1. During the quarter, the Company has made additional investments aggregating Rs. 16879 lacs in subsidiary, associate and joint venture companies.

2. The expansion project of increasing capacity from 3.8 MTPA to 6.8 MTPA at Vijayanagar works was under trial run as at March 31, 2009 and has commenced commercial production on April 10, 2009.

3. During the quarter, the Company has bought back and cancelled 478 Foreign Currency Convertible Bonds (FCCBs) of the Face Value of USD 1,00,000 each, the purchase being with the approval of the Reserve Bank of India, at a discount to the Face Value. This has resulted in a saving of Rs. 9730 lacs which has been reflected as part of Other Income. Consequent upon such buy back and cancellation, the Company’s obligation to convert the said Bonds into Shares, if so claimed by the Bond Holders and / or to redeem the same in foreign currency, has come to an end vis-a-vis the cancelled Bonds.

4. Exceptional Items represent a net exchange gain of Rs. 1783 lacs and net exchange loss of Rs.79013 lacs respectively for the quarter and year ended March 31, 2009 due to the unprecedented depreciation in the value of the rupee against various foreign currencies over the last year (see note 8(a)).

5. Pursuant to the notification of the Companies (Accounting Standards) Amendment Rules 2006 on March 31, 2009, the following changes in accounting policy estimate have been made during the year:

i. Exchange differences relating to long-term monetary items, arising during the year, in so far as they relate to the acquisition of a depreciable capital asset are added to / deducted from the cost of the asset and depreciated over the balance life of the asset.

ii. In Other cases such differences are accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortized to the Profit and Loss account over the balance life of the long-term monetary item, however that the period of amortization does not extend beyond; March 31, 2011.

Exchange differences relating to long-term monetary items have been recognized in the Profit and Loss account in the previous year. These have now been reversed from the General Reserve and accounted for in accordance with (i) and (ii) above.

Accordingly, Rs 26858 lacs has been added to the cost of the fixed assets, Rs 783 lacs transferred to Foreign Currency Monetary Item Translation Difference Account(unamortized balance at year end Rs 355 lacs) and consequently, the profit for the year is higher by Rs 26806 lacs and the General Reserve is lower by Rs.2774 lacs.

6. Paid up equity share capital does not include an amount of Rs 6103 lacs being the amount originally paid up on the shares forfeited in an earlier year.

7. The Board of Directors have recommended dividend of Rs 1 per share on 10% Cumulative Redeemable Preference shares of Rs 10 each, dividend of Rs 1.10 per share on 11% Cumulative Redeemable Preference shares of Rs 10 each and dividend of Rs 1 per equity share of Rs 10 each for the year 2008-09, subject to the approval of members at the Annual General Meeting.

8. a) Comparative financial information has been regrouped and reclassified, wherever necessary, to correspond to the figures of the current quarter / year.

b) Southern Iron and Steel Company Ltd (SISCOL) amalgamated with the Company during the last quarter of 2007-08 with effect from April 01, 2007. Accordingly figures for the quarter March 31, 2008 have been aggregated with the figures of SISCOL extracted from its unaudited (limited reviewed) financial results/information and regrouped/restated to present the combined numbers for the amalgamated Company.

9. The financial results of the Company and consolidated financial results for the year ended March 31, 2009 which have been extracted from the financial statements audited by the statutory auditors, have been reviewed by the Audit Committee and taken on record by the Board of Directors at its meeting held on May 07, 2009.

Seshagiri Rao MVS
Jt. Managing Director & Group CFO