transmission, consolidation or sub-division, see “Main Provisions of Articles of Association”
beginning on page 436.

Allotment only in Dematerialised Form

Pursuant to Section 29 of the Companies Act and the SEBI ICDR Regulations, the Equity Shares shall be Allotted only in
dematerialised form. As per the SEBI ICDR Regulations, the trading of the Equity Shares shall only be in dematerialised form.
In this context, two agreements have been signed amongst our Company, the respective Depositories and the Registrar to the
Offer:

• Tripartite agreement dated February 7, 2019 amongst our Company, CDSL and the Registrar to the Offer; and

• Tripartite agreement dated January 12, 2009 between our Company, NSDL and the Registrar to the Offer.

Market Lot and Trading Lot

Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in the Offer will be
only in electronic form in multiples of one Equity Share subject to a minimum Allotment of [●] Equity Shares. For further details,
see “Offer Procedure” beginning on page 419.

Joint Holders

Subject to the provisions contained in our Articles of Association, where two or more persons are registered as the holders of the
Equity Shares, they shall be entitled to hold the same as joint tenants with benefits of survivorship.

Nomination facility to Bidders

In accordance with Section 72 of the Companies Act read with the Companies (Share Capital and Debentures) Rules, 2014, as
amended, the sole Bidder, or the first Bidder along with other joint Bidders, may nominate any one person in whom, in the event
of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if
any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall be
entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s).
Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become
entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale,
transfer or alienation of Equity Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the
manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Registered and
Corporate Office or to the registrar and transfer agents of our Company.

Any person who becomes a nominee by virtue of the provisions of Section 72 of the Companies Act shall upon the production
of such evidence as may be required by our Board, elect either:

a) to register himself or herself as the holder of the Equity Shares; or

b) to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, our Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to
transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, our Board may thereafter withhold
payment of all dividends, interests, bonuses or other monies payable in respect of the Equity Shares, until the requirements of
the notice have been complied with.

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Since the Allotment of Equity Shares in the Offer will be made only in dematerialised mode there is no need to make a separate
nomination with our Company. Nominations registered with respective Depository Participant of the Bidder would prevail. If
the Bidder wants to change their nomination, they are requested to inform their respective Depository Participant.

Withdrawal of the Offer

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, reserve the right not to
proceed with the Fresh Issue, and the Selling Shareholder reserves the right to not proceed with the Offer for Sale, in whole or
in part thereof, to the extent of the Offered Shares after the Bid/Offer Opening Date but before the Allotment. In such an event,
our Company would issue a public notice in the newspapers in which the pre-Offer advertisements were published, within two
days of the Bid/Offer Closing Date or such other time as may be prescribed by SEBI, providing reasons for not proceeding with
the Offer. The Book Running Lead Managers through the Registrar to the Offer, shall notify the SCSBs and the Sponsor Bank,
in case of RIBs using the UPI Mechanism, to unblock the bank accounts of the ASBA Bidders (other than Anchor Investors)
shall notify the Escrow Collection Banks to release the Bid Amounts to the Anchor Investors, within one Working Day from the
date of receipt of such notification. Our Company shall also inform the same to the Stock Exchanges on which Equity Shares
are proposed to be listed.

Notwithstanding the foregoing, the Offer is also subject to obtaining (i) the final listing and trading approvals of the Stock
Exchanges, which our Company shall apply for after Allotment, and (ii) the final RoC approval of the Prospectus after it is filed
with the RoC. If our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, withdraw
the Offer after the Bid/Offer Closing Date and thereafter determine that they will proceed with a public offering of the Equity
Shares, our Company shall file a fresh draft red herring prospectus with SEBI and the Stock Exchanges.

Bid/Offer Programme

BID/OFFER OPENS ON [●]*

BID/OFFER CLOSES ON [●]**
* Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, consider participation by Anchor Investors in
accordance with the SEBI ICDR Regulations. The Anchor Investor Bid/Offer Period shall be one Working Day prior to the Bid/Offer Opening Date in
accordance with the SEBI ICDR Regulations.

** Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, consider closing the Bid/Offer Period for QIBs
one Working Day prior to the Bid/Offer Closing Date in accordance with the SEBI ICDR Regulations.

An indicative timetable in respect of the Offer is set out below:

Event Indicative Date

Bid/Offer Closing Date [●]
Finalisation of Basis of Allotment with the Designated Stock Exchange On or about [●]
Initiation of refunds (if any, for Anchor Investors)/unblocking of funds from ASBA Account * On or about [●]
Credit of Equity Shares to demat accounts of Allottees On or about [●]
Commencement of trading of the Equity Shares on the Stock Exchanges On or about [●]
* In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked through the UPI Mechanism) exceeding four Working
Days from the Bid/Offer Closing Date, the Bidder shall be compensated at a uniform rate of ₹ 100 per day for the entire duration of delay exceeding four
Working Days from the Bid/Offer Closing Date by the intermediary responsible for causing such delay in unblocking. The Book Running Lead Managers
shall, in their sole discretion, identify and fix the liability on such intermediary or entity responsible for such delay in unblocking.

The above timetable is indicative and does not constitute any obligation or liability on our Company or the Selling
Shareholder or the Book Running Lead Managers.

Whilst our Company shall ensure that all steps for the completion of the necessary formalities for the listing and the
commencement of trading of the Equity Shares on the Stock Exchanges are taken within six Working Days of the
Bid/Offer Closing Date or such other time as may be prescribed by SEBI, the timetable may be subject to change due to
various factors, such as extension of the Bid/Offer Period by our Company and the Selling Shareholder, revision of the
Price Band or any delay in receiving the final listing and trading approval from the Stock Exchanges or delay in receipt
of final certificates from SCSBs, etc. The commencement of trading of the Equity Shares will be entirely at the discretion
of the Stock Exchanges and in accordance with the applicable laws. The Selling Shareholder confirms that it shall extend
reasonable co-operation in relation to the Offered Shares required by our Company and the Book Running Lead
Managers for the completion of the necessary formalities for listing and commencement of trading of the Equity Shares
at the Stock Exchanges within six Working Days from the Bid/Offer Closing Date or such other time as may be prescribed
by SEBI.

In terms of the UPI Circulars, in relation to the Offer, the Book Running Lead Managers will be required to submit reports of
compliance with timelines and activities prescribed by SEBI in connection with the allotment and listing procedure within six
Working Days from the Bid/Offer Closing Date, identifying non-adherence to timelines and processes and an analysis of entities
responsible for the delay and the reasons associated with it.

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Submission of Bids (other than Bids from Anchor Investors):

Bid/Offer Period (except the Bid/Offer Closing Date)

Submission and Revision in Bids Only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time (“IST”)
Bid/Offer Closing Date
Submission and Revision in Bids Only between 10.00 a.m. and 3.00 p.m. IST

On the Bid/Offer Closing Date, the Bids shall be uploaded until:

(i) 4.00 p.m. IST in case of Bids by QIBs and Non-Institutional Bidders, and

(ii) until 5.00 p.m. IST or such extended time as permitted by the Stock Exchanges, in case of Bids by RIBs.

On Bid/Offer Closing Date, extension of time will be granted by Stock Exchanges only for uploading Bids received by RIBs
after taking into account the total number of Bids received and as reported by the Book Running Lead Managers to the Stock
Exchanges.

It is clarified that Bids not uploaded on the electronic bidding system or in respect of which the full Bid Amount is not
blocked by SCSBs or not blocked under the UPI Mechanism in the relevant ASBA Account, as the case may be, would
be rejected.

Due to limitation of time available for uploading the Bids on the Bid/Offer Closing Date, Bidders are advised to submit their
Bids one day prior to the Bid/Offer Closing Date. Any time mentioned in this Draft Red Herring Prospectus is IST. Bidders are
cautioned that, in the event a large number of Bids are received on the Bid/Offer Closing Date, some Bids may not get uploaded
due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Offer. Bids will
be accepted only during Monday to Friday (excluding any public holiday). None of our Company, the Selling Shareholder or
any member of the Syndicate is liable for any failure in uploading the Bids due to faults in any software or hardware system or
blocking of application amount by SCSBs on receipt of instructions from the Sponsor Bank due to any errors, omissions, or
otherwise non-compliance by various parties involved in, or any other fault, malfunctioning or breakdown in the UPI Mechanism.

In case of any discrepancy in the data entered in the electronic book vis-à-vis the data contained in the physical Bid cum
Application Form, for a particular Bidder, the details as per the Bid file received from the Stock Exchanges shall be taken as the
final data for the purpose of Allotment.

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, reserve the right to revise
the Price Band during the Bid/Offer Period in accordance with the SEBI ICDR Regulations. The revision in the Price Band shall
not exceed 20% on either side, i.e. the Floor Price can move up or down to the extent of 20% of the Floor Price and the Cap
Price will be revised accordingly, but the Floor Price shall not be less than the face value of the Equity Shares. In all
circumstances, the Cap Price shall be less than or equal to 120% of the Floor Price.

In case of any revision to the Price Band, the Bid/Offer Period will be extended by at least three additional Working Days
following such revision of the Price Band, subject to the Bid/Offer Period not exceeding 10 Working Days. In cases of
force majeure, banking strike or similar circumstances, our Company may, for reasons to be recorded in writing, extend
the Bid/Offer Period for a minimum of three Working Days, subject to the Bid/Offer Period not exceeding 10 Working
Days. Any revision in the Price Band and the revised Bid/Offer Period, if applicable, will be widely disseminated by
notification to the Stock Exchanges, by issuing a public notice, and also by indicating the change on the respective websites
of the Book Running Lead Managers and at the terminals of the Syndicate Members and by intimation to Self-Certified
Syndicate Banks (“SCSBs”), other Designated Intermediaries and the Sponsor Bank, as applicable.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Fresh Issue on the date of closure of the Offer; or
withdrawal of applications; or after technical rejections; or if the listing or trading permission is not obtained from the Stock
Exchanges for the Equity Shares so offered under the Offer Document and a subscription in the Offer equivalent to at least the
minimum number of securities as specified under Rule 19(2)(b)(iii) of the SCRR, our Company shall forthwith refund the entire
subscription amount received. If there is a delay beyond fifteen days, our Company and every Director of our Company, who
are officers in default, shall pay interest at the rate of fifteen per cent per annum. Subject to applicable law, a Selling Shareholder
shall not be responsible to pay interest for any delay, unless such default or delay has been caused solely by the Selling
Shareholder.

The requirement for minimum subscription is not applicable to the Offer for Sale. In case of under-subscription in the Offer,
after meeting the minimum subscription requirement of 90% of the Fresh Issue, the balance subscription in the Offer will be met
in the following order of priority: (i) through the sale of Offered Shares being offered by the Selling Shareholder in the Offer for
Sale; and (ii) through the issuance of balance part of the Fresh Issue.

415
Undersubscription, if any, in any category except the QIB portion, would be met with spill-over from the other categories at the
discretion of our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, and the
Designated Stock Exchange.

Further, our Company shall ensure that the number of prospective Allottees to whom the Equity Shares will be Allotted shall not
be less than 1,000 in compliance with Regulation 49(1) of SEBI ICDR Regulations.

Arrangements for Disposal of Odd Lots

Since the Equity Shares will be traded in dematerialised form only, and the market lot for our Equity Shares will be one Equity
Share, no arrangements for disposal of odd lots are required.

New Financial Instruments

Our Company is not issuing any new financial instruments through this Offer.

Restrictions, if any on Transfer and Transmission of Equity Shares

Except for the lock-in of the pre-Offer Equity Share capital of our Company, lock-in of Sona Autocomp’s minimum contribution
and the Anchor Investor lock-in as provided in “Capital Structure” beginning on page 71 and except as provided in the Articles
of Association, there are no restrictions on transfer or transmission of Equity Shares and their consolidation or sub-division. For
details see “Main Provisions of Articles of Association” beginning on page 436.

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 OFFER STRUCTURE

The Offer is of up to [●]* Equity Shares of face value of ₹ 10 at an Offer Price of ₹ [●] per Equity Share for cash (including a
share premium of ₹ [●] per Equity Share) aggregating up to ₹ 60,000 million comprising a Fresh Issue of up to [●] Equity Shares
aggregating up to ₹ 3,000 million and an Offer of Sale of up to [●] Equity Shares aggregating up to ₹ 57,000 million by the
Selling Shareholder. The Offer will constitute [●]% of the post-Offer paid-up Equity Share capital of our Company.
* Subject to finalisation of the Basis of Allotment.

The Offer is being made through the Book Building Process.

Particulars QIBs(1) Non-Institutional Bidders RIBs

Number of Equity Not less than [●] Equity Shares Not more than [●] Equity Not more than [●] Equity
Shares available for Shares available for allocation Shares available for allocation
Allotment or or Offer less allocation to QIB or Offer less allocation to QIB
allocation*(2) Bidders and RIBs Bidders and Non-Institutional
Bidders

Percentage of Offer size Not less than 75% of the Offer being available for Not more than 15% of the Not more than 10% of the
available for Allotment allocation to QIB Bidders. However, up to 5% of Offer or the Offer less Offer or Offer less allocation
or allocation the Net QIB Portion will be available for allocation to QIB Bidders and to QIB Bidders and Non-
allocation proportionately to Mutual Funds only. RIBs Institutional Bidders
Mutual Funds participating in the Mutual Fund
Portion will also be eligible for allocation in the
remaining Net QIB Portion. The unsubscribed
portion in the Mutual Fund Portion will be added
to the Net QIB Portion

Basis of Allotment if Proportionate as follows (excluding the Anchor Proportionate The allotment to each RIB
respective category is Investor Portion): shall not be less than the
oversubscribed* minimum Bid Lot, subject to
(a) Up to [●] Equity Shares shall be availability of Equity Shares
available for allocation on a in the Retail Portion and the
proportionate basis to Mutual Funds remaining available Equity
only; and Shares if any, shall be allotted
on a proportionate basis. For
(b) Up to [●] Equity Shares shall be further details, see “Offer
available for allocation on a Procedure” beginning on
proportionate basis to all QIBs, page 419.
including Mutual Funds receiving
allocation as per (a) above.

Up to [●] Equity Shares may be allocated on a

discretionary basis to Anchor Investors of which
one-third shall be available for allocation to
Mutual Funds only, subject to valid Bid received
from Mutual Funds at or above the Anchor
Investor Allocation Price

Mode of Bid ASBA only (excluding the UPI Mechanism)(3) ASBA only (excluding the ASBA only (including the
UPI Mechanism) UPI Mechanism)

Minimum Bid Such number of Equity Shares in multiples of [●] Such number of Equity Shares [●] Equity Shares
Equity Shares such that the Bid Amount exceeds in multiples of [●] Equity
₹ 200,000 Shares such that the Bid
Amount exceeds ₹ 200,000

Maximum Bid Such number of Equity Shares in multiples of [●] Such number of Equity Shares Such number of Equity Shares
Equity Shares not exceeding the size of the Offer, in multiples of [●] Equity in multiples of [●] Equity
subject to limits applicable to each Bidder Shares not exceeding the size Shares so that the Bid Amount
of the Offer (excluding the does not exceed ₹ 200,000
QIB Portion), subject to limits
applicable to Bidder

Mode of Allotment Compulsorily in dematerialised form

Bid Lot [●] Equity Shares and in multiples of [●] Equity Shares thereafter

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 Particulars QIBs(1) Non-Institutional Bidders RIBs

Allotment Lot A minimum of [●] Equity Shares and in multiples of one Equity Share thereafter

Trading Lot One Equity Share

Who can apply(4) Public financial institutions as specified in Section Resident Indian individuals, Resident Indian individuals,
2(72) of the Companies Act 2013, scheduled Eligible NRIs, HUFs (in the HUFs (in the name of Karta)
commercial banks, multilateral and bilateral name of Karta), companies, and Eligible NRIs applying
development financial institutions, mutual funds corporate bodies, scientific for Equity Shares such that the
registered with SEBI, FPIs other than individuals, institutions, societies, family Bid amount does not exceed ₹
corporate bodies and family offices, VCFs, AIFs, offices, trusts and FPIs who 2,00,000 in value.
FVCIs registered with SEBI, state industrial are individuals, corporate
development corporation, insurance company bodies and family offices for
registered with IRDAI, provident fund with Equity Shares such that the
minimum corpus of ₹ 250 million, pension fund Bid Amount exceeds ₹
with minimum corpus of ₹ 250 million, National 2,00,000 in value.
Investment Fund set up by the Government of
India, insurance funds set up and managed by
army, navy or air force of the Union of India,
insurance funds set up and managed by the
Department of Posts, India and Systemically
Important NBFCs

Terms of Payment In case of Anchor Investors: Full Bid Amount shall be payable by the Anchor Investors at the time of submission
of their Bids(5)

In case of all other Bidders: Full Bid Amount shall be blocked by the SCSBs in the bank account of the ASBA
Bidder, or by the Sponsor Bank through the UPI Mechanism, that is specified in the ASBA Form at the time of
submission of the ASBA Form

* Assuming full subscription in the Offer

(1) Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers may allocate up to 60% of the QIB Category to Anchor
Investors at the Anchor Investor Offer Price, on a discretionary basis, subject to there being (i) a maximum of two Anchor Investors, where allocation in
the Anchor Investor Portion is up to ₹ 100 million, (ii) minimum of two and maximum of 15 Anchor Investors, where the allocat ion under the Anchor
Investor Portion is more than ₹ 100 million but up to ₹ 2,500 million under the Anchor Investor Portion, subject to a minimum Allotment of ₹ 50 million
per Anchor Investor, and (iii) in case of allocation above ₹ 2,500 million under the Anchor Investor Portion, a minimum of fi ve such investors and a
maximum of 15 Anchor Investors for allocation up to ₹ 2,500 million, and an additional 10 Anchor Investors for every addition al ₹ 2,500 million or part
thereof will be permitted, subject to minimum allotment of ₹ 50 million per Anchor Investor. An Anchor Investor will make a minimum Bid of such number
of Equity Shares, that the Bid Amount is at least ₹ 100 million. One-third of the Anchor Investor Portion will be reserved for domestic Mutual Funds,
subject to valid Bids being received at or above the price at which allocation is made to Anchor Investors.
(2) Subject to valid Bids being received at or above the Offer Price. This is an Offer in terms of Rule 19(2)(b) of the SCRR and Regulation 6(2) of the SEBI
ICDR Regulations.
(3) Anchor Investors are not permitted to use the ASBA process.
(4) In case of joint Bids, the Bid cum Application Form should contain only the name of the first Bidder whose name should also a ppear as the first holder of
the beneficiary account held in joint names. The signature of only such first Bidder would be required in the Bid cum Application Form and such first
Bidder would be deemed to have signed on behalf of the joint holders.
(5) Full Bid Amount shall be payable by the Anchor Investors at the time of submission of the Anchor Investor Application Forms provided that any difference
between the Anchor Investor Allocation Price and the Anchor Investor Offer Price shall be payable by the Anchor Investor Pay -In Date as indicated in the
CAN.

Bidders will be required to confirm and will be deemed to have represented to our Company, the Selling Shareholder, the
Underwriters, their respective directors, officers, agents, affiliates and representatives that they are eligible under applicable law,
rules, regulations, guidelines and approvals to acquire the Equity Shares.

Subject to valid Bids being received at or above the Offer Price, undersubscription, if any, in any category except the QIB
Portion, would be met with spill-over from the other categories or a combination of categories at the discretion of our Company
and the Selling Shareholder, in consultation with the Book Running Lead Managers, and the Designated Stock Exchange. For
further details, see the “Terms of the Offer” beginning on page 412.

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 OFFER PROCEDURE

All Bidders should read the General Information Document, which highlights the key rules, processes and procedures applicable
to public issues in general in accordance with the provisions of the Companies Act, the SCRA, the SCRR and the SEBI ICDR
Regulations. The General Information Document is available on the websites of the Stock Exchanges and the Book Running
Lead Managers. Please refer to the relevant provisions of the General Information Document which are applicable to the Offer
especially in relation to the process for Bids by RIBs through the UPI Mechanism. The investors should note that the details and
process provided in the General Information Document should be read along with this section.

Additionally, all Bidders may refer to the General Information Document for information in relation to (i) category of investors
eligible to participate in the Issue; (ii) maximum and minimum Bid size; (iii) price discovery and allocation; (iv) payment
instructions for ASBA Bidders; (v) issuance of Confirmation of Allocation Note (“CAN”)) and Allotment in the Issue; (vi) price
discovery and allocation; (vii) general instructions (limited to instructions for completing the Bid cum Application Form); (viii)
designated date; (ix) disposal of applications; (x) submission of Bid cum Application Form; (xi) other instructions (limited to
joint bids in cases of individual, multiple bids and instances when an application would be rejected on technical grounds); (xii)
applicable provisions of the Companies Act relating to punishment for fictitious applications; (xiii) mode of making refunds;
and (xiv) interest in case of delay in Allotment or refund.

SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2018/138 dated November 1, 2018 read with its circular no.
SEBI/HO/CFD/DIL2/CIR/P/2019/50 dated April 3, 2019, has introduced an alternate payment mechanism using Unified
Payments Interface (“UPI”) and consequent reduction in timelines for listing in a phased manner. From January 1, 2019, the
UPI Mechanism for RIBs applying through Designated Intermediaries was made effective along with the existing process and
existing timeline of T+6 days. (“UPI Phase I”). The UPI Phase I was effective till June 30, 2019.

With effect from July 1, 2019, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/76 dated June 28, 2019, read with
circular bearing number SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 with respect to Bids by RIBs through
Designated Intermediaries (other than SCSBs), issued by SEBI, the existing process of physical movement of forms from such
Designated Intermediaries to SCSBs for blocking of funds has been discontinued and only the UPI Mechanism for such Bids
with existing timeline of T+6 days will continue for a period of three months or launch of five main board public issues, whichever
is later (“UPI Phase II”). Subsequently however, SEBI vide its circular no. SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated
November 8, 2019 extended the timeline for implementation of UPI Phase II till March 31, 2020. However, given the prevailing
uncertainty due to the COVID-19 pandemic, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated March 30,
2020, has decided to continue with the UPI Phase II till further notice. The final reduced timeline of T+3 days for the UPI
Mechanism for applications by RIBs (“UPI Phase III”) and modalities of the implementation of UPI Phase III maybe notified
and made effective subsequently, as may be prescribed by SEBI. The Offer will be undertaken pursuant to the processes and
procedures under UPI Phase II, subject to any circulars, clarification or notification issued by the SEBI from time to time.

Our Company, the Selling Shareholder and the Book Running Lead Managers do not accept any responsibility for the
completeness and accuracy of the information stated in this section and the General Information Document, and are not liable
for any amendment, modification or change in the applicable law which may occur after the date of this Draft Red Herring
Prospectus. Bidders are advised to make their independent investigations and ensure that their Bids are submitted in accordance
with applicable laws and do not exceed the investment limits or maximum number of the Equity Shares that can be held by them
under applicable law or as specified in the Red Herring Prospectus and the Prospectus.

Further, our Company, the Selling Shareholder and the members of the Syndicate are not liable for any adverse occurrences
consequent to the implementation of the UPI Mechanism for application in the Offer.

Book Building Procedure

The Offer is being made in terms of Rule 19(2)(b) of the SCRR through the Book Building Process in accordance with Regulation
6(2) of the SEBI ICDR Regulations, wherein not less than 75% of the Offer shall be allocated on a proportionate basis to QIBs.
Our Company and the Selling Shareholder may, in consultation with the Book Running Lead Managers, allocate up to 60% of
the QIB Portion to Anchor Investors at the Anchor Investor Allocation Price, on a discretionary basis in accordance with the
SEBI ICDR Regulations, out of which one-third shall be available for allocation to domestic Mutual Funds, subject to valid Bids
being received from domestic Mutual Funds at or above the Anchor Investor Allocation Price. In the event of under-subscription,
or non-allocation in the Anchor Investor Portion, the balance Equity Shares shall be added to the QIB Portion. Further, 5% of
the QIB Portion (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis only to Mutual
Funds, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders other
than Anchor Investors, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. Further, not
more than 15% of the Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not more
than 10% of the Offer shall be available for allocation to RIBs in accordance with SEBI ICDR Regulations, subject to valid Bids
being received at or above the Offer Price.

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Subject to valid Bids being received at or above the Offer Price, under-subscription, if any, in any category except in the QIB
Portion, would be allowed to be met with spill-over from any other category or combination of categories, at the discretion of
our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers, and the Designated Stock
Exchange and subject to applicable laws.

The Equity Shares, on Allotment, shall be traded only in the dematerialised segment of the Stock Exchanges.

Bidders should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised form. The Bid
cum Application Forms, which do not have the details of the Bidders’ depository account, including DP ID, Client ID,
UPI ID (in case of RIBs using the UPI Mechanism) and PAN, shall be treated as incomplete and will be rejected. Bidders
will not have the option of being Allotted Equity Shares in physical form.

Phased implementation of UPI for Bids by RIBs as per the UPI Circulars

SEBI has issued UPI Circulars in relation to streamlining the process of public issue of equity shares and convertibles by
introducing an alternate payment mechanism using UPI. Pursuant to the UPI Circulars, UPI has been introduced in a phased
manner as a payment mechanism (in addition to mechanism of blocking funds in the account maintained with SCSBs under the
ASBA) for applications by RIBs through intermediaries with the objective to reduce the time duration from public issue closure
to listing from six Working Days to up to three Working Days. Considering the time required for making necessary changes to
the systems and to ensure complete and smooth transition to the UPI payment mechanism, the UPI Circulars have introduced
and implemented the UPI payment mechanism in three phases in the following manner:

a) Phase I: This phase was applicable from January 1, 2019 until March 31, 2019 or floating of five main board public
issues, whichever was later. Subsequently, the timeline for implementation of Phase I was extended until June 30, 2019.
Under this phase, a RIB also had the option to submit the ASBA Form with any of the intermediary and use his / her
UPI ID for the purpose of blocking of funds. The time duration from public issue closure to listing would continue to
be six Working Days.

b) Phase II: This phase has become applicable from July 1, 2019 and was to initially continue for a period of three months
or floating of five main board public issues, whichever is later. SEBI vide its circular no.
SEBI/HO/CFD/DCR2/CIR/P/2019/133 dated November 8, 2019 has decided to extend the timeline for implementation
of UPI Phase II until March 31, 2020. Under this phase, submission of the physical ASBA Form by a RIB through
Designated Intermediaries (other than SCSBs) to SCSBs for blocking of funds has been discontinued and is replaced
by the UPI payment mechanism. However, the time duration from public issue closure to listing continues to be six
Working Days during this phase. Subsequently, SEBI vide its circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/50 dated
March 30, 2020 extended the timeline for implementation of UPI Phase II till further notice.

c) Phase III: The commencement period of Phase III is yet to be notified. In this phase, the time duration from public
issue closure to listing would be reduced to be three Working Days. Accordingly, upon commencement of Phase III,
the reduced time duration shall be applicable for the Offer.

The Offer will be made under UPI Phase II of the UPI Circular, unless UPI Phase III of the UPI Circular becomes effective and
applicable on or prior to the Bid/Offer Opening Date. If the Offer is made under UPI Phase III of the UPI Circular, the same will
be advertised in all editions of [●] and all editions of [●] (which are widely circulated English daily newspapers and Hindi daily
newspapers, Hindi also being the regional language of Haryana, where our Registered and Corporate Office is located) , on or
prior to the Bid/Offer Opening Date and such advertisement shall also be made available to the Stock Exchanges for the purpose
of uploading on their websites.

All SCSBs offering facility of making application in public issues shall also provide facility to make application using UPI. The
Company will be required to appoint one of the SCSBs as a sponsor bank to act as a conduit between the Stock Exchanges and
NPCI in order to facilitate collection of requests and / or payment instructions of the RIBs using the UPI.

For further details, refer to the General Information Document available on the websites of the Stock Exchanges and the Book
Running Lead Managers.

Bid cum Application Form

Copies of the Bid cum Application Form (other than for Anchor Investors) and the abridged prospectus will be available with
the Designated Intermediaries at the relevant Bidding Centres, and at our Registered Corporate Office. An electronic copy of the
Bid cum Application Form will also be available for download on the websites of NSE (www.nseindia.com) and BSE
(www.bseindia.com) at least one day prior to the Bid / Offer Opening Date.

All Bidders (other than Anchor Investors) shall mandatorily participate in the Offer only through the ASBA process. ASBA
Bidders must provide either (i) the bank account details and authorisation to block funds in their respective ASBA Form, or (ii)

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the UPI ID (in case of RIBs), as applicable, in the relevant space provided in the ASBA Form. The ASBA Forms that do not
contain such details will be rejected. Applications made by the RIBs using third party bank account or using third party linked
bank account UPI ID are liable for rejection. Anchor Investors are not permitted to participate in the Offer through the ASBA
process.

ASBA Bidders shall ensure that the Bids are made on ASBA Forms bearing the stamp of the Designated Intermediary, submitted
at the Bidding Centres only (except in case of electronic ASBA Forms) and the ASBA Forms not bearing such specified stamp
are liable to be rejected. RIBs using UPI Mechanism, shall submit their ASBA Forms with Syndicate Members, Registered
Brokers, RTA or Depository Participants. ASBA Bidders are also required to ensure that the ASBA Account has sufficient credit
balance as an amount equivalent to the full Bid Amount which can be blocked by the SCSB.

For Anchor Investor, the Anchor Investor Application Form will be available at the offices of the Book Running Lead Managers.

The prescribed colour of the Bid cum Application Form for the various categories is as follows:

Category Colour of Bid cum

Application Form*
Resident Indians, including QIBs, Non-institutional Investors and Retail Individual Investors, each resident in India White
and Eligible NRIs applying on a non-repatriation basis
Non-Residents including Eligible NRIs, their sub-accounts (other than sub-accounts which are foreign corporates or Blue
foreign individuals under the QIB Portion), FPIs or FVCIs registered multilateral and bilateral development financial
institutions applying on a repatriation basis
Anchor Investors White**
* Excluding electronic Bid cum Application Form
** Bid cum Application Forms for Anchor Investors will be made available at the office of the Book Running Lead Managers.
Electronic Bid cum Application forms will also be available for download on the website of NSE (www.nseindia.com) and BSE (www.bseindia.com).

The Designated Intermediaries (other than SCSBs) shall submit/deliver the Bid cum Application Form to the respective SCSB,
where the Bidder has a bank account and shall not submit it to any non-SCSB bank or any Escrow Collection Bank. Further,
SCSBs shall upload the relevant Bid details (including UPI ID in case of ASBA Forms under the UPI Mechanism) in the
electronic bidding system of the Stock Exchanges. Stock Exchanges shall validate the electronic bids with the records of the
CDP for DP ID/Client ID and PAN, on a real time basis and bring inconsistencies to the notice of the relevant Designated
Intermediaries, for rectification and re-submission within the time specified by Stock Exchanges. Stock Exchanges shall allow
modification of either DP ID/Client ID or PAN ID, bank code and location code in the Bid details already uploaded.

For RIBs using UPI mechanism, the Stock Exchanges shall share the bid details (including UPI ID) with Sponsor Bank on a
continuous basis to enable the Sponsor Bank to initiate UPI Mandate Request to RIBs for blocking of funds. The Sponsor Bank
shall initiate request for blocking of funds through NPCI to RIBs, who shall accept the UPI Mandate Request for blocking of
funds on their respective mobile applications associated with UPI ID linked bank account. The NPCI shall maintain an audit trail
for every bid entered in the Stock Exchanges bidding platform, and the liability to compensate RIBs (using the UPI Mechanism)
in case of failed transactions shall be with the concerned entity (i.e. the Sponsor Bank, NPCI or the Bankers to the Offer) at
whose end the lifecycle of the transaction has come to a halt. The NPCI shall share the audit trail of all disputed transactions/
investor complaints to the Sponsor Banks and the Bankers to the Offer. The Book Running Lead Managers shall also be required
to obtain the audit trail from the Sponsor Banks and the Bankers to the Offer for analysing the same and fixing liability.

Electronic registration of Bids

a) The Designated Intermediary may register the Bids using the on-line facilities of the Stock Exchanges. The Designated
Intermediaries can also set up facilities for off-line electronic registration of Bids, subject to the condition that they may
subsequently upload the off-line data file into the on-line facilities for Book Building on a regular basis before the closure of the
Issue.

b) On the Bid/Issue Closing Date, the Designated Intermediaries may upload the Bids till such time as may be permitted by the
Stock Exchanges and as disclosed in the Red Herring Prospectus.

c) Only Bids that are uploaded on the Stock Exchanges Platform are considered for allocation/Allotment. The Designated
Intermediaries are given till 1:00 pm on the next Working Day following the Bid/Issue Closing Date to modify select fields
uploaded in the Stock Exchange Platform during the Bid/Issue Period after which the Stock Exchange(s) send the bid information
to the Registrar to the Issue for further processing.

The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in
the United States, and, unless so registered, may not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable
state securities laws in the United States. Accordingly, the Equity Shares are being offered and sold (a) in the United
States only to U.S. QIBs in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities

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Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the Securities Act and
the applicable laws of the jurisdiction where those offers and sales occur.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance
with the applicable laws of such jurisdiction.

Participation by Promoters, members of their respective Promoter Groups, the Book Running Lead Managers, the
Syndicate Members and persons related to Promoters/Promoter Groups/the Book Running Lead Managers

The Book Running Lead Managers and the Syndicate Members shall not be allowed to purchase Equity Shares in this Offer in
any manner, except towards fulfilling their underwriting obligations. However, the associates and affiliates of the Book Running
Lead Managers and the Syndicate Members may Bid for Equity Shares in the Offer, either in the QIB Portion or in the Non-
Institutional Portion as may be applicable to such Bidders, where the allocation is on a proportionate basis, and such subscription
may be on their own account or on behalf of their clients. All categories of investors, including associates or affiliates of the
Book Running Lead Managers and Syndicate Members, shall be treated equally for the purpose of allocation to be made on a
proportionate basis.

Except as stated below, neither the Book Running Lead Managers nor any associate of the Book Running Lead Managers can
apply in the Offer under the Anchor Investor Portion:

(i) mutual funds sponsored by entities which are associate of the Book Running Lead Managers;

(ii) insurance companies promoted by entities which are associate of the Book Running Lead Managers;

(iii) AIFs sponsored by the entities which are associate of the Book Running Lead Managers; or

(iv) FPIs sponsored by the entities which are associate of the Book Running Lead Managers.

Further, the Promoters and members of their respective Promoter Groups shall not participate by applying for Equity Shares in
the Offer. Further, persons related to the Promoters and their respective Promoter Groups shall not apply in the Offer under the
Anchor Investor Portion. However, a qualified institutional buyer who has any of the following rights in relation to the Company
shall be deemed to be a person related to the Promoters or Promoter Groups of our Company:

(i) Rights under a shareholders’ agreement or voting agreement entered into with the Promoters or Promoter Groups of our
Company;

(ii) veto rights; or

(iii) right to appoint any nominee director on our Board.

Further, an Anchor Investor shall be deemed to be an “associate of the BRLM” if:

(i) either of them controls, directly or indirectly through its subsidiary or holding company, not less than 15% of the voting
rights in the other; or

(ii) either of them, directly or indirectly, by itself or in combination with other persons, exercises control over the other; or

(iii) there is a common director, excluding nominee director, amongst the Anchor Investors and the Book Running Lead
Managers.

Bids by Mutual Funds

With respect to Bids by Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid
cum Application Form. Failing this, our Company and the Selling Shareholder, in consultation with the Book Running Lead
Managers, reserve the right to reject any Bid without assigning any reason thereof, subject to applicable law.

Bids made by asset management companies or custodians of Mutual Funds shall specifically state names of the concerned
schemes for which such Bids are made.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and
such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids
clearly indicate the scheme concerned for which such Bid has been made.

No Mutual Fund scheme shall invest more than 10% of its NAV in equity shares or equity-related instruments of any single
company, provided that the limit of 10% shall not be applicable for investments in case of index funds or sector or industry

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specific schemes. No Mutual Fund under all its schemes should own more than 10% of any company’s paid-up share capital
carrying voting rights.

Bids by Eligible NRIs

Eligible NRIs Bidding on non-repatriation basis are advised to use the Bid cum Application Form for residents (white in colour).
Eligible NRIs Bidding on a repatriation basis are advised to use the Bid cum Application Form meant for Non-Residents (blue
in colour).

Eligible NRIs may obtain copies of Bid cum Application Form from the Designated Intermediaries. Eligible NRI Bidders
Bidding on a repatriation basis by using the Non-Resident Forms should authorize their SCSB (if they are Bidding directly
through the SCSB) or confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI Mechanism) to
block their Non-Resident External (“NRE”) accounts, or Foreign Currency Non-Resident (“FCNR”) Accounts, and eligible NRI
Bidders Bidding on a non-repatriation basis by using Resident Forms should authorize their respective SCSBs (if they are
Bidding directly through SCSB) or confirm or accept the UPI Mandate Request (in case of RIBs Bidding through the UPI
Mechanism) to block their Non-Resident Ordinary (“NRO”) accounts for the full Bid Amount, at the time of the submission of
the Bid cum Application Form. Participation of Eligible NRIs in the Offer shall be subject to the FEMA Rules.

NRIs will be permitted to apply in the Offer through Channel I or Channel II (as specified in the UPI Circular). Further, subject
to applicable law, NRIs may use Channel IV (as specified in the UPI Circular) to apply in the Offer, provided the UPI facility is
enabled for their NRE/ NRO accounts.

For details of restrictions on investment by NRIs, see “Restrictions on Foreign Ownership of Indian Securities” beginning on
page 435.

Participation of Eligible NRIs in the Offer shall be subject to the FEMA Rules.

Bids by HUFs

Bids by Hindu Undivided Families or HUFs should be made in the individual name of the Karta. The Bidder/applicant should
specify that the Bid is being made in the name of the HUF in the Bid cum Application Form/Application Form as follows: “Name
of sole or first Bidder/applicant: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta”.
Bids/Applications by HUFs may be considered at par with Bids/Applications from individuals.

Bids by FPIs

In terms of the SEBI FPI Regulations, the issue of Equity Shares to a single FPI or an investor group (which means the same set
of ultimate beneficial owner(s) investing through multiple entities) must be below 10% of our total paid-up Equity Share capital
on a fully diluted basis. Further, in terms of the FEMA Rules, the total holding by each FPI shall be less than 10% of the total
paid-up Equity Share capital of our Company and the total holdings of all FPIs could be up to 100%, being the sectoral cap, of
the paid-up Equity Share capital of our Company on a fully diluted basis.

In case of Bids made by FPIs, a certified copy of the certificate of registration issued under the SEBI FPI Regulations is required
to be attached to the Bid cum Application Form, failing which our Company reserves the right to reject any Bid without assigning
any reason. FPIs who wish to participate in the Offer are advised to use the Bid cum Application Form for Non-Residents (blue
in colour).

In case the total holding of an FPI increases beyond 10% of the total paid-up Equity Share capital, on a fully diluted basis or
10% or more of the paid-up value of any series of debentures or preference shares or share warrants issued that may be issued
by our Company, the total investment made by the FPI will be re-classified as FDI subject to the conditions as specified by SEBI
and the RBI in this regard and our Company and the investor will be required to comply with applicable reporting requirements.

As specified in 4.1.4.2 (b)(i) and 4.1.4.2 (c)(iv) of the General Information Document, it is hereby clarified that bids received
from FPIs bearing the same PAN shall be treated as multiple Bids and are liable to be rejected, except for Bids from FPIs that
utilize the multiple investment manager structure in accordance with the Operational Guidelines for Foreign Portfolio Investors
and Designated Depository Participants issued to facilitate implementation of SEBI FPI Regulations (“MIM Structure”),
provided such Bids have been made with different beneficiary account numbers, Client IDs and DP IDs. Accordingly, it should
be noted that multiple Bids received from FPIs, who do not utilize the MIM Structure, and bear the same PAN, are liable to be
rejected. In order to ensure valid Bids, FPIs making multiple Bids using the same PAN, and with different beneficiary account
numbers, Client IDs and DP IDs, are required to provide a confirmation along with each of their Bid cum Application Forms
that the relevant FPIs making multiple Bids utilize the MIM Structure and indicate the name of their respective investment
managers in such confirmation. In the absence of such confirmation from the relevant FPIs, such multiple Bids are liable to be
rejected. Further, in the following cases, the bids by FPIs will not be considered as multiple Bids: involving (i) the MIM Structure
and indicating the name of their respective investment managers in such confirmation; (ii) offshore derivative instruments
(“ODI”) which have obtained separate FPI registration for ODI and proprietary derivative investments; (iii) sub funds or separate

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class of investors with segregated portfolio who obtain separate FPI registration; (iv) FPI registrations granted at investment
strategy level/sub fund level where a collective investment scheme or fund has multiple investment strategies/sub-funds with
identifiable differences and managed by a single investment manager; (v) multiple branches in different jurisdictions of foreign
bank registered as FPIs; (vi) Government and Government related investors registered as Category 1 FPIs; and (vii) Entities
registered as Collective Investment Scheme having multiple share classes.

With effect from the April 1, 2020, the aggregate limit shall be the sectoral caps applicable to the Indian company as prescribed
in the FEMA Rules with respect to its paid-up equity capital on a fully diluted basis. While the aggregate limit as provided above
could have been decreased by the concerned Indian companies to a lower threshold limit of 24% or 49% or 74% as deemed fit,
with the approval of its board of directors and its shareholders through a resolution and a special resolution, respectively before
March 31, 2020, our Company has not decreased such limit and accordingly the applicable limit with respect to our Company is
100%.

FPIs are permitted to participate in the Offer subject to compliance with conditions and restrictions which may be specified by
the Government from time to time.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of Regulation 21 of
the SEBI FPI Regulations, an FPI, may issue, subscribe to or otherwise deal in offshore derivative instruments (as defined under
the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas by a FPI against securities held
by it in India, as its underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only
by persons registered as Category I FPIs; (ii) such offshore derivative instruments are issued only to persons eligible for
registration as Category I FPIs; (iii) such offshore derivative instruments are issued after compliance with ‘know your client’
norms; and (iv) such other conditions as may be specified by SEBI from time to time.

An FPI issuing offshore derivative instruments is also required to ensure that any transfer of offshore derivative instruments
issued by or on its behalf, is carried out subject to inter alia the following conditions:

(a) such offshore derivative instruments are transferred only to persons in accordance with Regulation 22(1) of the SEBI
FPI Regulations; and

(b) prior consent of the FPI is obtained for such transfer, except when the persons to whom the offshore derivative
instruments are to be transferred to are pre-approved by the FPI.

Participation of FPIs in the Offer shall be subject to the FEMA Rules.

Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, eligible
FPIs, AIFs, Mutual Funds, insurance companies, insurance finds set up by the army, navy or air force of India, insurance funds
set up by the Department of Posts, India or the National Investment Fund and provident funds with a minimum corpus of ₹ 250
million and pension funds with a minimum corpus of ₹ 250 million (in each case, subject to applicable law and in accordance
with their respective constitutional documents), a certified copy of the power of attorney or the relevant resolution or authority,
as the case may be, along with a certified copy of the memorandum of association and articles of association and/or bye laws, as
applicable must be lodged along with the Bid cum Application Form. Failing this, our Company and the Selling Shareholder
reserve the right to accept or reject any Bid in whole or in part, in either case, without assigning any reasons thereof.

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers in their absolute discretion,
reserve the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum
Application Form.

Bids by SEBI registered VCFs, AIFs and FVCIs

The SEBI FVCI Regulations, inter alia, prescribe the investment restrictions on VCFs and FVCIs registered with SEBI. Further,
the SEBI AIF Regulations prescribe, amongst others, the investment restrictions on AIFs. Accordingly, the holding in any
company by any individual VCF or FVCI registered with SEBI should not exceed 25% of the corpus of the VCF or FVCI.
Further, VCFs and FVCIs can invest only up to 33.3% of the investible funds in various prescribed instruments, including in
public offerings.

Category I AIFs and Category II AIFs cannot invest more than 25% of the investible funds in one investee company. A Category
III AIF cannot invest more than 10% of the investible funds in one investee company. A VCF registered as a Category I AIF, as
defined in the SEBI AIF Regulations, cannot invest more than one-third of its investible funds by way of subscription to an initial
public offering of a venture capital undertaking. Pursuant to the repeal of the SEBI VCF Regulations, the VCFs which have not
re-registered as an AIF under the SEBI AIF Regulations shall continue to be regulated by the SEBI VCF Regulations until the
existing fund or scheme managed by the fund is wound up and such fund shall not launch any new scheme after the notification

424
of the SEBI AIF Regulations. Our Company, the Selling Shareholder, and the Book Running Lead Managers will not be
responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.

Participation of VCFs, AIFs or FVCIs in the Offer shall be subject to the FEMA Rules.

All non-resident investors should note that refunds (in case of Anchor Investors), dividends and other distributions, if
any, will be payable in Indian Rupees only and net of bank charges and commission.

Bids by Limited Liability Partnerships

In case of Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, a certified
copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be attached to the Bid cum
Application Form. Failing this, our Company and the Selling Shareholder in consultation with the Book Running Lead Managers
reserve the right to reject any Bid without assigning any reason thereof.

Bids by Banking Companies

In case of Bids made by banking companies registered with the RBI, certified copies of (i) the certificate of registration issued
by the RBI, and (ii) the approval of such banking company’s investment committee are required to be attached to the Bid cum
Application Form. Failing this, our Company and the Selling Shareholder, in consultation with the Book Running Lead
Managers, reserve the right to reject any Bid without assigning any reason thereof, subject to applicable law.

The investment limit for banking companies in non-financial services companies as per the Banking Regulation Act, 1949, as
amended, (the “Banking Regulation Act”), and the Master Directions - Reserve Bank of India (Financial Services provided by
Banks) Directions, 2016, as amended, is 10% of the paid-up share capital of the investee company, not being its subsidiary
engaged in non-financial services, or 10% of the bank’s own paid-up share capital and reserves, whichever is lower. Further, the
aggregate investment by a banking company in subsidiaries and other entities engaged in financial services company cannot
exceed 20% of the investee company’s paid up share capital and reserves. However, a banking company would be permitted to
invest in excess of 10% but not exceeding 30% of the paid-up share capital of such investee company if (i) the investee company
is engaged in non-financial activities permitted for banks in terms of Section 6(1) of the Banking Regulation Act, or (ii) the
additional acquisition is through restructuring of debt/corporate debt restructuring/strategic debt restructuring, or to protect the
bank’s interest on loans/investments made to a company. The bank is required to submit a time-bound action plan for disposal
of such shares within a specified period to the RBI. A banking company would require a prior approval of the RBI to make (i)
investment in excess of 30% of the paid-up share capital of the investee company, (ii) investment in a subsidiary and a financial
services company that is not a subsidiary (with certain exceptions prescribed), and (iii) investment in a non-financial services
company in excess of 10% of such investee company’s paid-up share capital as stated in 5(a)(v)(c)(i) of the Reserve Bank of
India (Financial Services provided by Banks) Directions, 2016, as amended.

Bids by SCSBs

SCSBs participating in the Offer are required to comply with the terms of the circulars bearing numbers CIR/CFD/DIL/12/2012
and CIR/CFD/DIL/1/2013 dated September 13, 2012 and January 2, 2013, respectively, issued by SEBI. Such SCSBs are
required to ensure that for making applications on their own account using ASBA, they should have a separate account in their
own name with any other SEBI registered SCSBs. Further, such account shall be used solely for the purpose of making
application in public issues and clear demarcated funds should be available in such account for such applications.

Bids by Insurance Companies

In case of Bids made by insurance companies registered with the IRDAI, a certified copy of certificate of registration issued by
IRDAI must be attached to the Bid cum Application Form. Failing this, our Company and the Selling Shareholder in consultation
with the Book Running Lead Managers reserve the right to reject any Bid without assigning any reason thereof, subject to
applicable law.

The exposure norms for insurers are prescribed under the IRDAI Investment Regulations, based on investments in the equity
shares of a company, the entire group of the investee company and the industry sector in which the investee company operates.
Insurance companies participating in the Offer are advised to refer to the IRDAI Investment Regulations for specific investment
limits applicable to them and shall comply with all applicable regulations, guidelines and circulars issued by IRDAI from time
to time.

Bids by Provident Funds/Pension Funds

In case of Bids made by provident funds/pension funds with minimum corpus of ₹ 250 million, subject to applicable law, a
certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be
attached to the Bid cum Application Form. Failing this, our Company and the Selling Shareholder in consultation with the Book
Running Lead Managers reserve the right to reject any Bid, without assigning any reason thereof.

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Bids by Systemically Important NBFCs

In case of Bids made by Systemically Important NBFCs registered with RBI, certified copies of: (i) the certificate of registration
issued by RBI, (ii) certified copy of its last audited financial statements on a standalone basis, (iii) a net worth certificate from
its statutory auditor, and (iv) such other approval as may be required by the Systemically Important NBFCs, are required to be
attached to the Bid cum Application Form. Failing this, our Company and the Selling Shareholder, in consultation with the Book
Running Lead Managers, reserves the right to reject any Bid without assigning any reason thereof, subject to applicable law.
Systemically Important NBFCs participating in the Offer shall comply with all applicable regulations, guidelines and circulars
issued by RBI from time to time.

The investment limit for Systemically Important NBFCs shall be as prescribed by RBI from time to time.

Bids by Anchor Investors

(a) In accordance with the SEBI ICDR Regulations, in addition to details and conditions mentioned in this section the key
terms for participation by Anchor Investors are provided below. Anchor Investor Application Forms will be made
available for the Anchor Investor Portion at the offices of the BRLMs.

(b) The Bid must be for a minimum of such number of Equity Shares so that the Bid Amount exceeds ₹ 100 million. A Bid
cannot be submitted for over 60% of the QIB Portion. In case of a Mutual Fund, separate bids by individual schemes of
a Mutual Fund will be aggregated to determine the minimum application size of ₹ 100 million.

(c) One-third of the Anchor Investor Portion will be reserved for allocation to domestic Mutual Funds.

(d) Bidding for Anchor Investors will open one Working Day before the Bid/Offer Opening Date, and will be completed on
the same day.

(e) Our Company and the Selling Shareholder, in consultation with the BRLMs may finalise allocation to the Anchor
Investors on a discretionary basis, provided that the minimum number of Allottees in the Anchor Investor Portion will
not be less than:
• maximum of two Anchor Investors, where allocation under the Anchor Investor Portion is up to ₹ 100 million;

• minimum of two and maximum of 15 Anchor Investors, where the allocation under the Anchor Investor Portion
is more than ₹ 100 million but up to ₹ 2,500 million, subject to a minimum Allotment of ₹ 50 million per Anchor
Investor; and

• in case of allocation above ₹ 2,500 million under the Anchor Investor Portion, a minimum of five such investors
and a maximum of 15 Anchor Investors for allocation up to ₹ 2,500 million, and an additional 10 Anchor Investors
for every additional ₹ 2,500 million, subject to minimum Allotment of ₹ 50 million per Anchor Investor.

(f) Allocation to Anchor Investors will be completed on the Anchor Investor Bid/Offer Period. The number of Equity Shares
allocated to Anchor Investors and the price at which the allocation is made, will be made available in the public domain
by the BRLMs before the Bid/Offer Opening Date, through intimation to the Stock Exchanges.

(g) Anchor Investors cannot withdraw or lower the size of their Bids at any stage after submission of the Bid.

(h) If the Offer Price is greater than the Anchor Investor Allocation Price, the additional amount being the difference between
the Offer Price and the Anchor Investor Offer Price will be payable by the Anchor Investors on the Anchor Investor pay-
in date specified in the CAN. If the Offer Price is lower than the Anchor Investor Offer Price, Allotment to successful
Anchor Investors will be at the higher price.

(i) Equity Shares Allotted in the Anchor Investor Portion will be locked in for a period of 30 days from the date of Allotment.

(j) Neither the BRLMs nor any associate of the BRLMs (except Mutual Funds sponsored by entities which are associates of
the BRLMs or insurance companies promoted by entities which are associate of BRLMs or AIFs sponsored by the entities
which are associate of the BRLMs or FPIs, other than individuals, corporate bodies and family offices sponsored by the
entities which are associate of the and BRLMs) shall apply in the Offer under the Anchor Investor Portion.

(k) Bids made by QIBs under both the Anchor Investor Portion and the QIB Portion will not be considered multiple Bids.

The information set out above is given for the benefit of the Bidders. Our Company, the Selling Shareholder, and the
Book Running Lead Managers are not liable for any amendments or modification or changes to applicable laws or
regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their

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independent investigations and ensure that any single Bid from them does not exceed the applicable investment limits or
maximum number of the Equity Shares that can be held by them under applicable law or regulations, or as specified in
this Draft Red Herring Prospectus or as will be specified in the Red Herring Prospectus and the Prospectus.

General Instructions

Please note that QIBs and Non-Institutional Bidders 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. RIBs can revise their Bid(s) during the Bid/Offer Period
and withdraw or lower the size of their Bid(s) until Bid/Offer Closing Date. Anchor Investors are not allowed to withdraw their
Bids after the Anchor Investor Bid/Offer Period.

Do’s:

1. Check if you are eligible to apply as per the terms of the Red Herring Prospectus and under applicable law, rules,
regulations, guidelines and approvals. All Bidders (other than Anchor Investors) should submit their Bids through the
ASBA process only;

2. Ensure that you have Bid within the Price Band;

3. Read all the instructions carefully and complete the Bid cum Application Form in the prescribed form;

4. Ensure that you (other than the Anchor Investors) have mentioned the correct details of ASBA Account (i.e. bank
account number or UPI ID, as applicable) in the Bid cum Application Form if you are not an RIB bidding using the UPI
Mechanism in the Bid cum Application Form and if you are an RIB using the UPI Mechanism ensure that you have
mentioned the correct UPI ID (with maximum length of 45 characters including the handle) in the Bid cum Application
Form;

5. Ensure that your Bid cum Application Form bearing the stamp of a Designated Intermediary is submitted to the
Designated Intermediary at the relevant Bidding Centre (except in case of electronic Bids) within the prescribed time.
Bidders (other than Anchor Investors) shall submit the Bid cum Application Form in the manner set out in the General
Information Document;

6. RIBs Bidding in the Offer shall ensure that they use only their own ASBA Account or only their own bank account linked
UPI ID (only for RIBs using the UPI Mechanism) to make an application in the Offer and not ASBA Account or bank account
linked UPI ID of any third party;

7. Ensure that you have funds equal to the Bid Amount in the ASBA Account maintained with the SCSB before submitting
the ASBA Form to the relevant Designated Intermediaries;

8. Ensure that the signature of the first Bidder in case of joint Bids, is included in the Bid cum Application Forms. If the
first Bidder is not the ASBA Account holder, ensure that the Bid cum Application Form is also signed by the ASBA
Account holder;

9. Ensure that the names given in the Bid cum Application Form is/are exactly the same as the names in which the
beneficiary account is held with the Depository Participant. In case of joint Bids, the Bid cum Application Form should
contain the name of only the first Bidder whose name should also appear as the first holder of the beneficiary account
held in joint names;

10. Ensure that you request for and receive a stamped acknowledgement in the form of a counterfoil or acknowledgment
specifying the application number as a proof of having accepted the Bid cum Application Form for all your Bid options
from the concerned Designated Intermediary;

11. Ensure that you submit the revised Bids to the same Designated Intermediary, through whom the original Bid was
placed and obtain a revised acknowledgment;

12. Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts, who, in
terms of the circular no. MRD/DoP/Cir-20/2008 dated June 30, 2008 issued by SEBI, may be exempt from specifying
their PAN for transacting in the securities market, (ii) Bids by persons resident in the state of Sikkim, who, in terms of
the circular dated July 20, 2006 issued by SEBI, may be exempted from specifying their PAN for transacting in the
securities market, and (iii) persons/entities exempt from holding a PAN under applicable law, all Bidders should
mention their PAN allotted under the IT Act. The exemption for the Central or the State Government and officials
appointed by the courts and for investors residing in the State of Sikkim is subject to (a) the Demographic Details
received from the respective depositories confirming the exemption granted to the beneficial owner by a suitable
description in the PAN field and the beneficiary account remaining in “active status”; and (b) in the case of residents of

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 Sikkim, the address as per the Demographic Details evidencing the same. All other applications in which PAN is not
mentioned will be rejected;

13. Ensure that thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the
Constitution of India are attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official
seal;

14. Ensure that the category and the investor status is indicated in the Bid cum Application Form to ensure proper upload
of your Bid in the electronic Bidding system of the Stock Exchanges;

15. Ensure that in case of Bids under power of attorney or by limited companies, corporates, trust, etc., relevant documents
including a copy of the power of attorney, if applicable, are submitted;

16. Ensure that Bids submitted by any person outside India is in compliance with applicable foreign and Indian laws;

17. However, Bids received from FPIs bearing the same PAN shall not be treated as multiple Bids in the event such FPIs
utilise the MIM Structure and such Bids have been made with different beneficiary account numbers, Client IDs and
DP IDs;

18. FPIs making MIM Bids using the same PAN, and different beneficiary account numbers, Client IDs and DP IDs, are
required to submit a confirmation that their Bids are under the MIM structure and indicate the name of their investment
managers in such confirmation which shall be submitted along with each of their Bid cum Application Forms. In the
absence of such confirmation from the relevant FPIs, such MIM Bids shall be rejected;

19. Since the Allotment will be in dematerialised form only, ensure that the depository account is active, the correct DP ID,
Client ID, UPI ID (for RIBs bidding through UPI mechanism) and the PAN are mentioned in their Bid cum Application
Form and that the name of the Bidder, the DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism) and
the PAN entered into the online IPO system of the Stock Exchanges by the relevant Designated Intermediary, as
applicable, matches with the name, DP ID, Client ID, UPI ID (for RIBs bidding through UPI mechanism) and PAN
available in the depository database;

20. In case of QIBs and NIBs, ensure that while Bidding through a Designated Intermediary, the ASBA Form is submitted
to a Designated Intermediary in a Bidding Centre and that the SCSB where the ASBA Account, as specified in the
ASBA Form, is maintained has named at least one branch at that location for the Designated Intermediary to deposit
ASBA Forms (a list of such branches is available on the website of SEBI at http://www.sebi.gov.in);

21. Ensure that you have correctly signed the authorisation / undertaking box in the Bid cum Application Form, or have
otherwise provided an authorisation to the SCSB or the Sponsor Bank, as applicable, via the electronic mode, for
blocking funds in the ASBA Account equivalent to the Bid Amount mentioned in the Bid cum Application Form at the
time of submission of the Bid. In case of RIBs submitting their Bids and participating in the Offer through the UPI
Mechanism, ensure that you authorise the UPI Mandate Request, including in case of any revision of Bids, raised by
the Sponsor Bank for blocking of funds equivalent to Bid Amount and subsequent debit of funds in case of Allotment;

22. Ensure that the Demographic Details are updated, true and correct in all respects;

23. The ASBA Bidders shall use only their own bank account or only their own bank account linked UPI ID for the purposes
of making Application in the Offer, which is UPI 2.0 certified by NPCI;

24. Bidders (except RIBs Bidding through the UPI Mechanism) should instruct their respective banks to release the funds
blocked in the ASBA account under the ASBA process. In case of RIBs, once the Sponsor Bank issues the Mandate
Request, the RIBs would be required to proceed to authorize the blocking of funds by confirming or accepting the UPI
Mandate Request to authorize the blocking of funds equivalent to application amount and subsequent debit of funds in
case of Allotment, in a timely manner;

25. Bidding through UPI Mechanism shall ensure that details of the Bid are reviewed and verified by opening the attachment
in the UPI Mandate Request and then proceed to authorize the UPI Mandate Request using his/her UPI PIN. Upon the
authorization of the mandate using his/her UPI PIN, a RIB Bidding through UPI Mechanism shall be deemed to have
verified the attachment containing the application details of the RIB Bidding through UPI Mechanism in the UPI
Mandate Request and have agreed to block the entire Bid Amount and authorized the Sponsor Bank issue a request to
block the Bid Amount specified in the Bid cum Application Form in his/her ASBA Account;

26. RIBs bidding using the UPI Mechanism should mention valid UPI ID of only the Bidder (in case of single account) and
of the first Bidder (in case of joint account) in the Bid cum Application Form;

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27. RIBs using the UPI Mechanism who have revised their Bids subsequent to making the initial Bid should also approve
the revised UPI Mandate Request generated by the Sponsor Bank to authorize blocking of funds equivalent to the
revised Bid Amount and subsequent debit of funds in case of Allotment in a timely manner;

28. Bids by Eligible NRIs for a Bid Amount of less than ₹ 200,000 would be considered under the Retail Category for the
purposes of allocation and Bids for a Bid Amount exceeding ₹ 200,000 would be considered under the Non-Institutional
Category for allocation in the Offer;

29. Ensure that Anchor Investors submit their Bid cum Application Forms only to the Book Running Lead Managers;

30. RIBs using UPI Mechanism through the SCSBs and mobile applications shall ensure that the name of the bank appears
in the list of SCSBs which are live on UPI, as displayed on the SEBI website. RIBs shall ensure that the name of the
app and the UPI handle which is used for making the application appears in Annexure ‘A’ to the SEBI circular no.
SEBI/HO/CFD/DIL2/COR/P/2019/85 dated July 26, 2019; and

31. Ensure that you have accepted the UPI Mandate Request received from the Sponsor Bank prior to 12:00 p.m. of the
Working Day immediately after the Bid/ Offer Closing Date.

The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with. Application
made using incorrect UPI handle or using a bank account of an SCSB or SCSBs which is not mentioned in the Annexure ‘A’ to
the SEBI circular no. SEBI/HO/CFD/DIL2/CIR/P/2019/85 dated July 26, 2019 is liable to be rejected.

Don’ts:

1. Do not Bid for lower than the minimum Bid Lot;

2. Do not submit a Bid using UPI ID, if you are not a RIB;

3. Do not Bid for a Bid Amount exceeding ₹ 200,000 (for Bids by RIBs);

4. Do not Bid on another Bid cum Application Form and the Anchor Investor Application Form, as the case may be, after
you have submitted a Bid to any of the Designated Intermediary;

5. Do not Bid/ revise the Bid amount to less than the floor price or higher than the cap price;

6. Do not pay the Bid Amount in cheques, demand drafts or by cash, money order, postal order or by stock invest;

7. Do not send Bid cum Application Forms by post; instead submit the same to the Designated Intermediary only;

8. Do not Bid at Cut-off Price (for Bids by QIBs and Non-Institutional Bidders);

9. Do not instruct your respective banks to release the funds blocked in the ASBA Account under the ASBA process;

10. Do not submit the Bid for an amount more than funds available in your ASBA account;

11. Do not submit Bids on plain paper or on incomplete or illegible Bid cum Application Forms or on Bid cum Application
Forms in a colour prescribed for another category of Bidder;

12. Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or your relevant
constitutional documents or otherwise;

13. Do not Bid if you are not competent to contract under the Indian Contract Act, 1872 (other than minors having valid
depository accounts as per Demographic Details provided by the depository);

14. Do not fill up the Bid cum Application Form such that the Bids for Equity Shares for exceeds the Offer size and / or
investment limit or maximum number of the Equity Shares that can be held under the applicable laws or regulations or
maximum amount permissible under the applicable regulations or under the terms of the Red Herring Prospectus;

15. Do not Bid for Equity Shares more than specified by respective Stock Exchanges for each category;

16. In case of ASBA Bidders (other than RIBs using UPI mechanism), do not submit more than one Bid cum Application
Form per ASBA Account;

17. Do not make the Bid cum Application Form using third party bank account or using third party linked bank account
UPI ID;

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18. Anchor Investors should not bid through the ASBA process;

19. Do not submit the Bid cum Application Form to any non-SCSB bank or our Company;

20. Do not Bid on another Bid cum Application Form and the Anchor Investor Application Form, as the case may be, after
you have submitted a Bid to any of the Designated Intermediaries;

21. Do not submit the General Index Register (GIR) number instead of the PAN;

22. Anchor Investors should submit Anchor Investor Application Form only to the Book Running Lead Managers;

23. Do not Bid on a Bid cum Application Form that does not have the stamp of a Designated Intermediary;

24. If you are a QIB, do not submit your Bid after 3 p.m. on the QIB Bid / Offer Closing Date;

25. Do not withdraw your Bid or lower the size of your Bid (in terms of quantity of the Equity Shares or the Bid Amount)
at any stage, if you are a QIB or a Non-Institutional Bidder;

26. Do not submit the ASBA Forms to any Designated Intermediary that is not authorised to collect the relevant ASBA
Forms or to our Company;

27. Do not submit Bids to a Designated Intermediary at a location other than at the relevant Bidding Centres. If you are
RIB and are using UPI mechanism, do not submit the ASBA Form directly with SCSBs;

28. Do not submit incorrect details of the DP ID, Client ID, PAN and UPI ID details if you are a RIB Bidding through the
UPI Mechanism. Further, do not provide details for a beneficiary account which is suspended or for which details cannot
be verified to the Registrar to the Offer;

29. Do not submit the Bid without ensuring that funds equivalent to the entire Bid Amount are available for blocking in the
relevant ASBA account;

30. Do not link the UPI ID with a bank account maintained with a bank that is not UPI 2.0 certified by the NPCI in case of
Bids submitted by RIBs using the UPI Mechanism;

31. Do not Bid if you are an OCB;

32. RIBs Bidding through the UPI Mechanism using the incorrect UPI handle or using a bank account of an SCSB or a
banks which is not mentioned in the list provided in the SEBI website is liable to be rejected; and

33. Do not submit more than one Bid cum Application Form for each UPI ID in case of RIBs Bidding using the UPI
Mechanism.

The Bid cum Application Form is liable to be rejected if the above instructions, as applicable, are not complied with.

Grounds for Technical Rejection

In addition to the grounds for rejection of Bids on technical grounds as provided in the GID, Bidders are requested to note that
Bids maybe rejected on the following additional technical grounds:

1. Bids submitted without instruction to the SCSBs to block the entire Bid Amount;

2. Bids which do not contain details of the Bid Amount and the bank account details in the ASBA Form;

3. Bids submitted on a plain paper;

4. Bids submitted by RIBs using the UPI Mechanism through an SCSBs and/or using a mobile application or UPI handle,
not listed on the website of SEBI;

5. Bids under the UPI Mechanism submitted by RIBs using third party bank accounts or using a third party linked bank
account UPI ID (subject to availability of information regarding third party account from Sponsor Bank);

6. ASBA Form submitted to a Designated Intermediary does not bear the stamp of the Designated Intermediary;

7. Bids submitted without the signature of the First Bidder or sole Bidder;

8. The ASBA Form not being signed by the account holders, if the account holder is different from the Bidder;

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9. ASBA Form by the RIBs by using third party bank accounts or using third party linked bank account UPI IDs;

10. Bids by persons for whom PAN details have not been verified and whose beneficiary accounts are
“suspended for credit” in terms of SEBI circular CIR/MRD/DP/ 22 /2010 dated July 29, 2010;

11. GIR number furnished instead of PAN;

12. Bids by RIBs with Bid Amount of a value of more than ₹200,000 (net of retail discount);

13. Bids by persons who are not eligible to acquire Equity Shares in terms of all applicable laws, rules, regulations,
guidelines and approvals;

14. Bids accompanied by stock invest, money order, postal order or cash; and

15. Bids uploaded by QIBs after 4.00 pm on the QIB Bid/ Offer Closing Date and by Non-Institutional Bidders uploaded
after 4.00 p.m. on the Bid/ Offer Closing Date, and Bids by RIBs uploaded after 5.00 p.m. on the Bid/ Offer Closing
Date, unless extended by the Stock Exchanges.

Further, in case of any pre-issue or post issue related issues regarding share certificates/demat credit/refund orders/unblocking
etc., investors shall reach out the Company Secretary and Compliance Officer. For details of the Company Secretary and
Compliance Officer, see “General Information” beginning on page 63.

In case of any delay in unblocking of amounts in the ASBA Accounts (including amounts blocked through the UPI Mechanism)
exceeding four Working Days from the Bid/Offer Closing Date, the Bidder shall be compensated at a uniform rate of ₹ 100 per
day for the entire duration of delay exceeding four Working Days from the Bid/Offer Closing Date by the intermediary
responsible for causing such delay in unblocking. The Book Running Lead Managers shall, in their sole discretion, identify and
fix the liability on such intermediary or entity responsible for such delay in unblocking.

Names of entities responsible for finalising the basis of allotment in a fair and proper manner

The authorised employees of the Stock Exchanges, along with the Book Running Lead Managers and the Registrar, shall ensure
that the Basis of Allotment is finalised in a fair and proper manner in accordance with the procedure specified in SEBI ICDR
Regulations.

Method of allotment as may be prescribed by SEBI from time to time

Our Company will not make any allotment in excess of the Equity Shares offered through the Offer through the offer document
except in case of oversubscription for the purpose of rounding off to make allotment, in consultation with the Designated Stock
Exchange. Further, upon oversubscription, an allotment of not more than 1% of the Net Offer to public may be made for the
purpose of making allotment in minimum lots.

The allotment of Equity Shares to applicants other than to the RIBs and Anchor Investors shall be on a proportionate basis within
the respective investor categories and the number of securities allotted shall be rounded off to the nearest integer, subject to
minimum allotment being equal to the minimum application size as determined and disclosed.

The allotment of Equity Shares to each RIB shall not be less than the minimum bid lot, subject to the availability of shares in
RIB category, and the remaining available shares, if any, shall be allotted on a proportionate basis.

Payment into Anchor Investor Escrow Accounts

Our Company and the Selling Shareholder, in consultation with the Book Running Lead Managers will decide the list of Anchor
Investors to whom the CAN will be sent, pursuant to which, the details of the Equity Shares allocated to them in their respective
names will be notified to such Anchor Investors. For Anchor Investors, the payment instruments for payment into the Anchor
Investor Escrow Account should be drawn in favour of:

(a) In case of resident Anchor Investors: “[●]”

(b) In case of Non-Resident Anchor Investors: “[●]”

Anchor Investors should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement
between our Company, the Selling Shareholder, the Syndicate, the Escrow Collection Banks and the Registrar to the Offer to
facilitate collections of Bid amounts from Anchor Investors.

Pre-Offer Advertisement

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Subject to Section 30 of the Companies Act, our Company shall, after filing the Red Herring Prospectus with the RoC, publish
a pre-Offer advertisement, in the form prescribed under the SEBI ICDR Regulations, in all editions of [●] and all editions of [●]
(which are widely circulated English daily newspapers and Hindi daily newspapers, Hindi also being the regional language of
Haryana, where our Registered and Corporate Office is located).

In the pre-Offer advertisement, we shall state the Bid/Offer Opening Date and the Bid/Offer Closing Date. This advertisement,
subject to the provisions of Section 30 of the Companies Act, shall be in the format prescribed in Part A of Schedule X of the
SEBI ICDR Regulations.

Allotment Advertisement

Our Company, the Book Running Lead Managers and the Registrar shall publish an allotment advertisement before
commencement of trading, disclosing the date of commencement of trading in all editions of [●] and all editions of [●] (which
are widely circulated English daily newspapers and Hindi daily newspapers, Hindi also being the regional language of Haryana,
where our Registered and Corporate Office is located).

The information set out above is given for the benefit of the Bidders/applicants. Our Company, the Selling Shareholder,
and the Book Running Lead Managers are not liable for any amendments or modification or changes in applicable laws
or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders/applicants are advised to
make their independent investigations and ensure that the number of Bids for Equity Shares do not exceed the prescribed
limits under applicable laws or regulations.

Signing of the Underwriting Agreement and Filing with the RoC

(a) Our Company, the Selling Shareholder and the Underwriters intend to enter into an Underwriting Agreement after the
finalisation of the Offer Price.

(b) After signing the Underwriting Agreement, an updated Red Herring Prospectus will be filed with the RoC in accordance
with applicable law, which would then be termed as the Prospectus. The Prospectus will contain details of the Offer
Price, the Anchor Investor Offer Price, the Offer size, and underwriting arrangements and will be complete in all
material respects.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 38 of the Companies Act,
which is reproduced below:

“Any person who:

(a) makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its
securities; or

(b) makes or abets making of multiple applications to a company in different names or in different combinations of his
name or surname for acquiring or subscribing for its securities; or

(c) otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any
other person in a fictitious name,

shall be liable for action under Section 447.”

The liability prescribed under Section 447 of the Companies Act, for fraud involving an amount of at least ₹ 1 million or 1% of
the turnover of the Company, whichever is lower, includes imprisonment for a term which shall not be less than six months
extending up to 10 years and fine of an amount not less than the amount involved in the fraud, extending up to three times such
amount (provided that where the fraud involves public interest, such term shall not be less than three years.) Further, where the
fraud involves an amount less than ₹ 1 million or one per cent of the turnover of the company, whichever is lower, and does not
involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to
five years or with fine which may extend to ₹ 5 million or with both.

Undertakings by our Company

Our Company undertakes the following:

• the complaints received in respect of the Offer shall be attended to by our Company expeditiously and satisfactorily;

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• all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges
where the Equity Shares are proposed to be listed are taken within six working days of the Bid/Offer Closing Date or
within such other time period prescribed by SEBI will be taken;

• the funds required for making refunds/unblocking (to the extent applicable) as per the mode(s) disclosed shall be made
available to the Registrar to the Offer by our Company;

• if Allotment is not made within six working days from the Bid/Offer Closing Date or such other prescribed timelines
under applicable laws, the entire subscription amount received will be refunded/unblocked within the time prescribed
under applicable laws. If there is a delay beyond such prescribed time, our Company shall pay interest prescribed under
the Companies Act, the SEBI ICDR Regulations and other applicable laws for the delayed period;

• where refunds (to the extent applicable) are made through electronic transfer of funds, a suitable communication shall
be sent to the applicant within time prescribed under applicable laws, giving details of the bank where refunds shall be
credited along with amount and expected date of electronic credit of refund;

• that if the Offer is withdrawn after the Bid/Offer Closing Date, our Company shall be required to file a fresh offer
document with SEBI, in the event a decision is taken to proceed with the Offer subsequently;

• that our Company shall not have recourse to the Net Proceeds until the final approval for listing and trading of the
Equity Shares from all the Stock Exchanges where listing is sought has been received;

• except for the exercise of options vested pursuant to ESOP 2020, no further issue of the Equity Shares shall be made
till the Equity Shares offered through the Red Herring Prospectus are listed or until the Bid monies are
refunded/unblocked in the relevant ASBA Accounts on account of non-listing, under-subscription, etc.; and

• adequate arrangements shall be made to collect all Bid cum Application Forms from Bidders.

Undertakings by the Selling Shareholder

The Selling Shareholder undertakes, in relation to itself and its Offered Shares that:

• the Offered Shares have been held by it for a period of at least one year prior to the date of filing of this Draft Red
Herring Prospectus with SEBI;

• it is the legal and beneficial owner of the Offered Shares, and that such Offered Shares shall be transferred in the Offer,
free from encumbrances;

• it shall deposit the Equity Shares offered by it in the Offer in an escrow account opened with the Registrar to the Offer
prior to the filing of the Red Herring Prospectus with the RoC;

• it shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise
to the Bidder for making a Bid in the Offer, and shall not make any payment, direct or indirect, in the nature of discounts,
commission, allowance or otherwise to any person who makes a Bid in the Offer; and

• it shall not have recourse to the proceeds of the Offer for Sale until final approval for trading of the Equity Shares from
the Stock Exchanges has been received.

The statements and undertakings provided above, in relation to the Selling Shareholder, are statements which are specifically
confirmed or undertaken in relation to itself and the Offered Shares. All other statements or undertakings or both in this Draft
Red Herring Prospectus in relation to the Selling Shareholder, shall be statements made by our Company, even if the same relate
to the Selling Shareholder.

Utilisation of Net Proceeds

The Company declares that:

• all monies received out of the Fresh Issue shall be credited/transferred to a separate bank account other than the bank
account referred to in sub-section (3) of Section 40 of the Companies Act;

• details of all monies utilized out of the Fresh Issue shall be disclosed, and continue to be disclosed till the time any part
of the Net Proceeds remains unutilized, under an appropriate separate head in the balance sheet of our Company
indicating the purpose for which such monies have been utilized; and

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• details of all unutilized monies out of the Fresh Issue, if any shall be disclosed under an appropriate separate head in
the balance sheet of our Company indicating the form in which such unutilized monies have been invested.

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 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the FDI Policy and FEMA and the circulars and notifications issued
thereunder. The government bodies responsible for granting foreign investment approvals are the concerned ministries or
departments of the Government of India and the RBI. Unless specifically restricted, foreign investment is freely permitted in all
sectors of the Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow
certain prescribed procedures for making such investment.

The Government has from time to time made policy pronouncements on FDI through press notes and press releases. The DPIIT,
issued the FDI Policy by way of circular bearing number DPIIT File Number 5(2)/2020-FDI Policy dated October 15, 2020,
which with effect from October 15, 2020, consolidates and supersedes all previous press notes, press releases and clarifications
on FDI issued by the DPIIT that were in force and effect as on October 15, 2020. The Government proposes to update the
consolidated circular on FDI Policy once every year and therefore, the FDI Policy will be valid until the DPIIT issues an updated
circular.

As per the FDI Policy, FDI of up to 100% foreign investment under the automatic route is currently permitted in the sector of
“Manufacturing” subject to compliance with certain prescribed conditions. For details, see “Key Regulations and Policies in
India – Foreign Investment Regulations” on page 189.

Subject to certain provisions, the transfer of shares between an Indian resident and a non-resident does not require the prior
approval of the RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI Policy
and transfer does not attract the provisions of the SEBI Takeover Regulations; (ii) the non-resident shareholding is within the
sectoral limits under the FDI Policy; and (iii) the pricing is in accordance with the guidelines prescribed by SEBI and RBI.

Further, in accordance with Press Note No. 3 (2020 Series), dated April 17, 2020 issued by the DPIIT and the Foreign Exchange
Management (Non-debt Instruments) Amendment Rules, 2020 which came into effect from April 22, 2020, any investment,
subscription, purchase or sale of equity instruments by entities of a country which shares land border with India or where the
beneficial owner of an investment into India is situated in or is a citizen of any such country (“Restricted Investors”), will
require prior approval of the Government, as prescribed in the FDI Policy and the FEMA Rules. Further, in the event of transfer
of ownership of any existing or future foreign direct investment in an entity in India, directly or indirectly, resulting in the
beneficial ownership falling within the aforesaid restriction/ purview, such subsequent change in the beneficial ownership will
also require approval of the Government. Furthermore, on April 22, 2020, the Ministry of Finance, Government of India has also
made a similar amendment to the FEMA Rules. Pursuant to the Foreign Exchange Management (Non-debt Instruments) (Fourth
Amendment) Rules, 2020, a multilateral bank or fund, of which India is a member, shall not be treated as an entity of a particular
country nor shall any country be treated as the beneficial owner of the investments of such bank of fund in India. Each Bidder
should seek independent legal advice about its ability to participate in the Offer. In the event such prior approval of the
Government of India is required, and such approval has been obtained, the Bidder shall intimate our Company and the Registrar
to the Offer in writing about such approval along with a copy thereof within the Offer Period.

As per the existing policy of the Government, OCBs cannot participate in the Offer.

The Equity Shares have not been and will not be registered under the U.S. Securities Act or any state securities laws in
the United States, and, unless so registered, may not be offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable
state securities laws in the United States. Accordingly, the Equity Shares are being offered and sold (a) in the United
States only to U.S. QIBs in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities
Act, and (b) outside the United States in offshore transactions in reliance on Regulation S under the Securities Act and
the applicable laws of the jurisdiction where those offers and sales occur .

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside
India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance
with the applicable laws of such jurisdiction. The above information is given for the benefit of the Bidders. Our Company,
the Selling Shareholder, and the Book Running Lead Managers are not liable for any amendments or modification or
changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders
are advised to make their independent investigations and ensure that the number of Equity Shares Bid for do not exceed
the applicable limits under laws or regulations.

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 SECTION IX: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

Capitalized terms used in this section have the meanings that have been given to such terms in the Articles of Association of our
Company. The Articles of Association of our Company comprise of two parts, Part A and Part B, which parts shall, unless the
context otherwise requires, co-exist with each other until the date of listing of the Equity Shares. In case of inconsistency,
contradiction, conflict or overlap between Part A and Part B, the provisions of Part B shall, subject to applicable law, prevail
and be applicable until the date of listing of the Equity Shares. Except for Article 7(2)(e) of Part B, all other articles of Part B
shall automatically terminate and cease to have any force and effect from the date of listing of Equity Shares on the recognized
Stock Exchanges in India pursuant to the Offer and the provision of Part A shall continue to be in effect and be in force without
any further action, including any corporate or other action, by our Company or by our Shareholders.

Pursuant to Schedule I of the Companies Act and the SEBI ICDR Regulations, the main provisions of the Articles of Association
of our Company are detailed below:

Part A

Authorised Share Capital

Article 2.1 provides that the authorized share capital of the Company shall be such as given in Clause V of the Memorandum of
Association of the Company.

Lien

Article 5.1 provides that the Company shall have a first and paramount lien: (a) on every share/ debenture (not being a fully paid
share/ debenture), for all monies (whether presently payable or not) called, or payable at a fixed time, in respect of that share/
debenture; and (b) on all shares/ debentures (not being fully paid shares/ debentures) standing registered in the name of a member,
for all monies presently payable by him or his estate to the Company:

Provided that the fully paid up shares/ debentures will be free from all lien and in respect of any partly paid shares/ debentures
of our Company, the lien, if any, shall be restricted to monies called or payable at a fixed time in respect of such shares/
debentures.

Provided that in respect of shares, no equitable interest shall be created except upon the footing and condition that the Articles
will have full effect.

Provided that the Board of directors may at any time declare any share/ debenture to be wholly or in part exempt from the
provisions of this clause. unless otherwise agreed, the registration of a transfer of shares/ debentures shall operate as a waiver of
the Company’s lien, if any, on such shares/ debentures.

The Company’s lien, if any, on a share/ debenture shall extend to all dividends or interest, as the case may be, payable and
bonuses declared from time to time in respect of such shares/ debentures.

Article 5.2 provides that the Company may sell, in such manner as the Board thinks fit, any Shares on which the Company has
a lien:

Provided that no sale shall be made: (a) unless a sum in respect of which the lien exists is presently payable; or (b) until the
expiration of 14 after a notice in writing stating and demanding payment of such part of the amount in respect of which the lien
exists as is presently payable, has been given to the registered holder for the time being of the share or to the person entitled
thereto by reason of his death or insolvency or otherwise.

To give effect to any such sale, the Board may authorise some person to transfer the Shares sold to the purchaser thereof. The
purchaser shall be registered as the holder of the Shares comprised in any such transfer. The purchaser shall not be bound to see
to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the
proceedings with reference to the sale.

The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which
the lien exists as is presently payable. The residue, if any, shall, subject to a like lien for sums not presently payable as existed
upon the Shares before the sale, be paid to the person entitled to the Shares at the date of the sale.

Calls on Shares

Article 6.1(i) provides that the Board may from time to time, make calls upon the members in respect of any monies unpaid on
their Shares (whether on account of the nominal value of the Shares or by way of premium) and not by the conditions of allotment
thereof made payable at fixed times.

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Article 6.1(ii) provides that each member shall, subject to receiving at least 14 days’ notice specifying the time or times and
place of payment, pay to the Company, at the time or times and place so specified, the amount called on his Shares.

Article 6.1(iii) provides that a call may be revoked or postponed at the discretion of the Board. Article 6.2 provides that a call
shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed and may be
required to be paid by installments.

Article 6.3 provides that the joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

Article 6.4(i) provides that if a sum called in respect of a share is not paid before or on the day appointed for payment thereof,
the person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual
payment at ten per cent per annum or at such lower rate, if any, as the Board may determine.

Article 6.4(ii) provides that the Board shall be at liberty to waive payment of any such interest wholly or in part.

Article 6.5(i) provides that any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date,
whether on account of the nominal value of the share or by way of premium, shall, for the purposes of the Articles, be deemed
to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable.

Article 6.5(ii) provides that in case of non-payment of such sum, all the relevant provisions of the Articles as to payment of
interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and
notified.

Article 6.6 provides that the Shareholders shall not be entitled to any voting rights in respect of the monies so paid by him until
the same would but for such payment, become presently payable.

Article 6.7 provides that the Board, may, if it thinks fit, receive from any Shareholder willing to advance the same, all or any
part of the monies uncalled and unpaid upon any Shares held by him beyond the sums actually called for; and upon all or any of
the monies so advanced, may (until the same would, but for such advance, become presently payable) pay interest at such rate
not exceeding, unless the Company in general meeting shall otherwise direct, 12% per annum, as may be agreed upon between
the Board and the Shareholder paying the sum in advance provided that money paid in advance of calls shall not confer a right
to participate in profits or dividend. The Board may at any time repay the amount so advanced. The Shareholders shall not be
entitled to any voting rights in respect of the monies so paid by him until the same would, but for such payment, become presently
payable.

Transfer of Shares

Article 7(i) provides that the Company shall use a common form of transfer. The instrument of transfer shall be in writing and
all provisions of the Companies Act and of any statutory modification thereof for the time being shall be duly complied within
respect of all transfer of shares and the registration thereof.

Article 7(ii) provides that the instrument of transfer of any share in the Company shall be executed by or on behalf of both the
transferor and transferee.

Article 7(iii) provides that the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered
in the Register of Members in respect thereof.

Transmission of Shares

Article 8.1. provides that: (i) on the death of a Shareholder, the survivor or survivors where the member was a joint holder, and
his nominee or nominees or legal representatives where he was a sole holder, shall be the only persons recognised by the
Company as having any title to his interest in the shares; and (ii) Nothing in (i) shall release the estate of a deceased joint holder
from any liability in respect of any share which had been jointly held by him with other persons.

Article 8.2(i) provides that any person becoming entitled to a share in consequence of the death or insolvency of a Shareholder
may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter
provided, elect, either (i) to be registered himself as holder of the share; or (ii) to make such transfer of the share as the deceased
or insolvent Shareholder could have made.

Article 8.2(ii) provides that the Board shall, in either case, have the same right to decline or suspend registration as it would have
had, if the deceased or insolvent Shareholder had transferred the share before his death or insolvency.

Article 8.3(i) provides that if the person so becoming entitled shall elect to be registered as holder of the share himself, he shall
deliver or send to the Company a notice in writing signed by him stating that he so elects.

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Article 8.3(ii) provides that if the person aforesaid shall elect to transfer the Share, he shall testify his election by executing a
transfer of the Share.

Article 8.3(iii) provides that all the limitations, restrictions and provisions of these regulations relating to the right to transfer and
the registration of transfer of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency
of the Shareholder had not occurred and the notice or transfer were a transfer signed by that Shareholder.

Article 8.4 provides that a person becoming entitled to a share by reason of the death, lunacy, bankruptcy or insolvency of the
holder shall be entitled to the same dividends and other advantages to which he would have been entitled if he were the registered
holder of the share, except that he shall not, before being registered as a Shareholder in respect of the share, be entitled in respect
of it to exercise any right conferred by membership in relation to meetings of the Company. Provided that the Board may, at any
time, give notice requiring any such person to elect either to be registered himself or to transfer the Share, and if the notice is not
complied with within 90 days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in
respect of the share, until the requirements of the notice have been complied with.

Alteration of Capital

Article 10.1 provides that subject to the provisions of the Companies Act, the Company may by ordinary resolution increase the
share capital by such sum, to be divided into Shares of such amount as may be specified in the resolution.

Article 10.2(a) provides for consolidation and division all or any of its share capital into shares of larger amount than its existing
shares;

Article 10.2(b) provides for conversion of all or any of its fully paid-up shares into stock, and reconvert that stock into fully
paid-up shares of any denomination;

Article 10.2(c) provides for sub-division of its existing shares or any of them into shares of smaller amount than is fixed by the
memorandum;

Article 10.2(d) provides for cancellation of any shares which, at the date of the passing of the resolution, have not been taken or
agreed to be taken by any person.

Article 10.3 provides that where shares are converted into stock: (a) the holders of stock may transfer the same or any part thereof
in the same manner as, and subject to the same regulations under which, the shares from which the stock arose might before the
conversion have been transferred, or as near thereto as circumstances admit. Provided that the Board may, from time to time, fix
the minimum amount of stock transferable, so, however, that such minimum shall not exceed the nominal amount of the shares
from which the stock arose; (b) the holders of stock shall, according to the amount of stock held by them, have the same rights,
privileges and advantages as regards dividends, voting at meetings of the Company, and other matters, as if they held the shares
from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of the Company
and in the assets on winding up) shall be conferred by an amount of stock which would not, if existing in shares, have conferred
that privilege or advantage; (c) such of the regulations of the Company as are applicable to paid-up shares shall apply to stock
and the words “share” and “shareholder” in those regulations shall include “stock” and “stock-holder” respectively.

Article 10.4 provides that the Company may, by special resolution, reduce in any manner and with, and subject to, any incident
authorised and consent required by applicable law: (a) its share capital; (b) any capital redemption reserve account; or (c) any
share premium account.

Capitalisation of Profits

Article 11.1(i) provides that the Company in general meeting, may, on recommendation of the Board resolve: (a) that it is
desirable to capitalise any part of the amount for the time being standing to the credit of the Company’s reserve accounts or to
the credit of the profit and loss account or otherwise available for distribution; and that such sum be accordingly set free for
distribution; and (b) that such sum be accordingly set free for distribution in the manner specified in clause (ii) amongst the
Shareholders who would have been entitled thereto, if distributed by way of dividend and in the same proportions.

Article 11.1(ii) provides the sum aforesaid shall not be paid in cash but shall be applied either in or towards: (a) paying up any
amounts for the time being unpaid on shares held by such Shareholders respectively; (b) paying up in full, unissued share of the
Company to be allotted and distributed, credited as fully paid up, to and amongst such Shareholders in the proportions aforesaid;
(c) partly in the way specified in clause (a) and partly in that specified in sub clause (b); (d) a securities premium account and a
capital redemption reserve account or any other permissible reserve account may be applied as permitted under the Companies
Act in the paying up of unissued shares to be issued to Shareholders of the Company as fully paid bonus shares; and (e) the
Board shall give effect to the resolution passed by the Company in pursuance of the Articles.

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Article11.2(i) provides that whenever such a resolution as aforesaid shall have been passed, the Board shall (a) make all
appropriations and applications of the undivided profits resolved to be capitalised thereby, and all allotments and issues of fully
paid Shares, if any; and (b) generally do all acts and things required to give effect thereto.

Article 11.2.(ii) provides that the Board shall have power: (a) to make such provisions, by the issue of appropriate fractional
certificates or by payment in cash or otherwise as it thinks fit, for the case of Shares becoming distributable in fractions; and (b)
to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing
for the allotment to them respectively, credited as fully paid-up, of any further Shares or other securities to which they may be
entitled upon such capitalisation, or as the case may require, for the payment by the Company on their behalf, by the application
thereto of their respective proportions of profits resolved to be capitalised, of the amount or any part of the amounts remaining
unpaid on their existing shares.

Article 11.2(iii) provides that any agreement made under such authority shall be effective and binding on such Shareholders.

General Meetings

Article 14.1. provides that an annual general meeting shall be held in each calendar year within six months following the end of
the previous financial year of the Company. The Board shall issue the notice of annual general meeting together with the annual
financial statement, auditors report and other annexures as required under the Companies Act to all Shareholders and others
entitled to receive such notice at least 21 clear days before the annual general meeting is held to approve and adopt the audited
financial statements.

Article 14.2 provides that all general meetings other than annual general meeting shall be called extraordinary general meetings.

Article 14.3 provides that the board may, whenever it thinks fit, call an extraordinary general meeting,

Article 14.4. provides that annual general meeting and extraordinary general meeting may be called after giving shorter notice
as per the Companies Act.

Article 14.5 provides that if at any time Directors capable of acting who are sufficient in number to form a quorum are not within
India, any Director or any two Shareholders of the Company may call an Extraordinary general meeting in the same manner, as
nearly as possible, as that in which such a meeting may be called by the Board.

Board of Directors

Article 19.1 provides that Unless otherwise determined by the Company in general meeting, the number of directors shall not be
less than three and shall not be more than 15, and at least one Director shall be resident of India in the previous year. Provided
that the Company may appoint more than 15 directors after passing a special resolution.

Article 19.2(i) provides that the remuneration of the directors shall, in so far as it consists of a monthly payment, be deemed to
accrue from day-to-day.

Article 19.2(ii) provides that in addition to the remuneration payable to them in pursuance of the Companies Act, the directors
may be paid all travelling, hotel and other expenses properly incurred by them: (a) in attending and returning from meetings of
the Board of Directors or any committee thereof or general meetings of the Company; or (b) in connection with the business of
the Company.

Article 19.3 provides that the Board may pay all expenses incurred in getting up and registering the Company.

Article 19.4 provides that the Company may exercise the powers conferred on it by Section 88 with regard to the keeping of a
foreign register; and the Board may (subject to the provisions of that Section) make and vary such regulations as it may think fit
respecting the keeping of any such register.

Article 19.5 provides that all cheques, promissory notes, drafts, hundis, bills of exchange and other negotiable instruments, and
all receipts for monies paid to the Company, shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may
be, by such person and in such manner as the Board shall from time to time by resolution determine.

Article 19.6 provides that every director present at any meeting of the Board or of a committee thereof shall sign his name in a
book to be kept for that purpose.

Article 19.7 provides that: (a) subject to the provisions of Section 161 of the Companies Act, the Board shall have power at any
time, and from time to time, to appoint a person as an additional director, alternate director or a nominee director provided the
number of the directors along with Directors appointed together shall not at any time exceed the maximum strength fixed for the
Board by the Articles; and (b) an additional director shall hold office only up to the date of the next annual general meeting of

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the Company but shall be eligible for appointment by the Company as a director at that meeting subject to the provisions of the
Companies Act.

Chairman

Article 21.1 provides that Sunjay Kapur, if he so chooses and if he is a director at Sona Autocomp, will have a right to be
appointed as the non-executive chairman of the Board, until the earlier of (a) Sona Autocomp and its affiliates, collectively
holding less than 10% of the Equity Shares on a fully diluted basis, or (b) Sunjay Kapur’s chairmanship having been terminated
by the Company at any time after the effective date. The chairman will not have a casting vote.

Article 21.2 provides that as long as Sunjay Kapur is acting as the non-executive chairman of the Board, his only role and
responsibilities will be to: (a) engage with the customers (along with the other key managerial persons and relevant employees
of the Company); (b) represent himself, the Company and its Subsidiaries in industry associations, forums, conferences and other
business events; (c) contribute and participate in the strategic planning for the Company and its Subsidiaries; and (d) contribute
towards building and executing the vision, mission, values and culture of the Company and its Subsidiaries.

Provided however that, article 20 shall be subject to such rights being approved by the Shareholders of the Company through a
special resolution at the first general meeting of the Company held post listing of Equity Shares on the exchanges pursuant to
the IPO in accordance with applicable laws.

Proceedings of the Board

Article 21.1 provides that the Board of Directors may meet for the conduct of business, adjourn and otherwise regulate its
meetings, as it thinks fit. A director may, and the manager or company secretary on the requisition of a director shall, at any
time, summon a meeting of the Board.

Article 21.2 provides that save as otherwise expressly provided in the Companies Act, questions arising at any meeting of the
Board shall be decided by a majority of votes.

Article 21.3 provides that the continuing directors may act notwithstanding any vacancy in the Board but, if and so long as their
number is reduced below the quorum fixed by the Companies Act for a meeting of the Board, the continuing directors or director
may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting
of the Company, but for no other purpose.

Article 21.4 provides that the Board may elect a Chairperson of its meetings and determine the period for which he is to hold
office. If no such Chairperson is elected, or if at any meeting the Chairperson is not present within fifteen minutes after the time
appointed for holding the meeting, the directors present may choose one of their members to be Chairperson of the meeting.

Article 21.5 provides that the Board may, subject to the provisions of the Companies Act, delegate any of its powers to
Committees consisting of such member or members of its body as it thinks fit. Any Committee so formed shall, in the exercise
of the powers so delegated, conform to any regulations that may be imposed on it by the Board.

Article 21.6 provides that a Committee may elect a Chairperson of its meetings. If no such Chairperson is elected, or if at any
meeting the Chairperson is not present within fifteen minutes after the time appointed for holding the meeting, the members
present may choose one of their members to be Chairperson of the meeting.

Article 21.7 provides that a committee may meet and adjourn as it thinks fit. Questions arising at any meeting of a Committee
shall be determined by a majority of votes of the members present.

Article 21.8 provides that all acts done in any meeting of the Board or of a Committee thereof or by any person acting as a
director, shall notwithstanding that it may be afterwards discovered that there was some defect in the appointment of any one or
more of such directors or of any person acting as aforesaid or that they or any of them were disqualified or that his or their
appointment had terminated, be as valid as if every such director or such person had been duly appointed and was qualified to
be a director.

Article 21.9 provides that save as otherwise expressly provided in the Companies Act, a resolution in writing, signed, whether
manually or by secure electronic mode, by a majority of the members of the Board or of a Committee thereof, for the time being
entitled to receive notice of a meeting of the Board or Committee, shall be valid and effective as if it had been passed at a meeting
of the Board or Committee, duly convened and held.

Chairman, Company Secretary, Chief Executive Officer, Manager, and Chief Financial Officer

Article 22.1 provides that subject to the provisions of the Companies Act, a company secretary, chief executive officer, manager,
and chief financial officer may be appointed by the Board for such term, at such remuneration and upon such conditions as it

440
may think fit; and any chief executive officer, manager, company secretary and chief financial officer so appointed may be
removed by means of a resolution of the Board. A Director may be appointed as chief executive officer, manager, company
secretary or chief financial officer.

Article 22.2 provides that a provision of the Companies Act or these regulations requiring or authorising a thing to be done by
or to a director and chief executive officer, manager, company secretary or chief financial officer shall not be satisfied by its
being done by or to the same person acting both as director and as, or in place of, chief executive officer, manager, company
secretary or chief financial officer.

Dividend and Reserve

Article 23.1 provides that the Company in general meeting may declare dividends, but no dividend shall exceed the amount
recommended by the Board.

Article 23.2 provides that subject to the provisions of Section 123 of the Companies Act, the Board may from time to time pay
to the Shareholders such interim dividends as appear to it to be justified by the profits of the Company.

Article 23.3 provides that the Board may, before recommending any dividend, set aside out of the profits of the Company such
sums as it thinks fit as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which
the profits of the Company may be properly applied, including provision for meeting contingencies or for equalising dividends;
and pending such application, may, at the like discretion, either be employed in the business of the Company or be invested in
such investments (other than shares of the Company) as the Board may, from time to time, thinks fit. The Board may also carry
forward any profits which it may consider necessary not to divide, without setting them aside as a reserve.

Article 23.4 provides that subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends
shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid,
but if and so long as nothing is paid upon any of the shares in the Company, dividends may be declared and paid according to
the amounts of the shares. No amount paid or credited as paid on a share in advance of calls shall be treated for the purposes of
this regulation as paid on the share. All dividends shall be apportioned and paid proportionately to the amounts paid or credited
as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is
issued on terms providing that it shall rank for dividend as from a particular date such share shall rank for dividend accordingly.

Article 23.5 provides that the Board may deduct from any dividend payable to any Shareholder all sums of money, if any,
presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company.

Article 23.6 provides that any dividend, interest or other monies payable in cash in respect of shares may be paid by cheque or
warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the registered
address of that one of the joint holders who is first named on the Register of Members, or to such person and to such address as
the holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person
to whom it is sent.

Article 23.7 provides that any one of two or more joint holders of a share may give effective receipts for any dividends, bonuses
or other monies payable in respect of such share.

Article 23.8 provides that the notice of any dividend that may have been declared shall be given to the persons entitled to share
therein in the manner mentioned in the Companies Act.

Article 23.9 provides that where a dividend has been declared by the Company but which has not been paid or claimed within
30 days from the date of the declaration to any shareholder entitled to the payment of the dividend, the Company shall, within
seven days from the date of expiry of the said period of 30 days, transfer the total amount of dividend which remains unpaid or
unclaimed to a special account to be opened by the Company in that behalf in any scheduled bank to be called the “Unpaid
Dividend Account”..

Article 23.10 provides that the any money transferred to the “Unpaid Dividend Account” of the Company which remains unpaid
or unclaimed for a period of seven years from the date of such transfer shall be transferred by the Company along with interest
accrued, if any, thereon to the Investor Education and Protection Fund established under sub-section (1) of Section 125 of the
Companies Act.

Article 23.11 provides that no unclaimed or unpaid dividend shall be forfeited by the Board before it becomes barred by
Applicable Law.

Article 23.12 provides that no dividend shall bear interest against the Company.

Winding up

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Article 25.1 provides that subject to the provisions of Chapter XX of the Companies Act and the Rules made thereunder:

(a) If the Company shall be wound up, the liquidator may, with the sanction of a special resolution of the Company and any
other sanction required by the Companies Act, divide amongst the members, in specie or kind, the whole or any part of the
assets of the Company, whether they shall consist of property of the same kind or not.

(b) For the purpose aforesaid, the liquidator may set such value as he deems fair upon any property to be divided as aforesaid
and may determine how such division shall be carried out as between the Shareholders or different classes of Shareholders.

(c) The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the
benefit of the contributories if he considers necessary, but so that no member shall be compelled to accept any Shares or
other securities whereon there is any liability.

Indemnity

Article 26.1 provides that every officer of the Company shall be indemnified out of the assets of the Company against any
liability incurred by him in defending any proceedings relating to acts or omission by or on behalf of the Company, whether civil
or criminal, in which judgment is given in his favour or in which he is acquitted or in which relief is granted to him by the court
or the tribunal.

U.S Taxes

Article 29.2(a) provides for Tax reporting regimes indicating that each Shareholder shall upon request (and at the cost of
Company), provide to Company information and such documentation on it and its direct and indirect owners as required for the
Company to meet any applicable tax reporting or compliance requirements, including sections 1471 through 1474 of IRC and
any U.S. Treasury Regulations, instructions, forms, or other guidance issued pursuant thereto, an agreements which have been
entered into pursuant to section 1471(b)(1) of IRC, any intergovernmental agreement entered in relation to such sections of IRC,
any law executing any such intergovernmental agreements and any legislation or regime which implements or implements rules
similar to the Organisation for Economic Co-operation and Development’s Common Reporting Standard.

Article 29.2(b) provides for tax advances indicating that to the extend as is mentioned in law, the Company is required to withhold
or to make tax payments(includes any interest and penalties thereon) on behalf of or with respect to any members (“Tax
Advances”), the Company may retain such amounts and make such tax payments as so required. All Tax Advances made for
the members on whose behalf of member shall, at the option of Company (i) the Company will be paid promptly by the members
on whose behalf such Tax Advances were made or (ii) be repaid by reducing the amount of current or next succeeding distribution
or distributions which otherwise is made to such members or, if such distributions are not enough for that purpose, by so reducing
the proceeds of liquidation otherwise payable to such members. Whenever the Company selects the option set forth in clause (ii)
of the immediately preceding sentence for repayment of a Tax Advance by a member, for all other purposes of the Articles such
member shall be treated as having received all distributions unreduced by the amount of such Tax Advance. Each Shareholder
hereby agrees to indemnify and hold harmless the Company and any member or officer thereof from and against any liability
with respect to Tax Advances required on behalf of or with respect to such member. The obligations of a member set forth in
this Article 28.2 shall survive the withdrawal of any member from the Company or any transfer of a member’s interest.

Article 29.3(c) provides that the Company shall offer to the members such information as the members may reasonably request
at any time or from time to time in order to permit the members (i) to find out whether the Company has been a "passive foreign
investment company" (a PFIC) or a "controlled foreign corporation" (a CFC) (as such terms are defined in the Code), (ii) to
determine the consequences to the member (or their direct or indirect shareholders) of such status, and (iii) all such other
information that is reasonably necessary for the members (or their direct or indirect shareholders) to duly complete and file its
(or their) income tax returns and, if the Company is determined to be a PFIC, such information reasonably necessary to make or
maintain any election available under the Code related to PFIC status. Information necessary to allow the members (or their
direct or indirect shareholders) to make a “qualified electing fund” election with respect to the Company shall be provided to the
members as soon as reasonably practicable after the end of each Financial Year and in no event later than the immediately
succeeding March 1st following the end of each Financial Year of the Company for which it is determined that the Company is
a PFIC.

Article 29.3(d) provides that the Company agrees not to make any election to be treated as anything other than a corporation for
United States federal income Tax purposes without the prior consent of the Board.

Article 29.3(e) provides that the Company shall use its reasonable efforts to conduct its activities in a manner that makes it
possible for the Company to benefit from the provisions of any tax treaty between India and the United States of America and
any tax treaty between India and the Republic of Singapore.

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 Part B

Part B of the Articles of Association of the Company provides for the rights and obligations of the parties to the SHA.

In case of inconsistency, contradiction, conflict or overlap between Part A and Part B, the provisions of Part B shall subject to
applicable law, prevail and be applicable. However, except for Article 7(2)(e) of Part B, all other articles of Part B shall
automatically terminate and cease to have any force and effect from the date of listing of Equity Shares of the Company on the
recognized Stock Exchanges pursuant to the Offer and the provisions of Part A shall continue to be in effect and be in force
without any further action, including any corporate or other action, by the Company or by its Shareholders.

Article 7.2(e) provides that the Company and Singapore Topco shall share the costs, fees and expenses relating to the Offer
(except for the listing fees, which shall be borne by the Company) in accordance with applicable laws, in proportion to the
number of Equity Shares issued and/or transferred by each of the Company and Singapore Topco in the Offer, respectively.
Further, all interest borne, and expenses incurred by the Company on behalf of the Singapore Topco (if any) to the extent of the
Equity Shares offered by Singapore Topco in the Offer, will be adjusted or reimbursed by Singapore Topco to the Company, in
accordance with applicable laws. Provided that Singapore Topco will not be liable for any costs, fees and expenses in relation to
the Offer, in the event the Offer is withdrawn and/or not completed, including on account of a failure to receive listing or trading
approvals and all such fees and expenses in such case shall be borne by the Company.

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 SECTION X: OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The copies of the following documents and contracts which have been entered or are to be entered into by our Company (not
being contracts entered into in the ordinary course of business carried on by our Company or contracts entered into more than
two years before the date of this Draft Red Herring Prospectus) which are or may be deemed material will be attached to the
copy of the Red Herring Prospectus which will be delivered to the RoC for registration. Copies of the abovementioned contracts
and also the documents for inspection referred to hereunder, may be inspected at the Registered and Corporate Office between
10 a.m. and 5 p.m. IST on all Working Days from the date of the Red Herring Prospectus until the Bid/Offer Closing Date. Any
of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if so
required in the interest of our Company or if required by the other parties, without reference to the Shareholders, subject to
compliance of the provisions contained in the Companies Act and other applicable law.

A. Material Contracts for the Offer

1. Offer Agreement dated February 23, 2021 among our Company, the Selling Shareholder, and the Book
Running Lead Managers.

2. Registrar Agreement dated February 20, 2021 among our Company, the Selling Shareholder, and the Registrar
to the Offer.

3. Escrow and Sponsor Bank Agreement dated [●] among our Company, the Selling Shareholder, the Registrar
to the Offer, the Book Running Lead Managers, the Syndicate Members, and the Banker(s) to the Offer.

4. Share Escrow Agreement dated [●] among our Company, the Selling Shareholder, and the Share Escrow Agent.

5. Syndicate Agreement dated [●] among our Company, the Selling Shareholder, the Book Running Lead
Managers, the Syndicate Members, and the Registrar to the Offer.

6. Underwriting Agreement dated [●] among our Company, the Selling Shareholder, and the Underwriters.

7. Monitoring Agency Agreement dated [●] between our Company and the Monitoring Agency.

B. Material Documents

1. Certified copies of our Memorandum of Association and Articles of Association, as amended from time to
time.

2. Certificate of incorporation dated October 27, 1995 issued by the RoC in the name of ‘Sona Okegawa Precision
Forgings Limited’.

3. Certificate of commencement of business dated November 16, 1995 issued by the RoC in the name of ‘Sona
Okegawa Precision Forgings Limited’.

4. Fresh certificate of incorporation dated July 23, 2013 issued by the RoC upon change in name of our Company
from ‘Sona Okegawa Precision Forgings Limited’ to ‘Sona BLW Precision Forgings Limited’.

5. Copy of the Scheme of Amalgamation.

6. Copies of annual reports of our Company for the Financial Years 2020, 2019, and 2018.

7. Resolutions of our Board of Directors dated January 27, 2021 and February 22, 2021 authorising the Offer and
other related matters.

8. Resolution of the Shareholders of our Company dated January 30, 2021 authorising the Offer and other related
matters.

9. Resolution of the board of directors of Singapore VII Topco III Pte. Ltd. dated February 11, 2021, authorising
the Offer for Sale.

10. Consent letter dated February 22, 2021 provided by Singapore VII Topco III Pte. Ltd., consenting to participate
in the Offer for Sale.

11. Resolution of our Board of Directors dated February 22, 2021 approving this Draft Red Herring Prospectus.

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12. Consent letter from CRISIL Limited dated February 18, 2021 to rely on and reproduce part or whole of the
CRISIL Industry Report and include their name in this Draft Red Herring Prospectus.

13. Consent letter from Ricardo dated February 15, 2021 to rely on and reproduce part or whole of the Ricardo
Industry Report and include their name in this Draft Red Herring Prospectus and as an “expert” as defined
under Section 2(38) of the Companies Act.

14. The statement dated February 22, 2021 of possible special tax benefits issued by our Statutory Auditors.

15. Consent letters dated February 6, 2021 and February 4, 2021, received from Vinay Kumar Wadhawan,
Chartered Engineers and ELBI Consultancy (India) Private Limited, Chartered Engineers, to include their
respective names as required under Section 26(5) of the Companies Act in this Draft Red Herring Prospectus
and as an “expert” as defined under Section 2(38) of the Companies Act.

16. Certificate dated February 22, 2021 issued by our Statutory Auditors certifying the details and outstanding
balances of the loans to be repaid from the Net Proceeds.

17. Share subscription and share purchase agreement dated October 16, 2018 entered into by and among our
Company, Sona Autocomp, Sunjay Kapur, JM Financial Trustee and BCP Topco VI Pte. Ltd.

18. Employment agreement dated November 25, 2019 entered into among our Company and our Managing
Director and Group Chief Executive Officer, Vivek Vikram Singh.

19. Shareholders’ agreement dated October 16, 2018 entered into among our Company, Sona Autocomp, Sunjay
Kapur and BCP Topco VI Pte. Ltd., read with the assignment agreement dated February 14, 2019 executed
between BCP Topco VI Pte. Ltd. and Singapore VII Topco III Pte. Ltd. and the deed of adherence dated
February 14, 2019, as amended by the amendment agreement on February 22, 2021.

20. Share purchase and shareholders’ agreement dated October 16, 2018 entered into between our Company, Sona
Autocomp, Sunjay Kapur, Sona Holdings B.V., The Netherlands, Sona Autocomp Germany GmbH and Sona
BLW Prazissionchmiede GmbH, read with the amendment agreement dated March 28, 2019.

21. Share purchase agreement dated October 16, 2018 entered into among our Company, Comstar Automotive,
Comstar Automotive HK and Singapore VII Topco III Pte. Ltd., read with the amendment agreement dated
July 2, 2019.

22. Brand ownership agreement dated March 28, 2019 executed between our Company, Sona Autocomp, Sunjay
Kapur, Sona Management Services Limited and Sona Skill Development Centre Limited.

23. German brand ownership agreement dated March 28, 2019 executed between our Company, Sona Autocomp,
Sona BLW Prazissionchmiede GmbH and Sunjay Kapur.

24. Examination report dated February 12, 2021 of our Statutory Auditors on the Restated Consolidated Financial
Information, included in this Draft Red Herring Prospectus.

25. Examination report dated February 12, 2021 of our Statutory Auditors on the Pro Forma Consolidated
Financial Information, included in this Draft Red Herring Prospectus.

26. Consents in writing of the Selling Shareholder, our Directors, our Company Secretary and Compliance Officer,
Indian Legal Counsel to our Company, Indian Legal Counsel to the Book Running Lead Managers,
International Legal Counsel to the Book Running Lead Managers, Bankers to our Company, the Book Running
Lead Managers, independent chartered accountant, the Syndicate Member(s), the Banker(s) to the Offer and
the Registrar to the Offer, to act in their respective capacities.

27. Consent letter dated February 22, 2021 from our Statutory Auditors, to include their name as required under
section 26(5) of the Companies Act read with SEBI ICDR Regulations, in this Draft Red Herring Prospectus
and as an “expert” as defined under section 2(38) of the Companies Act to the extent and in their capacity as
our Statutory Auditors, and in respect of their (i) examination report dated February 12, 2021 on our Restated
Consolidated Financial Information; (ii) examination report dated February 12, 2021 on the Pro Forma
Consolidated Financial Information; and (iii) their statement dated February 22, 2021 on the possible special
tax benefits in this Draft Red Herring Prospectus and such consent has not been withdrawn as on the date of
this Draft Red Herring Prospectus. However, the term “expert” shall not be construed to mean an “expert” as
defined under the U.S. Securities Act.

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 28. Consent letter dated February 17, 2021 from SCV & Co. LLP, Chartered Accountants, to include their name
as required under section 26(5) of the Companies Act read with SEBI ICDR Regulations, in this Draft Red
Herring Prospectus and as an “expert” as defined under section 2(38) of the Companies Act in their capacity
as the independent chartered accountants.

29. Board and Shareholders resolution each dated July 5, 2019 for approving the terms of appointment of our
Managing Director and Group Chief Executive Officer, Vivek Vikram Singh.

30. Board and Shareholders resolution dated February 12, 2021 and February 22, 2021, respectively, for amending
the terms of appointment of our Managing Director and Group Chief Executive Officer, Vivek Vikram Singh.

31. Report titled “Assessment of Indian Market Potential for Specific Precision Forged and Electrical
Components” dated January 2021 issued by CRISIL.

32. Report titled “Global and Indian Automotive Market Overview” dated February 15, 2021 issued by Ricardo.

33. Employee Stock Option Plan 2020.

34. In-principle listing approvals dated [●] and [●] issued by BSE and NSE, respectively.

35. Tripartite agreement dated February 7, 2019 among our Company, CDSL and the Registrar to the Offer.

36. Tripartite agreement dated January 12, 2009 among our Company, NSDL and the Registrar to the Offer.

37. Due diligence certificate dated February 23, 2021 addressed from the Book Running Lead Managers to SEBI.

38. SEBI observation letter no. [●] dated [●].

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time if
so required in the interest of our Company or if required by the other parties, without reference to our Shareholders, subject to
compliance with the provisions contained in the Companies Act and other relevant statutes.

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 DECLARATION

We hereby certify and declare that all relevant provisions of the Companies Act and the guidelines or regulations issued by the
Government of India or the guidelines or regulations issued by SEBI, established under Section 3 of the SEBI Act, as the case
may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of
the Companies Act, the SCRA, the SCRR, the SEBI Act or rules made or guidelines or regulations issued thereunder, as the case
may be. We further certify that all the statements in this Draft Red Herring Prospectus are true and correct.

SIGNED BY ALL THE DIRECTORS OF OUR COMPANY

Sunjay Kapur
(Chairman and Non-Executive Director)

Vivek Vikram Singh

(Managing Director and Group Chief Executive Officer)
Amit Dixit
Non – Executive Director (Nominee)

Ganesh Mani
Non – Executive Director (Nominee)

Jeff M. Overly
Independent Director

Prasan Abhaykumar Firodia

Independent Director

Shradha Suri
Independent Director
Venkata Rama Subbu Behara (B V R Subbu)
Independent Director

SIGNED BY THE CHIEF FINANCIAL OFFICER OF OUR COMPANY

___________________________
Rohit Nanda
(Chief Financial Officer)

Place: Gurugram

Date: February 23, 2021

 DECLARATION

We, Singapore VII Topco III Pte. Ltd., hereby confirm that all statements, disclosures and undertakings specifically made by us
in this Draft Red Herring Prospectus in relation to ourselves, as a Selling Shareholder and our Offered Shares, are true and
correct. We assume no responsibility for any other statements, disclosures and undertakings including statements made or
confirmed by or relating to the Company or any other person(s) in this Draft Red Herring Prospectus.

FOR AND ON BEHALF OF SINGAPORE VII TOPCO III PTE. LTD.

Authorised Signatory

Name: Kimmo Tammela

Designation: Director

Place: Singapore

Date: February 23, 2021