Notes:-

The company has preponed the upgradation and modernisation of its Blast Furnace for achieving better productivity, efficiency and reducing cost of production. The upgradation activities had commenced during October 2008, which was earlier planned during 2010 / 2011. The Blast Furnace is expected to be re-commissioned during April 2009. This has resulted in non availability of Hot Metal, which is one of the key source of metallic for Company's Hot Rolled Coil Plant. Consequently, production of Hot Rolled Coils during the quarter was 2.76 lakhs MTs, representing a low capacity utilisation of 37% (production during quarters ended 30th June and 30th September 2008 being 7.36 lakhs MTs and 7.58 lakhs MTs, representing capacity utilisation of 98% and 101%, respectively). Due to such lower production, fixed overheads of Rs. 162.35 crores (including depreciation of Rs.115.60 crores) could not be absorbed during the quarter.

2 (a)

Exceptional items include an amount of Rs 360.37 crores being the value of raw material inventory written down during the quarter, in line with Accounting Standard-2 'Valuation of Inventories', issued by the Institute of Chartered Accountants of India. The Company had procured inputs in line with its planned production programme. However, steel prices have since fallen significantly due to severe global economic meltdown and recessionary conditions in the steel industry. The value of raw material inventories have been written down, as stated above, to consider at current net realisable value.

(b)

The financial results for the quarter and nine months ended 31st December 2008 have also been affected due to significant depreciation in the value of Indian Rupee against various foreign currencies owing to abnormal financial conditions prevailing globally. Such differences in relation to the operating balances / forward exchange contracts aggregating to Rs 80.80 crores and Rs 271.65 crores for the quarter and nine months period ended 31st December 2008, have also been included in exceptional items.

Due to volatility of foreign exchange rates, the Company, unlike in past, based on expert advise, has adjusted foreign exchange differences arisen during the period from April 1, 2008, on term loans obtained for acquiring imported fixed assets. The amount of such foreign exchange differences of Rs. 60.28 crores and Rs. 280.31 crores for the quarter and nine months period ended 31st December 2008 respectively, have been adjusted to the carrying amount of fixed assets, which is in line with Schedule VI of the Companies Act, 1956, but at variance with the treatment prescribed under Accounting Standard 11 "Effect of changes in foreign exchange rates". Had the treatment been given as per Accounting Standard 11, the net loss before tax for the quarter and nine months period ended 31st December 2008 would have been higher by Rs. 264.65 crores (net of depreciation of Rs. 15.66 Crores). The auditors, in their review report for the quarter ended December 31, 2008, have also referred to this matter.

The Auditors in their audit report on the Company's Accounts for the year ended 31st March, 2008 and limited review report for the quarter ended 30th September, 2008, had commented on their inability to express any opinion on the recognition of Deferred Tax Asset (Rs. 546.57 crores upto 31st March, 2008 and Rs. 544.63 crores upto 30th September, 2008). However, based on the future profitability projections and in light of the current trend of prices of finished products and input costs as well as the benefits likely to accrue on account of change in production process, the Company is virtually certain that there would be sufficient taxable income in the future, to claim the above tax credit.

Further, the Auditors in their limited review report for the quarter ended 30th September, 2008 had also commented about non-provisioning of the revised provisional prices of Iron Ore Lumps and Fines, supplied by National Mineral Development Corporation Ltd (NMDC), amounting to Rs 100.32 crores, in view of the dispute raised by the Company with respect to the legality of the revised provisional prices. Considering the subsequent revision in prices of Iron Ore Lumps and Fines by NMDC, the Company has made appropriate provision for the aforesaid amount during the current quarter.

There were no extraordinary items during the respective periods reported above.

Basic and Diluted EPS have been computed after considering the impact of proportionate arrear dividends on cumulative redeemable preference shares on the profit/ loss for the respective periods in terms of Accounting Standard 20 'Earnings Per Share".

Previous period/ year figures have been re-grouped / re-arranged wherever necessary.

At the beginning of the quarter, there were no complaints from investors pending for disposal. During the quarter, 188 complaints were received and these were appropriately disposed off. Thus, there were no complaints from investors pending for disposal at the end of the quarter.

The Statutory Auditors have carried out a limited review of the Unaudited Financial Results for the quarter ended 31st December, 2008.

The above Unaudited Financial Results for the quarter ended 31st December 2008 were reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on 30th January, 2009.