This Letter of Offer is being sent to you as a shareholder of INDIAN METALS & FERRO ALLOYS LIMITED (IMFA). If you require any clarification about the action to be taken, you may consult your stockbroker or your investment consultant, otherwise you can also contact the Manager to the Offer/Acquirer. If you have sold your shares in IMFA, please hand over this document and the accompanying Form of Acceptance cum Acknowledgement and Transfer Deed to the Member of the Stock Exchange ( as defined) through whom the sale was effected.

Pursuant to the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto

2,10,558 equity shares of face value Rs. 10/- each representing 1.75% of the paid-up Equity Capital, from existing shareholders

having its registered office at Bomikhal, Rasulgarh, Bhubaneswar – 751 010, Orissa. Tel No. (0674) 580100, 580125. Fax No.(0674) 580020.

having its registered office at B-4/147, Safdarjung Enclave, New Delhi – 110 029. Tel No. (011) 6181590 / 6186610 Fax No.(011) 6196694.

having its registered office at Bomikhal, P. O. Rasulgarh, Bhubaneswar – 751 010. Tel No. (0674) 580100 Fax No.(0674) 580020.

Regulation 26 of SEBI (SAST) Regulations, 1997 provides for an upward revision of the Offer Price anytime, upto seven working days prior to the date of the closure of the Offer. In case of a revision in the Offer Price, the public announcement for revision would be made in the Financial Express (English all editions), Jansatta (Hindi all editions) and The Samaya (Oriya Bhubaneswar edition). In case of a revision in Offer Price, the same price shall be paid by the Acquirer for all the shares tendered anytime during the period Offer is open.

In the event of any delay in making payment beyond 8/7/2002, the acquirer shall pay interest @ 15% p.a. on the offer price.

THE PROCEDURE FOR ACCEPTANCE IS SET OUT IN PARAGRAPH 9. FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT AND TRANSFER DEED(S) ARE ENCLOSED WITH THIS LETTER OF OFFER. A COPY OF PA AND LETTER OF OFFER (INCLUDING FORM OF ACCEPTANCE CUM ACKNOWLEDGEMENT) IS ALSO AVAILABLE ON SEBI'S WEB SITE ( www.sebi.gov.in )

"shareholders who have accepted the offer by tendering the requisite documents, in terms of the Public announcement / Letter of offer, cannot withdraw the same."

Note: Duly Signed Application and Transfer Deed(s) together with share certificate(s) should be despatched by Registered Post / Courier or hand delivered to the Manager to the Offer at above address to arrive not later than 5.00 p.m. on July 03, 2002.

The following definitions apply through this document, unless the context requires otherwise :

"Acquisition / Acquisition Agreement" or “Agreement ” or "Share Purchase Agreement "means the proposed acquisition by INDMET of 11,47,800 Fully paid-up equity shares of face value of Rs. 10/- each in the Company from the Seller pursuant to the agreement dated March 22, 2002.

"Manager" or "Manager to the Offer" means Fortune Financial Services (India) Limited;

"Offer" means the offer being made by INDMET to shareholders of IMFA as set out in this Letter of Offer.

"Offer Price" means Rs.10.00 (Rupees Ten only) per fully paid up (Rs. 10.00 paid up) equity share of IMFA.

“Person Acting in Concert" or "PAC” within the meaning of Regulation 2 of SEBI (SAST) Regulations means B. PANDA & CO. PVT. LTD.

"SEBI (SAST) Regulations"means Securities & Exchange Board of India (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 and subsequent amendments thereto;

"Stock Exchanges" means each of The Mumbai Stock Exchange, Mumbai, Calcutta Stock Exchange Association Limited, Kolkata & Bhubaneswar Stock Exchange Limited, Bhubaneswar

If, due to non-receipt of requisite statutory approvals, the Acquirer is unable to make the payment to the shareholders who have accepted the Offer within 30 days of the date of closure of the Offer, SEBI may, if satisfied that non-receipt of requisite statutory approvals was not due to any wilful default or neglect of the Acquirer or the failure of the Acquirer to diligently pursue the applications for such approvals, grant extension of time for the purpose, subject to the Acquirer agreeing to pay interest to the shareholders for delay beyond 30 days, as may be specified by SEBI from time to time.

The Acquirer will not be responsible for any delay in payment, or non-payment or diminution of value, if any, on account of non-receipt or delay in receipt of permissions and/or approvals from appropriate Governmental and Regulatory authorities unless such delay or non-payment or diminution of value, if any, is directly attributable to wilful default, neglect, act or omission to act on the part of the Acquirer.

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 OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF INDIAN METALS & FERRO ALLOYS 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 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 DISCSHARGES ITS RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER FORTUNE FINANCIAL SERVICES (INDIA) LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED APRIL 08, 2002 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS 1997 AND SUBSEQUENT AMENDMENTS THERETO. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.

2. DETAILS OF THE OFFER

2.1 Background of the Offer

a) INDMET COMMODITIES PRIVATE LTD (“INDMET ”/ “the Acquirer”), a private limited company, registered under the provisions of the Companies Act, 1956 incorporated on 8th June, 1993 having its registered office at B-4/147, Safdarjung Enclave, New Delhi-110 029 have agreed to acquire from JAGANNATH HOLDINGS PRIVATE LTD (the “Seller”) having its registered office at 9, Mathura Road, Jangpura B, New Delhi - 110 014 (Tel. No./Auto Fax No. 4322181/ 82 / 83 ) in terms of Share Purchase agreement dated March 22, 2002 an aggregate of 11,47,800 fully paid-up equity shares of the face value of Rs.10/- each in INDIAN METALS & FERRO ALLOYS LIMITED ( “IMFA”/ “the Target Company”), which represents 9.56% of the subscribed, issued and paid-up equity capital of IMFA. Under the terms of the agreement dated March 22, 2002, the Acquirer has agreed with the Seller to pay a price of Rs.5.00 (Rupees Five only) (the “Negotiated Price”) payable in cash/cheque for acquisition of such shares. In terms of the above agreement, INDMET has already paid a sum of Rs.24,63,000/- as initial down payment and the balance will be paid in two installments as follows:

1. Rs. 16,38,000/- on or before 30/9/2002 carrying interest @ 12% p.a. from the date of agreement to the date of actual payment.

2. Rs. 16,38,000/- on or before 31/3/2003 carrying interest @ 12% p.a. from 1st January, 2003 to the date of actual payment.

b) The offer to the shareholders of IMFA is made in accordance with Regulation 11(2) & Regulation 21 (3) of the SEBI(SAST) Regulations.

c) INDMET as on the date of this announcement do not hold any shares other than those proposed to be acquired in terms of the agreement dated March 22, 2002 mentioned hereinabove. However three of the Directors of INDMET are holding 22 shares each in IMFA as on the date of the PA. These directors were allotted 1 share each at par on November 18, 1991 and rest 21 shares were allotted by way of Bonus shares on various dates. B. Panda & Co. Pvt. Ltd.(PAC) holds 5,77,290 Equity shares in IMFA as on the date of the PA, however no purchases were done by the said PAC after May 1993. INDMET or PAC have not acquired either directly or through any other person, any shares of IMFA during the 12 months preceding the date of Public Announcement.

d) INDMET is a subsidiary of B. Panda & Co. Private Ltd. B. Panda & Co. Private Ltd. together with its Subsidiaries and its associates hold as on date 88.69 % of the paid up capital of IMFA . With the proposed acquisition of 9.56% of the paid-up equity share capital of IMFA by INDMET from JHPL, effectively B. Panda & Co. Private Ltd. together with its Subsidiaries and associates will hold 98.25% of the paid up capital of IMFA and only 2,10,558 shares are being held by public constituting 1.75% of the paid-up capital of IMFA.

e) There will be neither any change in control of IMFA nor in its Board of Directors as a result of the proposed acquisition of shares by INDMET as above.

2.2 Details of the proposed Offer

a) The Public Announcement dated March 28, 2002 was made in the following newspapers, in accordance with Regulation 15 of the SEBI(SAST) Regulations.

Publications Edition

The Financial Express All Editions

Jan Satta All Editions

The Samaya Bhubaneswar

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

b) INDMET alongwith its holding Company B. Panda & Co. Pvt. Ltd. is making an Offer to acquire 2,10,558 fully paid-up equity shares (“Shares”) of Rs.10/- each, representing 1.75% of the outstanding equity share capital of IMFA held by the public at a price of Rs.10.00 (Rupees Ten only) per fully paid up (Rs.10.00 paid up) equity share (“Offer”), subject to what is stated hereinafter.

c) The equity shares of the Company to be acquired, pursuant to the Offer are to be free from all liens, charges and encumbrances and together with all rights, attached thereto, including the rights to dividend or other distributions hereafter declared, made or paid.

d) The Offer is not conditional on any minimum level of acceptances.

e) INDMET has not acquired any shares of IMFA after the date of Public Announcement i.e March 28, 2002

f) The present offer is made by INDMET alongwith PAC with a view to consolidate the holdings by the promoters. The Company is also planning to delist the shares of IMFA from the stock exchanges of Bhubaneswar, Kolkata and Mumbai to save on cost of dematerialising the shares and recurring annual listing fees.

g) The Sellers or Acquirers will not act upon the acquisition agreement for acquiring equity shares of IMFA in case there is a non-compliance of any provisions of SEBI (SAST) Regulations.

h) None of the acquirers, sellers or the Target Company has been prohibited by SEBI from dealing in securities in terms of direction issued u/s 11B of SEBI Act.

3. BACKGROUND OF INDMET (THE ACQUIRER) and B. Panda & Co. Pvt. Ltd. (BPCO) (PAC)

3.1 INDMET (THE ACQUIRER)

a) INDMET, the Acquirer, is a Company registered under the Companies Act, 1956 incorporated as a Private Limited Company on 8th June, 1993 having its registered office at B-4/147, Safdarjung Enclave, New Delhi - 110 029. INDMET is promoted by B. Panda & Co. Private Ltd., who holds 73% of the paid up share capital of INDMET. B. Panda & Co. Private Ltd. together with its Subsidiaries and its associates will hold 98.25% of the paid-up capital in the IMFA with the proposed acquisition of 9.56% from the Seller. The shares of INDMET are not listed on any exchange.

b) INDMET is engaged in trading in metals, acting as agents for imports & exports, investment in shares etc.

c) INDMET has complied with all the applicable provisions of Chapter II of SEBI (SAST) Regulations within the time specified in the Regulations.

d) Mr U.K.Sinha, Partner of M/s. U. K. S & Associates, Chartered Accountants, (Membership No. 91640), 204, Harsha Complex, F-17, Subhash Chowk, Laxmi Nagar, Delhi-110 092 Tel. No .2052804, vide their letter dated March 21, 2002 has certified that the Networth of INDMET is Rs.12,24,187.15 (Rupees Twelve Lacs Twenty Four Thousand One Hundred Eighty Seven and Paise Fifteen Only) as on 31st March, 2001.

e) Management

Board of Directors of INDMET as of March 28, 2002 :

Name Designation Residential Address

Mr K G Nair Director Plot No.349/6, Jai Durga Nagar, Laxmisagar, Bhubaneswar - 751 006.

Mrs. Shaifalika Panda Director G-11, Anand Niketan, New Delhi - 110 021

Mr M K B P Mahapatra Director VIM-103, Shailasree Vihar, Bhubaneswar - 751 016

Mr J K Pahwa Director L-342, Sarita Vihar, New Delhi - 110 044

Mr H Vidyasankar Director A-317, 1st Floor, Sahidnagar, Bhubaneswar - 751 007

Mr Dipak Kumar Mohanty Director Duplex No.9, Phase III, Kedargouri Apartments, Garage Chowk, Lewis Road, Bhubaneswwar - 751 002

There are no common Directors between INDMET and IMFA

f) Shares of INDMET are not listed on any stock exchanges.

g) Share holding pattern of INDMET is as under:

Sl. No. Shareholder’s Category Number of Shares held (Rs.10 each) % of Shares held

1. Promoters 78,000 100

2. FII/Mutual Funds/FIs/Banks NIL NIL

3. Public NIL NIL

Total Paid Up Capital 78,000 100

g) Brief Audited financials of INDMET

(Amount Rs. In Lakhs)

Profit & Loss Statement	31/3/1999	31/03/2000	31/03/2001	31/12/2001
Income from Operations	12.60	9.73	13.81	18.54
Other Income	NIL	NIL	0.14	NIL
Total Income	12.60	9.73	13.95	18.54
Total Expenditure	13.27	7.51	8.86	10.71
Profit Before Depreciation Interest and Tax	(0.67)	2.22	5.09	7.83
Depreciation	0.13	0.12	0.60	0.37
Interest	NIL	NIL	NIL	NIL
Profit (Loss) Before Tax	(0.80)	2.10	4.49	7.46
Provision for Tax	NIL	2.04	1.84	2.84
Profit (Loss) After Tax	(0.80)	0.06	2.65	4.62

Balance Sheet Statement	31/3/1999	31/03/2000	31/03/2001	31/12/2001
Sources of funds
Paid up share capital	7.80	7.80	7.80	7.80
Share Application Money	NIL	NIL	NIL	NIL
Reserves and Surplus (excluding revaluation reserve)	1.73	1.79	4.44	9.06
Networth	9.53	9.59	12.24	16.86
Secured Loan	NIL	NIL	NIL	NIL
Unsecured Loan	NIL	NIL	NIL	NIL
Total	9.53	9.59	12.24	16.86
Uses of funds	31/3/1999	31/03/2000	31/03/2001	31/12/2001
Net fixed assets	1.68	2.62	2.58	2.21
Pre-operative Exp. Pending for Capitalisation	NIL	NIL	NIL	NIL
Investments	5.16	0.60	0.60	0.60
Net Current assets	2.45	6.19	8.94	13.93
Total Miscellaneous expenditure not written off	0.24	0.18	0.12	0.12
Total	9.53	9.59	12.24	16.86