HINDUJA FOUNDRIES · PDF fileHINDUJA FOUNDRIES LIMITED ... rights@hindujafoundries.com

Letter of Offer Dated March 19, 2010

For Equity Shareholders of the Company only

HINDUJAFOUNDRIESLIMITED

(OurCompanywas initially incorporatedasaprivate limitedcompanyonJuly30,1959asEnnoreFoundriesPrivateLimitedunder theCompaniesAct,1956, in the stateofTamilNadu.OurCompany subsequently changed status toapublic limitedcompanyfromMarch28,1961onwards.ThenameofourCompanywaschangedtoHindujaFoundriesLimitedfromFebruary14,2008.)

RegisteredOffice:KathivakkamHighRoad,Ennore,Chennai600057.Tel:(+9144)25752103;Fax:(+9144)25750390,Website:www.hindujafoundries.com

ContactPerson:Mr.N.Kothandapani,CompanySecretaryandComplianceOfficer;Email:rights@hindujafoundries.com

FORPRIVATECIRCULATIONTOTHEEQUITYSHAREHOLDERSOFOURCOMPANYONLY

ISSUEOF10,055,749EQUITYSHARESWITHAFACEVALUEOFRS.10EACHATAPREMIUMOFRS.40PEREQUITYSHARE FORANAMOUNTAGGREGATINGRS. 5,027.87 LAKHONARIGHTSBASISTOTHE EXISTING EQUITYSHAREHOLDERSOFHINDUJAFOUNDRIESLIMITED (COMPANY) INTHERATIOOF7EQUITYSHARE(S)FOREVERY13FULLYPAIDUPEQUITYSHARE(S)HELDBYTHEEXISTINGEQUITYSHAREHOLDERSONTHERECORDDATE,FEBRUARY4,2010.THEISSUEPRICEIS5TIMESTHEFACEVALUEOFTHEEQUITYSHARES.FORFURTHERDETAILS,PLEASESEETHESECTIONTITLEDTERMSOFTHEISSUEONPAGE197OFTHISLETTEROFOFFER.

GENERALRISKInvestmentsinequityandequityrelatedsecuritiesinvolveadegreeofriskandInvestorsshouldnotinvestanyfundsinthisIssueunlesstheycanaffordtotaketheriskoflosingtheirinvestment.InvestorsareadvisedtoreadtheRiskFactorscarefullybeforetakinganinvestmentdecisioninthisIssue.Fortakinganinvestmentdecision,InvestorsmustrelyontheirownexaminationoftheIssuerand theIssue including therisks involved.Thesecuritiesbeingoffered inthisIssuehavenotbeenrecommendedorapprovedby the Securities andExchangeBoardof India (SEBI)nordoes SEBI guarantee the accuracy or adequacy of thisdocument.InvestorsareadvisedtorefertosectiontitledRiskFactorsonpageXIIofthisLetterofOfferbeforemakinganinvestmentinthisIssue.

OURCOMPANYSABSOLUTERESPONSIBILITYWehavingmadeallreasonableinquiries,acceptresponsibilityforandconfirmthatthisLetterofOffercontainsallinformationwithregardtousandtheIssue,whichismaterialinthecontextofthisIssue,thattheinformationcontainedinthisLetterofOfferis true and correct in allmaterial respects and is notmisleading in anymaterial respect, that the opinions and intentionsexpressedhereinarehonestlyheldandthattherearenootherfacts,theomissionofwhichmakesthisLetterofOfferasawholeoranysuchinformationortheexpressionofanysuchopinionsorintentionsmisleadinginanymaterialrespect.

LISTINGOur existing Equity Shares are listed on Bombay Stock Exchange Limited (BSE),National Stock Exchange of IndiaLimited(NSE)andMadrasStockExchange(MSE).OurGDRsarelistedontheLuxembourgStockExchange.Wehavereceived inprinciple approvals fromBSE,NSE andMSE for listing theEquity Shares arising from this Issuevide lettersdatedSeptember11,September17andSeptember9,2009,respectively.TheDesignatedStockExchangeforthisIssueisBSE.LEADMANAGERTOTHEISSUE REGISTRARTOTHEISSUE

HDFCBankLimitedInvestmentBankingDivisionProcessHouse,GroundFloor,KamalaMillsCompound,SenapatiBapatMarg,LowerParel(W),Mumbai400013Tel:(+9122)40804108;Fax:(+9122)40804114ContactPerson:Mr.PareshSoniEmail:paresh.soni@hdfcbank.comInvestorGrievanceId:Investor.redressal@hdfcbank.comWebsite:www.hdfcbank.comSEBIRegistrationNo.:INM000011252

IntegratedEnterprises(India)Limited2ndfloor,KencesTowers1,RamakrishnaStreetNorthUsmanRoad,TNagar,Chennai600017Tel:(+9144)281408013,Fax:(+9144)28142479ContactPerson:Mr.SureshBabuEmail:corpserv@iepindia.comWebsite:www.iepindia.comSEBIRegistrationNo.:INR000000544

ISSUEPROGRAMME

ISSUEOPENSONLASTDATEFORREQUESTFORSPLITAPPLICATIONFORMS ISSUECLOSESON

March 27, 2010 April 03, 2010 April 10, 2010

mailto:paresh.soni@hdfcbank.comhttp://www.hdfcbank.com/http://www.iepindia.com/

I

TABLEOFCONTENTS

CHAPTERS PageNo. SECTION1GENERAL

DEFINITIONSANDABBREVIATIONS IINOTICETOOVERSEASSHAREHOLDERS VIIIPRESENTATIONOFFINANCIALINFORMATIONANDUSEOFMARKETDATA

IX

FORWARDLOOKINGSTATEMENTS XEXCHANGERATES XI

SECTIONIIRISKFACTORS

RISKFACTORS XII SECTIONIIIINTRODUCTION

SUMMARY 1THEISSUE 8SUMMARYFINANCIALINFORMATION 9GENERALINFORMATION 15CAPITALSTRUCTURE 21OBJECTSOFTHEISSUE 29STATEMENTOFTAXBENEFITS 73

SECTION1VABOUTUS

OURMANAGEMENT 84RELATEDPARTYTRANSACTIONS 99

SECTIONVFINANCIALSTATEMENTS

AUDITEDFINANCIALSTATEMENTSFORMARCH31,2009 100FINANCIALINDEBTEDNESS 166STOCKMARKETDATA 173

SECTIONVILEGALANDOTHERINFORMATION

OUTSTANDINGLITIGATIONSANDDEFAULTS 176GOVERNMENTANDOTHERAPPROVALS 182OTHERREGULATORYANDSTATUTORYDISCLOSURES 184

SECTIONVIIISSUERELATEDINFORMATION

TERMSOFTHEISSUE 197 SECTIONVIIIOTHERINFORMATION

MATERIALCONTRACTSANDDOCUMENTSFORINSPECTION 229DECLARATION 231

II

SECTIONIGENERAL

DEFINITIONSANDABBREVIATIONS In thisLetterofOffer,all references toRe.,Rupees,Rs.orINR refer to IndianRupees, theofficial currency of India, USD or U.S.$ or $ refer to the United States Dollar, the officialcurrencyof theUnitedStatesofAmerica,Euro refers to theofficial currencyofEuropeanUnion,Dirham refers to the official currency of theUnitedArab Emirates, and CZK refers toCzechKoruna,theofficialcurrencyoftheCzechRepublic.Referencestothesingularalsoreferstothepluralandonegenderalsoreferstoanyothergender,whereverapplicable,andthewordsLakhorLacmeans 100 thousand and theword croremeans 100 lakhs.Any discrepancies in any tablebetweenthetotalandthesumsoftheamountslistedareduetoroundingoff.DefinitionsUnlessthecontextotherwiserequires,thefollowingtermshavethefollowingmeaningsinthisLetterofOffer.

Term DescriptionWe,us,our,ourCompany theIssuer, HFL or theCompany

Unless the context requires, refers toHindujaFoundriesLimited,apubliclimitedcompany incorporatedundertheprovisionsoftheCompaniesAct,1956 having its registered office at Kathivakkam High Road, Ennore,Chennai600057.

Company/ Issue related terms

Term Description

AbridgedLetterofOffer

Theabridged letterofoffertobesent toourEquityShareholdersason theRecord Date with respect to this Issue in accordance with SEBI ICDRRegulations.

ApplicationSupportedbyBlockedAmount/ASBA

The application (whether physical or electronic) used by an Investors tomakeanapplicationauthorizing theSCSB toblock theamountpayableonapplicationintheirspecifiedbankaccount

Articles/ArticlesofAssociation/AoA

TheArticlesofAssociationofourCompany.

ASBAInvestor Anapplicantwho;a)holdsthesharesoftheCompanyindematerializedformasontherecorddate and has applied for entitlements and / or additional shares indematerializedform;b)hasnotrenouncedhis/herentitlementsinfullorinpart;c)isnotarenouncee;d)isapplyingthroughabankaccountmaintainedwithSCSBs.

Auditor Fraser&RossandS.R.Batliboi&Associates,ourstatutoryjointauditors.Board/BoardofDirectors

BoardofDirectorsofHindujaFoundriesLimitedincludinganycommitteesthereof.

BankerstotheIssue IndusIndBankLimited,IDBIBankLimitedandHDFCBankLimitedConsolidatedCertificate

Incaseofphysicalcertificate, theCompanywould issueonecertificate fortheEquitySharesallottedinonefolio.

ControllingBranches Suchbranchesof theSCSBswhichcoordinateapplicationsunder the Issue

III

Term Description

by the ASBA Investors with the Registrar to the Issue and the StockExchanges and a list of which is available athttp://www.sebi.gov.in/pmd/scsb.pdf.

DesignatedBranches SuchbranchesoftheSCSBswhichshallcollectCAFfromASBAinvestorandalistofwhichisavailableonhttp://www.sebi.gov.in/pmd/scsb.pdf

DesignatedStockExchange

BombayStockExchangeLimited(BSE)

Depositories National SecuritiesDepository Limited (NSDL) andCentralDepositoryServices(India)Limited(CDSL)

DraftLetterofOffer DraftLetterofOfferoftheCompanydatedAugust28,2009,fortheRightsIssue.

ECS ElectronicClearingService.EquityShare(s)orShare(s)

EquitysharesofourCompanyhavingafacevalueofRs.10unlessotherwisespecifiedinthecontextthereof.

EquityShareholder MeansaholderofEquitySharesofourCompany.FinancialYear/Fiscal/FiscalYear/FY

AnyperiodoftwelvemonthsendedMarch31ofthatparticularyear,unlessotherwisestated.

Issue Issue of 10,055,749 Equity Shares with a face value of Rs. 10 each at apremiumofRs.40perEquityShareforanamountaggregatingRs.5,027.87lakhsonarightsbasis to theexistingEquityShareholders in theratioof7Equity Share(s) for every 13 fully paidup Equity Share(s) held by theexistingEquityShareholderson theRecordDate.The issueprice is5 timesthefacevalueoftheEquityShares.

IssueClosingDate April10,2010IssueOpeningDate March27,2010IssuePrice Rs.50perEquityShare.Investor(s) EquityShareholdersasonRecordDateand/orRenounceesapplying in the

Issue.LeadManager HDFCBankLimited.LetterofOffer Means the letterofoffer filedwith theStockExchangesafter incorporating

SEBIcommentsontheDraftLetterofOffer.Memorandum/Memorandum ofAssociation/MoA

MemorandumofAssociationoftheCompany.

MICR MagneticInkCharacterRecognition.NetAssetValueperShare

NetWorthdividedbynumberofEquitySharesoutstanding

NetWorth Equity Share capital and reserves (excluding revaluation reserves), net ofmiscellaneousexpenditurenotwrittenoff

Promoter/Promoters The promoters of the Company namely, Hinduja Automotive Limited(UnitedKingdom)andAshokLeylandLimited.

RecordDate February4,2010Refundthroughelectronictransferoffunds

RefundsthroughECS,DirectCredit,RTGSorNEFT,asapplicable.

Registrar ofCompanies/RoC

TheRegistrarofCompanies,Tamilnadu,locatedatBlockNo.6,BWing2ndFloor,ShastriBhavan,HaddowsRoad,Chennai600006.

IV

Term Description

Registrar / Registrar totheIssue

IntegratedEnterprises(India)Limited

Renouncees Any persons who have acquired Rights Entitlements from the EquityShareholders.

RightsEntitlement 7 Equit