(This Public Announcement is in compliance with the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998)

Super Auto Forge Limited ("SAFL" or "the Company") hereby announces its buyback ("the Buyback") up to a maximum of 7,51,005 fully paid up Equity Shares of the Company, of face value of Rs.10/- each ("Shares"), from the existing owners of Equity Shares of the Company from the open market through Stock Exchange using the Electronic Trading facilities of the Madras Stock Exchange (MSE) and Pune Stock Exchange ("PSE") (together "the Stock Exchanges") in accordance with Section 77A and all other applicable provisions of the Companies Act, 1956 ("the Act") and the Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 ("the Regulations") and the relevant provisions of the Memorandum and Articles of Association of the company at a maximum price not exceeding Rs.59/- ("Maximum Buyback Price"), payable in cash, for an aggregate sum not exceeding Rs.443.09 lakhs ("Offer Size"). The No. of Equity Shares represents 25% of the paid up capital of the company as on March 31, 2001 and the amount represents 13.08% of the paid up capital and free reserves of the company as on 31^st March 2001. The aggregate sum deployed for buyback would depend upon the actual price paid for the Equity Shares bought back.

Pursuant to Section 77A and other applicable provisions of the Act and the Regulations, the Buyback has been duly authorised by:

1. A resolution passed by the Board of Directors of the company ("the Board") at their meeting held on 26.09.2001.

 

2. A special resolution passed by the Shareholders of the company at the Extra Ordinary General Meeting (EGM) of the company held on 05.12.2001

 

3. A resolution passed by the Board of Directors of the company at their meeting held on 05.12.2001.

The company was originally promoted as Super Auto Forge Pvt Ltd (SAFPL) in 1974 as a small-scale cold forging unit by Mr.S Seetharaman and Late Mr S Sankaranarayanan. Subsequently, the group companies viz. Impact Forge Pvt Ltd and Southern Heat Treaters Pvt Ltd were amalgamated with SAFPL with effect from 1^st April 1993. A High Court order to the effect was passed vide their order nos. CP 51 of 93 and CP 49 & 50 of 93. Impact Forge P Ltd was engaged in cold forging of steel components and was amalgamated with SAFPL since the line of business was same. Southern Heat Treaters P Ltd was engaged in the business of heat treatment of metals which is a concommitant requirement to cold forging and was hence amalgamated with the company. The company became a public limited company from December 1994. The company is engaged in the manufacture of cold forged/Cold Extruded Steel and Aluminum Components for the Automotive industry and import substitute components for defence applications. The company has set up plants at Ekkatuthangal, Medavakkam, Kolapakkam and Thirumudivakkam near Chennai. The company has been awarded ISO 9002 Certification and QS 9000 Certification for their plants.

Brief Financial information of the company based on the Audited Accounts of the Company for the last 3 financial years are given below.

(Rs. lakhs)

** unaudited as per limited review

The share buyback program has been proposed in order to improve returns to the investors and enhance the overall shareholder value. This will be done without in any manner compromising on the pursuit of growth opportunities by the company. Buy-Back will also provide an opportunity to the shareholders to exercise an exit option, should they so desire. There has been very few trades of the shares of the company in the Madras and Pune Stock Exchanges in the last five years and there is no exit available to the shareholders who had invested in the offer for sale of the company in 1996. The company has come forward with this buy back scheme to offer an exit route to the willing shareholders who are desirous of exiting from their investment in the equity shares of the company.

1. At the Extraordinary General Meeting of the Company held on 05.12.2001, the shareholders approved the buyback of 7,51,005 Equity Shares through any one of the methods prescribed in Regulation 4.1 of the SEBI (Buy Back of Securities) Regulations 1998 and further on such terms and conditions as the Board may in its absolute discretion deem fit, at a maximum price of Rs.59/- per share.

 

2. The Board at its meeting held on 05.12.2001, approved the method of buy back of 7,51,005 equity shares of the company from the open market through Stock Exchanges.

 

3. The maximum buy back price of Rs.59/- per equity share is fixed considering the current liquidity position and funds required for the future business plan of the company.

9. Share Capital of the company as on 05.12.2001 is given below :-

ii. The Shareholding pattern of the Company as on 05.12.2001 and after the offer (assuming full buyback) stands as under:-

3. There are no partly paid up Equity Shares or outstanding convertible instruments.

 

4. There are no Equity Shares under lock in.

 

5. The promoters and/or persons acting in concert have not purchased any shares in the last 12 months preceding the date of public announcement.

1. The Maximum amount required for funding this buyback is Rs. 443.09 lakhs.

 

2. The funds for the Buyback will be available from the current surplus and/or internal accruals from the company. The cost of financing the Buyback would therefore be only notional loss of income that the funds used for buyback would have earned had they been deployed in the ordinary course of company’s business. Though the company does not propose raising debt for effecting the buyback, it may borrow funds in the ordinary course of its business.

1. The company has taken permission vide EGM resolution dated 05.12.2001 to buyback a maximum of 751005 Equity Shares of Rs.10/- each at a Maximum buyback price of Rs.59/- per share.

 

2. It is being clarified that the resolution provides for the Maximum price of Rs.59/- does not indicate that the company will or is obliged to buy or continue to buy shares so long as the price is below Rs.59/-. Similarly, the fact that the resolution indicates a maximum aggregate purchase price of Rs.443.09 lakhs does not indicate that the company will utilise or is obliged to utilise the entire amount of Rs. 443.09 lakhs.

1. The company’s shares are listed on the Madras and Pune Stock Exchanges.

 

2. There have been very few trades of the company's shares in the last five years since its listing in the Madras and Pune Stock Exchanges. The shares of the company have not been traded for the last 3 years and for the last six months preceding this announcement.

 

3. The Board at its meeting held on 26.09.2001 approved the proposal for buyback up to 751005 fully paid up Equity Shares, representing up to 25% of the Paid up Equity Share Capital of the company, at a price not exceeding Rs.59/- per share. There has been no trading on MSE and PSE also, subsequent to the date of resolution of the Board of Directors approving the buyback.

1. The buyback is not likely to cause a material impact on the profitability of the company except to the extent of loss of investment income on the amount to be utilised for buyback.

 

2. The Promoters and/or persons acting in control of the company will not tender their shares held by them in the proposed buyback. The holding of the Promoters after buyback would be 95.11% of the total equity, assuming buy back of entire 7,51,005 equity shares. Buyback of the equity shares will not affect the existing management structures.

 

3. Post buyback the debt equity ratio assuming the full subscription of the offer will be within 2:1 as prescribed under section 77A of the Companies Act, 1956.

 

4. Consequent to the buy-back, if the Non-Promoter Holding in the company reduces to less than 10% of the equity share capital, the company proposes to apply for de-listing its equity shares from the Madras Stock Exchange and the Pune Stock Exchange after complying with the provisions of the Listing Agreements with the concerned Stock Exchanges including making necessary arrangements in consultation with the Board of Directors at the appropriate time for those Shareholders who do not participate in the buy-back of the shares.

The Company has passed a Special resolution authorising the Buyback at the EGM held on 05.12.2001.

1. The company will pay the consideration to the Appointed Brokers on every settlement date as applicable in respect of shares bought back in the settlement period.

 

2. The shareholders/ beneficiary owners holding shares may present the share certificates along with valid transfer deeds to their respective brokers through whom the trade was executed.

 

3. The shares bought back would be extinguished and the Share Certificates would be physically destroyed within 7 days or such other permissible period from the date of acceptance in the manner specified in the Buyback Regulations. The details of shares extinguished would be notified to all the Stock Exchanges on which shares are listed and to the Securities & Exchange Board of India ("SEBI") as per provisions of the Buyback Regulations.

As required under Sec 173(2) and 77A read with provisions of Section 192 A (1) of the Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 the following details are furnished to the Shareholders.

(i)The Board of Directors at its meeting held on 26.09.2001 considered and approved the proposal to buy back the company’s fully paid equity shares of Rs.10/- each ("Equity Shares")

(ii)The share buy back programme has been proposed in order to improve returns to the investors and enhance the overall shareholder value. This will be done without in any manner compromising on the pursuit of growth opportunities of the company. Buy back will also provide an opportunity to the shareholders to exercise an exit option, should they so desire.

(iii)The company will adopt the buy back of its equity shares through any one of the methods referred in sub-regulation of Regulation 4.1 of Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 from the existing shareholders.

(iv)An amount of Rs.443.09 lakhs is required to finance the buy-back of equity shares and the same is proposed to be financed from internally generated funds. The amount does not exceed 25% of the paid up share capital and free reserves of the company as on 31.03.2001.

(v)The Buyback will be made at a price not exceeding Rs.59/- per Equity Share. There have been very few trades in the company’s Equity Shares since its listing in the Madras and Pune Stock Exchanges, in the last five years and there is no exit available to those shareholders who had invested in the offer for sale of the company in 1996. The company has come forward with this buy back scheme to offer an exit route to those willing shareholders who are desirous of exiting from their investment in the equity shares of the company. Consequent to the implementation of the proposed buyback of shares and on receiving 7,51,005 shares for buyback by the company, the shareholding of the promoters is expected to increase to 95%.

Considering the current liquidity position for the future business plan of the company it is proposed to buy back the equity shares from those shareholders who are willing and desirous of selling their shareholdings at a price not exceeding Rs.59/- per equity share of Rs.10/- each.

(vi)The company intends to buyback a maximum of 7,51,005 fully paid up Equity Shares of Rs.10/- each, constituting 25% (twenty five percent) of the paid up Equity Share capital of the company. The shares bought back will be cancelled and the share capital of the company will be reduced to that extent.

(vii)(a) The aggregate shareholding of the promoters as on the date of notice is 21,42,920 Equity Shares of Rs.10/- each constituting 71.34% of the paid up Equity Share capital of the company.

2. There has been no purchase or sale of equity shares by the promoters and by any person in the control of the company during a period of 6 months preceding the date of the Board Meeting namely 26.09.2001 at which the buy back proposal was approved till the date of notice convening the general meeting.

(viii) The promoters and / or persons acting in control of the company (hereinafter referred to as "Promoter") will not tender their shares to the company in the buy-back.

(ix)The Board of Directors confirms that there are no defaults subsisting in the repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks.

(x)The Board of Directors confirm that, based on a full enquiry conducted into the affairs and prospects of the company they have formed the opinion that:

a. immediately following the date on which the General Meeting of the company is convened, there will be no ground on which the company could be found unable to pay its debts.

b.as regards its prospects for the year immediately following that date, having regard to its intention with respect to the Management of company’s business during that said year and to the amount and character of the financial resources, which will in their view be available to the company during that year, the company will be able to meet its liabilities as and when they fall due and will not be rendered insolvent within a period of one year from that date.

c.in forming its opinion for the above purposes, the Board of Directors has taken into account the liabilities, as if the company were being wound up under the provisions of the Companies Act, 1956 (including prospective and contingent liabilities).

(xi)We reproduce below the text of the report dated 22.10.2001 addressed to the Board by K Ramkrish & Co, Statutory Auditors of the Company stating that :

a.We have enquired into the state of affairs of the company in relation to its audited accounts for the year ended 31^st March 2001 and projections for the year 2001-02 as contained in the Budget approved by the Board of Directors in their meeting held on 26.09.2001.

b.The amount of permissible capital payment towards buyback of Equity Shares (including premium) in question, as ascertained below has been properly determined in accordance with section 77A(2)(c) of the Companies Act, 1956.

c.Based on the representations made by the company and other information and explanations given to us, which to the best of our knowledge and belief were necessary for this purpose, we report that we are of the opinion that the declaration as approved by the Directors in their Board meeting held on September 26, 2001 is based on reasonable grounds and that the company will not, having regard to its state of affairs, be rendered insolvent within a period of one year from the date of Extraordinary General Meeting proposed to be held on 05.12.2001.

(xii)The buy-back will be completed within 12 months from the date of passing the resolution as permitted under the Companies Act, 1956. The company will however endeavor to complete the process at an early date.

(xiii)Consequent to the buy-back, if the Non-Promoter Holding in the company reduces to less than 10% of the equity share capital, the company proposes to apply for de-listing its equity shares from the Madras Stock Exchange and the Pune Stock Exchange after complying with the provisions of the Listing Agreements with the concerned Stock Exchanges including making necessary arrangements in consultation with the Board of Directors at the appropriate time for those Shareholders who do not participate in the buy-back of the shares.

In case of any queries, the Shareholders may contact the Secretarial Department on all the working days between 10.00 A.M. and 1.00 P.M. at the following address

Super Auto Forge Limited

TS-82/2, Mettu Street

Ganapathy Nagar, Ekkattuthangal

Chennai 600 097

Ph : 044 – 2342713 / Fax : 044 - 2344972

The company has appointed Indbank Merchant Banking Services Ltd as the Manager to the Offer. The contact details are:

Indbank Merchant Banking Services Ltd

SEBI Regn No.INM000001394

V Floor, Spencer Towers

770-A, Anna Salai

Chennai 600 002

Telephone : 044 - 8591398 / 8591399 Fax: 8591444

The Directors of the Company accept responsibility for the information contained in this announcement.

Place : Chennai