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LETTER OF OFFER

"This Document is important and requires your immediate attention."

This Letter of Offer ("LOO") is sent to you as a shareholder of AHMEDNAGAR FORGINGS LIMITED ("AFL"). If you require any clarification about the action to be taken, you may consult your stock broker or investment consultant or the Manager / Registrar to the Offer. In case you have recently sold your shares in the Company, please hand over this LOO and the accompanying Form of Acceptance cum Acknowledgement and Withdrawal ("FOA") & Transfer Deed ("TD") to the Member of Stock Exchange through whom the said sale was effected.

AMTEK AUTO LIMITED

Registered Office : Plot No # 16, Industrial Estate, Rozka-Meo (Sohna), Distt. Gurgaon (Haryana)

Phone No. (0124) 6362456, 6362140, Tel./ Fax No. (0124) 6362454, Email : [email protected]

Corporate Office : 4, Bhanot Apartments, Local Shopping Centre, Pushpa Vihar, New Delhi – 110 062

Phone No. (011) 6092281-84, Fax No. (011) 6084554/ 6087867, Email : [email protected]

MAKES A CASH OFFER AT Rs. 34.50/- PER EQUITY SHARE ("OFFER PRICE")

Pursuant to the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers), Regulations, 1997 and subsequent amendments thereof ["SEBI (SAST) Regulations"]

TO ACQUIRE BY TENDER UPTO 16,00,000 FULLY PAID-UP EQUITY SHARES ("OFFER")

Representing 20% of the voting capital of

AHMEDNAGAR FORGINGS LIMITED

Registered Office : "AFL House", 347-A, Off Dhole Patil Road, Pune – 411 001.

Tel No. : [020] 6122220 Fax No. : [020] 6139777 Email : [email protected]

ATTENTION:

1. Amtek Auto Limited ("AAL" or "Acquirer") will acquire shares tendered by non-resident shareholders, under the "Offer", subject to Reserve Bank of India ("RBI") approval under Foreign Exchange Management Act, 1999 ("FEMA"). On closure of the Offer, the Acquirers on behalf of such non-resident shareholders would make the requisite application to RBI to obtain permission under FEMA to enable AAL to acquire the shares. As on date there are no other statutory approvals required to implement the offer.

2. Shareholders who have accepted the Offer by tendering the requisite documents, in terms of the Public Announcement ("PA") / LOO, can withdraw the same upto three working days (i.e. 30th December, 2002 (Monday)), prior to the date of the closure of the Offer.

3. AAL reserves the right to revise the Offer Price in terms of Regulation 26 of the SEBI (SAST) Regulations any time during the tenure of the Offer upto 7 working days prior to the date of close of the Offer (i.e. 23rd December, 2002 (Monday)), or to withdraw the Offer in terms of Regulation 27 of the SEBI (SAST) Regulations. If there is any upward revision in, or withdrawal of, the Offer by AAL, the same shall be notified by way of a Public Announcement in the same newspapers where the original Public Announcement had appeared. If the Offer Price is revised upward, such revised price will be payable to all shareholders who have tendered their shares at any time during the tenure of the Offer to the extent to which their tenders have been accepted by AAL.

4. If there is a competitive bid :

The public offers under all the subsisting bids shall close on the same date.

As the Offer Price cannot be revised during 7 working days (i.e., 24th December, 2002 (Tuesday) to 2nd January, 2003 (Thursday), prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final Offer Price of each bid and tender their acceptance accordingly.

5. The procedure for acceptance is set out in Section 8 of this LOO. A FOA and a Transfer Deed are enclosed with this LOO.

6. A copy of PA, LOO and FOA would also be available on SEBI’s website www.sebi.gov.in. The FOA can be downloaded and used as an application.

All future correspondence, if any, should be addressed to either the Manager to the Offer or the Registrar to the Offer at their following addresses :

Schedule of Major Activities of the Offer

MANAGER TO THE OFFER REGISTRAR TO THE OFFER

SMIFS CAPITAL MARKETS LIMITED805, Antriksh Bhawan

22, K. G. Marg

New Delhi – 110 001.

Tel : (011) 3352192 / 3

Tel./ Fax (011) 3350223

Email : [email protected]

Contact Person : Mr. V. Swaminathan

RCMC Share Registry (P) Ltd.

1515-1st Floor, Bhisham Pitamah Marg

Kotla Mubarakpur (Near South Extn.)

New Delhi - 110 003.

Tel. : (011) 4692346/ 4601017 / 4649720

Fax. : (011) 4692345


Contact Person: Mr. P. L. Gupta

OFFER OPENS ON 4th December, 2002 (Wednesday) OFFER CLOSES ON 2nd January, 2003 (Thursday)

Activity Day and Date

Public Announcement Date 15th October, 2002 (Tuesday)

Specified Date 19th October, 2002 (Saturday)

Date by which LOO to be despatched to shareholders 25th November, 2002 (Monday)

Date of Opening of the Offer 4th December, 2002 (Wednesday)

Date of Closing of the Offer 2nd January, 2003 (Thursday)

Last date for revising the Offer Price/ Number of Shares 23rd December, 2002 (Monday)

Last Date for Competitive Bid 5th November, 2002 (Tuesday)

Last Date of withdrawal by shareholders 30th December, 2002 (Monday)

Date by which acceptance / rejection would be intimated and the corresponding payment for the acquired shares and / or the share certificates (in case of physical mode) for the rejected share will be dispatched / instructions for credit to the beneficial owners' depository account will be issued for shares in demat mode which have been rejected in full or part.

01st February, 2003 (Saturday)

TABLE OF CONTENTS

Sr. No. Subject Page No.

1. Disclaimer Clause 1

2. Details of the Offer 1-3

3. Background of the Acquirer – Amtek Auto Limited 4-7

4. Disclosure in terms of Regulation 21(3) 7

5. Background of Target Company – Ahmednagar Forgings Limited 7-9

6. Offer Price and Financial Arrangements 9-12

7. Terms and Conditions of the Offer 12-13

8. Procedure for Acceptance and Settlement of the Offer 13-15

9. Documents for Inspection 15-16

10. Declaration by the Acquirer – Amtek Auto Limited 16

DEFINITIONS

AAL / Acquirer Amtek Auto Limited

AFL / Target Company Ahmednagar Forgings Limited

ASE The Ahmedabad Stock Exchange

BoD Board of Directors

BSE The Stock Exchange, Mumbai

CDSL Central Depository Services (India) Limited

DSE The Delhi Stock Exchange Association Limited

DP Depository Participant

Eligible Persons for the Offer All owners (registered and unregistered) who own the shares of Ahmednagar Forgings Limited anytime before the closure of the Offer (except the acquirer and parties to MoU/ Agreement)

FEMA Foreign Exchange Management Act, 1999

FOA / Form of Acceptance Form of Acceptance cum Acknowledgement and Withdrawal

LOO / Offer Document Letter of Offer

Manager / Manager to the Offer / Merchant Banker to the Offer / SCML

SMIFS Capital Markets Limited

MoU Memorandum of Understanding

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

Offer Offer for acquisition of upto 16,00,000 equity shares of face value of Rs.10/- each of Ahmednagar Forgings Limited representing 20% of the voting capital by Amtek Auto Limited

Offer Price Rs. 34.50/- per fully paid-up equity share of Ahmednagar Forgings Limited

PA Public Announcement dated 15th October, 2002

PACs Persons Acting in Concert

PSE Pune Stock Exchange

RBI Reserve Bank of India

Registrar / Registrar to the Offer / Collection Centre / RCMC

RCMC Share Registry (P) Ltd.

SEBI Securities and Exchange Board of India

1. DISCLAIMER CLAUSE

"IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF AHMEDNAGAR FORGINGS LIMITED TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER OR THE COMPANY WHOSE SHARES / CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT ACQUIRER DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, SMIFS CAPITAL MARKETS LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 26October, 2002 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVER) REGULATIONS, 1997 AND SUBSEQUENT AMENDEMENT(S) THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH A STATUTORY CLEARANCES AS MAYBE REQUIRED FOR THE PURPOSE OF THE OFFER."

2. DETAILS OF THE OFFER

1. Background of the Offer

1. Amtek Auto Ltd. (AAL), a Company incorporated under the Companies Act, 1956, is making this Open Offer pursuant to Regulations 10 and 12 of the SEBI (SAST) Regulations, 1997 with the objective of substantial acquisition of shares and voting rights accompanied with change in control / management.

2. AAL on 10th October, 2002 acquired 11,83,790 fully paid-up Equity Shares of Rs.10/- each of AFL representing 14.80% of its Issued, Subscribed & Paid-up Equity Share Capital for cash at a price of Rs. 34.50 (Rupees Thirty-four and Paise Fifty only) per share from promoters, their friends, relatives and associates on a spot delivery basis. Further, AAL entered into a MoU with the promoters of AFL on 10th October, 2002 to acquire from them 24,57,660 fully paid-up Equity Shares of Rs 10 each representing 30.72% of the issued, subscribed & paidacquisition) for cash at a price of Rs. 34.50 (Rupees Thirty-four and Paise Fifty only) per share (the negotiated price).

AAL has not acquired shares of AFL in the last twelve months nor holds any shares in AFL as on the date of the PA except for the acquisition of 11,83,790 equity shares as mentioned aforesaid. Further, the Directors of the AAL have not acquired any shares of AFL over the past twelve months nor hold any shares in AFL as on date of PA.

3. AAL has entered into a MoU with the promoters of AFL ("Sellers") on 10th October, 2002 to acquire from them 24,57,660 fully paid-up Equity Shares of Rs 10 each representing 30.72% of the Issued, Subscribed & Paid-up capital for cash at a price of Rs. 34.50 (Rupees Thirty-four and Paise Fifty only) per share with the objective of substantial acquisition of shares and voting rights accompanied with change in control / management. Some of the special features of the MoU/ Agreement are given below :

1. Subject to compliance of all applicable provisions of law including the SEBI (Substantial Acquisition of Shares & Takeover) Regulations, 1997 and amendments thereto, the sellers shall sell and acquirers shall purchase 24,57,660 (Twenty Four Lacs Fifty Seven Thousand Six Hundred Sixty only) fully paid up equity shares, of Rs. 10/- (Rupees Ten only) i.e. 30.72% (approximately) of the fully paid up equity held by the sellers in AFL, for Rs. 34.50 (Rupees Thirty-four and Fifty Paise only) per share aggregating to Rs. 8,47,89,270/- (Rupees Eight Crores Forty-seven Lacs EightyThousand Two Hundred Seventy only). In case of any non-compliance of any provisions of the Regulations the agreement for sale shall not be acted upon by the seller or the acquirer.

2. The parties to the Agreement agree that they shall take all necessary steps to ensure that all the personal guarantees/ bonds of the sellers issued to any financial institution, banks, lenders, and statutory authorities, are released at the earliest.

3. Acquirer has agreed to purchase the shares of AFL on the basis of the financial statement for the year ending 31st March, 2002 and disclosures made. Incase any liability being fastened on to the Company, for the period prior to the change in the management, on account of any misstatement in the disclosure or any known, determined and undisclosed liability except to the extent disclosed in the financial statement or disclosed during the due diligence in the documents given by the seller to the acquirer or acquired by the acquirer in the process of the due diligence, the seller shall indemnify the company against such liabilities.

4. In case of any claim being made on the company or a claim being made on the acquirer within a period of three years from the signing of this Agreement, for the period prior to the change of management, the company/ acquirers as the case may be shall within 30 (Thirty) days only thereof, inform the sellers of the same, and the sellers shall fully cooperate in contesting such claim. However, in the case of such a claim crystallizing into a liability payable by the company/ acquirers, and any appeal regarding the same not succeeding, the sellers shall reimburse the company/ acquirer. It is clarified that the seller shall not be responsible if the losses/ liability arise due to any change in legislation relating to the period prior to the signing of the Agreement.

5. During the period between the signing of the Agreement and the change of management, the sellers shall take necessary steps for :

i. smooth running of the business and to ensure that there in no material adverse effect in the finances of AFL;

ii. maintains its fixed assets and long term liabilities, working capital limits, investments at substantially the same levels as on 30th June 2002;

iii. preserve reputation and customer - client relation of AFL and maintain all contracts documents and agreements;

iv. sellers shall refrain from making any representation or promise, oral or written or amending or granting any new contracts, salaries, wages, benefits, perquisites, loans or other compensation to any officer director or employee or AFL;

v. sellers shall refrain the Company from assuming, entering into, amending, altering, or terminating any labour or hiring any officer, director, employee, or other representative of AFL;

SEBI (SAST) Regulations / Regulations / Takeover Regulations

Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof.

Sellers Promoters of Ahmednagar Forgings Limited

Shares Fully paid-up equity shares of face value of Rs.10/- each of Ahmednagar Forgings Limited

Specified Date Date for the purpose of determining the names of Shareholders, as appearing in the Register of Members of Ahmednagar Forgings Limited or the beneficial records of the Depositories, to whom the Letter of Offer is to be sent, i.e. 19th October, 2002

vi. sellers shall refrain from authorizing or issuing any shares of its share capital or other securities or entering into contract or granting any option warrant or right calling for the authorization or issuance or any such shares or other securities;

vii. sellers shall cause AFL to restrain, except in the ordinary course of business, from:

a. Disposing of any assets of AFL and from permitting any of such assets to be subjected to any liens.

b. Selling any part of the operation or business of AFL to any third party.

c. Entering into any contracts permitting any person other than AFL to carry on its business operations;

1. Each of the parties to the Agreement, agrees to give in good faith full assistance and cooperation to the other as may be reasonably required to fulfill its obligations under the Agreement and to complete the said transaction to comply with the applicable provisions of law and the parties agree to do execute and perform all such further acts, deeds or things as may be reasonably required by the other party in this connection.

The details of seller(s), name, complete addresses (including phone nos. / fax number etc.) the number of shares to be sold and shares as a percentage to the paid up capital of AFL are given below :

Sr. No.

Name & Address of Seller(s)

Phone/ Fax No.

No. of shares to be sold

Percentage to the paid up capital of AFL

1. Mr. U. V. Patel

Shrushti, Bunglow No. 10 & 11,

Mantri Kishore Park,

Bhonsle Nagar,

University Road, Pune – 411 005.

Phone # (020) 5538923

9,25,780 11.57

2. Mrs. M. U. Patel w/o Mr. U. V. Patel



Bhonsle Nagar,


Phone # (020) 5538923

4,59,540 5.74

3. Mr. J. S. Mody

Saurabh, Mahavir Nagar,

Savedi Road, Ahmednagar – 414 001

Phone # (0241) 326138/ 323278

1,71,540 2.14

4. Mrs. K J. Modi w/o Mr. J. S. Mody

Saurabh, Mahavir Nagar,

Savedi Road, Ahmednagar – 414 001

Phone # (0241) 326138/ 323278

1,70,850 2.13

5. Mr. R. L. Soni

20, Dream Land Society,

Mulund (West), Mumbai – 400 080.

Phone # (022) 5617659

2,48,960 3.11

1. The proposed change in control / management is through MoU / Agreement, the salient features have been enumerated in 2.1.3 above.

2. Based on the information available, AAL has not been prohibited by SEBI from dealing in securities in terms of directions issued under Section 11B of SEBI Act. Also based on the information available, AFL and sellers have also not been prohibited by SEBI from dealing in securities in terms of directions issued under Section 11B of SEBI Act.

3. After completion of the Offer, AAL intends and reserves the right to nominate their representatives on the Board of Directors of AFL. However, the names of such representatives have not yet been finalized.

1. Details of the proposed Offer

1. The Public Announcement dated 15th October, 2002 was made in the following newspapers all on 15th October, 2002, in accordance with Regulation 15 of the SEBI (SAST) Regulations, 1997:

The Public announcement is also available on the SEBI website at www.sebi.gov.in.

2. AAL is making this Open Offer to acquire up to 16,00,000 fully paid-up Equity Shares of Rs.10/- each representing 20% of the voting capital of AFL from its existing shareholders at a price of Rs. 34.50 (Rupees Thirty-four and Paise Fifty only) per equity share ("Offer Price") payable in cash.

3. AFL does not have any partly paid equity share.

4. There is no differential pricing, in accordance with explanation (iii) to Regulation 20(11).

6. Mrs. P. R. Soni w/o. Mr. R. L. Soni

20, Dream Land Society,

Mulund (West), Mumbai – 400 080

Phone # (022) 5617659

1,02,600 1.28

7. Ms. C. U. Patel d/o Mr. U. V. Patel



Bhonsle Nagar,


Phone # (020) 5538923

1,79,900 2.24

8. Ms. K. U. Patel d/o Mr. U. V. Patel



Bhonsle Nagar,


Phone # (020) 5538923

1,98,490 2.48

Total 24,57,660 30.72

Publication

Business Standard (English National Daily)

Vir Arjun (Hindi National Daily)

Kesari (Marathi Daily)

Tarun Bharat (Marathi Daily)

5. This Offer is not a competitive offer.

6. This is not a conditional Offer and this offer is not subject to any minimum level of acceptance.

7. The Acquirer has not acquired any shares of AFL after the date of PA and up to the date of this LOO.

2. Object of the Acquisition / Offer

1. The Acquisition is for substantial acquisition of shares and voting rights accompanied with change in control / management.

2. AAL, who is already into auto ancillary business especially machined auto parts, intends to source ferrous forgings from AFL for itself, thereby increasing the capacity utilization of AFL. This acquisition would also provide AAL an opportunity to establish manufacturing presence in Western India, which has a number of auto companies, which are being catered to by AFL as an OEM. With this mind, AAL has acquired 11,83,790 shares representing 14.80% of the Voting rights of the AFL from the promoter, their friends and associates and further, they have also entered into a MoU with the promoters of the target company to purchase another 24,57,660 equity shares representing 30.72% of the Voting Capital of the AFL and acquire Management control. The acquirer is now making an Open Offer with the objective of Substantial acquisition of shares and voting rights accompanied with change in control / management and to comply with SEBI (SAST) Regulations, 1997.

3. BACKGROUND OF THE ACQUIRER – AMTEK AUTO LIMITED

1. Information about the Acquirer Company

1. Amtek Auto Limited (AAL), is a company incorporated under the Companies Act, 1956, having its Registered Office at Plot No # 16, Industrial Estate, Rozka-Meo (Sohna), Distt. Gurgaon (Haryana) and Corporate Office at 4, Bhanot Apartments, Local Shopping Centre, Pushp Vihar, New Delhi – 110 062.

2. There are no persons acting in concert/ deemed to be acting in concert with AAL for the purpose of this acquisition.

3. AAL has not entered into any agreement with anyone in this regard.

4. Amtek Auto Limited was originally incorporated under the Companies Act, 1956 in the name and style of A. M. Metal Cast Limited on 3rd October, 1985 and subsequently, changed its name to its present name - Amtek Auto Limited on 12th November, 1987. A brief history and major areas of operations of the company are as follows :

AAL is engaged in manufacturer of connecting rods assemblies and other engine components. AAL is one of the largest manufacturer of Connecting Rod Assemblies in the country and OEM supplier of connecting rod assemblies to Maruti Udyog Limited (MUL). AAL has facilities for the manufacture of connecting rod assemblies (2 wheelers & 4 wheelers), knuckles, gear pinion etc. at Gurgaon and Sohna, Haryana and a forging unit at Gurgaon. The company has a unit near Bangalore to manufacture engine assemblies including pinion assemblies, connecting rod assemblies, knuckles and sheet metal components. AAL has a technical collaboration agreement with Aizen Company Ltd., Japan, which is a leading manufacturer of connecting rod assemblies in the world. AAL also supplies connecting rods to Maruti Udyog Ltd, Eicher Ltd. (for Tractors), New Holland Tractors Ltd., John Deere, Hero Honda Motors, LML, Escorts Ltd. etc.

5. AAL is the flagship company of the Amtek group, promoted by Mr. Arvind Dham. Mr. Dham, B.Arch from Punjab University, Chandigarh and M Arch from State University of New York (SUNY), Buffalo, USA, has fifteen years of work experience in Auto Ancillary business.

6. The applicable provisions of Chapter II of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 has been complied with by the Acquirer.

7. The shareholding pattern of AAL as on 14th October, 2002 is as under

Total Paid up capital is Rs. 774.74 Lacs as on the date of this LOO.

8. The names and addresses of the Directors on the Board of Directors of AAL is as under :

Sl. No. Shareholder’s Category No. of Shares held % of Shares held

1. Promoters 52,27,440 67.47%

2. FIIs / Mutual Funds / FIs / Bank 2,90,640 3.75%

3. Public 22,29,373 28.78%

TOTAL 77,47,453 100.00%

Name Address

Mr. Arvind Dham B – 7, Geetanjali Enclave, New Delhi – 110 017.

Mrs. Anita Dham B – 7, Geetanjali Enclave, New Delhi – 110 017.

Mr. J. S. Pal 203, Badrinath, Plot No. 1, Shivpuri Complex, Sion, Trombay Road, Chembur, Mumbai – 400 071.

None of the above directors are on the Board of AFL.

9. The shares of AAL are listed on Stock Exchange(s) at Delhi (Regional), Ludhiana, Chennai, Mumbai & is also traded under the permitted category on NSE.

10. The total paid up capital of AAL as on the date of PA comprises 77,47,453 Equity Shares of Rs.10/- each fully paid-up. The market price of AAL was Rs. 395.05 as on 10BSE (Source: The Economic Times dated 11th October, 2002).

11. The brief audited financial details indicated at 3.1.12 below has been disclosed after making the following adjustments in the audited financial statements wherever quantification is possible :

1. There was no adjustments / rectification for incorrect accounting policies or failures to make provisions or other adjustments, which has resulted in audit qualifications.

2. There was no material amounts relating to adjustments for last three years, which can be identified and adjusted in arriving at profits of the years to which they relate.

3. There has been no change in accounting policy during the last three years.

4. The statement of profit or loss has been computed after considering extraordinary items.

5. The statement of assets and liabilities has been prepared after deducting the balance outstanding on revaluation reserve account from both fixed assets and reserves and the net worth has been arrived at after such deduction.

12. Brief audited financial details of AAL :

Mr. Rajiv Thakur D – 137, Defence Colony, New Delhi – 110 024

Mr. Sanjay Chhabra S – 183, Panchshila Park, New Delhi – 110 016

Mr. B. Lugani 11, Commercial Complex, Gulmohar Enclave, New Delhi – 110 049.

Mr. D. S. Malik 573, Sector – 29, NOIDA – 201 303 (U.P.)

Profit & Loss Statement For the period from 1-4-2002 to 30-6-2002

(Unaudited)

Year Ended 31st

March 2002

(Audited)

Year Ended 31March 2001

(Audited)

Income from operations 7,133.00 22,091.83 13,861.47

Other Income 74.00 224.87

Total Income 7,207.00 22,316.70 14,025.10

Total Expenditure. 5,388.00 16,423.20

Profit Before Depreciation, Interest and Tax

1,819.00 5,893.50

Depreciation 588.00 1,815.30

Interest 483.00 1,589.70

Profit Before Tax 748.00 2,488.50

Provision for Tax 59.00 187.60

Profit After Tax 689.00 2,300.90

Provision for Deferred Tax N.A. 682.60

Profit after Deferred Tax N.A. 1,618.30

Balance Sheet Statement For the period from 1-4-2002 to 30-6-2002

(Unaudited)

Year Ended 31st

March 2002

(Audited)


(Audited)

Sources of funds

Paid up Equity Share Capital 774.75 774.70

* annualised

Note : The Board of AAL at its meeting held on 3rd August, 2002 has recommended issue of Bonus Shares in the ratio of 1 share for every share held. The same has been ratified by the Shareholders at the Annual General Meeting held on 30th September, 2002.

13. There are no Person(s) Acting in Concert (PACs). The details of other group companies of Amtek Group are as under :

a. Amtek India Ltd., manufactures of gear shifter forks and yokes (transmission components) with manufacturing facility at Gurgaon and Bhiwadi. As a backward integration, the company set up a Castings unit at Bhiwadi, Rajasthan. The Company’s Foundry Division caters to the captive demand for high grade SG and Grey Iron castings for automotive applications. The major products manufactured at Amtek India include fully finished castings of a wide variety of transmission and suspension components for various automotive applications.

b. Amtek Siccardi India Limited, located at IMT Manesar, near Delhi for manufacturing Crankshafts, has a technical collaboration with Atelier de Siccardi of France. The plant is equipped with worldclass machines which include the largest Unipro 90 version German HELLER Pin and Journal Internal Milling machine and a Japanese 9-axis CNC TOYODA Grinder, besides other allied equipment required for manufacturing Crankshafts.

c. Benda Amtek Ltd., is a joint venture between Benda Kogyo Limited of Japan and AAL. The Company has also equity participation from IFCI Venture Capital Ltd. The JV has established itself as one of the largest manufacturer of Flywheel Ring Gears and assemblies in India. The manufacturing plant is equipped with modern production facilities, which include some special Benda Kogyo patented machines imported from Japan and Korea.

d. WHF Precision Forgings Limited., formerly Wesman Halverscheidt Forgings Ltd., a company registered under Board of Industrial and Financial Reconstruction (BIFR), was acquired by the Amtek Group under a scheme of rehabilitation submitted by ICICI to BIFR in May, 2001. The Company is engaged in the manufacturer of precision forgings at it plant located at Mandideep, Dist. Raisen, near Bhopal, Madhya Pradesh.

e. Amtek Castings India Limited, formerly known as Indsil Auto Components Limited, was acquired by the Amtek Group from Indsil Group in April, 2002. The Company at its factory located at Coimbatore, Tamil Nadu, manufacturers Grey and Nodular Castings.

Brief details of the above companies are given below :

Advance against Share Application 1,000.00 0.00

Preference Share Capital 2,805.80 1,805.80

Reserves & Surplus (Excluding Revaluation Reserves)

14,406.60 13,717.60

Shareholders funds 18,987.15 16,298.10 10,626.16

Secured loans 10,793.25 9,539.80

Unsecured loans 3,389.72 3,375.70

Total 33,170.12 29,213.60 18,193.60

Uses of funds

Net fixed assets 20,909.76 19,727.10 14,260.33

Investments 3,205.70 2,867.70

Net current assets 8,923.15 6,493.20

Total miscellaneous expenditure not written off

131.51 125.60

Total 33,170.12 29,213.60 18,193.60

Other Financial Data For the period from 1-4-2002 to 30-6-2002

(Unaudited)

Year Ended 31st

March 2002

(Audited)


(Audited)

Dividend (%) N.A. 20%

Earning Per Share (Rs.) 8.89 26.92

Net Worth 15,049.84 14,366.70

Return on Networth (%) 18.32* 15.87

Book Value Per Share (Rs.) 194.27 185.44

(*) Excluding revaluation reserves

Note : 1> The financials of Benda Amtek Ltd and WHF Precision Forgings Ltd. are as on 30th June, 2001.

2> The financials of Amtek Siccardi Limited are as on 30th September, 2001

3> The financials of Amtek India Ltd. is on 30th June, 2002

4> The financials of Amtek Castings India Ltd. are as on 31st March, 2001.

5> None of the above company is a sick industrial company except WHF Precision Forgings Limited which is registered with BIFR.

1. The acquirer is not an individual, hence information required from individuals is not being furnished.

3. Disclosure in terms of Regulation 16(ix)

1. The Acquisition is for substantial acquisition of shares and voting rights accompanied with change in control / management.

2. AAL, who is already into auto ancillary business especially machined auto parts, intends to source ferrous forgings from AFL for itself, thereby increasing the capacity utilization of AFL. This acquisition would also provide AAL an opportunity to establish manufacturing presence in Western India, which has a number of auto companies, which are being catered to by AFL as an OEM. With this mind, AAL has acquired 11,83,790 shares representing 14.80% of the Voting rights of the AFL from the promoter, their friends and associates and further, they have also entered into a MoU with the promoters of the target company to purchase another 24,57,660 equity shares representing 30.72% of the Voting Capital of the AFL and acquire Management control. The acquirer is now making an Open Offer with the objective of Substantial acquisition of shares and voting rights accompanied with change in control / management and to comply with SEBI (SAST) Regulations, 1997.

AAL does not have any plans to dispose of or otherwise encumber any assets of AFL in the next two years, except in the ordinary course of business of AFL and except to the extent required for purpose of restructuring and/ or rationalisation of assets, investment, liabilities or otherwise of AFL.

3. AAL plans to increase the capacity utilization of AFL by sourcing ferrous forgings from AFL for itself.

4. The Acquirer undertakes that they shall not sell, dispose of or otherwise encumber any substantial asset of the AFL except, with the prior approval of the shareholders of AFL.

3. Option in terms of Regulation 21(3), if applicable

As consequent to the Offer, public shareholding will not fall below 10%, the provisions of Regulation 21(3) of the SEBI (SAST) Regulations, 1997 containing the provisions relating to delisting option are not applicable.

4. BACKGROUND OF THE TARGET COMPANY – AHMEDNAGAR FORGINGS LIMITED

1. AFL, incorporated on March 21, 1977 as Ahmednagar Forgings Limited under the Companies Act, 1956, is having its registered office at AFL House, 347-A, Off Dhole Patil Road, Pune (Maharashtra). AFL is a leading manufacturer of forged parts, machined parts, cold forged parts and high tensile fastners. Ahmednagar Forgings Ltd. (AFL) has four plants; two of them are located at Ahmednagar, Maharashtra and the other two at separate locations, Chakan and Kuruli near Pune. The forgings are supplied in forged as well as after a variety of heat treatments. It has specialized in supply of machined parts such as Rear Axle Shafts and Crown & Pinion gears One of its plants at Ahmednagar also manufactures High Tensile Fastners and Cold formed components.

2. Share Capital Structure of AFL :

Name of the Company Amtek India Ltd. Amtek Siccardi India Limited

Benda Amtek Ltd. WHF Precision Forgings Limited

Amtek Castings India Ltd.

Date of Incorporation 2nd December, 1983 15th April, 1997 12th July, 1995 24th June, 1985 14th November, 1996

Nature of Business Manufacturer of transmission components and Castings

Manufacturer of Crankshafts

Manufacturer of Flywheel Ring Gears and assemblies

Manufacturer of precision forgings

Manufacture of grey and nodular castings

Equity Capital, 1,184.00 700.00 932.87 400.00 606.27

Advance against Share Application Money

- NIL - - NIL - 1,264.14 - NIL - - NIL -

Reserves (*) 9,467.00 2,836.69 1,927.33 10.04 - NIL -

Total Income 13,997.30 5,188.68 3,876.85 1508.87 516.01

Profit After Tax (PAT) 1,791.00 564.11 486.65 (434.29) (167.15)

Earnings Per Shares (EPS)(Rs.) 16.05 8.06 5.22 - -

Net Asset Value (NAV) 93.82 50.34 30.58 - 7.23

3. There are no outstanding convertible instruments (warrants / FCDs / PCDs) and there are no partly paid-up shares.

4. The applicable provisions of Chapter II of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, has been complied with by the Acquirer, Sellers, Promoters & other major shareholders within the time specified in the Regulations. The compliance details of the Target Company are given below :

* The Target Company has made the above disclosures to Pune Stock Exchange (Regional Stock Exchange) and ASE, BSE & NSE, on 24/10/2002 under SEBI Regularisation Scheme, 2002. After submission of the above, AFL has complied with Chapter II of SEBI (SAST) Regulations, 1997

5. The Target Company has complied with the listing requirements and no penal action has been initiated/ taken by any stock exchange, as per information available from AFL.

6. The Present composition of the Board of Directors ("BoD") as on the date of public announcement is as under :

None of the above Directors represent the Acquirer.

7. There has been no merger / demerger / spin off during the last three years involving AFL. There has been no change in the name of AFL since the date of listing.

8. Brief financial details of AFL for a period of last three years :

Paid up Equity Shares of Target company No. of Shares/ voting rights % of shares/voting rights

Fully paid up equity shares 80,00,000 100%

Partly paid up equity shares NIL NIL

Total paid up equity shares 80.00.000 100%

Total voting rights in Target company 80,00,000 100%

Source: Annual Report of AFL for the Year ended 31st March, 2002

Sl. No. Regulation/ Sub-regulation

Due Date for compliance as mentioned in the regulation

Actual date of compliance Delay, if any (in no. of days)

Col. 4- Col. 3

1 2 3 4 5

1 6(2) 20.05.1997 24.10.2002 1983

2 6(4) 20.05.1997 24.10.2002 1983

3 8(3) 30.04.1998 24.10.2002 1638

4 8(3) 30.04.1999 24.10.2002 1273

5 8(3) 30.04.2000 24.10.2002 907

6 8(3) 30.04.2001 24.10.2002 542

7 8(3) 30.04.2002 12.04.2002 NIL

8 7(3) 17.10.2002 11.10.2002 NIL

Sr. No.

Name & Address Position

1. Mr. U. V. Patel Chairman & Managing Director

2. Mr. J. S. Mody Joint Managing Director

3. Mr. R. L. Soni Director on the Board

4. Mr. M. K. Patel Director on the Board

5. Mr. H. V. Amin Director on the Board

6. Mr. R. P. Gokhale Nominee Director on the Board (ICICI)

Profit & Loss Statement For the period from 1-4-2002 to 30-6-2002

Year ended 31st March Year ended 31st March Year ended 31st March

(Unaudited) 2002

(Audited)

2001

(Audited)

2000

(Audited)

Income from operations 2,211.73 8,449.26 8,115.51 10,599.09

Other Income 6.54 27.83 68.97 63.71

Total Income 2,218.27 8,477.09 8,184.48 10,662.80

Total Expenditure 1,999.05 7,677.86 7,533.27 9,195.33

Profit Before Depreciation, Interest and Tax 219.22 799.23 651.21 1,467.47

Depreciation 118.47 473.30 511.27 600.67

Interest 89.41 403.84 545.17 715.66

Profit Before Tax & extra-ordinary item 11.34 (77.91) (405.23) 151.14

Extra-ordinary Item - - 257.74 -

Provision for Tax - 1.77 0 13.63

Profit After Tax 11.34 (79.68) (662.97) 137.51

Balance Sheet Statement For the period from 1-4-2002 to 30-6-2002

(Unaudited)

Year Ended 31st March 2002

(Audited)


(Audited)


(Audited)

Sources of funds

Paid-up Share Capital 800.00 800.00 800.00 800.00

Reserves and Surplus (excluding revaluation reserves) 2,930.02 2,918.68 2,998.37 3,661.35

Shareholders Fund 3,730.02 3,718.68 3,798.37 4,461.35

Secured loans 2,916.23 2,924.09 3,332.89 4,267.05

Unsecured loans 1,773.19 1,739.49 1,741.45 1,576.83

Total 8,419.44 8,382.26 8,872.71 10,305.23

Uses of funds

Net fixed assets 4,322.30 4,369.15 4,688.15 5,136.78

Investments 249.91 249.91 246.04 333.69

Net current assets 3,837.59 3,752.19 3,922.00 4,807.53

Total miscellaneous expenditure not written off 9.64 11.01 16.52 27.23

Total 8,419.44 8,382.26 8,872.71 10,305.23

Other Financial Data For the period from 1-4-2002 to 30-6-2002

(Unaudited)

Year ended 31st March 2002

(Audited)


(Audited)


(Audited)

Dividend (%) - NIL NIL NIL

Earning Per Share (Rs.) 0.14 - - 1.72

Networth (Shareholders Fund – Miscellaneous 3720.38 3707.67 3781.85 4434.12

Price Earning Ratio (P/E) : 60.53 on the Offer Price, after annualising EPS for the period 01/04/2002 to 30/06/2002.

9. Pre and Post- Offer Shareholding pattern of the target company as on the date of the LOO is given below :

Notes: 1> The actual position may differ depending on the response received in the Open Offer.

2> AAL has not purchased any shares after the PA till the date of the LOO.

3> AFL has 6281 number of shareholders in the public category.

4> The details of institutional holding are given below

Expenditure not written off) (Rs in Lacs)

Return on Networth (%) 0.30 - - 3.10

Book Value Per Share (Rs.) 46.50 46.35 47.27 55.43

Shareholders Category Shareholding & voting rights prior to the offer (A)

Shares / Voting rights agreed to be acquired which triggered off the Regulations (B)

Shares / voting rights to be acquired in Open Offer (Assuming full acceptances) (C) *

Shareholding / voting rights after the offer i.e. (A)+(B)+(C)= (D) *

Sr. No. No. % No. % No. % No. %

1> Promoter Group

(a) Parties to the agreement, if any 27,75,508 34.69 (24,57,660) 30.72 - - 3,17,848 3.97

(b) Promoters other than (a) above 1,55,577 1.95 - - - - 1,55,577 1.95

Total (1) (a+b) 29,31,085 36.64 (24,57,660) 30.72 - - 4,73,425 5.92

2> Acquirers

(a) Main Acquirer 11,83,790 14.80 24,57,660 30.72 16,00,000 20.00 52,41,450 65.52

(b) PACs N.A.

Total (2) (a+b) 11,83,790 14.80 24,57,660 30.72 16,00,000 20.00 52,41,450 65.52

3> Parties to agreement other than 1(a) & 2

- - - - - - - -

4> Public (other than 1, 2 & 3)

(a) FIs/ MFs/ FIIs/ Banks, SFIs 5,84,558 7.31 - - (16,00,000) (20.00) 22,85,125 28.56

(b) Others 33,00,567 41.25 - -

Total (4) (a+b) 38,85,125 48.56 - - (16,00,000) (20.00) 22,85,125 28.56

Grand Total (1+2+3+4) 80,00,000 100.00 80,00,000 100.00

FIs/ MFs/ FIIs/ Banks, SFIs No. of Share held Percentage

Life Insurance Co. of India Ltd. 2,50,700 3.13

United India Insurance Co. Ltd. 15,200 0.19

New India Insurance Co. Ltd. 2,000 0.03

Bank of India 500 0.01

SICOM Limited 3,10,358 3.88

Morgan Stanley 3,900 0.05

Canbank Mutual Fund 1,600 0.02

Standard Chartered Bank 100 0.00

5. OFFER PRICE AND FINANCIAL ARRANGEMENTS

1. Justification of Offer Price

1. The shares of AFL are listed on PSE, BSE, ASE & NSE.

2. The annualized trading turnover during the preceding 6 calendar months ending 30th September, 2002 prior to the month in which the P.A. is made in each stock exchange is as under :

Based on the above information, the Equity Shares of the Target Company are frequently traded on NSE and BSE and infrequently traded on PSE and ASE within the meaning of Regulation 20(5) of the SEBI (SAST) Regulations, 1997.

3. The shares of the Target Company are deemed to be most frequently traded on NSE in terms of Regulations and the Offer Price is highest of the following prices:

4. As per Regulations 20(4)(c), the price and volume data of AFL is given below :

26 weeks weekly high/ low

Bank of America 200 0.00

Total 5,84,558 7.31

Name of stock exchange(s)

Total No. of shares traded during the 6 calendar months prior to the month in which

PA was made

Total No. of listed Shares

Annualized Trading turnover (in terms of % to

total listed shares)

PSE NIL 80,00,000 NIL

NSE 7,42,772 80,00,000 18.57

BSE 3,80,658 80,00,000 9.52

ASE NIL 80,00,000 NIL

Source: Respective Stock Exchanges

1. Negotiated price paid for 24,57,660 shares acquired under the MoU entered into on 10th

October, 2002 in terms of Regulation 20(4)(a)Rs 34.50

2. Highest price paid by AAL for 11,83,790 shares purchased on spot delivery basis during the 26-week period prior to the date of PA in terms of Regulation 20(4)(b)

Rs 34.50

3. The average of weekly high and low of the closing prices of the shares of AFL as quoted on NSE, where the shares are most frequently traded during the 26-week period preceding the date of PA

Rs 13.90

4. The average of daily high and low prices of the shares of AFL as quoted on NSE, where the shares are most frequently traded during the 2-week period preceding the date of PA

Rs 19.92

Week no.

Week ending Weekly High of Closing Price

(Rs.)

Weekly Low of Closing Price

(Rs.)

Average (Rs.) Volume (Number of shares)

1 22nd April, 2002 9.00 6.00 7.50 5,233

2 29th April, 2002 14.10 10.50 12.30 32,949

3 6th May, 2002 14.25 13.00 13.63 27,704

4 13th May, 2002 12.70 10.70 11.70 25,092

5 20th May, 2002 10.40 9.05 9.73 24,289

6 27th May, 2002 10.45 8.30 9.38 7,853

2 weeks daily high/ low

7 3rd June, 2002 9.70 8.75 9.23 7,699

8 10th June, 2002 10.75 10.00 10.38 5,924

9 17th June, 2002 12.00 10.60 11.30 26,766

10 24th June, 2002 14.05 11.95 13.00 50,896

11 1st July, 2002 20.20 15.10 17.65 1,32,799

12 8th July, 2002 18.70 16.10 17.40 95,877

13 15th July, 2002 18.25 17.30 17.78 41,629

14 22nd July, 2002 16.60 15.15 15.88 23,102

15 29th July, 2002 14.80 11.85 13.33 31,750

16 5th August, 2002 13.75 12.00 12.88 32,535

17 12th August, 2002 15.55 13.85 14.70 13,351

18 19th August, 2002 15.30 14.20 14.75 15,730

19 26th August, 2002 15.55 14.35 14.95 6,427

20 2nd September, 2002 14.75 14.00 14.38 17,352

21 9th September, 2002 14.05 13.50 13.78 17,730

22 16th September, 2002 16.50 12.85 14.68 42,863

23 23rd September, 2002 17.00 15.45 16.23 34,555

24 30th September, 2002 16.35 15.80 16.08 20,582

25 7th October, 2002 17.25 16.30 16.78 49.703

26 14th October, 2002 25.30 19.00 22.15 1,78.429

Source : www.nseindia.com

Day No.

Dates Daily High Price (Rs.)

Daily Low Price (Rs.)

Average (Rs.) Volume (Number of shares)

1 1st October, 2002 17.00 16.30 16.65 5,820

2 2nd October, 2002 Holiday

3 3rd October, 2002 16.95 16.40 16.68 15,838

4 4th October, 2002 18.00 16.25 17.13 8,646

5 5th October, 2002 Saturday

6 6th October, 2002 Sunday

7 7th October, 2002 17.75 15.25 16.50 19,399

8 8th October, 2002 19.00 17.25 18.13 19,349

9 9th October, 2002 20.90 20.25 20.58 8,450

10 10th October, 2002 23.00 20.70 21.85 55,211

5. As the shares of AFL are infrequently traded on PSE & ASE, the required disclosures in accordance with Regulation 20(5) of the SEBI (SAST) Regulations are as follows

Source : www.capitalmarket.com

6. There is no non-compete fee payable to any person.

7. In terms of Regulation 20(11), the Offer Price of Rs. 34.50 per share is justified as it is the highest of the following :

i. Negotiated price paid for 24,57,660 shares acquired under the MoU entered into on 10th October, 2002) was Rs. 34.50.

ii. Highest price paid by AAL for 11,83,790 shares purchased on spot delivery basis during the 26-week period prior to the date of PA was Rs 34.50.

iii. The average of the weekly high and low of the closing prices of the shares of AFL as quoted on NSE during the 26-week period prior to PA is Rs 13.90. (Source : www.nseindia.com)

iv. The average of the daily high and low prices of the shares of AFL as quoted on NSE during the 2-week period prior to PA is Rs 19.92. (Source : www.nseindia.com)

A number of valuation approaches are feasible, the Guidelines of erstwhile Controller of Capital Issues (CCI) substantially addresses the parameters contained in Clause (c) of Regulation 20(5) which are elaborated below

i) Net Asset Value (NAV)

a) The latest audited Balance Sheet available is for the year ending 31st March, 2002 and forms the basis for estimating the NAV of AFL.

b) The NAV of AFL is estimated to be Rs. 46.35.

ii) Profit Earning Capacity Value (PECV)

a) Considering the last three years (1999-2000, 2000-2001 & 2001-2002) for assessing the average profits

b) AFL has incurred losses in the last two years of operation and as per the CCI guidelines, the PECV is Nil.

iii) As per the CCI guidelines where PECV is Nil, the fair value is assessed to be 50% of the NAV, i.e. Rs. 23.18

iv) Considering, the Supreme Court decision in the Hindustan Lever Employee Union Vs Hindustan Lever Ltd., (1995) 83 Com Case 30, wherein the Honourable Court had opined that the fair value

11 11th October, 2002 25.30 25.20 25.25 14,919

12 Saturday

13 Sunday

14 14th October, 2002 27.85 25.25 26.55 80,500

Source : www.nseindia.com

1. Negotiated price paid for 24,57,660 shares acquired under the MoU entered into on 10th

October, 2002 in terms of Regulation 20(4)(a)Rs 34.50

2. Highest price paid by AAL for 11,83,790 shares purchased on spot delivery basis during the 26-week period prior to the date of PA in terms of Regulation 20(4)(b)

Rs 34.50

3. Other Parameters :

For the period from 1-4-2002 to

30-6-2002

(Unaudited)

Year ended 31st March

2002

(Audited)

Return on Networth (%) 0.30 -

Book Value per share (Rs) 46.50 46.35

Earning Per Share (Rs) (on annualised basis) 0.57 -

Price Earning Ratio (based on the Offer Price) 60.53 -

Industry P/E Ratio 9.9

for a listed company could be assessed based on the following weightages :

Market based value : 2

Earnings based value : 2

Net Asset Value : 1

Given the NAV of Rs. 46.35, the average market price for the last 26 weeks of about Rs. 13.90 and a PECV of Nil as assessed above, if one were to apply this approach, the share price would be in the region of Rs. 14.83 per share.

1. The Offer Price shall not be less than the highest price paid by the acquirer(s) for any acquisition of shares of AFL from the date of PA upto 7 working days prior to the closure of the Offer.

1. Financial arrangements

1. The total amount of funds required to make the payment of consideration for the shares tendered during the Open Offer (assuming full acceptances) at the Offer Price of Rs. 34.50/Thirty-four and Paise Fifty Only) per fully paid-up equity share would be Rs. 552 Lacs (Rupees Five Hundred Fifty-two Lacs Only). The Offer is not subject to any differential pricing.

2. In accordance with Regulation 28(2) of the SEBI (SAST) Regulations 1997, AAL has deposited an amount of Rs. 138 Lacs (Rupees One Hundred Thirty-eight Lacs only) by way of cash, representing 25% of the total consideration payable under the Open Offer assuming full acceptances.

3. AAL has opened an Escrow Account with Corporation Bank, M-41, Connaught Circus, New Delhi – 110001 and. SMIFS Capital Markets Limited, the Manager to the Open Offer, have been duly authorised by AAL to realize the value of escrow account in terms of SEBI (SAST) Regulations, 1997.

4. AAL has adequate and firm financial resources to fulfill the obligations under the offer. M/s Manoj Mohan & Associates, Chartered Accountants and Statutory Auditor, have certified vide their certificate dated 11th October, 2002 that the Acquirer has sufficient resources to meet all required financial obligations under the Offer. These resources will be met from internal accrual.

5. The name, address, date of certificate, membership number etc. of the Chartered Accountant certifying the adequacy of financial resources of acquirer for fulfilling all the obligations under the Offer are as under :

Date of Certificate : 11th October, 2002

Name : M/s Manoj Mohan & Associates

Address : V – 20, Sector 5, NOIDA – 201 301.

Telephone / Fax Nos. : (0124) 534820


Membership No. : 076980

6. The Merchant Banker to the Open Offer confirms that firm arrangement for funds and money for payment are in place to fulfill the Offer obligations in accordance with SEBI (SAST) Regulations, 1997.

3. TERMS AND CONDITIONS OF THE OFFER

1. Locked-in Shares

1. Regarding acceptance of locked-in shares, if any, whether already acquired or to be acquired through this Offer, the same can be transferred to the acquirers subject to the continuation of the residual lock -in period in the hands of the acquirers.

2. Eligibility for Accepting the Offer

1. The present Offer is being made to all shareholders whose names appear in the Register of Members of AFL (except the Acquirer and parties to the agreement) as on the Specified Date (i.e. 19th October, 2002) and also to those persons who own the shares any time prior to the close of the Offer but are not registered shareholder(s). Accidental omission to dispatch this LOO, nonreceipt, or delayed receipt of this LOO will not invalidate this Offer in any way.

2. The LOO will be mailed to equity shareholders of AFL whose names appear in the Register of Members of AFL and the beneficial owners of the Equity Shares of AFL, whose names appear on the beneficial records of the respective Depositories at the close of business hours as on 19th October, 2002 (being the "Specified Date")(except the Acquirer and parties to the agreement).

3. Shareholders who wish to tender their shares should submit documents in accordance with the procedure specified in section 8 of the LOO and the FOA.

3. Statutory Approvals / Other Approvals Required for the Offer

1. AAL will make the requisite application to the Reserve Bank of India (RBI) to obtain permission under the Foreign Exchange Management Act, 1999 (FEMA) to acquire shares from Nonresident shareholders of AFL, if any.

2. No approval other than those mentioned above is required for the purpose of this Offer.

3. In case of non receipt of the statutory approval(s) within time, SEBI has a power to grant extension of time to AAL for payment of consideration to shareholders subject to AAL agreeing to

pay interest as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations, 1997.

4. The Acquirer does not require any approval of any Bank / FI for making this Offer. However, the shares of AFL held by promoters are covered by a non-disposal undertaking and any transfer of the same would require prior approval by FI / Banks.

4. Others

1. Shareholders who have accepted the Offer by tendering the requisite documents, in terms of the PA/ Letter of Offer, shall have the option to withdraw acceptance tendered by them up to 30December, 2002 (Monday), being three working days prior to the date of closure of the Offer.

2. In terms of Regulation 22(5A), Shareholders shall have an option to withdraw acceptance tendered upto three Working Days prior to the date of closure of the Offer by submitting the documents as specified below, so as to reach Registrar to the Issue. The withdrawal can be exercised by submitting Form of Withdrawal as enclosed with Letter of Offer. In case of nonreceipt of Form of Withdrawal, the withdrawal can be exercised by making plain paper application along with the following details :

1. In case of physical shares by stating the Name, Address, Distinctive Nos., Folio No., No. of equity shares tendered, and;

2. In case of dematerialized shares by stating the Name, Address, No. of equity shares offered, DP name, DP ID, beneficiary account number and a photocopy of the delivery instruction in "Offmode or counterfoil of the delivery instruction in "Off-market" mode, duly acknowledged by the DP, in favour of the special depository account.

3. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

1. Shareholders of AFL who wish to avail of this Offer are free to offer their shareholding in whole or in part. Shareholders should forward the documents mentioned in 8.1.1/ 8.1.2 either by hand delivery (on all working days) (between 10 a. m. to 3 p. m.) or by Registered Post on or before the close of the Offer, in accordance with the instructions specified in this LOO and in the FOA to the Registrar to the Offer M/s RCMC Share Registry (P) Limited at address mentioned below :

1. For Equity Shares held in physical form :

Registered Shareholders should enclose :

Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, by all shareholders whose names appear in the share certificates.

Original Share Certificate(s).

Valid Share Transfer form(s) duly signed as transferors by all the registered shareholders (in case of joint holdings) in the same order and as per specimen signatures registered with AFL and duly witnessed at the appropriate place. A blank Share Transfer Form is enclosed along with this Letter of Offer. Notwithstanding that the signature(s) of the transferor(s) has / have been attested, if the signature(s) of the transferor(s) differs from the Specimen signature(s) recorded with AFL or are not in the same order, such shares are liable to be rejected under the Open Offer even if the offer has been accepted by bonafide owner of such shares.

1. For Equity shares held in demat form :

The Registrar to the Offer, RCMC Share Registry (P) Limited, have opened a special depository account in NSDL with Jyoti Jain Investment & Finance Co. Ltd. The details of the special depository account are as under :

Name and Address of the registrar to whom the shares should be sent including name of the contact person, telephone no., fax no. and email address etc.

RCMC Share Registry (P) Limited

1515-1st Floor, Bhisham Pitamah Marg, Kotla Mubarakpur (Near South Extn.), New Delhi – 110 003

Tel No. (011) 4692346/ 4601017 & 4649720

Fax No. (011) 4692345


Contact Person: Mr. P.L. Gupta

DP Name Jyoti Jain Investment & Finance Co. Ltd.

DP ID IN 302050

Beneficial Owners should enclose:

Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, by all shareholders whose names appear in the same order in which their names appear in their beneficiary account.

Photocopy of the delivery instruction in "Off-market" mode or counterfoil of the delivery instruction in "Off-market" mode, duly acknowledged by the DP in favour of special depository account.

For each delivery instruction, the beneficial owner should submit a separate Form of Acceptance cum acknowledgment.

All beneficial owners maintaining account with CDSL are required to fill in an additional inter depository slip, maintained with the DP while giving instructions to their respective DPs.

1. Unregistered Shareholders should enclose:

Form of Acceptance cum Acknowledgement duly completed and signed in accordance with the instructions contained therein, or application on plain paper.

Original Share Certificate(s).

Broker Contract Note in Original issued by the broker through whom the shares were acquired.

Valid Share Transfer form(s) as received from the market.

All other requirements for valid transfer (including matching of signatures) will be pre-conditions for valid acceptance. No indemnity is required from unregistered shareholders.

1. The Market lot of the Equity Shares is 1.

2. The details of buyer should be left blank failing which the same will be invalid under the Offer. The details of the Acquirers as buyer will be filled by the Acquirer upon verification of the Form of Acceptance cum acknowledgment and the same being found valid. All other requirements for valid transfer will be preconditions for valid acceptance.

3. The shareholders should also provide all relevant documents, which are necessary to ensure transferability of the shares in respect of which the application is being sent. Such documents may include but are not limited to

i. Duly attested death certificate and succession certificate (in case of single shareholders) if the original shareholder is deceased, in case succession certificate has not been obtained, the legal heir may approach the registrar.

ii. Duly attested power of attorney if any person apart from the shareholder has signed the application form and / or transfer deed(s).

iii. In case of Companies, the necessary corporate authorization (including Board Resolution) and specimen signatures of authorized signatories.

iv. Non resident shareholders should also enclose copy of permission received from RBI for shares held by them in AFL and No objection Certificate / Tax Clearance Certificate from the income tax authorities under the Income Tax Act, 1961 indicating the amount of tax to be deducted by the Acquirers before remitting the consideration. In case the aforesaid No Objection Certificate / Tax Clearance Certificate is not submitted, the acquirer will arrange to deduct tax at the maximum marginal rate as may be applicable to the category of shareholder on the entire consideration amount payable to such shareholder(s).

1. Shareholders are advised to ensure that the FOA and other relevant documents are complete in all respects, otherwise the same is liable to be rejected. In the case of demat shares, the shareholders are advised to ensure that their shares are credited in favour of the special depository account, before the closure of the Offer. The FOA of such demat shares not credited in favour of the special depository account, before the closure of the Offer will be rejected.

2. The share certificate(s), share transfer form(s) and the Form of Acceptance along with the relevant documents should be sent only to the Registrar to the Offer (Collection Centre) and not to the Manager to the Offer or the Acquirers or AFL.

3. All owners of the equity shares of AFL, registered or unregistered, are eligible to participate in the Offer. Unregistered owners including shareholders who have sent their shares for transfer / demat can send their application in writing to the Registrar to the Offer, on a plain paper stating the Name, Address, No. of equity shares held, No. of equity shares offered, Distinctive Nos., Folio No., together with original Share Certificate(s), valid transfer deed(s) and the original contract note issued by the broker through whom they acquired their Shares. Unregistered owners should not sign the transfer deed and the transfer deed should be valid for transfer. No indemnity is required from the unregistered owners.

4. In case of non-receipt of the Letter Of Offer, the eligible persons may send their consent, to the Registrar to the Offer, on a plain paper stating their Name, Address, No. of equity shares held, No. of equity shares offered, Distinctive Nos., Folio No., along with documents as mentioned above, so as to reach the Registrar to the Offer on or before the close of the Offer, i.e. 2(Thursday) or in case of beneficial owner, they may send the application in writing to the Registrar to the Offer, on a plain paper stating the Name, Address, No. of equity shares held, No. of equity shares offered, DP name, DP ID, beneficiary account number and a photocopy of the delivery instruction in "Off-market" mode or counterfoil of the delivery instruction in "Offacknowledged by the DP, in favour of the special depository account, so as to reach the Registrar to the Offer, on or before the close of the Offer, i.e. 2nd January, 2002 (Thursday). The eligible persons can write to the Manager to the Offer requesting for the LOO and FOA and fill up the same in accordance with the instructions given therein, so as to reach the Registrar to the Offer, on or before the close of the Offer i.e. 2nd January, 2002 (Thursday).

5. Alternatively, the Letter of Offer and Form of Acceptance cum Acknowledgement and Withdrawal will be available on SEBI’s website : www.sebi.gov.in, from the date of opening of the Offer. The eligible persons can download the Form of Acceptance cum Acknowledgement and Withdrawal from the SEBI’s website and apply in the same.

6. In case, the number of shares offered for sale are more than the shares agreed to be acquired, the Acquirers shall accept the offers received on a proportionate basis, in consultation with the Manager to the Offer, ensuring that the basis of acceptance is decided in a fair and equitable manner. Unaccepted Share Certificate(s), transfer forms and other documents, if any, will be returned by registered post at the shareholders’ / unregistered owners’ sole risk to the sole / first shareholder. Shares held in demat form to the extent not accepted will be credited back to the beneficial ownerswith the respective depository participant as per the details furnished by the beneficial owner in the FOA.

Client ID 10015380

7. In case of non receipt of the statutory approval(s) within time, SEBI has a power to grant extension of time to Acquirers for payment of consideration to shareholders subject to Acquirers agreeing to pay interest as directed by SEBI in terms of Regulation 22(12) of SEBI (SAST) Regulations, 1997.

8. The Registrar to the Offer will hold in trust the Shares / Share Certificates, Shares lying in credit of the special depository account, FOA, if any, and the transfer form(s) on behalf of the shareholders of AFL who have accepted the Offer, till the cheques / drafts for the consideration and / or the unaccepted shares / share certificates are despatched / returned.

9. The payment of consideration to those shareholders whose equity share certificates and other documents are found in order and are accepted by AAL, will be through a crossed account payee Cheque / demand draft / pay order. The intimation regarding the acceptance (in part or full) or rejection of the shares and the corresponding payment for the acquired shares and/or share certificates for the rejected shares will be dispatched to the shareholders by registered post at the shareholders’ sole risk. Shares held in demat form to the extent not accepted will be credited back to the beneficial account with the respective DP as per the details furnished by the beneficial owner in the FOA.

10. All cheques/demand drafts will be drawn in the name of the first holder, in case of joint registered holders. In case of unregistered owner of the shares, payment will be made in the name of the person specified by such owner. No indemnity is required from unregistered shareholders. It is desirable that the shareholders provide bank details in the FOA, for incorporation in the cheque / demand draft.

11. The shares withdrawn by shareholders would be returned by Registered Post.

3. DOCUMENTS FOR INSPECTION

The following documents are regarded as material documents and are available for inspection at the Corporate Office :

Amtek Auto Limited

"Bhanot Apartments", 4, L. S. C. Pushpa Vihar, New Delhi – 110 062,

Phone No. (011) 6092281-84,

Fax No. (011) 6084554/ 6087867,

Email [email protected].

from 11.00 a.m. to 1.00 p.m. on any day, except Sundays, Holidays, after the Offer opens i.e. 4th December, 2002 (Wednesday) but before the Offer closes i.e. before 2nd January, 2002 (Thursday)

i. A Certificate of Incorporation, Memorandum and Articles of Association of AAL

ii. A copy of Chartered Accountant’s Certificate dated 11th October, 2002 certifying the adequacy of financial resources with AAL to fulfill the Open Offer obligations.

iii. Audited annual reports of AAL and AFL for the three years ended March 31, 2002, 2001 & 2000.

iv. A copy of letter dated 14th October, 2002 from Corporation Bank, M-41, Connaught Circus, New Delhi – 110001, confirming amount kept in the escrow account and a lien marked in favour of SMIFS Capital Markets Limited.

v. Copy of the MoU/ Agreement, which triggered the Open Offer.

vi. A published copy of PA dated 15th October, 2002.

vii. A copy of the letter dated 15th November, 2002 from SEBI in terms of proviso to Regulation 18(2).

viii. A copy of the Board Resolutions dated 9th October, 2002 of AAL.

ix. A copy of the agreement entered into with the Depository Participant viz. Jyoti Jain Investment & Finance Co. Ltd., New Delhi for opening a special depository account for the purpose of the Offer.

3. DECLARATION BY THE ACQUIRERS (INCLUDING PACs, IF ANY)

Amtek Auto Limited & its Directors, jointly and severally accept full responsibility for the information contained in this LOO and also for the obligations of AAL laid down in the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments made thereof. Mr. Arvind Dham, Managing Director, ALL, has been authorized by the Board of Directors of AAL to be authorised signatory to the LOO.

By Order of the Board

For Amtek Auto Limited

Sd/-

Arvind Dham

Managing Director

Place : New Delhi

Date : 21st November, 2002

Encl.:

1. Form of Acceptance cum Acknowledgement and Withdrawal Form

2. Transfer deed for shareholders holding shares in physical form.