Hinduja Foundries Ltd has decided to close its Ductron Castings unit located near Hyderabad. The forging company has been asked by Telangana to surrender the land allotted to it for a Greenfield project in Medak district.

The company in a statement to the BSE had last week informed that pursuant to the restructuring initiative undertaken to improve the company's overall profitability and performance, it has announced a VRS at its Ductron Castings unit in Hyderabad.

With the VRS, which was accepted substantially by all the employees of the unit, the board of directors at its meeting last week had approved the closure of the unit.

Land issue

The company had acquired a piece of land from Andhra Pradesh Industrial Infrastructure Corporation Ltd (the erstwhile) and the registration would have been completed had the company commenced commercial production before March 31, 2012.

Hinduja Foundries also informed the BSE that while steps were being taken to implement the project, the company has not been able to do so in view of the delays in basic infrastructure facilities such as electricity and water supply to the company. It had been seeking extension of time from the government.

Telangana State Industrial Corporation Ltd (the new infrastructure entity of Telangana) had sought cancellation of the land allotment and had requested the company to surrender the land by October 2014. While the company had sought extension of time, the TS body insisted on surrendering the land without giving any extension.

The company is exploring various options including the surrender of land, pending resolution.

According to the results statement, Hinduja Foundries has significant accumulated losses as on June 30, 2015. This has eroded the networth of the company.