MIRA INFORM REPORT

Report Date :

14.12.2013

IDENTIFICATION DETAILS

Name :	HINDUJA FOUNDRIES LIMITED (w.e.f. February, 2008)
Formerly Known As :	ENNORE FOUNDRIES LIMITED
Registered Office :	Kathivakkam High Road, Ennore, Chennai – 600 057, Tamilnadu
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	30.07.1959
Com. Reg. No.:	18-003849
Capital Investment / Paid-up Capital :	Rs.3503.974 millions
CIN No.: [Company Identification No.]	L27104TN1959PLC003849
TAN No.: [Tax Deduction & Collection Account No.]	CHEE00046E
PAN No.: [Permanent Account No.]	AAACE1078K
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is primarily engaged in the business of manufacture of grey iron and aluminum gravity die-castings for automobiles, compressors, industrial engines, power generators and tractors, as well as for defence and marine applications.
No. of Employees :	1600 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (30)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 12293000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. Company has changed its accounting year of 18 months (from 1^st April to 30^th September, 2012) to 6 months (From 1^st October, 2012 to 31^st March, 2013). Further company will follow financial period of 12 months. As per, company has incurred heavy loss from its operation. However, trade relations are fair. Business is active. Payment terms are slow but correct. The company can be considered for business dealings with some caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

The current downturn provides an opportunity to push ahead with reforms to accelerate growth, says the latest India Development Update report released by the World Bank. The report says that the adverse effects of rupee depreciation are likely to be offset by the gains in the exports performance due to improved external competitiveness. Since May this year, the local currency has depreciated substantially and fell to a record level of Rs 68.85 to a dollar on August, 28.

A stagflation like situation appears to have arisen as inflation jumped to an eight month high of 6.46 % for the month of September. It is up from 6.10 % in August. Growth continues to be muted with factory output plunging to 0.6  % in August. Onion prices have risen nearly 300 % from last September. Vegetables cost nearly 90 % more than they did last year. Wake up to the economic contribution of slum dwellers. They contribute more than 7.5 % to the country’s gross domestic product, according to a recent study conducted in 50 top cities.

136000 estimated number of jobs created during the second quarter of the current financial year. 50000 estimated number of additional jobs in the field of corporate social responsibility in the coming years.

The International Finance Corporation expects to come out with its rupee linked bonds issue before the end of 2013 as a part of its plan to raise $ 1 billion. The Apple iPhone 5c (Rs 41900 for 16 GB variant) and 5s (Rs 53500 for 16GB variant) has been launched in India from 1^st November.

The Land Acquisition Act to provide just and fair compensation to farmers will come into force from January 1 next year, said Rural Development Minister Jairam Ramesh. The Act replaces a 119 year old registration. The Securities and Exchange Board of India has approved the trading of currency futures on the Bombay Stock Exchange. The exchange plans to launch the currency futures platform with advanced trading technology by the end of November.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Term Loan: B
Rating Explanation	Risk prone credit quality and very high credit risk.
Date	March, 2013

Rating Agency Name	ICRA
Rating	Short Term Non-Fund Based Facilities: A4
Rating Explanation	Minimal degree of safety and very high credit risk.
Date	March, 2013

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION PARTED BY

Name :	Mr. Ramesh
Designation :	Accounts Department
Contact No.:	91-44-25752103
Date :	19.11.2013

LOCATIONS

Registered Office/ Factory 1 :	Kathivakkam High Road, Ennore, Chennai – 600 057, Tamilnadu, India
Tel. No.:	91-44-25752103
Fax No.:	91-44-25750390
E-Mail :	mgovind@hindujafoundries.com
Website :	www.hindujafoundries.com
Location :	Owned
Corporate Office :	No.477-482, Anna Salai, Khivraj Complex II, 7^th Floor, Nandanam, Chennai – 600 035, Tamilnadu, India
Tel. No.:	91-44-42016742
Fax No.:	91-44-42021443
Factory 2 :	Ductron Casting Unit, B-15, IDA, Uppal, Hyderabad – 500 039, Andhra Pradesh, India
Factory 3 :	Plot K-2, SIPCOT Industrial Estate, Arneri Village, Sriperumbudur, Chennai – 602 105, Tamilnadu, India

DIRECTORS

AS ON 31.03.2013

Name :	Mr. R. Seshasayee
Designation :	Chairman
Name :	Mr. D.G. Hinduja
Designation :	Co-Chairman (Alternate : Y M Kale)
Name :	Mr. D.J. Balaji Rao
Designation :	Director
Name :	Mr. Jean Brunol
Designation :	Director
Name :	Jorma Antero Halonen
Designation :	Director (Upto July 07, 2013)
Name :	Mr. S. Ragothaman
Designation :	Director
Name :	Mr. F. Sahami
Designation :	Director
Name :	Mr. Sridhar Venkiteswaran
Designation :	Director
Name :	B. Swaminathan
Designation :	Managing Director (Upto July 17, 2013)
Name :	Mr. G.R.V. Rajan
Designation :	Managing Director and Chief Executive Officer (From July, 17, 2013)

KEY EXECUTIVES

Name :	Mr. Ramesh
Designation :	Accounts Department
Name :	K. R. Ravishankar
Designation :	Chief Financial Officer
Name :	Mr. Govind M. Joshi
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2013

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	5405793	19.65
Sub Total	5405793	19.65
(2) Foreign
Bodies Corporate	14814609	53.85
Sub Total	14814609	53.85
Total shareholding of Promoter and Promoter Group (A)	20220402	73.50
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	4001	0.01
Financial Institutions / Banks	10	0.00
Foreign Institutional Investors	1822679	6.63
Sub Total	1826690	6.64
(2) Non-Institutions
Bodies Corporate	1469401	5.34
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	1611987	5.86
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	2364407	8.59
Any Others (Specify)	16824	0.06
Clearing Members	16683	0.06
Trusts	141	0.00
Sub Total	5462619	19.86
Total Public shareholding (B)	7289309	26.50
Total (A)+(B)	27509711	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	1221000	0.00
Sub Total	1221000	0.00
Total (A)+(B)+(C)	28730711	0.00

BUSINESS DETAILS

Line of Business :	Subject is primarily engaged in the business of manufacture of grey iron and aluminum gravity die-castings for automobiles, compressors, industrial engines, power generators and tractors, as well as for defence and marine applications.
Exports :
Products :	· Finished Goods
Countries :	· European Countries
Imports :
Products :	· Machinery · Raw Materials
Countries :	· European Countries
Terms :
Selling :	L/C (30 days) and Credit (30 days)
Purchasing :	L/C, Cash (60 days) and TT

GENERAL INFORMATION

Suppliers :

Mahindra and Mahindra

Customers :

· Mahindra

· New Holland Agriculture

· Escorts

· TAFE

· John Deere

· Renault

· Hyundai

· Fiat

· Avtec

· Ashok Leyland

· Tata Motors

· JCB

· Leyland Deere

· Mitsubishi

No. of Employees :

1600 (Approximately)

Bankers :

· Bank of Baroda

· Canara Bank

· DBS Bank Limited

· HDFC Bank Limited

· ICICI Bank Limited

· IDBI Bank Limited

· Karur Vysya Bank Limited

· Standard Chartered Bank

· State Bank of India

· State Bank of Travancore

· Union Bank of India

· Yes Bank

Facilities :

Secured Loans	31.03.2013 (Rs. in Millions)	30.09.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Indian rupee loan from banks	1800.000	1250.000
Foreign currency loan from banks	870.229	948.546
SHORT TERM BORROWINGS
Cash credit and overdraft facilities from banks	1185.529	1096.442
Others	16.000	35.500
Total	3871.758	3330.488

Notes:

Long Term Borrowings:

Term loan of Rs.2100.000 millions (Previous year : Nil) from Yes Bank is secured by equitable mortgage and first charge over all the fixed assets of the Company including movable properties and immovable properties (both present and future) and second charge on the current assets of the Company. The said loan is repayable in 12 quarterly instalments commencing from March 2013 to September 2017. The company is in the process of creating charge for the securities provided.

Term loan of Nil (Previous year : Rs.1550.000 millions) from ICICI Bank was secured by equitable mortgage and first charge over all the fixed assets of the Company including movable properties and immovable properties (both present and future) and second charge on the current assets of the Company. The said loan was repayable in 10 equal half yearly instalments commencing from September 2011 to March 2016. This amount has been further repaid as at March 31, 2013.

Foreign currency term loan of Rs.1087.786 millions (Previous year: Rs.1053.940 millions) from DBS Bank is secured by first pari passu charge over all the fixed assets of the Company including movable properties and immovable properties (both present and future). The said loan is repayable in 10 equal half-yearly instalments commencing from August, 2013. The Company is in the process of creating charge for the securities provided.

Short Term Borrowings:

Cash credit and overdraft facilities from banks are secured by a first charge on current assets and a pari passu second charge on the fixed assets of the Company. As at March 31, 2013, the interest on such facilities ranges from 13.35% p.a. to 15.50% p.a.

Other loans repayable on demand from banks (secured) loans comprises of loans from DBS Bank. Such loans are secured by a first charge on current assets and a pari passu second charge on the fixed assets of the Company. The interest rate on such loans ranges from 13.35% p.a. to 15.50% p.a.

Banking Relations :	--
Auditors :
Name :	BSR and Company Chartered Accountants
Address :	10, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034, Tamilnadu, India
Holding Company :	Hinduja Automotive Limited (formerly ‘LRLIH Limited’), UK
Fellow Subsidiary :	Ashok Leyland Limited
Associate Company :	AL Wind Energy Limited
Entity under common control :	Nissan Ashok Leyland Powertrain Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
200000000	Equity Shares	Rs.10/- each	Rs.2000.000 millions
35000000	Preference Shares	Rs.100/- each	Rs.3500.000 millions
	Total		Rs.5500.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
28843118	Equity Shares	Rs.10/- each	Rs.288.431 millions
1500000	6% Redeemable nonconvertible cumulative preference shares	Rs.100/- each	Rs.150.000 millions
1000000	6% Redeemable nonconvertible cumulative preference shares	Rs.100/- each	Rs.100.000 millions
30000000	9% Redeemable non-convertible cumulative preference shares	Rs.100/- each	Rs.3000.000 millions
	Total		Rs.3538.431 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28730711	Equity Shares	Rs.10/- each	Rs.287.307 millions
1500000	6% Redeemable non-convertible cumulative preference shares	Rs.100/- each	Rs.150.000 millions
1000000	6% Redeemable non-convertible cumulative preference shares	Rs.100/- each	Rs.66.667 millions
30000000	9% Redeemable nonconvertible cumulative preference shares	Rs.100/- each	Rs.3000.000 millions
	Total		Rs.3503.974 millions

Notes:

Rights, preferences and restriction attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each equity share holder is entitled to one vote per share.

Rights, preferences and restriction attached to preference shares

1,500,000 6% Redeemable non-convertible cumulative preference shares of Rs.100/- each issued to Ashok Leyland Limited on March 19, 1999 are redeemable at par during the period April 2011 to April 2013. Redemption due on April 2011 and April 2012 was initially rescheduled to April 2013. The company has sought and obtained a further extension from the preference shareholder.

1,000,000 6% Redeemable non-convertible cumulative preference shares of Rs.100/- each issued to Ashok Leyland Limited on November 12, 2003 are redeemable at par during the period April 2008 to April 2010. Out of the above, an amount of Rs.33.333 millions has been redeemed in April 2008. Redemption due on April 2009 and April 2010 was initially rescheduled to April 2013. The company has sought and obtained a further extension from the preference shareholder.

7,500,000 9% Redeemable non-convertible cumulative preference shares of Rs.100/- each issued to Ashok Leyland Limited on September 29, 2012 are redeemable at par within a period of two years from the date of allotment.

7,500,000 9% Redeemable non-convertible cumulative preference shares of Rs.100/- each issued to Ashok Leyland Limited on October 19, 2012 are redeemable at par within a period of two years from the date of allotment.

15,000,000 9% Redeemable non-convertible cumulative preference shares of Rs.100/- each issued to Ashok Leyland Limited on March 20, 2013 are redeemable at par within a period of two years from the date of allotment.

FINANCIAL DATA

[all figures are in Rupees Millions]

Note:

FINANCIAL DETAILS FILE ATTACHED

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	No
8) No. of employees	Yes
9) Name of person contacted	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	Yes
18) Major customers	Yes
19) Payments terms	Yes
20) Export / Import details (if applicable)	Yes
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	No
31) Date of Birth of Proprietor/Partner/Director, if available	Yes
32) PAN of Proprietor/Partner/Director, if available	No
33) Voter ID No of Proprietor/Partner/Director, if available	No
34) External Agency Rating, if available	Yes

INDEX OF CHARGES:

S. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	CHARGE HOLDER	ADDRESS	Service Request Number (SRN)
1	10402410	21/12/2012	400,000,000.00	YES BANK LIMITED	NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A.B. ROAD, WORLI, MUMBAI, MAHARASHTRA - 400018, INDIA	B67888222
2	10398011	21/12/2012	2,250,000,000.00	YES BANK LIMITED	NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A.B. ROAD, WORLI, MUMBAI, MAHARASHTRA - 400018, INDIA	B66226978
3	10393615	14/12/2012	1,100,000,000.00	DBS BANK LIMITED	NO.806 ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	B64749831
4	10294065	08/06/2011	500,000,000.00	CANARA BANK	PRIME CORPORATE BRANCH, SPENCER TOWER I, GROUND F LOOR, 770 ANNA SALAI, CHENNAI, TAMILNADU - 600002, INDIA	B15758808
5	10291192	07/06/2011	60,000,000.00	THE KARUR VYSYA BANK LIMITED	CENTRAL LOAN PROCESSING CELL, SOUTH WING FIRST FL OOR, 37 WHITES ROAD, CHENNAI, TAMILNADU - 600014, INDIA	B14624563
6	10280128	29/03/2011	50,000,000.00	IDBI BANK LIMITED	NO:7, CHEVALIER SHIVAJI GANESAN SALAI, T. NAGAR, CHENNAI, TAMILNADU - 600017, INDIA	B10555779
7	10233537	17/07/2010	66,000,000.00	IDBI BANK LIMITED	NO:7, CHEVALIER SHIVAJI GANESAN SALAI, T. NAGAR, CHENNAI, TAMIL NADU - 600017, INDIA	A91347476
8	10187978	04/09/2010 *	500,000,000.00	IDBI BANK LIMITED	NO:7, CHEVALIER SHIVAJI GANESAN SALAI, T. NAGAR,, CHENNAI, TAMILNADU - 600017, INDIA	A95014676
9	90288675	24/09/2013 *	1,684,000,000.00	STATE BANK OF INDIA (CONSORTIUM LEADER)	COMMERCIAL BRANCH, NO.232 NSC BOSE ROAD, CHENNAI, TAMILNADU - 600001, INDIA	B88433727
10	90292158	24/06/2001 *	32,400,000.00	ICICI LIMITED	163 BACKBAY RECLAMATION, MUMBAI, MAHARASHTRA - 400020, INDIA	-
11	90292116	05/06/1992	32,420,010.00	THE INDUSTRIAL CREDIT AND INVESTMENT COROPORATION OF INDIA	163 BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
12	90291319	19/02/1992	30,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT COROPORATION OF INDIA LIMITED	163 BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
13	90291925	11/10/1987	35,000,000.00	THE IDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF IN DIA LIMITED	163 BACKBY RECLAMATION, ANNA SALAI, BOMBAY, MAHARASHTRA - 400020, INDIA	-
14	90291867	30/12/1985	9,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT COROPORATION OF INDIA	163 BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA -400020, INDIA	-
15	90291759	20/10/1982 *	8,000,000.00	THE INDUSTRIAL BANK OF INDIA	NARIMAN BHAVAN 221 VINAY K SHAH MARG NARIMAN POINT, BOMBAY, MAHARASHTRA - 400021, INDIA	-
16	90291742	13/01/1983 *	6,201,162.00	THE INDUSTRIAL FINANCE CORPN OF INDIA	BANK OF BARODA BUILDING 16 SANSAD MARG, NEW DHELI, DELHI - 110001, INDIA	-
17	90295335	26/12/1981 *	2,610,757.00	THE IDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF IN DIA LIMITED	MADRAS, TAMILNADU, INDIA	-

* Date of charge modification

Unsecured Loans	31.03.2013 (Rs. in Millions)	30.09.2012 (Rs. in Millions)
SHORT TERM BORROWINGS
Short-term loans from banks	999.813	2630.000
Buyer’s credit	6.314	16.485
Total	1006.127	2646.485

Notes:

Long Term Borrowings:

The foreign currency loan from HSBC consist of USD 5,000,000 and USD 15,000,000 loan respectively.

The said loan is repayable in three annual instalments commencing from April 20, 2011 and May 31, 2011 respectively.

Short Term Borrowings:

Unsecured short-term loans represents loan from Bank of Baroda. The interest rate on such loan was 10.25% p.a. as at March 31, 2013.

Buyer’s Credit repayable on their respective due dates within next 12 months. Interest rate on such buyer’s credit ranges from 6% p.a.

COMPANY OVERVIEW

Subject was incorporated in the year 1959 and commenced commercial production in the year 1961. The Company is a part of the Hinduja group of companies and is listed in the Bombay, Madras and National Stock Exchanges. The Company is primarily engaged in the business of manufacture of grey iron and aluminum gravity die-castings for automobiles, compressors, industrial engines, power generators and tractors, as well as for defence and marine applications.

BUSINESS OPERATIONS:

The Company’s Sales Revenue for the six months period 1^st October 2012 to 31^st March, 2013 was Rs.3042.200 millions and the loss incurred during the same period was Rs.990.800 millions. The corresponding Sales Revenue and Loss figures of the previous year comprising of 18 months period from 1^st April 2011 to 30^th September 2012 was Rs.10293.600 millions and Rs.3013.800 millions respectively.

Total Net Sales of Ferrous and Non Ferrous Castings at 37359 MT were proportionately lower in the current accounting period as compared to 130750 MT in the previous accounting period. Gross production of Ferrous and Non Ferrous Castings at 42100 MT was proportionately lower in the current accounting period as compared to 157408 MT in the previous accounting period.

In the period, the Company consolidated its position as a principal supplier of castings to various Original Equipment Manufacturers (OEMs) namely Tata Cummins, Renault, New Holland, John Deere etc., meeting their exacting standards of quality and delivery schedules. Necessary infrastructure and tooling have been put in place and technical knowhow has been developed to become supplier of choice to all major OEMs in the Commercial Vehicle, Passenger Vehicle, Tractors and Construction Equipment segments. The company is well poised to take advantage of opportunities that will arise on revival of the market.

The Company continued to face numerous challenges due to negative growth of the OEM market, uncertain power scenario, and sharp increase in raw material and power prices which were not adequately compensated by the customers. Sriperumbudur Unit (SPU) Ramp-up is proceeding at a rapid pace with debottlenecking of capacity constraints and stabilization of production processes.

CHANGES IN CAPITAL STRUCTURE:

During the year, the Company allotted 22500000, 9% Redeemable, Non-Convertible, Cumulative Preference Shares of Rs.100/- each of an aggregate nominal amount of Rs.2250.000 millions to Ashok Leyland Limited. With the above allotment, the total Preference Share Capital of the Company increased to Rs.3216.700 millions as at March 31, 2013 (Previous Year Rs.966.700 millions). There was no change in paid-up equity share capital of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Foundry Scene

The Indian Foundry Industry produces an estimated 10 million MT of various grades of Castings to International standards. Castings find application in diverse industries such as Automobiles, Railways, Pumps, Compressors, Valves, Diesel Engines, Cement /Electrical / Textile Machinery and aero. Foundry products are broadly classified as grey iron, SG iron, malleable iron, steel and non-ferrous castings. Grey iron castings account for approximately 68% of total castings produced during 2011-12.

There are approximately 4600 foundries in India, of which 90% are small-scale units, 12% classified as medium-scale units and 2% large scale units. Some of the medium and large-scale foundries are modern, globally competitive and have International Quality accreditation. There is growing awareness about environment and many foundries are switching over to less polluting induction furnaces and coke-less cupolas in the grey iron and steel sector.

The Indian Foundry industry grew at a healthy rate of 10 per cent annually in the period up to 2011 owing to increasing share of local manufacture in the GDP and strong international demand. However with the marked slowdown in the economy since 2012, the foundry industry has taken a huge hit with negative growth in most of the market segments.

Subject produces castings for engines used in automotive, agricultural machinery (tractors) and construction equipment sectors. The company almost entirely operates in the niche segment of cast iron cylinder blocks, cylinder heads and transmission housings.

Economy - Growth and Outlook

The Indian economy experienced a lower growth rate of around 5.5% during 2012-13. As compared to agricultural growth of 3.6% during 2011-12, overall growth during 2012-13 was lower at 1.8% due to delayed onset of monsoon and the quantum of rains received being less than long-term average in many parts of the country. Industrial sectors continued to reel under severe slowdown. CSO estimates of manufacturing GDP growth of just

1.9% for the full year have proved to be right.

During 2012-13, the automotive and the tractor sectors have experienced de-growth. According to industry data released by Society of Indian Automobile Manufacturers (SIAM), due to higher interest rates and lower economic growth, the sale and consequently the production of medium and heavy commercial vehicles declined to 2,78,560 vehicles during 2012-13 as compared to 3,84,800 vehicles during 11-12.

In comparison, the production of light commercial vehicles was marginally up by 1.6% due to small increase in demand for pick-up vehicles in 2.0-3.5 ton maximum mass category due to last mile connectivity in the retail sector. While passenger car production during the year 2012-13 was down by 4.26% as compared to the previous year, production of utility vehicles witnessed a growth of 52%, resulting in an increase of 2.78% in production of passenger vehicles.

The lower than average rainfall in large parts of the country during 2012-13, adversely affected sale and consequently production of tractors. Tractor production during 2012-13 was 5,78,690 units in comparison to production of 641845 numbers during 2011-12-a decline of around 10%.

Most market analysts expect GDP to be around 5 % during 2013-14, assuming a normal monsoon. It is expected that RBI would continue to adopt a conservative policy on interest rate in view of its focus on containing inflation. While the economy faces strong head winds in the near term, long term prospects of Indian economy remain bright due to strong fundamentals and commitment towards reforms and liberalization.

Automotive Industry

The long term Auto industry prospects in India appear good both from end market and manufacturing platform perspectives. Consumer demand has been sustained by favorable demographic changes, in particular by ongoing urbanization and an increasing middle class. Disposable incomes have increased and correspondingly raised vehicle ownership levels. Over the last 5 years, relatively high GDP growth and industrial activity increased the demand for commercial vehicles. Prevailing low levels of agricultural mechanization have resulted in strong tractor demand. India is expected to be the third largest automotive market by volumes by 2018 after US and China.

India has also been acknowledged by many global OEMs as one of the most strategically important emerging auto markets in the world. It is not only an attractive destination for OEMs as an end customer market but also as an important manufacturing base. For example, global majors Ford, Daimler Benz, Hyundai Motor and Renault-Nissan have set up fully fledged manufacturing facilities in Chennai. These manufacturing facilities will service both domestic and export markets.

However, the year 2012 -13 has been a challenging year for automotive sector as has been stated earlier. Poor industrial output, lack of governmental spending on road building and other infrastructure projects, negative investment climate and high interest rates have adversely impacted many players in the automotive sector. The prospects for the automotive sector are expected to improve from the early part of 2014.

Company Performance

Consequent to the severe slowdown in commercial vehicle, passenger vehicle and tractor segments, Hinduja Foundries achieved a gross production of 42100 MT in the six month period October 2012 to March 2013 in comparison to gross production of 47502 MT during the previous six months period of April to September 2012. The loss of business in commercial vehicle segment on account of adverse market conditions was partly made up by increased business with Tractor manufactures.

During this period, the production of a number of new products, especially for customers such as Simpson, TAFE and New Holland, got stabilized. Machine shop capacity was continuously upgraded to meet customer requirements. Machining activity is expected to generate additional contribution.

Certain critical investments necessary for addressing new product segments have been implemented. The beneficial results of these projects are expected to be visible in the coming periods.

FINANCIAL AND OPERATIONAL PERFORMANCE:

Gross production during the period October 2012 to March 2013 was 42100 MT compared to 47502 MT in the corresponding period during the previous year and 157408 MT in the 18 month period April 2011 to September 2012. Sales for the period were 40052 MT against 45461 MT in the corresponding period in 2011-12 and 130750 MT for April 2011 to September 2012. (18 months). Net sales for the period were Rs.3042.100 millions as against Rs.3562.100 millions in the corresponding period in the previous year.

High levels of domestic inflation adversely affected input costs and the Company had to absorb most of the input cost increases. Power supply continued to be restricted in Tamilnadu and Andhra Pradesh. Consequently the Company was constrained to purchase private power to meet production requirement.

Net loss before tax was Rs.990.800 millions for the six month period October 2012 to March 2013 as compared to Rs.3013.800 millions in the 18 month period April 2011 to September 2012. This is after considering reversal of MAT of Rs.47.045 millions.

DEVELOPMENT OF NEW PRODUCTS / PARTNERSHIP FOR GROWTH:

The Company has been actively scouting for international partnership to achieve global standards of foundry technology / process, tool development and quality control. They are in the process of setting out the parameters of the end targets and the goals that they wish to achieve in the coming years.

CONTINGENT LIABILITIES:

Particulars	31.03.2013 (Rs. in Millions)	30.09.2012 (Rs. in Millions)
Dividend on Redeemable preference shares	148.707	62.290
Sales tax, income tax and excise related matters	206.085	203.128

The Tamil Nadu Government has issued notification levying additional charge on High Tension Industries, having Arc furnaces at 25% of the power consumption effective from 1^st December 2001 till 15^th March 2003. Though the Company has not received any demand in this regard, the notification has been challenged by the Company before the High Court of Madras. The High Court has granted interim stay. Subsequently, TNERC passed an order imposing 15% Arc furnace additional charge effective from March 16, 2003. The Company also filed an affidavit stating that it had installed in 1999, harmonic filters to contain the harmonic levels. The Hon’ble Madras High Court after hearing the case on October 8, 2003, directed TNEB to verify the installation of harmonic filters by the Company and report back the status. Though the verification is done, TNEB has not filed the report in the High Court and the case is yet to come up for further hearing. The Management believes that the final impact is not ascertainable pending the receipt of report from TNEB. In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the grounds that there are reasonable chances of successful outcome of appeals.

PART I - FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2013

(Rs. in millions)

SI. No.	Particulars	Quarter Ended			Half Year Ended
		September 30, 2013		June 30, 2013	September 30, 2013
		(Unaudited)		(Unaudited)	(Unaudited)
1	Income from operations
	(a) Net sales/income from operations (Net of excise duty)	1564.089		1739.481	3303.570
	(b) Other operating income	3.772		3.563	7.335
	Total income from operations (net)	1567.861		1743.044	3310.905
2	Expenses
	(a) Cost of materials consumed	785.582		890.761	1676.343
	(b) Purchases of stock-in-trade	-		-	-
	(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade	(17.694)		(36.444)	(54.138)
	(d) Employee benefits expense	329.614		323.000	652.614
	(e) Depreciation and amortisation expense	119.489		105.533	225.022
	(f) Power and fuel	280.760		314.509	595.269
	(g) Other expenses	305.449		319.477	624.926
	Total expenses	1803.200		1916.836	3720.036
3	Profit / (loss) from operations before other income, finance costs and exceptional items (1 - 2)	(235.339)		(173.792)	(409.131)
4	Other income	8.934		6.154	15.088
5	Profit / (loss) from ordinary activities before finance costs and exceptional items (3 + 4)	(226.405)		(167.638)	(394.043)
6	Finance costs	176.144		160.697	336.841
7	Profit / (loss) from ordinary activities after finance costs but before exceptional items (5 - 6)	(402.549)		(328.335)	(730.884)
8	Exceptional items	-		-	-
9	Profit / (loss) from ordinary activities before tax (7 - 8)	(402.549)		(328.335)	(730.884)
10	Tax expense / (credit)	-		-	-
11	Net Profit / (loss) from ordinary activities after tax (9 - 10)	(402.549)		(328.335)	(730.884)
12	Extraordinary items (net of tax expense Nil)	-		-	-
13	Net Profit / (loss) for the period (11 - 12)	(402.549)		(328.335)	(730.884)
14	Paid-up equity share capital (Face value of Rs.10 each)	287.307		287.307	287.307
15	Reserve excluding revaluation reserves as per balance sheet of previous accounting year	-		-	-
16	Earnings per share (after extraordinary items)
	(of Rs.10 each) :
	(a) Basic and diluted - (Rs.)	(16.92)		(14.30)	(31.22)
		(Not annualised)		(Not annualised)	(Not annualised)
	PART II
A	PARTICULARS OF SHAREHOLDING
1	Public shareholding
	- Number of shares		7,289,309	7,289,309	7,289,309
	- Percentage of shareholding		25.37%	25.37%	25.37%
2	Promoters and Promoter Group Shareholding
	a) Pledged / Encumbered
	- Number of shares		Nil	Nil	Nil
	- Percentage of shares (as a % of the total shareholding of promoter and promoter group)		Nil	Nil	Nil
	- Percentage of shares (as a % of the total share capital of the company)		Nil	Nil	Nil
	b) Non - encumbered
	- Number of shares		20,220,402	20,220,402	20,220,402
	- Percentage of shares (as a % of the total shareholding of the Promoter and Promoter group)		100%	100%	100%
	- Percentage of shares (as a % of the total share capital of the company)		70.38%	70.38%	70.38%

B	INVESTOR COMPLAINTS	Quarter ended September 30, 2013
	Pending at the beginning of the quarter	-
	Received during the quarter	8
	Disposed of during the quarter	8
	Remaining unresolved at the end of the quarter	-

Notes:

1. The above results have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on November 7, 2013.The same has been subjected to limited review by the Statutory Auditors. Their report is unqualified.

2. The Company operates in a single business segment - castings. Further, the Company markets its products primarily in the domestic markets. Hence there are no reportable geographical segments.

3. The Company’s performance has been impacted by automotive market slowdown, inadequate price compensation, volatile material prices and extended working capital cycles. As a result, the accumulated losses as at September 30, 2013 have significantly eroded the net worth of the Company. In February 2013, the Company has intimated to the Board for Industrial and Financial Reconstruction (‘BIFR’) about erosion of more than 50% of the Company’s peak networth pursuant to section 23 of Sick Industrial Companies (Special Provision) Act, 1985. (‘SICA’). The Company has initiated various steps to improve its operational performance / liquidity, remove bottlenecks relating to its projects, improve the networth including raising of capital etc. Based on business plans, availability of short-term and long-term bank funding arrangements, subscription to the capital and continued support by the promoters, the Company believes that it would be able to realize its assets and settle its liabilities in the normal course at their carrying values and that no adjustments would be required in respect of the carrying value of assets/liabilities as at September 30, 2013. Accordingly, the financial statements have been prepared on a going concern basis.

4. The Company had acquired a piece of land from APIIC (Andhra Pradesh Industrial and Infrastructure Corporation Limited) and the registration of the land in favour of the Company would be completed upon the Company commencing commercial production before March 31, 2012. Whilst, the Company has been taking steps to implement the project on such land, the basic infrastructural facilities viz adequate electricity, water supply and market conditions have not been made available to the Company. The Government authorities had sought to cancel the allotment of the aforesaid land in respect of which the Company had obtained a stay from the High Court of Andhra Pradesh for maintaining status quo with regard to possession. Subsequently, vide their letter dated October 28, 2013, APIIC has informed the Company that they could either seek an extension of time for project implementation or surrender the possession of land upon which APIIC would refund the eligible amounts. The Company is in the process of evaluating the alternative courses of action and pending this, the associated project costs incurred to date aggregating to Rs.165.800 millions have been carried at cost as at September 30, 2013

5. The Company's previous financial year was for a period of 6 months ended March 31, 2013. The aforesaid format of presenting the financial results is in the context of shorter period for the previous financial year and the related guidance provided by the stock exchange.

6. Results for the quarter and year ended September 30, 2012 includes the differences (physical stock being lower than book stock) aggregating to Rs.829.500 millions arising out of the physical verification of inventory carried by the Company during the period ended September 30, 2012. Such differences between book stock and physical stock (which were predominantly due to ineffective process standards and inadequate documentation and controls in connection with recording and usage of rejections in the Company’s factories) have been fully reckoned appropriately in the statement of profit and loss (as part of increase/decrease in work-in-progress/finished good and/or consumption of materials as the case may be), and as such, the physically verified stocks have been considered in the financial statements for the period ended September 30, 2012.

7. Figures for the quarter ended September 30, 2012 are the balancing figures between audited figures in respect of full financial year and the published year to date figures upto the fifth quarter ended June 30, 2012 which were reviewed and not subjected to audit.

FIXED ASSETS:

Tangible Assets

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Machinery

· Service Installations

· Electrical Installations

· Patterns and Dies

· Fixtures

· Office Furniture

· Office Machinery

· Motor Vehicles

Intangible Assets

· Technical - Know How

· Goodwill and Others

· Software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.13
UK Pound	1	Rs.101.53
Euro	1	Rs.85.41

INFORMATION DETAILS

Information Gathered by :	HNA
Report Prepared by :	SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.