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General Manager Date : August 28, 2003

Reserve Bank of India,


Exchange Control Department
15, Netaji Subhas Road,
Post Bag No.2026
Kolkata- 700 001

Dear Sir,

Re: Our Direct Investment in M/s NIF(UK) Ltd. – I.D. No. CAWAZ 20030104 dated
9.4.03 – APR for the year ended 30.04.2002

Please refer to your letter No. KOL.EC. 887/10.01.0265/2003-04 dated 29th July, 2003.
We are submitting our point wise reply to your queries in the above letter as follows:-

1) We will bring our original share certificate held in WOS for your physical
verification as & when advised by you. Further Date of issue was inadvertently
omitted in the share certificate. However date of issue certified by the Director of
WOS is enclosed herewith for your record. Further we have received
communication from UK that Common Seal is not required to be affixed on share
certificate as per present Company Law in UK. However share certificate which
was used by WOS for issue of share was as per old Company Law in UK.
2) C.A. Certificate stating the value of non-equity exports made to overseas WOS
and value realised thereof as indicated in item no. 13 of APR is enclosed herewith.
3) Directors’ Report on Balance Sheet of the WOS was enclosed with the APR.
However the same is again being submitted for your reference.
4) Full particulars of the date and amount of equity investment and loans granted to
the overseas WOS is enclosed herewith. The loans granted to WOS is interest free
& long term investment in WOS. The investment in WOS has been made in form
loan rather than equity as it will be easier to recall the loan rather than equity as &
when deemed fit by the management. The investment in WOS has been made
with objective of exploring export opportunity for the Indian Party in European
market & Indian Party has made considerable amount of exports to WOS as
indicated in item no. 13 of APR. As all the transactions between Indian Party &
WOS has been made at arm’s length so Indian Party is Profiting out of exports to
the WOS. As this investment is necessary to allow the WOS to continue its
business operations smoothly in UK there is no immediate plan for repayment of
loans granted to WOS.
5) WOS has incurred loss in the first year as it had not achieved the break even sales
for the year ended 30th April, 2002. Hence even though it had made trading profit
but as it could not recover its fixed cost so it incurred loss in the first year of its
operation. However the company has made significant progress since then & is
expected to make profit in the near future.
6) The loan granted by Indian party to WOS was GBP 3,07,400 till 30th April, 2002
& the same was reflected in item no. ___ of APR. However a further remittance
of GBP 82,500 was made by Indian party to WOS totaling our loan to GBP
3,89,900 till date.

If you have any further query in this regard please feel free to contact the undersigned.

Thanking You,

Yours faithfully,

For Nandikeshwari Iron Foundry Pvt. Ltd.

Authorised Signatory.