MANAGEMEN'’

 

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations, and
our assessment of the factors that may affect our prospects and performance in future periods, together with our
Restated Financial Information, including the reports thereon, each included in this Prospectus.

The Restated Financial Information 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 2016)” issued by the ICAI. As required by applicable law, we
have transitioned our financial reporting from Indian GAAP to Ind AS and, for the purposes of transition to Ind
AS, we have followed the guidance prescribed in “Ind AS 101 - First Time adoption of Indian Accounting
Standard”, with April 1, 2016 as the transition date.

Ind AS differs in certain material respects from Indian GAAP, IFRS and U.S. GAAP. Accordingly, the degree to
which our financial statements will provide meaningful information to an investor in countries other than India
is entirely dependent on the reader's level of familiarity with Ind AS. As a result, the Restated Financial
Information Statements may not be comparable to our historical financial statements. For a reconciliation of
Indian GAAP to Ind AS, please see “Financial Statements”. Please also see “Risk Factors - Our Company has
prepared financial statements under Ind AS. Significant differences exist between Ind AS and other accounting
principles.” on page 53.

This discussion and analysis contains forward-looking statements that reflect our current views with respect to
future events and our financial performance, which are subject to numerous risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking statements. As such, you should also
read “Forward-Looking Statements” and “Risk Factors” and beginning on pages 15 and 22, respectively, which
discuss a number of factors and contingencies that could affect our financial condition and results of operations.
Our fiscal year ends on March 31 of each year.

Overview

We are a diversified engineering company with vertically integrated manufacturing capabilities, engaged in three

business segments, namely powertrain and other products for the automotive segment (“Automotive -
Powertrain and Others”), aluminium products for the automotive segment (“Automotive — Aluminium
Products”), and industrial and engineering products segment (“Industrial and Engineering”). We are the largest
player involved in the machining of cylinder blocks and cylinder heads in the intermediate, medium and heavy
commercial vehicles segment as well as in the construction equipment industry in India. We are among the top
three-four component players with respect to machining of cylinder block for the tractor segment in India. (Source:
CRISIL Report). We are present across the entire value chain in the Automotive-Aluminium Products segment,
providing diverse products and solutions. Our strong in-house engineering and design capabilities help us offer
comprehensive solutions and products to our long standing domestic and international customers in each of the
segments in which we operate.

Our comprehensive solutions include design, process engineering and manufacturing including foundry, heat
treatment, fabrication, machining and assembly facilities. Our core competence in machining and assembly of
industrial and engineering products has helped us to first establish ourselves as a significant player in the
Automotive - Powertrain and Others segment. Our key products in this segment are highly engineered and include
engine parts such as cylinder blocks and cylinder heads, camshafts, transmission parts, gear box housings, turbo
chargers and bearing caps. The end users for our products include OEMs producing commercial vehicles, special
utility vehicle, tractors and off-highway vehicles. Additionally, we also provide machining services within our
Automotive — Powertrain and Others segment. Over the years, we have been instrumental in import substitution
for critical powertrain parts.

We have leveraged our long-term presence in developing aluminium products for precision components to also
establish and grow the Automotive - Aluminium Products segment. Within our Automotive — Aluminium
Products segment, we are equipped with an array of processes including the high pressure die casting, low pressure
die casting and gravity die casting machines to manufacture components, machining tools for machining and
assembly lines. Our key products are highly engineered and include crank case and cylinder blocks for two
wheelers, engine and structural parts for passenger vehicles and gear box housing for heavy commercial vehicle.
Our sales volume, in terms of tonnage, from the Automotive - Aluminium Products segment was 9,339.32 tonnes,

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