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ELECTROSTEEL CASTINGS LIMITED

Regd. Office: Rathod Colony, Rajgangpur, Orissa
Corporate Office: 19 , Camac Street , Kolkata - 700 017

Unaudited Financial Results for the Quarter ended December 31,2008

# Interest is net of derivative gains/losses and foreign exchange difference on borrowings.

1. The above financial results, as reviewed by Audit Committee, were approved and taken on record by the Board of Directors in their meeting held on January 19, 2009.
2. The Company operates mainly in one business segment viz Pipes and all other activites revolve around the main business.
3. During the none month ended December 31, 2008, Zero Coupon Convertible Bonds (ZCCB) worth US $ 0.50 million (current quarter - nill) were converted into equity share. Accordingly 5,28,275 equity shares of face values of Re 1 each at a price of Rs. 42.44 per share have been issued to them resulting in increase in the paid up equity share capital by Rs. 5.28 lakh. further during current quarter ended December 31, 2008, 6,25,000 warrants issued to the promoters / promoter group in earlier period were converted into 62,50,000 equity shares of Re. 1/- per share at a premium of Rs. 42.80 in ratio of 1:10. This has resulted in increase of paid up equity share capital by Rs. 62.50 lakhs.
4. As on December 31, 2008, the Company had inter-alia outstanding forward exchange contracts for hedging future exports against the associated currency rate risks. The Mark-to-Market (MTM) losses on such forward contract as on December 31, 2008 stood at Rs. 2608.01 lakhs. Further, MTM losses on outstanding derivative contracts viz. Options and Swap Contracts entered into, based on past performance / underlying of foreign currency and other exposures to hedge the associated currency and / or interest rate risks as on December 31, 2008 stood at Rs. 1986.68 lakhs. Such losses being notional and not affecting cash flow of the Company and the actual gain or loss in this respect is ascertained and getting accrued only on culmination of respective contracts, are recognized accordingly. Out of above loss of Rs 1968.68 lakhs, as a matter of abundani caution, Rs. 1570.33 lakhs (net of reversal of Rs. 4449.77 lakhs in respect of transactions settled upto December 31, 2008) has already been provided for in earlier year and have been continued to be kept in these accounts and for the balance amount no provision has been considered necessary and will be given effect to at the end of the year or on the date of the respective settlements.
5. The Board has accorded its consent, subject to approval of shareholders, to issue upto 1,40,00,000 convertible warrants on a preferential basis to the Promoters / Promoter Group with an option to the holder of eachl warants to apply for and be alloted one equity share of Re.1/- each of the company for cash at a price of not less than Rs. 23/- per share. The meeting of share holders has been called on February 19, 2009 for the said purpose.
6. Pursuant to the recent circular issued by Ministry of Finance, allowing the Indian Companies to prepay the existing ZCCBs subject to certain compliances, the Board has accorded its consent to buy-back its outstanding ZCCBs having USD 20.45 million, due for redemption / conversion uptill 26th May, 2011.
7. The auditors have commented upon the Company's investments and advances in a joint venture wherein the Company had 50% share in the equity capital. Pending final judicial pronouncement in the matter, the investment and advances are considered to be good.
8. Details of number of investor complaints for the quarter ended December 2008: beginning - nil, received - 20, disposed off - 20 and pending - nil.
9. The above results have been reviewed by the statutory auditors.
10. Previous period's figures have been regrouped / rearranged wherever necessary
    

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