1. Upon allotment of 473,398,534 equity shares of Re 1 each at a premium of Rs 95 per share on rights basis on October 23, 2008, paid-up capital of the Company has increased from Rs 122.71 crores to Rs 170.05 crores. Issue expenses amounting to Rs 124.90 crores has been adjusted against Securities Premium Account. The proceeds of the rights issue have been utilized to part-finance repayment of bridge loan taken for acquisition of Novelis Inc. during last year. Basic and diluted Earnings per Share (EPS) for the relevant previous year have been recomputed taking into account the effect of this rights issue. 2. a) The Company has formulated a scheme of financial restructuring to deal with various costs associated with its organic and inorganic growth plan. The recent economic downturn particularly in the commodity space is also expected to result in impairment / diminution in value of certain assets/ investments. Accordingly, as per a Scheme of Arrangement under sections 391 to 394 of the Companies Act 1956 ("the Scheme") between the Company and its equity shareholders approved by the High Court of judicature of Bombay, a separate reserve account titled as Business Reconstruction Reserve ("BRR") has been created by transferring balance standing to the credit of Securities Premium Account of the Company for adjustment of certain expenses as prescribed therein. Accordingly, Rs 8,647 crores has been transferred to BRR and following expenses incurred during the year have been adjusted against the same as per the Scheme:- (Rs in Crores) For the year ended March 31, 2009 (Standalone) : Impairment of Goodwill : Nil Impairment of Fixed Assets * : 67 Restructuring Expenses - Employees Cost : Nil - Impairment of Fixed Assets : Nil - Other Expenditure : Nil Interest : Nil Total : 67 For the year ended March 31, 2009 (Consolidated) : Impairment of Goodwill : 3597 Impairment of Fixed Assets * : 67 Restructuring Expenses - Employees Cost : 222 - Impairment of Fixed Assets : 44 - Other Expenditure : 142 Interest : 544 Total : 4616 *Net of Deferred Tax Rs. 34 crores b) Had the Scheme not prescribed aforesaid treatment, the impact would have been as under:- (i) Net Profit would have been lower by Rs. 67 crores and Rs. 4,616 crores for standalone and consolidated, respectively. (ii) Earning per Share (EPS) would have been as under: For the year ended March 31, 2009 (Standalone) Basic EPS : 14.37 Diluted EPS : 14.37 Basic EPS before Tax adjustment for earlier years : 13.37 Diluted EPS before Tax adjustment for earlier years : 13.37 For the year ended March 31, 2009 (Consolidated) Basic EPS : (27.45) Diluted EPS : (27.45) Basic EPS before Tax adjustment for earlier years : (28.44) Diluted EPS before Tax adjustment for earlier years : (28.44) 3. Adjustment for earlier years (net) under Tax Expenses includes write back of provision for tax resulting from change in estimation of tax liability on progress in tax assessments 4. In pursuance of announcement dated March 29, 2008 of the Institute of Chartered Accountants of India on Accounting for Derivatives, mark to market losses on outstanding derivative instruments as on March 31, 2009 stood at Rs. 313.55 crores, arising from hedging transactions undertaken by the Company for its commodities and foreign currency related exposures. The Company does not hold or issue derivative financial instruments for trading or speculative purposes and all the derivatives entered into by the Company are to mitigate or offset the risks that arise from their normal business activities only. The above mark to market loss is expected to flow back through future cash flows. The Company is at an advanced stage for early adoption of Accounting Standard (AS) 30 on Financial Instruments: Recognition and Measurement. Pending adoption of AS 30, the Company has not provided for the losses on mark to market basis. 5. Subsequent to the finalization of consolidated financials for FY 2007-08, Novelis Inc., a subsidiary, has restated its consolidated financial statements as of March 31, 2008 and for the period from May 16, 2007 through March 31, 2008. This restatement corrects non-cash errors relating to the subsidiary´s application of purchase price accounting associated with an equity method investment which led to a misstatement of provision for income taxes during the period purchase accounting was being finalized. In view of above, the consolidated figures for the year ended March 31, 2008 included in this consolidated results have been restated. The effect of such restatement along with certain reclassification as against original figures published earlier are as under: (Rs in Crores) ---------------------------------------------------------------------------------------------------------------------- Restatement (including Original Reclassification) ---------------------------------------------------------------------------------------------------------------------- (Increase)/Decrease in Stock (240) (146) Consumption of Raw Materials 40537 40443 Depreciation (including impairment) 2483 2451 Tax Expenses (Current year) 1177 898 Minority Interest 219 221 Share in (Profit)/ Loss of Associates (100) 16 Net Profit 2193 2387 ---------------------------------------------------------------------------------------------------------------------- 6. The Board of Directors of the Company have recommended dividend of 135% aggregating to Rs. 229.58 crores. Together with the Corporate Dividend Tax of Rs. 39.02 crores, the total payout works out to Rs. 268.60 crores. 7. Figures of previous year have been regrouped wherever found necessary. 8. The consolidated financial results comprise the performance of the Company, its subsidiaries as also share in joint ventures and associates. The consolidated financial results are based on the consolidated financial statements prepared in conformity with Companies (Accounting Standard) Rules, 2006 and other applicable accounting practices. 9. Both the standalone and consolidated financial results of the Company have been approved by Audit Committee and Board of Directors in the meetings held on June 30, 2009. D Bhattacharya Managing Director