hindalco industries limited · hindalco industries limited v investor(s) shall mean the holder(s)...

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LETTER OF OFFER HINDALCO INDUSTRIES LIMITED November 25, 2005 For Equity Shareholders of the Company Only JM Morgan Stanley Private Limited 141 Maker Chambers III Nariman Point, Mumbai 400 021 Tel: (91 22) 5630 3030 Fax: (91 22) 2204 7185 Email: Hindalcorightsissue@ jmmorganstanley.com Website: www.jmmorganstanley.com Contact Person: Mr. Kushal Doshi DSP Merrill Lynch Limited Mafatlal Centre, 10th Floor Nariman Point, Mumbai 400 021 Tel: (91 22) 5632 8000 Fax: (91 22) 2204 5818 Email:[email protected] Website: www. dspml.com Contact Person: Mr. Sumedh Jog Karvy Computershare Private Limited Unit: Hindalco Rights Issue Karvy House, 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034 Tel: (91 40) 2343 1546 Fax: (91 40) 2343 1551 Email: [email protected] Website: www.karvy.com Contact Person: Mr. Murali Krishna LEAD MANAGERS TO THE ISSUE Registered Office: Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 025, India. We were incorporated on December 15, 1958 as Hindustan Aluminium Corporation Limited under the provisions of the Companies Act, 1956. We changed our name from Hindustan Aluminium Corporation Limited to Hindalco Industries Limited on October 9, 1989. The Registered Office of the Company was shifted from Industry House, 159 Churchgate Reclamation, Mumbai 400 020, India effective September 1, 1970. (For further details see “History of the Company and Other Corporate Matters” on page 80 of this Letter of Offer.) ISSUE, ON A RIGHTS BASIS OF 231,936,993 EQUITY SHARES WITH A FACE VALUE OF Re. 1 EACH AT A PREMIUM OF Rs. 95 PER EQUITY SHARE FOR AN AMOUNT AGGREGATING Rs. 22,266 MILLION TO THE EXISTING EQUITY SHAREHOLDERS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EXISTING EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, i.e., NOVEMBER 28, 2005 ON A PARTLY PAID BASIS IN TERMS OF THIS LETTER OF OFFER (“ISSUE”). THE ISSUE PRICE FOR THE EQUITY SHARES WILL BE PAID IN THREE INSTALLMENTS: 25% OF THE ISSUE PRICE WILL BE PAYABLE ON APPLICATION; 25% OF THE ISSUE PRICE WILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY, BETWEEN 9 AND 12 MONTHS AFTER THE ALLOTMENT DATE; AND 50% OF THE ISSUE PRICE WILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY, BETWEEN 18 AND 24 MONTHS AFTER THE ALLOTMENT DATE. THE TOTAL ISSUE PRICE IS 96 TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR MORE DETAILS, SEE “TERMS OF THE ISSUE” ON PAGE 293 OF THIS LETTER OF OFFER. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of the Company are listed on The Stock Exchange, Mumbai (Designated Stock Exchange) (“BSE”) and The National Stock Exchange of India Limited (“NSE”). The Company has received “in-principle” approvals from BSE and the NSE for listing the Equity Shares arising from this Issue vide letters dated October 6, 2005 and October 11, 2005 respectively. Tel: +91-22-56626666; Fax: +91-22-24227586/24362516 Contact Person: Mr. Anil Malik, Company Secretary and Compliance Officer E-mail: [email protected], Website: www.hindalco.com For private circulation to the Equity Shareholders of the Company only LETTER OF OFFER FOR PRIVATE CIRCULATION TO THE ORDINARY SHAREHOLDERS OF THE COMPANY ONLY GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to “Risk Factors” on page vii of this Letter of Offer before making an investment in this Issue. REGISTRAR TO THE ISSUE ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT ISSUE CLOSES ON MONDAY, DECEMBER 19, 2005 TUESDAY, JANUARY 3, 2006 WEDNESDAY, JANUARY 18, 2006 APPLICATION FORMS

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Page 1: HINDALCO INDUSTRIES LIMITED · HINDALCO INDUSTRIES LIMITED v Investor(s) Shall mean the holder(s) of Equity Shares of the Company as on the Record Date, i.e. November 28, 2005 and

LETTER OF OFFER

HINDALCO INDUSTRIES LIMITED

November 25, 2005For Equity Shareholders of the Company Only

JM Morgan Stanley Private Limited141 Maker Chambers IIINariman Point,Mumbai 400 021Tel: (91 22) 5630 3030Fax: (91 22) 2204 7185Email: [email protected]: www.jmmorganstanley.comContact Person: Mr. Kushal Doshi

DSP Merrill Lynch LimitedMafatlal Centre, 10th FloorNariman Point,Mumbai 400 021Tel: (91 22) 5632 8000Fax: (91 22) 2204 5818Email:[email protected]: www. dspml.comContact Person: Mr. Sumedh Jog

Karvy Computershare Private LimitedUnit: Hindalco Rights IssueKarvy House, 46 Avenue 4,Street No. 1, Banjara Hills,Hyderabad 500 034Tel: (91 40) 2343 1546Fax: (91 40) 2343 1551Email: [email protected]: www.karvy.comContact Person: Mr. Murali Krishna

LEAD MANAGERS TO THE ISSUE

Registered Office: Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 025, India. We were incorporated on December 15, 1958as Hindustan Aluminium Corporation Limited under the provisions of the Companies Act, 1956. We changed our name from Hindustan AluminiumCorporation Limited to Hindalco Industries Limited on October 9, 1989. The Registered Office of the Company was shifted from Industry House, 159Churchgate Reclamation, Mumbai 400 020, India effective September 1, 1970. (For further details see “History of the Company and Other CorporateMatters” on page 80 of this Letter of Offer.)

ISSUE, ON A RIGHTS BASIS OF 231,936,993 EQUITY SHARES WITH A FACE VALUE OF Re. 1 EACH AT A PREMIUM OF Rs. 95 PER EQUITYSHARE FOR AN AMOUNT AGGREGATING Rs. 22,266 MILLION TO THE EXISTING EQUITY SHAREHOLDERS IN THE RATIO OF ONE EQUITYSHARE FOR EVERY FOUR EXISTING EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, i.e., NOVEMBER28, 2005 ON A PARTLY PAID BASIS IN TERMS OF THIS LETTER OF OFFER (“ISSUE”). THE ISSUE PRICE FOR THE EQUITY SHARES WILL BEPAID IN THREE INSTALLMENTS: 25% OF THE ISSUE PRICE WILL BE PAYABLE ON APPLICATION; 25% OF THE ISSUE PRICE WILL BECOMEPAYABLE, AT THE OPTION OF THE COMPANY, BETWEEN 9 AND 12 MONTHS AFTER THE ALLOTMENT DATE; AND 50% OF THE ISSUEPRICE WILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY, BETWEEN 18 AND 24 MONTHS AFTER THE ALLOTMENT DATE. THETOTAL ISSUE PRICE IS 96 TIMES OF THE FACE VALUE OF THE EQUITY SHARES. FOR MORE DETAILS, SEE “TERMS OF THE ISSUE” ONPAGE 293 OF THIS LETTER OF OFFER.

ISSUER’S ABSOLUTE RESPONSIBILITYThe Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information withregard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true andcorrect in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly heldand that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any suchopinions or intentions misleading in any material respect.

LISTINGThe existing Equity Shares of the Company are listed on The Stock Exchange, Mumbai (Designated Stock Exchange) (“BSE”) and The NationalStock Exchange of India Limited (“NSE”). The Company has received “in-principle” approvals from BSE and the NSE for listing the EquityShares arising from this Issue vide letters dated October 6, 2005 and October 11, 2005 respectively.

Tel: +91-22-56626666; Fax: +91-22-24227586/24362516Contact Person: Mr. Anil Malik, Company Secretary and Compliance Officer

E-mail: [email protected], Website: www.hindalco.comFor private circulation to the Equity Shareholders of the Company only

LETTER OF OFFERFOR PRIVATE CIRCULATION TO THE ORDINARY SHAREHOLDERS OF THE COMPANY ONLY

GENERAL RISKSInvestments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they canafford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision inthis Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved.The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee theaccuracy or adequacy of this document. Investors are advised to refer to “Risk Factors” on page vii of this Letter of Offer before making aninvestment in this Issue.

REGISTRAR TO THE ISSUE

ISSUE PROGRAMMEISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT ISSUE CLOSES ON

MONDAY, DECEMBER 19, 2005 TUESDAY, JANUARY 3, 2006 WEDNESDAY, JANUARY 18, 2006

APPLICATION FORMS

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TABLE OF CONTENTS

ABBREVIATIONS & TECHNICAL TERMS ........................................................................................... iii

RISK FACTORS ..................................................................................................................................... vii

SUMMARY ........................................................................................................................................... 1

THE ISSUE ........................................................................................................................................... 5

SELECTED FINANCIAL INFORMATION ............................................................................................. 6

GENERAL INFORMATION ................................................................................................................... 8

CAPITAL STRUCTURE ......................................................................................................................... 15

OBJECTS OF THE ISSUE.................................................................................................................... 25

BASIS FOR ISSUE PRICE .................................................................................................................... 34

STATEMENT OF TAX BENEFITS ........................................................................................................ 37

INDUSTRY OVERVIEW ....................................................................................................................... 42

OUR BUSINESS ................................................................................................................................... 50

REGULATIONS AND POLICIES .......................................................................................................... 77

HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS ............................................. 80

DIVIDENDS ........................................................................................................................................... 83

MANAGEMENT ................................................................................................................................... 84

PROMOTERS AND PROMOTER GROUP ........................................................................................... 96

GROUP COMPANIES ........................................................................................................................... 99

SUBSIDIARIES ...................................................................................................................................... 106

OUR JOINT VENTURE COMPANIES .................................................................................................. 120

RELATED PARTY TRANSACTIONS .................................................................................................... 123

AUDITORS REPORT ............................................................................................................................. 126

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY .............................................. 175

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS ................................................................................. 177

MATERIAL DEVELOPMENTS ............................................................................................................. 202

INFRASTRUCTURE .............................................................................................................................. 203

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DESCRIPTION OF CERTAIN INDEBTEDNESS ................................................................................... 206

OUTSTANDING LITIGATIONS AND DEFAULTS ................................................................................ 208

GOVERNMENT APPROVALS ............................................................................................................. 258

STATUTORY AND OTHER INFORMATION ......................................................................................... 283

TERMS OF THE ISSUE ....................................................................................................................... 293

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND US GAAP…. ........ 312

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION……………………………………. ........ 321

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................... 334

DECLARATION ..................................................................................................................................... 335

NO OFFER IN THE UNITED STATES

The rights and the shares of the Company have not been and will not be registered under the United StatesSecurities Act of 1933, as amended (the “Securities Act”) or any U.S. state securities laws and may not be offered,sold, resold or otherwise transferred within the United States or to, or for the account or benefit of, “U.S. Persons”(as defined in Regulation S under the Securities Act), except in a transaction exempt from the registrationrequirements of the Securities Act. The rights referred to in this Letter of Offer are being offered in India but notin the United States of America. The offering to which this Letter of Offer relates is not, and under no circumstancesis to be construed as, an offering of any shares or rights for sale in the United States of America, or the territoriesor possessions thereof, or as a solicitation therein of an offer to buy any of the said shares or rights. Accordingly,this Letter of Offer should not be forwarded to or transmitted in or into the United States of America at any time.The Company will not accept subscriptions from any person, or his agent, who appears to be, or who theCompany has reason to believe is, a resident of the United States of America and to whom an offer, if made,would result in requiring registration of this Letter of Offer with the United States Securities and ExchangeCommission. The Company is informed that there is no objection to a United States shareholder selling its rightsin India.

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ABBREVIATIONS & TECHNICAL TERMS

In this Letter of Offer, the terms “we”, “us”, “our”, “the Company” or “Hindalco”, unless the context otherwiseimplies, refer to Hindalco Industries Limited. All references to “Rs.”or “INR” refer to Rupees, the lawful currency ofIndia, “USD” or “US$” refer to the United States Dollar, the lawful currency of the United States of America, “AUD”or “A$” refer to the Australian Dollar, the lawful currency of Australia. References to the singular also refers to theplural and one gender also refers to any other gender, wherever applicable, and the words “Lakh” or “Lac” mean“100 thousand” and the word “million” means “10 lakh” and the word “crore” means “10 million” or “100 lakhs”and the word “billion” means “1,000 million” or “100 crores”. Any discrepancies in any table between the totaland the sums of the amounts listed are due to rounding off.

General Terms and Abbreviations

Act The Companies Act, 1956 and amendments thereto

AGM Annual General Meeting

Articles Articles of Association of the Company as originally framed or asaltered from time to time in pursuance of any previous companieslaw or of this Act

AS Indian Accounting Standard

Auditor Singhi & Co., having their office at 1-B Old Post Office Street,Kolkata 700 001

Board or Board of Directors Board of Directors of Hindalco Industries Limited

BSE Bombay Stock Exchange Limited

Capital or Share Capital Share Capital of the Company

CDSL Central Depository Services (India) Limited

DP Depository Participant

Equity Share(s) or Share(s) means the equity share of the Company having a face value ofRe. 1 unless otherwise specified in the context thereof. On August6, 2005 the shareholders of the Company approved the sub-division of equity shares of the Company from Rs.10 per shareto Re. 1 per share.

Equity Shareholder means a holder of Equity Shares

FEMA Foreign Exchange Management Act, 1999

FI Financial Institutions

FII(s) Foreign Institutional Investors registered with SEBI underapplicable laws

FY / Fiscal Financial Year ending March 31 or December 31, as the casemay be

GOI Government of India

Issuer Hindalco Industries Limited, a company incorporated under theIndian Companies Act, 1956 having its registered office atCentury Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli,Mumbai 400 025

IT Act The Income Tax Act, 1961 and amendments thereto

ITAT Income Tax Appellate Tribunal

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Memorandum Memorandum of Association of the Company as originally framedor as altered from time to time in pursuance of any previouscompanies law or of this Act

MoU Memorandum of Understanding

NBFC Non Banking Finance Company

NIC National Industry Classification

NR Non Resident

NRI(s) Non Resident Indian(s)

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

OCB Overseas Corporate Bodies

RBI The Reserve Bank of India

ROC Registrar of Companies at Mumbai, Maharashtra located atHakoba Mill Compound, 2nd Floor, Dattaram Lad Marg,Kalachowkie, Mumbai – 400 033

SEBI Securities and Exchange Board of India

SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 andamendments thereto

SEBI DIP Guidelines The SEBI (Disclosure and Investor Protection) Guidelines, 2000issued by SEBI on January 19, 2000 read with amendmentsissued subsequent to that date

SIA Secretariat of Industrial Assistance

Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers)Regulations, 1997 as amended to date

Issue Related Terms and Abbreviations

ABNL Aditya Birla Nuvo Limited (formerly Indian Rayon And IndustriesLimited)

Birla Copper The copper division of Hindalco

CAF Composite Application Form

CRISIL Credit Rating Information Services of India Limited

Company Hindalco Industries Limited

CRU The CRU International Limited with its head office at 31 MountPleasant, London, WC1X 0AD, UK

Designated Stock Exchange The designated stock exchange for the Issue shall be BSE

Draft Letter of Offer Draft letter of offer dated September 23, 2005 filed with SEBI forits comments

Grasim Grasim Industries Limited

Hindalco Hindalco Industries Limited

IGCL Indo Gulf Corporation Limited

IGFL Indo Gulf Fertilisers Limited

Indal Indian Aluminium Company, Limited

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Investor(s) Shall mean the holder(s) of Equity Shares of the Company as onthe Record Date, i.e. November 28, 2005 and Renouncees

IRIL Indian Rayon And Industries Limited

Issue Issue, on a rights basis of 231,936,993 Equity Shares with a facevalue of Re. 1 each at a premium of Rs. 95 per Equity Share foran amount aggregating Rs. 22,266 million to the existing equityshareholders in the ratio of one Equity Share for every fourexisting Equity Shares held by the existing shareholders on therecord date, i.e., November 28, 2005 on a partly paid basis interms of this Letter of Offer.

Issue Closing Date January 18, 2006 (Wednesday)

Issue Opening Date December 19, 2005 (Monday)

Issue Price Rs. 96 per Equity Share

Karvy Karvy Computershare Private Limited

Letter of Offer Letter of Offer dated November 25, 2005 as filed with the StockExchanges after incorporating SEBI comments on the Draft Letterof Offer

Promoters Dr. K.M. Birla and Birla Group Holdings Private Limited

Record Date November 28, 2005

Registrar to the Issue or Registrar Karvy Computershare Private Limited

Renouncees Shall mean the persons who have acquired Rights Entitlementsfrom Equity Shareholders

Rights Entitlement The number of Equity Shares that a shareholder is entitled to inproportion to his/her shareholding in the Company as on theRecord Date

Stock Exchange(s) Shall refer to the BSE and NSE where the Shares of the Companyare presently listed

UCL Ultra Tech Cement Limited

Utkal Alumina Utkal Alumina International Limited

Technical and Industry Terms and Abbreviations

AUD/ A$ Australian Dollar

Cenvat Central Value Added Tax

CEPS Cash Earnings Per Share

CESTAT Customs, Excise, Service Tax Appellate Tribunal

DWT Deadweight tons

ECB External Commercial Borrowings

EEPC Engineering Export Promotion Council

EPS Earnings Per Share

JFTC Jelly Filled Telecom Cable

LME London Metal Exchange

Modvat Modified Value Added Tax

MPEB Madhya Pradesh Electricity Board

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MU Million Units

MVA Million Volts per Annum

MW Mega Watt

NAV Net Asset Value

PAT Profit After Tax

PBIT Profit Before Interest and Tax

SCN Show cause notice

Tc/Rc Treatment and Refining Charges

Tpa Tons per annum

VSF Viscose Staple Fibre

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RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information inthis Letter of Offer, including the risks and uncertainties described below, before making an investment in ourEquity Shares. If any of the following risks actually occur, our business, results of operations and financial conditioncould suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment. Thefinancial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosedin the risk factors mentioned below. However there are risk factors where the impact is not quantifiable andhence the same has not been disclosed in such risk factors.

Unless otherwise stated, the financial information used in this section is derived from our standalone auditedfinancial statements under Indian GAAP, as restated. Bracketed numbers indicate losses/ negative figures. In thissection, any conversion from US Dollars to Indian Rupees has been done based on the 12 PM Noon Exchangerate of 1US Dollar = 45.690 Indian Rupees on November 10, 2005 as given by the Federal Reserve Bank of NewYork – Such conversions are for convenience purposes.

Internal Risk Factors

Our major capital projects may not be completed, in the timeframe or at cost levels originally anticipated, andmay not achieve the intended economic results.

We currently plan to expand our existing facilities and construct new alumina and aluminium plants as detailed in“Objects of the Issue”. We may also acquire additional copper mines as and when suitable opportunities areidentified. These projects and any other future projects could be delayed by failure to receive regulatory approvalsor to obtain sufficient funding, due to technical difficulties, human resource, technological or other resourceconstraints, or for other unforeseen reasons, events or circumstances. These projects may incur significant costoverruns and may not be completed on time or at all. In addition, some of our projects for which the proceeds ofthe Issue are proposed to be utilized involve significant land acquisitions which remain to be completed. Forinstance, we have identified certain proposed sites/ village areas that form part of the area to be acquired for ourAditya greenfield projects. Any difficulties in acquiring such land free from encumbrances and with clear title, orat all, may adversely affect the implementation of these projects. Further, we are yet to place orders for certainplant and machinery in relation to our projects. Any difficulties in obtaining timely supply of such plant andmachinery may adversely affect the implementation of these projects. Kindly refer to the section titled “Objects ofthe Issue” for the percentage of the plant and machinery for which orders are yet to be placed.

Our decision to undertake, continue and reconfigure any of these projects will be based on assumptions of futuredemand for our products which may not materialize. We expect that a significant portion of the additionalproduction would be sold in the international market, where the selling prices might be lower than the domesticmarket. In addition, as a consequence of project delays, cost overruns, changes or lack of demand for ourproducts or for other reasons, we may not achieve the economic benefits expected of these projects and ourfailure to obtain expected economic benefits from these projects could adversely affect our business, financialcondition and results of operations. Our group companies may be engaged in the business of supplying certainmaterials which could be used as inputs in these projects and may supply such inputs for the purpose of theproposed projects.

Moreover, the current strong commodity cycle and the large number of projects being developed in the aluminiumand copper industry have increased the demand for skilled personnel. If we are unable to attract personnel withsufficient skills or successfully train our own personnel, we may not be able to effectively develop and managethese projects which may adversely affect our business, financial condition and results of operations.

We may change our business plan and consequently our fund requirements may change.

The use of proceeds of the Issue have been determined based on internal estimates of our Management. In viewof the highly competitive and dynamic nature of the industry in which we operate, we may have to revise ourbusiness plan from time to time and consequently our fund requirement may also change. This may includerescheduling of our capital expenditure programmes and increase or decrease the capital expenditure for aparticular purpose vis-à-vis current plans at the discretion of our Management. While these decisions would betaken in the best interest of the Company, we may not be able to achieve the same results as we expect in casewe are required to reschedule any of our capital expenditure programmes.

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If investors who are issued partly paid shares do not pay the amount payable on calls, the amount raisedthrough the Issue will be lower than the proposed Issue size of Rs. 22,266 million.

As per the terms of the Issue, the issue proceeds would be raised in three steps, first 25% of the Issue price wouldbe payable on application, next 25% of the Issue price would be called within 9 to 12 months from the date ofallotment and the final 50% of the Issue price would be called between 12 to 24 months from the date ofallotment. If any of the calls remain unpaid, the amount raised through the Issue may be lower than the proposedIssue size of Rs. 22,266 million and may require us to take steps for forfeiture of the shares. Based on our cashflow position at that point in time, we may have to raise alternate source of funds or finance the projects from ourinternal accruals if substantial number of shareholders decide not to pay their calls. We cannot assure you thatwe will have sufficient cash flows or will be able to obtain financing on favourable terms or at all. If adequatefunding is not available, our ability to continue to grow our business could be adversely affected.

Our anticipated capital expenditure and other corporate needs are substantial and we may not be able toobtain sufficient funding for these requirements, which could limit our ability to grow our business.

We plan to expand the capacity of and improve the operating efficiencies of our alumina, aluminium and copperplants, and acquire additional copper mines as and when suitable opportunities are identified. These plans,which include the projects covered under the section “Objects of the Issue”, require substantial additional fundingto meet capital expenditures and working capital requirements to be spent over a number of years. We havehistorically relied on a combination of cash flows from operations and debt financing to fund our capitalexpenditures and corporate requirements.

Our future cash flows from operations depends on our results of operations, which are subject to a number ofrisks and uncertainties including:

1. our future results of operations, and cash flows including the future market prices of our products and ourability to grow our business;

2. the cost of financing and the condition of financial markets, which are also influenced by changes in monetarypolicy of the Indian government with respect to interest rates and lending practices; and

3. obtaining regulatory and other corporate approvals required to access domestic or international financingor to undertake any project involving significant capital investment.

We cannot assure you that we will have sufficient cash flows or will be able to obtain financing on favourableterms or at all. If adequate funding is not available, our ability to continue to grow our business could beadversely affected.

Our copper smelters have experienced technical difficulties in the recent past, which has impacted theoperational performance and profitability of our copper business.

Our copper smelter I at Dahej with a capacity of 180,000 metric tpa experienced temporary shutdowns due tofurnace related issues while our copper smelter II with a capacity of 70,000 metric tpa experienced lower utilizationdue to refractory life stabilisation issues which impacted production. Furthermore, our newly commissionedcopper smelter III is in the process of being ramped up. The shortfall in production due to the shut downs in ourcopper smelters I and II resulted in revenue and contribution loss, which along with expenses relating to the rampup phase of our smelter III and high backwardation prevailing throughout the period impacted our results adversely.We expect these issues to continue into the near short term and the ramping-up of our copper smelter III will alsocontinue, which may affect our profitability in the short term. We cannot assure you that these technical difficultieswill not recur in the future.

A significant portion of our energy requirements are met by our own power plants and any disruption to theseoperations could increase our production costs.

We require a substantial amount of electricity for our aluminium and copper production and energy costs representa significant portion of the production costs for our operations. We source almost all the electricity requirementsfor our smelters at Renukoot, Hirakud and Dahej from our own power plants at competitive costs. If these powerplants are not able to supply the requisite electricity for any reason, we would need to rely on the state electricityboard as an alternative source. The state electricity board may not be able to consistently meet our requirementsand, if for any reason such electricity is not available, we may need to shut down our plant until an adequate

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supply of electricity is restored. The cost of such purchased power would be significantly higher thereby adverselyimpacting our cost of production and profitability.

Any interruption in the supply of electricity to our aluminium smelter lasting longer than six hours can causesubstantial damage to our smelter. Pots are used in the process of transforming alumina into primary aluminum.Pots will cool off if they are deprived of electricity for six consecutive hours, which could cause the moltenaluminium in the pot to solidify. Interruptions of electricity supply can also result in production shutdowns,increased costs associated with restarting production and the loss of production in progress. Historically we haveexperienced significant power interruption and cannot assure that same may not recur in future.

Furthermore, most of these dedicated power plants are dependent on coal as a raw material. Renusagar haslong-term agreements in place with two suppliers for its coal supply, Hirakud operates its own coal mines, butDahej relies on tender based contracts from time to time to procure its coal requirements. If for any reason, weare unable to procure sufficient coal of requisite quantity and quality, and at reasonable prices in the future, itcould materially disrupt our supply of power or increase our power costs.

If we are unable to obtain a steady supply of copper concentrate at reasonable costs, our results of operationsmay be affected.

We produce copper from copper concentrate. For fiscal 2005, we procured 76% of our copper concentrate fromlong-term suppliers, 13% from spot purchases and 10% from our mines in Australia.

In general, long-term supply contracts run for a period of three to five years, and are renewable at the end of theperiod. The quantity of supply for each year is fixed for the contract period and terms such as TcRc and freightdifferential are negotiated each year based on prevailing market conditions. If these contracts cannot be renewedon time or on terms favourable to us, our results of operations could be adversely impacted.

In certain contracts, each party has an option to decline to purchase or deliver, as the case may be, the contractedcopper concentrate for any particular year. If such terms are invoked by our suppliers and if we are unable tosource copper concentrate from alternate sources on time and on terms favourable to us, our results of operationscould be adversely impacted.

Of the two copper mines owned by our wholly owned subsidiary Birla Mineral Resources Pty Limited through its100% holding in Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited, Nifty had estimated proven and probablecopper ore reserves of 34.59 million metric tons, while Mt. Gordon had estimated proven and probable copperore reserves of only 2.30 million metric tons as of March 31, 2005. Extended supply from these mines will dependon the success of any future exploration programs. Moreover, the copper sulphide mine at Nifty is still at adevelopmental stage and efforts of our subsidiary Birla Nifty Pty Limited to extract copper ore may not be successful.If we do not purchase additional mines for sourcing copper concentrate, we will have to rely more heavily oncopper concentrate supplied by external parties. We cannot assure you that we will be able to find sources forour copper concentrate requirements on time, having requisite quality or on commercially viable terms, or at all.

If we are unable to obtain a steady supply of bauxite at reasonable costs, our results of operations may beaffected.

We produce alumina from bauxite. Our current level of alumina production depends to a large extent on theconsistency of the supply of good quality bauxite. A reduction in the quantities of bauxite would reduce theamount of alumina which we can produce. We obtain our bauxite from two major sources: our own mines andthird party suppliers, which primarily consist of independent mines. Each of these sourcing methods exposes usto risks relating to security of supply or cost.

A steady supply of bauxite from these sources is contingent upon geological and economic uncertainties, andrenewal of our mining leases. If the quality of bauxite deteriorates in our existing mines, our production cost mayincrease, thereby adversely impacting our results of operations. We are in the process of acquiring leases forsome of the new bauxite mines required for our expansion projects. Any delay or inability in obtaining therequisite leases will impact these expansion plans and the operating costs of these facilities. Further, we cannotassure you that any bauxite that we may extract from these new mines will be of good quality.

We may not be able to renew the purchase contracts for the bauxite we acquire from third party sources atreasonable prices or at all. If we are unable to obtain a steady supply of requisite quality bauxite at competitiveprices, our results of operations will be adversely affected.

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Any inability to procure surface rights or any defect in leasehold title could affect our ability to mine.

When we receive mining lease rights for a new mine, surface rights of the land are acquired subsequently and inparts, based on the mining plan. Surface rights are necessary for us to mine from the land. We only acquire entiresurface rights at the outset in exceptional cases, typically when there is a large reserve. We apply for additionalsurface rights as and when we reach an agreement with the landowner. We are also required to pay for the re-forestation and re-vegetation of nearby degraded forest land and non-mineral bearing areas where our miningtakes place in designated forest land. We expect to be able to continue to obtain additional surface rights in thefuture in due course but our inability to obtain surface rights could negatively affect our financial condition andresults of operations.

We conduct a significant part of our mining operations on properties that we lease. Our right to mine some of ourreserves may be materially adversely affected by defects in title or boundaries. In order to obtain leases or miningcontracts to conduct our mining operations on property where these defects exist, we may in the future have toincur unanticipated costs, which could adversely affect our profitability.

We are dependent upon external suppliers to meet a certain portion of our caustic soda requirements.

Caustic soda is a key raw material used to dissolve the bauxite in the alumina refining process. Import of causticsoda was stopped in fiscal 2005 due to very high international prices and anti-dumping duty on caustic soda.While we currently source a majority of our requirements for caustic soda from our subsidiary, Bihar Caustic andChemicals Limited with the balance being sourced from local suppliers, our caustic soda prices can still beaffected as these producers can raise their prices for caustic soda. Continuing increases in caustic soda pricesmay have an adverse effect on our business and results of operations.

Our operations are reliant on the timely supply of raw materials and products to our plants and transportationof our products from our plants to our customers, which are subject to uncertainties and risks.

We depend on various forms of transport, such as seaborne freight, rail and trucking to receive raw materialsused in production and to deliver our products from our manufacturing facilities to our customers. Thesetransportation facilities may not adequately support our operations due to traffic congestion and unavailability ofrailway wagons or trucks. Further, disruptions of transportation services because of weather-related problems,strikes, lock-outs, inadequacies in the road infrastructure and port facilities, or other events could impair ourability to source raw materials and components and our ability to supply our products to our customers. We canprovide no assurance that such disruptions will not occur in the future. In addition, significant increases intransportation cost may adversely impact our financial results.

Changes in technology may render our current technologies obsolete or require us to make substantial capitalinvestments.

The industry in which we operate is subject to significant changes in technology. To maintain the competitivenessof our business, we need to keep pace with technological developments and changing standards. If we areunable to adequately respond to the technological changes and the technologies currently employed by usbecome obsolete, our business, financial condition and results of operations may be materially and adverselyaffected. In addition, the cost of implementing new technologies and upgrading our plants to keep pace withtechnological developments may be significant and may adversely affect our results of operations.

The heavy equipment we operate is subject to operational hazards.

Our production processes depend on heavy equipment which are potentially hazardous. Any significant accidentcaused by such equipment could interrupt our operations and result in legal and regulatory liabilities. Insurancecoverage related to accidents resulting from the proper or improper use of such equipment may be inadequateto offset losses arising from claims related to such accidents. Moreover, any equipment involved in an accidentor malfunction may be damaged or destroyed thereby adversely impacting our financial condition or results ofoperations.

Deliveries under our copper sales agreements can be suspended or cancelled by our customers in certaincases.

Under each of our copper sales agreements, we or our customers may suspend or cancel delivery of copperduring a period of force majeure. Events of force majeure under these agreements include acts of nature, labour

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strikes, fires, floods, wars, transportation delays, government actions or other events that are beyond the controlof the parties. Any suspension or cancellation by our customers of deliveries under our copper or other salescontracts that are not replaced by deliveries under new contracts or sales on the spot market would reduce ourcash flow and could adversely affect our financial condition and results of operations.

Our business may be affected by planned and unplanned outages and other material disruptions.

Industrial disruptions, work stoppages, refurbishments, installation of new plants, geotechnical issues, accidentsor sustained bad weather at our operations can result in production losses and delays in delivery of products,which may adversely affect our profitability. Production may fall below historic or estimated levels as a result ofunplanned outages.

Our insurance does not cover all of the risks we face, and the occurrence of events that are not covered by ourinsurance could cause us losses, which if significant, could adversely affect our financial condition.

We are not fully insured against all potential hazards incidental to our business. For example, we maintain limitedcover against business interruption risks. The occurrence of events that are not fully insured could require us topay for any repairs and damage claims, which could have a material adverse effect on results of our operationsand our financial condition.

Our business depends on the continuing employment of the management team, and skilled personnel and ourability to retain and attract talented personnel.

We are dependent on our management team and our ability to meet future business challenges depends on theircontinuation and our ability to attract and recruit talented and skilled personnel. We face strong competition inrecruiting and retaining skilled and professionally qualified staff. The loss of key personnel or any inability tomanage the attrition levels in different employee categories may materially and adversely impact our business,our ability to grow and our control over various business functions.

Our copper hedging activities may not achieve the intended results and may adversely affect our results ofoperations and financial condition.

From time to time, we hedge exposures of our copper business to LME price fluctuations. Nonetheless, wecannot assure that our commodity hedging activities will adequately protect us from price fluctuations. Further,our hedging may at times limit our ability to benefit from favourable price movements.

If we are unable to manage our growth, our business could be disrupted.

Growing our business through capacity expansions and acquisitions of copper mines is a key component of ourstrategy to realize our vision of attaining global size and to further improve our cost competitiveness in the globalaluminium industry, and to reduce costs in our copper business. In order to achieve such future growth, weneed to effectively manage our expansion projects, accurately assess new markets, attract new customers, obtainsufficient financing, control our input costs, maintain sufficient operational and financial controls and makeadditional capital investments to take advantage of anticipated market conditions. We expect our growth to placesignificant demands on our management and other resources. Any inability to manage our growth could havean adverse effect on our business, financial condition and results of operations.

The Equity Shares will be partially paid until anytime between 18 and 24 months after the Allotment Date atthe option of the Company

The Equity Shares are being issued on a partly paid basis. The Issuer Price will be paid in installments as follows:(i) 25% of the Issue Price including share premium will be payable on application; (ii) a further 25% of the IssuePrice including share premium will become payable, at the option of the Company, between 9 and 12 monthsafter the Allotment Date; and (iii) the remaining 50% of the Issue Price including share premium will becomepayable, at the option of the Company, between 18 and 24 months after the Allotment Date (such additionalpayments as set forth in (ii) and (iii) above, the “Additional Payments”). The price movements of partly paid sharesmay be greater in percentage terms than price movements if the Equity Shares were fully paid. Investors in therights offering will be required to pay the Additional Payments when due, even if, at that time, the market price ofthe Equity Shares is less than the Issue Price. If the holder fails to pay the Additional Payments with any interestthat may have accrued thereon after notice has been delivered by the Company, then any shares in respect ofwhich such notice has been given may, at any time thereafter before payment of the Additional Payments and

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interest and expenses due in respect thereof, be forfeited by resolution of the Board to that effect. Such forfeitureshall include all dividends declared in respect of the forfeited shares and actually paid before the forfeiture.Notwithstanding such forfeiture, a person whose shares have been forfeited shall remain liable to pay to theCompany the Additional Payments and interest and expenses owing upon or in respect of such shares at the dateof forfeiture with interest thereon from the date of forfeiture until payment at such rate not exceeding ninepercent per annum as the Directors may determine. For more information, see “Terms of the Issue” on page 293and “Main Provisions of the Articles of Association” on page 321 of this Letter of Offer.

Partly paid shares will not be traded for a period of approximately 45 days from the issue of the Call Money Notice.

The Company will fix a record date to determine the list of shareholders to whom the Call Money Notice wouldbe sent for each Call. As per the present regulatory framework, trading of our partly paid Equity Shares isexpected to be suspended for a period of approximately 45 days, starting five days prior to such record date forthe Call concerned. The process of corporate action for credit of fully paid shares to the demat account of theshareholder may take about two weeks from the date of payment of the amount payable on Call. During thisperiod shareholders who pay the amount payable on Call for the partly paid shares will not be able to trade inthose shares. For more details see “Procedure For Calls” on page 294 of this Letter of Offer.

If investors do not pay the amount payable on calls, trading in those shares will be discontinued and suchshares will be liable for forfeiture by the Company.

Once the amount payable on calls is duly made, such shares will be listed and tradeable with a separate ISIN No.from the date of listing of such shares and up to five days prior to the record date for the next call, if applicable.However, if the amount due on calls is not paid, these shares will be liable for forfeiture by the Company inaccordance with its Articles of Association. Since trading of the partly paid shares would be suspended five daysprior to the record date for the concerned call, the partly paid shares would cease to trade from such date andthere would be no market for the same. For more details see “Procedure For Calls” on page 294 and “MainProvisions of Our Articles of Association” on page 321 of this Letter of Offer.

Birla Group Holdings Private Limited, one of our Promoters has incurred losses in the last three years.

Birla Group Holdings Private Limited, one of our Promoters has incurred losses in recent years, as set forth in thetable below. Please refer to the chapter on “Promoters and Promoter Group” on page 96 of this Letter of Offer:

Company Year Ended March 31 September

2003 2004 2005 30, 2005

Birla Group Holdings Private Limited (Rs. in millions) (28.45) (15.80) (10.30) (8.93)

Certain of our subsidiaries and joint venture companies have incurred losses in the last three years.

Certain of our subsidiaries and joint venture companies have incurred losses in recent years, as set forth in thetables below. Please refer to the chapter on “Subsidiaries” on page 106 and “Our Joint Venture Companies” onpage 120 of this Letter of Offer:

Company Year Ended March 31 September

2003 2004 2005 30, 2005

Birla Maroochydore Pty. Ltd. (in AUD) - (70,914) (126,282) (51,738)*

Birla Mineral Resources Pty. Ltd. (AUD in millions) - (16.74) 3.54 0.14*

Birla Mt. Gordon Pty. Ltd. (AUD in millions) - (6.54) (30.09) (14.44)*

Birla Nifty Pty. Ltd. (AUD in thousands) - 34.931 (20.70) 1.58*

Indian Aluminium Company Ltd. (Rs. in millions) 1,186.30 1,321.53 (15.45) (6.17)

Indal Exports Ltd. (Rs. in thousands) (263) (19) (18) (14)

Idea Cellular Ltd. (Rs. in millions) (1,598.08) (2,069.12) 260.53 210.29

* Profit before tax1 From January 1, 2003 upto March 31, 2004

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The accounts of certain of our subsidiaries, for the six-month period ended September 30, 2005, are unaudited.

The stand-alone accounts of Birla Mineral Resources Pty. Ltd, Birla Maroochydore Pty. Ltd., Birla Mt. Gordon Pty.Ltd., Birla Nifty Pty. Ltd, and Birla Resources Pty. Ltd. for the six-month period ended September 30, 2005 areunaudited.

We are involved in several litigation proceedings and we cannot assure you that we will prevail in theseactions.

There are outstanding litigations against us, our directors, our Promoters and group companies. We are defendantsin legal proceedings incidental to our business and operations. These legal proceedings are pending at differentlevels of adjudication before various courts and tribunals. Should any new developments arise, such as a changein Indian law or rulings against us by appellate courts or tribunals, we may need to make provisions in ourfinancial statements, which could adversely impact our business results. Furthermore, if significant claims aredetermined against us and we are required to pay all or a portion of the disputed amounts, it could have amaterial adverse effect on our business and profitability.

Material Litigations relating to the Company, the Promoters, the Directors, group companies and joint venturecompanies

A) Against the Company

● There are approximately 25 criminal cases filed against us, two of which have also been filed against ourdirector Mr. S.S. Kothari as occupier of factory. Please refer to “Outstanding Litigation and Defaults” on page208 of this Letter of Offer.

●· There are about approximately 141 labour related cases filed against us for claims aggregating approximatelyRs. 40.32 million. Please refer to “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

● There are about approximately 57 civil cases filed against us for claims aggregating approximately Rs. 351.4million. We have also received six demand notices for an amount aggregating to Rs. 32.1 million. Pleaserefer to “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

● There are approximately 30 income tax related appeals for claims aggregating approximately Rs. 8009.43million against the Company. Please refer to “Outstanding Litigation and Defaults” on page 208 of this Letterof Offer.

● There are approximately 71 SCNs for claims aggregating Rs. 2354.19 million and 51 demands for amountsaggregating Rs. 2258.77 million in relation to central excise claims against the Company. Please refer to“Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

● There are approximately 4 SCNs for amounts aggregating Rs. 75.07 million and 6 demands for amountsaggregating Rs. 72.51 million in relation to customs claims against the Company. Please refer to “OutstandingLitigation and Defaults” on page 208 of this Letter of Offer.

● There are approximately 6 SCNs for amounts aggregating approximately Rs. 422.02 million and 24 demandsaggregating approximately Rs. 125.24 million issued by the sales tax authorities. Please refer to “OutstandingLitigation and Defaults” on page 208 of this Letter of Offer.

● There are approximately 3 SCNs against us for claims aggregating approximately Rs. 10.93 million and 9demands for amounts aggregating Rs. 8470.79 million in respect of other taxes, fees and cesses. Please referto “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

● There are approximately 4 service tax related SCNs issued to us for claims aggregating Rs. 62.4 million and1 service tax related demand for an amount of approximately Rs. 15.13 million. Please refer to “OutstandingLitigation and Defaults” on page 208 of this Letter of Offer.

● We are involved in approximately 11 arbitration proceedings for claims aggregating approximately Rs. 386.03million. Please refer to “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

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● Two cases have been filed in relation to transfer or transmission of our shares, where we have been namedas a party.

● There are about 26 other cases filed against us for claims aggregating approximately Rs. 50.13 million.

B) Against the Promoters

Please refer to the “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

C) Against the Directors

Please refer to the “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

D) Against group companies

Please refer to the “Outstanding Litigation and Defaults” on page 208 of this Letter of Offer.

E) Against joint venture companies

For more information regarding litigation involving us, our Directors, or us or our subsidiaries, our Promoters,our joint venture companies and group companies, see “Outstanding Litigation and Defaults” on page 208 of thisLetter of Offer.

Our indebtedness could adversely affect our financial condition and results of operations.

We have entered into agreements with certain banks and financial institutions for short term loans and long termborrowings. Some of these agreements contain certain restrictive covenants, such as requiring consent of thelenders inter alia, for issuance of new shares, creating further encumbrances on our assets, disposing of ourassets, declaring dividends or incurring capital expenditures beyond certain limits. Some of these borrowingsalso contain covenants which limit our ability to make any change or alteration in our capital structure, makeinvestments, effect any scheme of amalgamation or restructuring. In addition, certain of these borrowings containfinancial covenants, which require us to maintain, among other matters, specified net worth to assets ratio, debtservice cover ratio, and maintenance of security coverage. There can be no assurance that we will be able tocomply with these financial or other covenants or that we will be able to obtain the consents necessary to take theactions we believe are necessary to operate and grow our business.

We have a number of contingent liabilities under Indian GAAP, and our profitability could be adversely affectedif any of these contingent liabilities materialize.

Our contingent liabilities as of March 31, 2005 and the six months ended September 30, 2005 not provided forinclude:

(Rs. in millions)

Half year For the yearended ended

September March 31,30, 2005 2005

(a) Claims/Disputed liabilities not acknowledged as debt:

Following demands are disputed by the Company and are notprovided for:

i) Demand notice by Assistant. Collector, Central Excise Mirzapur for 91.21 91.21excise duty on power generated by company’s captive powerplant, Renusagar Power Co. Ltd. (Since amalgamated).

ii) Demand of interest on past dues of the Aluminium Regulation 63.29 63.29account upto 31.12.1987.

iii) Retrospective Revision of Water Rates by UP Jal Vidyut Nigam 40.80 40.8Limited (April 1989 to June 1993 & Jan 2000 to Jan 2001)

iv) Transit fees levied by Divisional Forest officer, Renukoot on coal 175.93 52.05and bauxite

v) M.P Transit Fee on Coal demanded by Nonthern Coal Fields Limited 124.90 112.48

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(Rs. in millions)

Half year For the yearended ended

September March 31,30, 2005 2005

vi) Withholding Tax on payment of fees on GDR issue. 91.56 91.56

vii) Imposition of Cess on Coal by Shaktinagar Special Area 35.36 31.4Development Authority.

viii) Demand of Royalty on Vanadium by District Mining officer, 53.40 12.9Lohardaga.

ix) Demand from District Mining Office, Lohardaga & Gumla 31.90 -towards payment of increased surface rent on Mining Leases

x) The demand of Excise Duty on gold 1,557.70 1,557.7

xi) Demand for non-payment of sales tax on leased assets. 260.50 212.26

xii) Demand raised for reversal of difference between duty paid 13.00 -and Cenvat credit taken in returned material.

xiii) Claim by KSEB for difference between the actual demand 26.73 -and contract demand

xiv) Other Contingent Liabilities in respect of Excise, Customs, 98.63 84.85Sales Tax etc. each being for less than Rs. 10 millions

b) i) Bills discounted with Banks 385.53 468.14

ii) Guarantees outstanding (includes corporate guarantees of 12,796.99 12,595.15Rs.11,689.11 million (2004-05 Rs. 11,399.76 million) given onbehalf of subsidiary companies)

iii) Letters of Credit Outstanding 675.65 684.17

iv) Bank Guarantees & Bonds 287.17 249.54

c) The Company has received supplementary bills on account of 50.10 50.10revision in rate of power for Main Supply from the UPSEB forthe period 15th May 1976 to 30th June 1980 and the same remainsunprovided for as disputed by the Company

d) In terms of the Scheme of Arrangement between the Company, theerstwhile Indo Gulf Corporation Ltd. (IGCL) and Indo Gulf FertilisersLimited approved by the Hon’ble High Courts at Allahabad and Mumbaivide their orders dated 18th November 2002 and 31st October 2002respectively, the company may be liable to pay a portion of disputeddemands of Income Tax of Rs.133.95 million pertaining to IGCL.

e) 228,340,226 Equity Shares of Rs.10/- each fully paid up in IDEACellular Ltd. are held by the Company as investment. Out of theabove 115,187,999 shares of Rs. 10/- each have been pledged forsecuring financial assistance granted by the lenders to that company.

If any of these contingent liabilities materialize, our profitability could be adversely affected. For more detaileddescriptions of our contingent liabilities, see “Auditors Report” starting on page 126 of this Letter of Offer.

We require certain registrations and permits from government and regulatory authorities in the ordinarycourse of business and the failure to obtain them in a timely manner or at all may adversely affect our operations.

We require certain registrations and permits for operating our business, including factory license, approvals tostore hazardous substances and environmental clearances, which we have applied for. For more information,

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see “Government Approvals” on page 258 of this Letter of Offer. If we fail to obtain approval of any of theseregistrations and permits in a timely manner, or at all, our business may be adversely affected and our directorsand officers may be subjected to civil or criminal proceedings.

In addition, we require certain registration and permits for our expansions and greenfield projects, which wehave applied for. In respect of Utkal Alumina, some of the existing approvals are in the name of Indal and have notbeen amended in favour of Utkal Alumina. The company has applied for renewal of the letter of intent granted bythe Ministry of Commerce, Government of India in respect of approval as a 100% export oriented unit, which ispending approval. Any renewal, reapplication or amendment of approvals in respect of Utkal Alumina cannot becompleted till the said letter of intent is renewed. If we fail to obtain approval of any of these registrations andpermits in a timely manner, or at all, our business may be adversely affected. For more information, see“Government Approvals” on page 258 of this Letter of Offer.

External Risk Factors

Changes in the market prices of alumina, aluminium and copper could adversely affect our revenues andprofitability.

Domestic and LME prices for aluminium and alumina: We price our alumina and aluminium products by referenceto domestic market prices or international market prices (the London Metal Exchange, or LME, price for aluminum).These prices have been volatile and cyclical in the past. Any significant decline in the domestic and internationalprices of alumina and aluminium will adversely affect our revenues and profitability. Further, under currentregulations in India, we are not permitted to hedge against changes in the domestic price of aluminum.

LME price and TcRc for copper: The prices we pay for copper concentrate and the prices we charge for ourcopper products are based on the LME price for copper. However, because we are a custom copper smelter, weattempt to make the LME price a pass through for us as both our copper concentrate purchases and sales offinished goods are based on LME prices.

Nevertheless, we are also exposed to differences in the LME price between the quotational periods for thepurchase of copper concentrate and sale of the copper, and any decline will adversely affect us. We attempt tohedge against such risks, but are still exposed to timing and quantity mis-matches. Treatment and refiningcharges, or TcRc, for some of our long-term copper concentrate supply contracts are also negotiated as apercentage of the prevailing LME price. In addition, certain of our long-term copper concentrate supply agreementsprovide for price participation terms which are linked to LME prices. As a result, any significant volatility in theLME price for copper could adversely affect our revenue and profitability.

The level of TcRc has a significant impact on the profitability of our copper business. These have been volatile andcyclical in the past. We purchase copper concentrates at the LME price for the relevant quotational period lessTcRc. While our TcRc is negotiated between our supplier and us, our TcRc is influenced by global TcRc, which isprimarily the result of factors such as the supply and demand of copper concentrates, prevailing and forecastedLME prices and mining and freight costs. Our TcRc prices are also substantially influenced by the benchmarkprice set by certain large Japanese smelters. The TcRc in the past has been volatile and any significant decline willadversely affect our profitability.

Any increase in competition in our target markets could result in lower prices or sales volumes of the aluminum,aluminium products and copper we produce, which may cause our profitability to suffer.

There is substantial competition in the alumina, aluminium and copper industries, both in India and internationally,and we expect this to continue. Our competitors in the alumina, aluminium markets and copper outside Indiainclude major international producers. Certain of these global players have significantly greater financial resourcesand manufacturing and technological capabilities, more established and larger marketing and sales organizations,and larger technical staffs than we do.

In the domestic aluminium market, we compete primarily against National Aluminium Company Limited, BharatAluminium Company Limited and Madras Aluminium Company Limited. In the domestic copper market, wecompete primarily against Sterlite Industries Limited and Hindustan Copper Limited. These companies are alsoexpanding their production capacities. If domestic demand is not sufficient to absorb these increases in capacity,our competitors could reduce their prices, which may require us to do the same or cause us to lose market shareto our competitors or sell our products in overseas markets at relatively lower prices. Should the price of our

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products decline, our profit margins would decline, and without a sufficient increase in our sales volume, ourrevenues would also decline.

The end-user markets for certain value-added aluminium and copper products are highly competitive. Aluminiumand copper compete with other materials particularly plastic, steel, iron, glass, and paper, among others, forvarious applications. In the past, customers have demonstrated a willingness to substitute other materials foraluminium and copper. The willingness of customers to accept substitutes could have a material adverse effecton our business, results of operations and prospects.

Our business performance is exposed to exchange rate fluctuations.

We produce and sell commodities that are typically priced by reference to U.S. Dollar prices, while a majority ofour costs are incurred in Indian Rupees. We also incur a portion of costs in Australian Dollars in connection withmining operations in Australia. As a result, our financial condition and results of operations are affected, directlyor indirectly, by the exchange rates of the U.S. Dollar-Indian Rupee and U.S. Dollar-Australian Dollar. If the U.S.Dollar declines in value relative to the Indian Rupee, our revenues generated from and the profitability of theproducts we sell could be reduced. Similarly, a U.S. Dollar decline against the Australian Dollar could adverselyaffect the revenues and profitability of our wholly owned Australian subsidiary Birla Mineral Resources Pty Limitedwhich wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited. On the other hand, our foreigncurrency borrowings and purchases of imported capital equipments and inputs are impacted by any depreciationof the Indian Rupee.

While we hedge currency exposures from time to time, as part of our risk management activities, our profitabilitymay be significantly affected by exchange rate fluctuations between the U.S. Dollar and the Indian Rupee andbetween the U.S. Dollar and the Australian Dollar. Further, our hedging arrangements may, at times, limit thebenefits of favourable exchange rate movements.

In addition, the policies of the Reserve Bank of India may change from time to time and this may impact our abilityto adequately hedge our foreign currency exposures.

Changes in customs duties may have a material adverse effect on our results of operations and financialcondition.

The customs duties on imported copper and aluminium (other than for certain aluminium products) have beenreduced over the last few years. Imports of copper metal and aluminium are currently subject to a customs dutyof 10%. The Government of India may reduce customs duties further in the future, although the timing andextent of such reductions cannot be predicted. Since we sell a majority of our aluminium and a significant partof our copper production in the domestic market, any reduction in these customs duties will have an adverseeffect on our results of operations and financial condition.

In addition, if customs duties decline further, we could incur additional competition from foreign aluminium andcopper producers which may force us to reduce our prices or decrease our domestic market share and adverselyaffect our result of operations.

The Government of India and other state governments may further increase the royalty rates/ cess we pay forour mines.

Given the commodity nature of our businesses, cost competitiveness is a key determinant of profitability. One ofour key strengths is our cost effective access to quality bauxite. The principal components of bauxite costs aremining costs, royalties and freight. The Government of India charges us royalties on the amount of bauxiteextracted. In September 2000, the Government of India changed the nationwide bauxite royalty from a fixed feeto a variable fee formula, which was further revised upward in October 2004 under the same formula. Any futureincrease in the royalty we pay will increase our cost of bauxite, which would adversely impact our profitability.

Our operations are subject to extensive regulations and may be adversely affected by present or future violationsor enforcement actions.

Our operations are subject to extensive regulations including regulations relating to pollution and protection ofthe environment and worker health and safety. National, state and local authorities in the countries in which wehave operations, including India and Australia, regulate the industries in which we operate with respect to matterssuch as labour conditions, royalties, permit and licensing requirements, planning and development, tax

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registrations, mining leases, supply of water, environmental compliance (including, for example, compliancewith waste and waste water treatment and disposal, air emissions, discharges and forest and soil conservationrequirements), plant and wildlife protection, reclamation and restoration of properties after operations are complete,surface subsidence from underground mining and the effects that mining, smelting and refining operations haveon groundwater quality and availability.

Numerous governmental permits, approvals and leases are required for our operations. We are required toprepare and present to national, state or local authorities data pertaining to the effect or impact that any proposedexploration, mining or production activities may have upon the environment. The costs, liabilities and requirementsassociated with complying with these laws and regulations or complying with changes in requirements or themanner in which they are applied or the cost of rehabilitation of site operations which have been closed downmay be substantial and time-consuming and may delay the commencement or continuation of exploration,mining or production activities. Failure to comply with these laws and regulations or to obtain or renew thenecessary permits, approvals and leases may result in the loss of the right to mine or operate a smelter or refinery.There can be no assurance that compliance with these laws and regulations or changes thereto or the cost ofrehabilitation of site operations which have been closed down or the failure to obtain necessary permits, approvalsor leases or successful challenges to the grant of such permits, approvals and leases will not adversely affect ourresults of operations or financial condition.

We incur and expect to continue to incur significant capital and operating costs to comply with environmentalregulations. We could also incur significant costs, including clean up costs, fines and civil and criminal sanctions,if we fail to comply with environmental laws and regulations or the terms of consents and approvals.

New legislation or regulations may be adopted in the future that may materially and adversely affect our operations,our cost structure or our customers’ ability to use our products. New legislation or regulations, or different ormore stringent interpretation or enforcement of existing laws and regulations, may also require us or our customersto change operations significantly or incur increased costs which could have an adverse effect on our results ofoperations or financial condition.

In addition, a violation of health and safety laws relating to a mine, smelter, refinery or other plant or a failure tocomply with the instructions of the relevant health and safety authorities could lead to, among other things, atemporary shutdown of all or a portion of the mine, smelter, refinery or other plant, a loss of the right to mine oroperate the smelter, refinery or other plant or the imposition of costly compliance procedures. If health andsafety authorities require us to shut down all or a portion of a mine, smelter, refinery or other plant or to implementcostly compliance measures, whether pursuant to existing or new health and safety laws and regulations, suchmeasures could have a material adverse effect on our results of operations or financial condition.

The price for our phosphatic fertilizers is primarily fixed by the Government of India and any decrease in thepre-determined price will adversely affect our results of operations.

The price of phosphatic fertilizers is primarily fixed by the Government of India. In the event the prices of theseproducts decline, it could result in an adverse impact on our revenues and results of operations.

Our business faces natural disasters and operation risks that may cause significant interruption of operations.

Mining or producing and transporting bauxite, alumina, primary aluminium products, copper concentrate, copper,copper products, coal and other raw materials is generally subject to a number of risks and hazards, includingunusual or unexpected geological conditions, ground conditions, phenomena such as inclement weatherconditions, floods, tsunamis and earthquakes and the handling of hazardous substances and emissions ofcontaminants. Our rolling mill operations are particularly susceptible to risk of fire. Such risks and hazards couldresult in injury or death, damage to, or destruction of, mineral properties, processing or production facilities orthe environment, monetary losses and possible legal liability. Our business, financial condition, liquidity andoperating results could be materially adversely affected if any of these developments were to occur.

A slowdown in economic growth in India could cause our business to suffer.

We sell a significant portion of our aluminium and copper products in the Indian market. Our performance andthe growth of our business are dependent on the health of the overall Indian economy and our expansion plansare based on our expectations of continued economic growth in India. Any future slowdown in the Indianeconomy could affect us, our customers and other contractual counter-parties.

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Our operations have been affected by social unrest in the past and may continue to be affected in the future.

India has from time to time experienced social unrest and hostilities both internally and with neighbouring countries.A number of the bauxite and coal mines which we currently, or propose to, operate or source from are locatedin areas that have experienced social unrest and certain of these mines have been attacked by rebel groups. Twoof our bauxite mines are located in the states of Jharkhand and Chhattisgarh which have experienced significantpolitical upheaval and insurgencies which affected our operations in the past. These interruptions could have amaterial impact on our operations and profitability. We cannot assure you that such situations will not recur. Inrecent years, there have been military confrontations between India and Pakistan in the Kashmir region. India hasalso experienced terrorist attacks in some parts of the country. We cannot assure you that such situations will notrecur. These hostilities and tensions could lead to political or economic instability in India and a possible adverseeffect on our business, our future financial performance and the price of our Equity Shares.

Political instability or a change in economic liberalization and deregulation policies could seriously harmbusiness and economic conditions in India generally and our business in particular.

In recent years, the Government of India has pursued policies of economic liberalization, including significantlyrelaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments inthe Indian economy as producers, consumers and regulators has remained significant. The current ruling coalition,elected in May 2004, has announced policies and taken initiatives that support the continued economic liberalizationpolicies that have been pursued by the previous governments. We cannot predict the Government of India’sliberalization policies and we cannot assure you that they will continue in the future. The rate of progress ofeconomic liberalization could change, and specific laws and policies affecting alumina and aluminium companies,as well as copper and copper companies, foreign investment, currency exchange rates and other matters affectinginvestment in our Equity Shares could change as well, due to changes effected by current or future governments.In addition, significant changes in India’s economic liberalization and deregulation policies could disrupt businessand economic conditions in India generally, and our business in particular.

Natural disasters in South Asia and elsewhere could disrupt our operations and cause our business to suffer.

Our offshore and onsite operations may be impacted by natural disasters such as earthquakes, tsunamis, diseaseand health epidemics. In December 2004, certain parts of India were severely affected by a tsunami triggered byan earthquake in the Indian Ocean. Though our operations were not affected by the disaster, we cannot guaranteethat in the future our operations will not be affected by such natural disasters.

Indian laws limit our ability to raise capital outside India and may prevent us from operating our business orentering into a transaction that is in the best interests of our shareholders.

Indian law relating to foreign exchange management constrains our ability to raise capital outside India throughthe issuance of equity or convertible debt securities. Generally, any foreign investment in, or acquisition of, anIndian company, subject to certain exceptions, requires approval from relevant government authorities in India,including the Reserve Bank of India. Changes to such policies may create restrictions on our capital raisingabilities. For example, a limit on the foreign equity ownership of Indian aluminium manufacturing companiesmay constrain our ability to seek and obtain additional equity investments by foreign investors. In addition, theserestrictions, if applied to us, may prevent us from entering into certain transactions, such as an acquisition by anon-Indian company, which might otherwise be beneficial for us and the holders of our Equity Shares.

Terrorist attacks and other acts of violence or war involving India, the United States, the United Kingdom, andother countries could adversely affect the financial markets, result in a loss of business confidence and adverselyaffect our business, results of operations and financial condition.

Terrorist attacks and other acts of violence or war, including those involving India, the United States, the UnitedKingdom or other countries, may adversely affect Indian and worldwide financial markets. These acts may alsoresult in a loss of business confidence and have other consequences that could adversely affect our business,results of operations and financial condition. Increased volatility in the financial markets can have an adverseimpact on the economies of India and other countries, including economic recession.

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Notes to risk factors:

1. Net worth of the Company as on March 31, 2005 was Rs. 76,571.9 million and as on September 30, 2005 wasRs. 82,593.9 million. The size of the Issue is Rs. 22,266 million. The net asset value per share (book value) ason March 31, 2005 For Equity Shares of Re. 1 face value is Rs.82.54.

2. This Issue, on a rights basis of 231,936,993 Equity Shares with a face value of Re. 1 each at a premium of Rs.95 per Equity Share for an amount aggregating Rs. 22,266 million to the existing equity shareholders in theratio of one Equity Share for every four existing Equity Shares held by the existing shareholders on therecord date, i.e., November 28, 2005 on a partly paid basis in terms of this Letter of Offer.

3. We had entered into certain related party transactions for fiscals 2003, 2004 and 2005 disclosed in the sectiontitled “Related Party Transactions” on page 123 of this Letter of Offer.

4. Before making an investment decision in respect of this Offer, you are advised to refer to the section entitled“Basis for Issue Price” on page 34 of this Letter of Offer.

5. Please refer to the sub section entitled “Basis of Allotment” on page 305 of this Letter of Offer for details onbasis of allotment.

6. Average cost of acquisition of Equity Shares of our Company by our Promoters is as under.

● Birla Group Holdings: Rs. 3.80 per Equity Share

● Dr. K.M. Birla: NIL (Acquired by way of gift)

7. For transactions in Equity Shares of the Company by the promoter group and Directors of the Company inthe last six months, please refer to pages 22 and 89, respectively of this Letter of Offer.

8. For interests of our directors and key managerial personnel, please refer to “Management” on page 84 ofthis Letter of Offer. For interests of our Promoters and promoter group please refer to “Promoters andPromoter Group” on page 96 of this Letter of Offer.

9. We and the Lead Managers are obliged to keep this Letter of Offer updated and inform the public of anymaterial change/development till the listing and trading commence.

You may contact the Lead Managers for any complaints pertaining to the Issue including any clarification orinformation relating to the Issue. The Lead Managers are obliged to provide the same to you.

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SUMMARY

Our fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12-monthperiod ended March 31 of that year. In this section, any reference to “we”, “us” or “our” refers to HindalcoIndustries Limited. Unless otherwise stated, the financial information used in this section is derived from ourunconsolidated audited financial statements under Indian GAAP, as restated.

Pursuant to a Scheme of Arrangement approved by the High Courts of Kolkata and Mumbai, all businesses ofIndal with the exception of business pertaining to the foils plant at Kollur, Andhra Pradesh were demerged into uswith effect from April 1, 2004. As a result, the financial statements for fiscal 2005 include the full year financialresults of the aluminium business of Indal and may not be comparable with those of fiscal 2004. For details of theScheme of Arrangement and its financial implications, please see “Our Business” on page 50 of this Letter ofOffer. Bracketed numbers indicate losses/ negative figures. In this section, any conversion from US Dollars toIndian Rupees has been done based on the 12 PM Noon Exchange rate of 1US Dollar = 45.690 Indian Rupees onNovember 10, 2005 as given by the Federal Reserve Bank of New York – Such conversions are for conveniencepurposes.

Business Overview

We are the leading producer of aluminium and copper in India and are also one of the leading metals and miningcompanies in Asia. We are a flagship company of the Aditya Birla Group, which is one of the largest businessgroups in India. We were incorporated in 1958 and have been listed on the Indian Stock Exchanges since 1968and on the Société de la Bourse de Luxembourg since 1993. The listing and trading of our GDRs have beentransferred from the Bourse de Luxembourg (a market appearing on the list of regulated markets issued by theEuropean Commission) to the EuroMTF (which is regulated by Luxembourg Stock Exchange) with effect fromNovember 25, 2005.

We are a vertically integrated aluminium producer and according to CRU, our Renukoot plant, which accountedfor 84% of our primary aluminium metal production in fiscal 2005, is amongst the top 15% of the lowest costproducers globally. According to CRU of July 2005, we are the fourth largest aluminium producing companybased in Asia and the thirteenth largest in the world by volume. In our copper business, we are a custom smelterand are partially integrated with upstream copper mines. We are currently the largest producer of copper in Indiaand expect to be amongst the top 10 producers of copper in the world, by installed capacity, by end of thecalendar year 2005.

For fiscal 2005, our net sales and operating revenues were Rs.95,232.5 million out of which 55% was accountedfor by our aluminium business and 45% by our copper business. For the same period, our profit before interestand tax (PBIT) was Rs.20,832.4 million, with 77% and 12% accounted for by our aluminium and copper businesses,respectively. The remaining 11% was unallocable in nature. Our aluminium revenues and profit before interestand tax have grown at a compounded annual growth rate of 48% and 55%, respectively, since fiscal 2003. Weacquired our copper business at the end of fiscal 2003.

Our aluminium operations are based in India, with access to abundant, good quality bauxite and coal, as well asproximity to key consumer markets. Our total alumina production capacity is currently 1,145,000 metric tpa andour total aluminium production capacity is currently 455,000 metric tpa. Our production facilities comprise aluminarefineries, smelters and facilities for value-added products such as rolled products, extrusions, foils and wheels.Our facilities are supported by dedicated bauxite mines and our own power plants, which provide us withsignificant cost advantages.

Our copper smelting facility is based at Dahej, with a current capacity of 250,000 metric tpa. We have recentlycompleted the capacity expansion of our copper smelter to 500,000 metric tpa. We expect the full ramp up of thecapacity to be achieved by fiscal 2007. As part of our upstream integration efforts, we acquired two copper minesin Mt. Gordon in Queensland, Australia and Nifty in Western Australia in 2003 through our wholly owned subsidiaryBirla Mineral Resources Pty Limited which, in turn, wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon PtyLimited. Mt. Gordon commenced its supply of copper concentrate in August 2004 while Nifty is expected tocommence its supply of copper concentrate in the second half of fiscal 2006. As part of our efforts to add valueto the by-products of copper smelting, we also produce phosphatic fertilizers and precious metals like gold andsilver. Our copper business is also supported by a dedicated, all-weather jetty located at Dahej and owned by our

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wholly owned subsidiary, Dahej Harbour and Infrastructure Limited.

We are currently embarking on a growth plan designed to make us a global-sized, globally-competitive metalsproducer. We plan to achieve this through a combination of expansion of existing facilities and greenfield projects,in both alumina and aluminium, backed by dedicated power plants. We also plan to make further investments incopper mines, as and when appropriate opportunities are identified. These expansions will increase our overallsize and capacity and help to reduce further our production costs, thereby improving our competitive position inthe global markets.

Our Competitive Strengths

We believe that we have delivered consistent growth and superior value to our shareholders over the years,despite volatility in the global metal markets. We believe that our historical success and potential for growth aredue primarily to the following competitive strengths:

Strengths in Our Aluminium Business

In our aluminium business, our competitive strengths include our globally competitive cost structure, fully integratedoperations, cost effective access to abundant supply of quality raw materials and domestic market leadership.

We are amongst the lowest cost producers globally. Given the commodity nature of our businesses, costcompetitiveness is a key determinant of profitability. According to CRU, our Renukoot plant, which accounted for84% of our primary aluminium metal production in fiscal 2005, is amongst the top 15% of the lowest costproducers globally. We believe that this has helped us in achieving operating margins that are amongst the bestin the industry.

Our operations are fully integrated. We have cost effective access to quality bauxite, low cost power from ourpower plants, which meet a large part of our power requirements and which are located on the pithead of coalmines, significant control over supplies of other key raw materials such as caustic soda and aluminium fluoridefrom subsidiaries and a comprehensive range of value-added products with proximity to end-use markets. Theseprovide us significant cost advantages in the production of aluminium, delivery of quality products, achievementof operating efficiencies that we benchmark against the best in the world through continual improvements andadoption of best practices. The integrated nature of our operations also provides us with flexibility to change ourproduct mix to take advantage of market opportunities.

We have cost effective access to quality bauxite. Our existing refineries are located close to our bauxite reserves.Based on our current requirements as well as proposed expansion of existing refineries at Muri and Belgaum, weexpect our total reserves, including bauxite deposits for which we are in the process of securing leases, to last forapproximately 22, 44 and 23 years, respectively at our Muri, Renukoot and Belgaum refineries. We believe that wewill be able to obtain access to additional reserves for our future needs. In addition, our bauxite reserves are ofgood quality and provide significant cost advantages in the production of alumina and aluminium.

We have located our facilities close to coal deposits giving us access to low cost power. We also have costeffective access to coal deposits, providing us an advantage in our power costs, the largest cost component inour production of aluminium. This has helped us in generating uninterrupted power at a competitive cash costwhich we believe is significantly lower than the alternative sources of power supplies in India and comparable topower costs for many global aluminium smelters. Our largest power plant at Renusagar (near our integratedaluminium complex at Renukoot) is located on the pithead of its sourcing coal mine, which provides us withsignificant cost advantages in generating power for use in our facilities. Our other power plant, at Hirakud, has adedicated coal mine, which provides us with further cost advantages. Our Hirakud smelter accounted forapproximately 16% of the total aluminium metal we produced in fiscal 2005.

We are a leader in the domestic market. In addition to cost advantages, we also benefit from market leadershipacross the value chain. We are the domestic market leader in aluminium and have retained this position forseveral years now. In primary metals, our market share was approximately 33% in fiscal 2005. In the value-addedrolled product segment, our market share in fiscal 2005 was 63%. In the highly fragmented extrusions markets,we had a 21% domestic share in fiscal 2005. We have built this strong market position through our qualityproducts, superior customer service and reliability of supplies.

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Strengths in Our Copper Business

At the company level, we have the following competitive advantages in our copper business.

Cost advantage. We believe that we are a low cost copper smelter. Our expanded copper capacity will help usreduce our costs significantly.

By-product value addition. Another key competitive advantage is our ability to add value to by-products. Coppersmelting generates sulphuric acid, the disposal of which is generally a problem. We have turned this problem intoan opportunity by converting the sulphuric acid into phosphatic fertilizers, for which there is a growing market inIndia. Copper smelting also generates anode slime, which contain traces of gold and silver. Our in-house preciousmetal refinery helps in recovering these metals, which is an additional advantage over most custom smeltersworldwide.

Freight and handling cost advantage. We benefit from our proximity to growth markets in Asia, which havewitnessed a growing deficit in copper in recent years. The refined copper deficit in Asia was at 2.8 million metrictons in fiscal 2005. With alternative supplies possible only from distant locations, we benefit from significantfreight advantage in catering to growth markets in Asia. We further gain from the jetty in Dahej, owned by ourwholly owned subsidiary, Dahej Harbour and Infrastructure Limited, that can handle vessels up to 70,000 deadweighttons, or DWT, and has a cargo handling capacity of approximately 3 million metric tons per annum dependingupon jetty occupancy.

Other Company Strengths

We also benefit from the following other key strengths:

Proven ability to handle large projects and successful acquisitions

Since our inception, we have implemented several large expansions at existing facilities as well as greenfieldprojects, on schedule and within budget. We have also successfully completed and integrated several acquisitions,including the acquisition of Indian Aluminium Company Limited, the acquisition of our copper business fromIndo Gulf Corporation and the acquisition of two copper mines in Australia through our wholly owned subsidiaryBirla Mineral Resources Pty Limited which wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited.We believe that our knowledge of the aluminium and copper industries and project management expertisepositions us well to leverage emerging opportunities in the aluminium and copper industries.

Our people

Our management team includes some of the most experienced managers in the Indian aluminium and copperindustries. Most of our senior management team have substantial experience in their respective industries andhave been instrumental in the growth of our organization. We believe that our management team is well placedto provide strategic leadership and direction to explore new emerging opportunities in these sectors as well asconstantly improve our current operations. We have witnessed low attrition of key management personnel andhave also recruited several professionals with domain expertise in critical areas. We believe these provide us witha significant competitive edge.

Our Strategy

Aluminium

Towards realizing our vision of attaining global size and further improve our cost competitiveness in the globalaluminium industry, we are embarking on several expansions at our existing facilities and greenfield projects,both in alumina and aluminium. These include ongoing expansion of existing facilities, both in alumina andaluminium, a greenfield joint venture alumina project with Alcan Inc., under implementation, and a planned fullyintegrated greenfield project in Orissa with the capacity to produce alumina and aluminium. Our strategy is tosupport all of the above projects with low cost dedicated sources of key inputs, including bauxite and coal fordedicated power.

Upon completion of our expansion plans, including the projects mentioned in the section “Objects of the Issue”on page 25 of this Letter of Offer, our aggregate alumina capacity is expected to increase from 1,145,000 metrictpa to 3,610,000 metric tpa. Aluminium smelting capacity is expected to increase from 455,000 metric tpa to765,000 metric tpa. Our power generation capacity is also expected to increase from 987.2 megawatt to 1,637.2

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megawatt. These projects together with other greenfield projects under evaluation are expected to significantlyreduce our costs and move us into the ranks of the top 10 global producers of alumina and aluminium, byvolume.

Copper

In the copper business, our strategy is to reduce costs through optimal utilization of expanded smelting capacity,currently under commissioning trials, and increase the extent of copper concentrate supply from the minesowned by our wholly owned subsidiary Birla Mineral Resources Pty Limited which wholly owns Birla Nifty PtyLimited and Birla Mt. Gordon Pty Limited, which, in turn, own copper mines in Australia. We will also consideropportunities to acquire copper mines so as to satisfy our copper concentrate requirements.

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THE ISSUE

Equity Shares proposed to be issued by the Company 231,936,993 Equity Shares

Rights Entitlement One Equity Share for every four Equity Sharesheld on the Record Date

Record Date November 28, 2005

Issue Price per Equity Share Rs. 96 per Equity Share

Equity Shares outstanding prior to the Issue 927,747,970 Equity Shares

Equity Shares outstanding after the Issue 927,747,970 fully paid up Equity Shares, and231,936,993 Equity Shares partly paid up

Terms of the Issue For more information, see “Terms of Issue” on page293 of this Letter of Offer.

Terms of Payment

Due Date Amount

On application Rs. 24, which constitutes 25% of the Issue Price ofRs. 96, including share premium.

Anytime between 9 and 12 months after the Rs. 24, which constitutes a further 25% of the IssueAllotment Date, at the option of the Company Price of Rs. 96, including share premium

Anytime between 18 and 24 months after the Rs. 48, which constitutes the remaining 50% of theAllotment Date, at the option of the Company Issue Price of Rs. 96, including share premium.

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SELECTED FINANCIAL INFORMATION

The following table sets forth our selected financial information derived from our restated consolidated financialstatements as of and for the fiscal years ended March 31, 2003, 2004 and 2005, and for the six months endedSeptember 30, 2005. These financial statements have been prepared in accordance with Indian GAAP and theAct and the annual financial statements have been restated as described in the auditors’ report included therewith,beginning on page 126 of this Letter of Offer. Bracketed numbers indicate losses/ negative figures. The selectedfinancial information presented below should be read in conjunction with our financial statements, the notesthereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results ofOperations” beginning on page 177 of this Letter of Offer.

STATEMENT OF CONSOLIDATED PROFIT & LOSS (Rs. in millions)

Fiscal year ended March 31, For the sixmonths ended

2003 2004 2005 September30, 2005

Income:

Net Sales 64,009.4 77,513.9 96,257.4 50,211.2

Operating Revenues 304.6 4,718.9 4,797.2 2,220.8

Net Sales & Operating Revenue 64,314.1 82,232.7 101,054.6 52,432.0

Other Income 2,102.0 2,795.2 2,778.8 1,257.1

Increase (Decrease) in inventories 418.8 3,188.5 3,021.0 4,821.2

Total 66,834.9 88,216.5 106,854.5 58,510.3

Expenditure:

Raw material consumed 27,385.0 36,054.2 43,461.9 24,782.7

Goods Purchased 0.6 8.4 182.2 35.2

Payment to and provision for employees 3,797.4 4,598.6 5,051.3 2,695.0

Manufacturing and operating expenses 13,213.4 20,293.5 24,965.2 14,172.2

Selling, Distribution, Administrationand other overheads 5,010.5 4,911.3 6,109.5 2,998.1

Interest & Finance Charges 1,901.7 2,345.6 2,159.1 1,339.5

Depreciation 3,711.3 5,140.3 6,324.9 3,589.6

Total 55,019.8 73,351.9 88,254.1 49,612.4

Net profit before tax and exceptional items 11,815.0 14,864.5 18,600.4 8,897.9

Exceptional Items (Net) 1,613.2 10.0 130.6 2.5

Net profit before tax 10,201.9 14,854.5 18,469.9 8,895.4

Provision for current tax 2,669.5 3,233.5 5,418.8 2,304.7

Provision for deferred tax 827.9 1,637.7 809.0 374.3

Provision for Fringe Benefits Tax 0.0 0.0 0.0 47.0

Provision for taxation for earlier year/swritten back (net) (0.0) 8.7 (715.9) (0.3)

Net profit after tax before Minority Interest 6,704.5 9,974.5 12,958.0 6,169.8

Minority Interest 47.9 39.7 110.1 87.2

Net Profit 6,656.6 9,934.8 12,847.9 6,082.5

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STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES

(Rs. in millions)

Fiscal year ended March 31, For the Sixmonths ended

September

2003 2004 2005 30, 2005

Fixed Assets: (A)

Gross Block 86,766.9 102,585.1 109,531.7 122,742.3

Less : Depreciation (24,945.1) (30,412.8) (38,065.6) (41,742.4)

Less : Impairment 0.0 0.0 (999.3) (999.3)

Net Block 61,821.9 72,172.4 70,466.8 80,000.6

Less : Revaluation Reserve 0.0 0.0 0.0 0.0

Net Block after adjustment of 61,821.9 72,172.4 70,466.8 80,000.6revaluation reserve

Capital Work-in-progress 8,776.4 7,115.6 16,386.9 12,304.0

Sub-total (A) 70,598.3 79,287.9 86,853.7 92,304.6

Investments (B) 11,867.7 18,655.7 29,558.5 28,033.4

Current Assets, Loans & Advances: (C)

Inventories 14,490.9 17,033.7 26,970.4 33,637.4

Sundry Debtors 7,027.8 7,517.4 8,404.4 8,664.2

Cash & Bank Balances 3,537.0 2,831.2 4,730.5 8,523.1

Loans & Advances and other current assets 9,644.3 10,222.3 9,415.9 8,225.1

Sub-total (C) 34,700.1 37,604.5 49,521.2 59,049.8

Liabilities and Provisions: (D)

Secured Loans 27,736.8 24,385.1 32,310.2 30,560.8

Unsecured Loans 5,303.7 12,851.5 16,998.0 25,895.2

Deferred Tax Liability 10,258.7 11,952.6 11,342.5 11,502.0

Current Liabilities and provisions 11,649.0 15,119.3 27,910.8 27,873.9

Sub-total (D) 54,948.1 64,308.5 88,561.4 95,831.8

Minority Interest (E) 357.4 932.1 857.7 1,144.7

Net Worth (E) 61,860.5 70,307.6 76,514.3 82,411.2

Represented by: (F)

1. Share Capital 1,305.1 1,412.9 1,415.9 1,415.9

Advance against Equity Share Capital 112.8 0.0 0.0 0.0

2. Reserves 60,519.6 69,089.5 75,233.5 81,116.0

Less : Revaluation Reserve 0.0 0.0 0.0 0.0

Less : Miscellaneous Expenditure to theextent written-off or adjusted (77.0) (194.9) (135.0) (120.7)

Reserves (Net of Revaluation Reserves &Miscellaneous expenditure) 60,442.6 68,894.7 75,098.4 80,995.3

Net Worth 61,860.5 70,307.6 76,514.3 82,411.2

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GENERAL INFORMATION

Dear Shareholder(s),

Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on September 20,2005 and the resolutions passed by the Committee of Directors on November 12, 2005 it has been decided tomake the following offer to the Equity Shareholders of the Company, with a right to renounce:

ISSUE, ON A RIGHTS BASIS OF 231,936,993 EQUITY SHARES WITH A FACE VALUE OF RE. 1 EACH AT APREMIUM OF RS. 95 PER EQUITY SHARE FOR AN AMOUNT AGGREGATING RS. 22,266 MILLION TO THEEXISTING EQUITY SHAREHOLDERS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EXISTINGEQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E., NOVEMBER 28, 2005ON A PARTLY PAID BASIS IN TERMS OF THIS LETTER OF OFFER (“ISSUE”). THE ISSUE PRICE FOR THEPARTLY PAID EQUITY SHARES WILL BE PAID IN THREE INSTALLMENTS: 25% OF THE ISSUE PRICE WILL BEPAYABLE ON APPLICATION; 25% OF THE ISSUE PRICE WILL BECOME PAYABLE, AT THE OPTION OF THECOMPANY, BETWEEN 9 AND 12 MONTHS AFTER THE ALLOTMENT DATE; AND 50% OF THE ISSUE PRICEWILL BECOME PAYABLE, AT THE OPTION OF THE COMPANY, BETWEEN 18 AND 24 MONTHS AFTER THEALLOTMENT DATE. THE TOTAL ISSUE PRICE IS 96 TIMES OF THE FACE VALUE OF THE EQUITY SHARES.

Registered Office of the Company:

Hindalco Industries LimitedCentury Bhavan, 3rd FloorDr. Annie Besant Road, Worli, Mumbai 400 025Registration No. 11-11238 and new 21 digit registration number – U270293 MH 1958 PLC 11238.

Registrar of Companies at Mumbai, Maharashtra located at Hakoba Mill Compound, 2nd Floor, Dattaram LadMarg, Kalachowkie, Mumbai – 400 033.

The Equity Shares of the Company are listed on the BSE and NSE.

Board of Directors

Name and Designation Age Address

Dr. K. M. Birla 38 16-A, IL-Palazzo, Little Gibbs Road, Mumbai – 400 006,Chairman (Non-executive) Maharashtra

Mrs. R. Birla 60 16-A, IL- Palazzo, Little Gibbs Road, Mumbai – 400 006,Non-executive Director Maharashtra

Mr. D. Bhattacharya 57 14/A,Woodlands, Peddar Road, Mumbai – 400 026,Managing Director Maharashtra

Mr. A.K. Agarwala 72 “Haveli”, Flat No.3, L.D. Ruparel Marg, Mumbai – 400 006,Non-executive Director Maharashtra

Mr. C.M.Maniar 69 Garden House, 1st Floor, Dady Seth, 2nd Cross Lane,Independent Director Chowpatty Band Stand, Mumbai – 400 007, Maharashtra

Mr. E.B. Desai 74 Sonarica, 81, 33A, Peddar Road, Mumbai - 400 026,Non-executive Director Maharashtra

Mr. S.S. Kothari 83 87-B, Gaurav Nagar, Civil Lines, Jaipur - 302 006,Non-executive Director Rajasthan

Mr. M.M.Bhagat 72 13, Kabir Road, Kolkata 700 026, West BengalIndependent Director

Mr. K. N. Bhandari 63 5, New Power House Road, Sector-7,Independent Director Jodhpur – 342 003, Rajasthan

For more details regarding our Directors please refer to “Management” on page 84 of this Letter of Offer.

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Company Secretary and Compliance Officer

Mr. A. MalikHindalco Industries Limited,Century Bhavan,3rd Floor, Dr. Annie Besant Road,Worli, Mumbai 400 025.Tel: (91 22) 5662 6666Fax: (91 22) 2422 7586 / 2436 2516Email: [email protected]

Investors may contact the Compliance Officer for any pre-Issue / post-Issue related matter.

Bankers of the Company

Allahabad Bank ABN Amro2, Netaji Subhash Road, Sakhar Bhavan, 3rd FloorKolkata – 700 001 Nariman Point,

Mumbai – 400 021.

Bank of America Bank of BarodaExpress Towers, 16th Floor Baroda House,Nariman Point P.B. No. 506, Mandvi,Mumbai – 400 021 Baroda – 390 006

Bank of Nova Scotia BNP ParibasMittal Tower, ‘B’ Wing, French Bank Building,Nariman Point, 62, Homji Street,Mumbai – 400 021 Fort, Mumbai – 400 001.

Calyon Bank Citibank N. A.12th Floor, Citibank Center, 7th FloorHoechst House Bandra-Kurla ComplexNariman Point Bandra (East)Mumbai – 400 021 Mumbai – 400 051

Corporation Bank DBS BankNo.85, Mangaladevi Temple Street, 3rd Floor, Fort HouseMangalore – 575 001 221 Dr. D.N. Road, Fort

Mumbai – 400 001

Deutsche Bank AG HDFC BankHazarimal Somani Marg HDFC Bank HouseFort, Mumbai – 400 001 Kamala Mills Compound

6th Floor, Senapati Bapat MargLower Parel, Mumbai – 400 013

HSBC ICICI Bank Limited52/60 Mahatma Gandhi Road, ICICI TowersMumbai – 400 001. Bandra-Kurla Complex

Mumbai – 400 51

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IDBI Bank Limited Punjab National BankIDBI Tower, World Trade Centre Complex, 7, Bhikaji Cama Place,Cuffe Parade, Mumbai – 400 005 New Delhi – 110 066

Standard Chartered Bank State Bank of India90, Mahatma Gandhi Road Madame Cama Road,Fort, Mumbai – 400 001 Mumbai – 400 021

Syndicate Bank UCO BankManipal – 576 119, No.10, Biplabi Trailokya Maharaj Sarani,Udupi District. Kolkata – 700 001

Union Bank of IndiaUnion Bank Bhavan,239, Vidhan Bhavan Marg,Nariman Point,Mumbai – 400 021

Issue Management Team

Lead Managers to the Issue

JM Morgan Stanley Private Limited141 Maker Chambers IIINariman Point, Mumbai 400 021Tel: (91 22) 5630 3030Fax: (91 22) 2204 7185Contact Person: Mr. Kushal DoshiEmail: [email protected]: www.jmmorganstanley.com

DSP Merrill Lynch LimitedMafatlal Centre, 10th FloorNariman Point, Mumbai 400 021Tel: (91 22) 56328000Fax: (91 22) 22045818Contact Person: Mr.Sumedh JogEmail: [email protected]: www. dspml.com

The statement of inter se allocation of responsibilities for this Issue between JM Morgan Stanley Private Limited(“JMMS”) and DSP Merrill Lynch Limited (“DSPML”) is as follows:

No. Activities Responsibility Coordinator

1. Capital structuring with the relative components and JMMS / DSPML JMMSformalities such as composition of debt and equity, type ofinstruments

2. Drafting and Design of the Offer Document and of JMMS / DSPML JMMSadvertisement / publicity material including newspaperadvertisements and brochure / memorandum containingsalient features of the Offer Document. The designatedLead Merchant Banker shall ensure compliance with theGuidelines for Disclosure and Investor Protection andother stipulated requirements and completion of prescribedformalities with Stock Exchange and SEBI.

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No. Activities Responsibility Coordinator

3. Retail/Non-institutional marketing strategy which will cover, JMMS / DSPML JMMSinter alia, preparation of publicity budget, arrangements forselection of (i) ad-media, (ii) centres of holding conferencesof brokers, investors etc. (iii) bankers to the issue, (iv)collection centres, (v) distribution of publicity and issuematerial including application form and Letter of Offer.

4. Institutional marketing strategy. JMMS / DSPML DSPML

5. Selection of various agencies connected with the issue, JMMS / DSPML JMMSnamely Registrars to the Issue, printers, monitoring agencyand advertisement agencies.

6. Follow-up with bankers to the issue to get quick estimates JMMS / DSPML DSPMLof collection and advising the issuer about closure of theissue, based on the correct figures.

7. The post-issue activities will involve essential follow-up steps, JMMS / DSPML DSPMLwhich must include finalisation of basis of allotment / weedingout of multiple applications, listing of instruments and dispatchof certificates and refunds, with the various agencies connectedwith the work such as registrars to the issue, bankers to theissue, and bank handling refund business. Even if many ofthese post-issue activities would be handled by otherintermediaries, the designated Lead Merchant Banker shall beresponsible for ensuring that these agencies fulfill theirfunctions and enable him to discharge this responsibilitythrough suitable agreements with the issuer company.

Legal Advisor to the Company

Amarchand & Mangaldas & Suresh A. Shroff & Co.5th Floor, Peninsula Chambers,Peninsula Corporate Park,Ganpatrao Kadam Marg,Lower Parel,Mumbai – 400 013.Tel: (91 22) 5660 4455Fax: (91 22) 2496 3666

Legal Advisor to the Lead Managers

AZB & Partners23rd Floor, Express Towers,Nariman Point, Mumbai – 400 021,Tel: (91 22) 5639 6880Fax: (91 22) 5639 6888

Auditors of the Company

Singhi & Co.1-B Old Post Office Street,Kolkata – 700 001Tel: (91 33) 2248 4577Fax: (91 33) 2220 7146

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Registrar to the Issue

Karvy Computershare Private LimitedKarvy House, 46 Avenue 4, Street No. 1Banjara Hills, Hyderabad – 500 034.Tel: (91 40) 2343 1546Fax: (91 40) 2343 1551Email: [email protected]: www.karvy.comContact Person: Murali Krishna

Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre-issue/post-issue related problems such as non-receipt of Letter of Offer/letter of allotment/ share certificate(s)/ refund orders.

Monitoring Agency

Industrial Development Bank of India Limited (IDBI Bank)IDBI Tower, WTC Complex,Cuffe Parade, Mumbai – 400 005Tel: (91 22) 2218 9111Fax: (91 22) 2218 1294Website: www. idbi.com

Banker to the Issue

ICICI Bank LimitedCapital Market Division,30, Mumbai Samachar Marg,Fort, Mumbai – 400 001Tel: (022) 2265 5285Fax: (022) 2261 1138Email: [email protected]: www.icicibank.com

Credit rating

This being an issue of Equity Shares, no credit rating is required. The details of the ratings received and outstandingby the Company for various securities/ instruments in the last three years are as follows:

Borrowing Programs Amount Rating Agency Rating Date of Rating Letter(In Rs. million)

Short Term Debt/ 2,500 Fitch Ratings F1+(ind) April 7, 2003Commercial Paper India Pvt. Ltd.

Short Term Debt 250 CRISIL P1+ February 9, 2005

Non Convertible Debentures 1,500 CRISIL AAA/ Stable January 4, 2001

Non Convertible Debentures 500 CRISIL AAA/ Stable May 30, 2001

Non Convertible Debentures 2,000 CRISIL AAA/ Stable June 19, 2001

Non Convertible Debentures 500 CRISIL AAA/ Stable August 31, 2001

Non Convertible Debentures 5000 Fitch Ratings AAA (ind) / March 25, 2002India Pvt. Ltd. Stable

Non Convertible Debentures 600 CRISIL AAA/ Stable July 9, 2002

Non Convertible Debentures 250 CRISIL AAA/ Stable August 13, 2002

Non Convertible Debentures 500 CRISIL AAA/ Stable August 13, 2002

Non Convertible Debentures 500 CRISIL AAA/ Stable November 14, 2002

Non Convertible Debentures 1050 CRISIL AAA/ Stable November 22, 2002

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Borrowing Programs Amount Rating Agency Rating Date of Rating Letter(Rs. in millions)

Non Convertible Debentures 600 CRISIL AAA/ Stable April 1, 2003

Non Convertible Debentures 2,500 CRISIL AAA/ Stable August 31, 2004

Non Convertible Debentures 1,000 CRISIL AAA/ Stable September 7, 2004

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of sub-section(1) of Section 68A of the Act which is reproduced below:

“Any person who makes in a fictitious name an application to a company for acquiring, or subscribing for, anyshares therein, or otherwise induces a company to allot, or register any transfer of shares therein to him, or anyother person in a fictitious name, shall be punishable with imprisonment for a term which may extend to fiveyears”

Issue Schedule

The subscription will open upon the commencement of the banking hours and will close upon the close ofbanking hours on the dates mentioned below:

Issue Opening Date : Monday, December 19, 2005

Last date for receiving requests for split forms : Tuesday, January 3, 2006

Issue Closing Date : Wednesday, January 18, 2006

Allotment Letters / Refund Orders

The Company will issue and dispatch letters of allotment/ share certificates/ demat credit or letters of regret alongwith refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of30 days from the date of closure of the Issue. If such money is not repaid within eight days from the day theCompany becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section73 of the Act.

The Board of Directors declares that funds received against this Issue will be transferred to a separate bankaccount other than the bank account referred to sub-section (3) of Section 73 of the Act.

The Letter of Allotment / Refund Order exceeding Rs.1,500 would be sent by registered post/speed post to thesole/first applicant’s registered address. Refund Orders up to the value of Rs.1,500 would be sent under Certificateof Posting. Such Refund Orders would be payable at par at all places where the applications were originallyaccepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/firstapplicant. Adequate funds would be made available to the Registrar to the Issue for this purpose.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall berefunded to the applicants within forty-two days from the date of closure of the Issue. If there is a delay in therefund of subscription by more than eight days after the Company becomes liable to repay the subscriptionamount, i.e. forty-two days after closure of the Issue, the Company will pay interest for the delayed period, at therates prescribed in sub-sections (2) and (2A) of Section 73 of the Act.

The Issue will become undersubscribed after considering the number of shares applied as per entitlement plusadditional shares. The Promoters or promoter group will subscribe to such undersubscribed portion as per therelevant provisions of the law. The undersubscribed portion shall be applied for only after the close of the Issue.If any person presently in control of the Company desires to subscribe to such undersubscribed portion and ifdisclosure is made pursuant to the Takeover Code, such allotment of the undersubscribed portion will be governedby the provisions of the Takeover Code. Allotment to Promoters of any unsubscribed portion, over and abovetheir entitlement shall be done in compliance with Clause 40A of the Listing Agreement. For further details pleaserefer to “Basis of Allotment” on page 305 of this Letter of Offer.

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No Offer in the United States

The rights and the shares of the Company are not registered under the United States Securities Act, 1933, asamended, and the Issue is not, and under no circumstances is to be construed as, an offering of any shares orrights for sale in the United States. For further details please see “Terms of the Issue” on page 293 of this Letter ofOffer.

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CAPITAL STRUCTURE

The capital structure of our Company and related information is set forth below. For the purpose of this chapterbracketed numbers indicate negative figures.

(Rs. in millions)

Aggregate Aggregatenominal value Value at Issue

Price

Authorized share capital

1450,000,000 Equity Shares of Re. 1 each 1,450.00

500,000 14% Free of Company’s tax but subject to deduction 50.00of taxes at source at the prescribed rates, RedeemableCumulative Preference Shares of Rs. 100/- each.

Total 1,500.00

Issued, subscribed and paid-up capital

927,808,470 Equity Shares of Re. 1 each fully paid-up (i), (ii) 927.81

60,500 Less: Face Value of shares forfeited (0.06)

927.75

Add: Forfeited shares account (Amt. Paid-up) 0.03

927.78(iii)

Present Issue being offered to the Equity Shareholders throughthe Letter of Offer

231,936,993 Equity Shares of Re. 1 each at a premium of 231.93(vi) 22,265.95Rs. 95 i.e. at a price of Rs. 96

Paid up capital after the Issue

1,159,684,963 Equity Shares of Re. 1 (vi) 1,159.68(vii)

Share premium account

Existing share premium account 9291.17

Share premium account after the Issue 31,325.18 (viii)

a. Subscribed and paid-up Equity Share Capital includes:

(i) 49,176,677 Equity shares of Rs. 10/- each were allotted as fully paid-up Bonus shares by Capitalization ofGeneral Reserve and Capital Redemption Reserve.

(ii) 600,000 Equity Shares of Rs. 10/- each fully paid-up issued pursuant to a contract for considerationother than cash.

(iii) 18,767,835 Equity Shares of Rs. 10/- each (including 3,099 partly paid up shares) were allotted to theshareholders of erstwhile Indo Gulf Corporation Ltd. (since amalgamated) pursuant to the Scheme ofArrangement without payment being received in cash. The 3,099 partly paid up shares were made fullypaid on various dates upto July 22, 2005.

(iv) 299,522 Equity Shares of Rs. 10/- each fully paid up were allotted to the shareholders of Indian AluminiumCompany Limited pursuant to the Scheme of Arrangement without payment being received in cash.

(v) On August 6, 2005 the shareholders of the Company approved the subdivision of Equity Shares of theCompany from Rs. 10 per share to Re. 1 per share.

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(vi) Comprising 927,747,970 fully paid up Equity Shares and 231,936,993 Equity Shares partly paid up to theextent of 25% of the Issue Price including share premium. A further 25% of the Issue Price includingshare premium, shall become payable, at the option of the Company, anytime between 9 and 12months after the Allotment Date. Rs 48 per Equity Share, which constitutes the remaining 50% of theIssue Price including share premium, shall become payable at the option of the Company, anytimebetween 18 and 24 months after the Allotment Date.

(vii) The nominal value of Equity Shares does not include forfeited shares account.

(viii) Assuming all calls on all Equity Shares offered under the Rights Issue are duly paid up.

Notes to the Capital Structure

1a. Build up of Equity Share Capital

The details of movement in share capital as at September 30, 2005 is given as follows:

Date of No. of Face Issue Cumulative Consideration Remarksallotment Equity Shares Value Price paid-up

Allotted (Rs.) (Rs.) capital (Rs.)

February 2, 70 10 10 700 Cash Subscribers to the1959 memorandum of association.

April 29, 1959 149,930 10 10 1,500,000 Cash Initial issue to the subscribersto the memorandum ofassociation and KaiserAluminium & ChemicalCorporation.

March 28, 1960 600,000 10 0 7,500,000 Consideration Issue to Kaiser Aluminium &other than Chemical Corporation and tocash(1) Kaiser Aluminium Technical

Services Inc.

February 1, 1960 1,975,650 10 10 27,256,500 Cash Initial Issue to the Public.

February 6, 1960 157,350 10 10 28,830,000 Cash Initial Issue to the Public.

March 14, 1960 1,301,850 10 10 41,848,500 Cash Initial Issue to the Public.

March 28, 1960 1,807,650 10 10 59,925,000 Cash Initial Issue to the Public.

April 20, 1960 7,500 10 10 60,000,000 Cash Initial Issue to the Public.

1963 (8,500) 10 10 59,915,000 - Reduction of Issued sharecapital pursuant to forfeitureof shares amounting to netRs. 85,000.

1964 1,700 10 10 59,932,000 Cash Annulment of shares forfeited

1965 650 10 10 59,938,500 Cash Annulment of shares forfeited

1966 100 10 10 59,939,500 Cash Annulment of shares forfeited

December 18, 84,934 10 10 60,788,840 Cash Rights Issue1967

December 21, 48,533 10 10 61,274,170 Cash Rights Issue1967

December 26, 105,424 10 10 62,328,410 Cash Rights Issue1967

December 30 1,437,669 10 10 76,705,100 Cash Rights Issue1967

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Date of No. of Equity Face Issue Cumulative Consideration Remarksallotment Shares Value Price paid-up

Allotted (Rs.) (Rs.) capital (Rs.)

January 12, 1968 271,474 10 10 79,419,840 Cash Rights Issue

January 30, 1968 89,909 10 10 80,318,930 Cash Rights Issue

March 07, 1972 2,002,431 10 - 100,343,240 Bonus Bonus Equity Shares allotted

July 14, 1972 5,542 10 - 100,398,660 Bonus Coupons allotted in Bonusissue

July 09, 1982 3,339,916 10 - 133,797,820 Bonus Bonus Equity Shares allotted

October 05, 1982 6,706 10 - 133,864,880 Bonus Coupons allotted in Bonusissue

July 26, 1988 4,455,114 10 - 178,416,020 Bonus Bonus Equity Shares allotted

December 22,1988 7,048 10 - 178,486,500 Bonus Coupons allotted in Bonus

October 1, 1990 6,381,234 10 110 242,298,840 Cash Conversion of 12.5% PartlyConvertible Debentures

October, 9, 1990 14,537,930 10 - 387,678,140 Bonus Bonus Equity Shares allotted

July 26, 1993 4,473,000 10 USD 432,408,140(2) Cash GDR Issue16.1

July 26, 1993 2,236,500 10 USD 454,773,140(2) Cash Warrants issued to above16.1 GDR holders.

July 12, 1994 4,166,666 10 USD 496,439,800(2) Cash Private Placement to Foreign24 Investors (GDR)

October 26, 1996 24,821,990 10 - 744,659,700 Bonus Bonus Equity Shares allotted

February – 758,530 10 10 737,074,400 Buy Back Reduction of Issued shareMay 2002 capital pursuant to buy-back

of shares* amounting toRs. 7,585,300.

March 21, 2003 18,767,835 10 - 924,752,750 Non-cash Shares allotted to(pursuant to shareholders of erstwhileScheme of Indo Gulf CorporationArrangement) Limited under Scheme of

Arrangement of Hindalco /IGFL / IGCL (Including 3,099partly paid up shares)

March 23, 2005 299,522 10 - 927,747,970 Non-cash Shares allotted to(pursuant to shareholders of Indal underScheme of Scheme of ArrangementArrangement) relating to the de-merger of

units of Indal

September 6, 927,747,970 1 - 927,747,970 Share split Subdivision of the face value2005 of each Equity Share from

Rs. 10 into Re. 1

Total 927,747,970 1 927,747,970

* 5,807 Equity Shares of Rs. 10 each were bought back during fiscal 2002 and 752,723 Equity Shares of Rs. 10 each were bought back during

fiscal 2003.

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(1) 480,000 Equity Shares of Rs. 10 each were issued to Kaiser Aluminium & Chemical Corporation of Oakland, USA, credited as fully paid-upagainst the sale and assignment to the Company of know-how property and 120,000 Equity Shares of Rs. 10 each were issued to KaiserAluminium Technical Services Inc. of Oakland, USA, against the rendering to the Company of technical and consultative services.

(2) 2,236,500 warrants issued to the GDR holders were exercised in fiscal 1994, 1995 and 1996 as set out in note 1b below on various dates.

1b. Details of Share Premium Account prior to the Issue

Financial Particulars No. of Premium Amount CumulativeYear Equity Shares per share (Rs. in millions) Amount

(Rs. in millions)

1990-1991 Conversion of 12.5% Partly 6,381,234 100.00 638.12 638.12Convertible Debentures

1993-1994 Private Placement to Foreign 4,473,000 495.02 2,214.22 2,852.34Investors (GDR)

Warrants exercised by above 130,650* 495.02 64.67 2,917.01GDR holders.

Less: Issue expenses - - (108.33) 2,808.68

1994-1995 Private Placement to Foreign 4,166,666 717.82 2,990.90 5,799.58Investors (GDR)

Warrants exercised by above 467,900* 717.82 335.87 6,135.45GDR holders.

Less: Issue expenses - - (105.71) 6,029.74

1995-1996 Exercise of warrants 1,637,950* 525.49 860.73 6,890.47

2002-2003 Transferred on amalgamation - - 4,503.44 11,393.91of Indo Gulf CorporationLimited under Scheme ofArrangement of Hindalco /IGFL / IGCL

2004-2005 Less: Adjusted as per - - (2,102.74) 9,291.17Scheme of Arrangementrelating to the de-merger ofunits of Indal

* Warrants issued by the Company on July 26, 1993 and exercised in fiscal 1994, 1995 and 1996.

1c. Details of Equity Shares Bought Back

(i) Buy-back on the BSE, of Equity Shares of the Company of face value Rs. 10 each.

Time Period No. of Shares Average Price (In Rs.) Total Amount(Rs. in millions)

February 2002 1,652 724.98 1.20

April 2002 608,339 734.76 446.98

May 2002 13,961 747.14 10.43

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(ii) Buy-back on the NSE, of Equity Shares of the Company of face value Rs. 10 each.

Time Period No. of Shares Average Price (In Rs.) Total Amount(Rs. in millions)

February 2002 4,155 724.97 3.01

April 2002 130,423 733.97 95.73

2. Cumulative Redeemable Preference Shares

There are no issued cumulative redeemable preference shares as on date of this Letter of Offer and theCompany has not made any issue or redemption of cumulative redeemable preference shares in the precedingten years.

3. Current shareholding pattern of the Company as on September 30, 2005

Shareholders No. of Equity % of No. of % of postShares held pre-Issue Equity Issue capital

pre-Issue capital Shares assumingpost Issue allotment of all

Equity Sharesoffered

Promoters

Dr. K.M. Birla 362,400 0.04 453,000 0.04

Birla Group Holdings Private Limited 3,663,360 0.39 4,579,200 0.39

Promoter Group

Relatives and HUF 643,420 0.07 804,275 0.07

Turquoise Investments andFinance Pvt. Ltd. 63,951,970 6.89 79,939,962 6.89

Trapti Trading and InvestmentsPvt. Ltd. 56,088,430 6.04 70,110,538 6.04

Birla Institute of Technologyand Science 21,583,090 2.33 26,978,863 2.33

Pilani Investment and IndustriesCorporation Ltd. 22,690,160 2.45 28,362,700 2.45

Grasim Industries Ltd. 23,034,530 2.48 28,793,163 2.48

Aditya Birla Nuvo Ltd. (formerly 16,316,130 1.76 20,395,163 1.76Indian Rayon And Industries Limited)

Trustee on behalf of Hindalcounder Scheme of Arrangementof HIL/IGCL/IGFL 16,316,130 1.76 20,395,162 1.76

Umang Commercial Company Ltd. 14,391,940 1.55 17,989,925 1.55

Kamal Trading Company Limited 522,890 0.06 653,613 0.06

Heritage Housing Finance Limited 308,330 0.03 385,413 0.03

Mangalam Services Limited 74,330 0.01 92,913 0.01

TGS Investment and Trade Pvt. Ltd. 86,310 0.01 107,888 0.01

Global Holdings Pvt. Ltd. 3,060 0.00 3,825 0.00

Total Promoters and promotergroup shareholding 240,036,480 25.87 300,045,600 25.87

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Shareholders No. of Equity % of No. of % of postShares held pre-Issue Equity Issue capital

pre-Issue capital Shares assumingpost Issue allotment of all

Equity Sharesoffered

Public

Other Directors and Relatives 701,810 0.08 877,263 0.08

Banks, Financial Institutions &Insurance Companies 109,275,737 11.78 136,594,671 11.78

UTI and Mutual Funds 46,433,968 5.01 58,042,460 5.01

FII 185,037,936 19.94 231,297,420 19.94

Corporates 37,647,022 4.06 47,058,778 4.06

OCBs and NRIs 40,438,508 4.36 50,548,135 4.36

Indian Public 115,221,720 12.42 144,027,150 12.42

GDRs 150,950,670 16.27 188,688,338 16.27

Transhold 2,004,119 0.22 2,505,149 0.22

Total public shareholding 687,711,490 74.13 859,639,363 74.13

Total 927,747,970 100.00 1,159,684,963 100.00

4. Details of the shareholding of the Promoters, Promoter Group, directors of the promoter in the Companyas on September 30, 2005

Name of entities Percentage of shareholding No. of Shares

(a) Promoters

Dr. K.M. Birla 0.04 362,400

Birla Group Holdings Private Limited 0.39 3,663,360

Sub-total (a) 0.43 4,025,760

Promoter Group

(b) Relatives and HUF

Mrs. R. Birla 0.03 241,140

Mrs. V Bajaj 0.01 66,020

Mrs. N Birla 0.00 49,750

Aditya Vikram Kumar Mangalam Birla HUF 0.03 269,850

Dr. K. M. Birla as father and naturalguardian of his minor daughterMs. Ananyashree Birla 0.00 15,000

Dr. K M Birla Karta of AVKM Birla HUF 0.00 1660

Sub-total (b) 0.07 643,420

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Name of entities Percentage of shareholding No. of Shares

(c) Companies forming part of thePromoter Group

Turquoise Investments and Finance Pvt. Ltd. 6.89 63,951,970

Trapti Trading and Investments Pvt. Ltd. 6.04 56,088,430

Birla Institute of Technology and Science 2.33 21,583,090

Pilani Investment and IndustriesCorporation Ltd. 2.45 22,690,160

Grasim Industries Ltd. 2.48 23,034,530

Aditya Birla Nuvo Ltd. (formerly Indian 1.76 16,316,130Rayon And Industries Limited)

Trustee on behalf of Hindalco underScheme of Arrangement of HIL/IGCL/IGFL 1.76 16,316,130

Umang Commercial Company Ltd. 1.55 14,391,940

Kamal Trading Company Limited 0.06 522,890

Heritage Housing Finance Limited 0.03 308,330

Mangalam Services Limited 0.01 74,330

TGS Investment & Trade Pvt. Ltd. 0.01 86,310

Global Holdings Private Limited 0.00 3060

Sub-total (c) 25.37 235,367,300

Total Promoter and PromoterGroup shareholding 25.87 240,036,480

4a. Details of acquisition by our Promoters

(i) Dr. K.M. Birla

Date of acquisition Details of the Quantity Pricetransaction (Number of Equity

Shares of Rs. 10 each) (in Rs.)

April 11, 1988 Gift 7,800 NA

July 9, 1988 Gift 3,150 NA

July 26, 1988 Bonus 3,650 NA

March 1, 1990 Gift 500 NA

October 9, 1990 Bonus 9,060 NA

October 27, 1996 Bonus 12,080 NA

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(ii) BGHPL

Date of acquisition Details of the Quantity Price pertransaction (Number of Equity share

Shares of Rs. 10 each) (in Rs.)

March 31, 1990 Share purchase 108,000 83.35

October 1, 1990 Conversion of partlypaid convertibledebentures 44,640 110.0

October 9, 1990 Bonus 91,584 NA

October 27, 1996 Bonus 122,112 NA

5. Details of the transactions in Equity Shares by the Promoters and the promoter group during the last sixmonths

Name Date of Details of the Quantity Pricetransaction transaction (Number of Equity (in Rs.)

Shares of Rs.10 each)

TGS Investment & Trade Pvt. Ltd. May 26, 2005 Purchased 8,631 1,163.28

6. Top ten shareholders

a. Top ten shareholders as on November 18, 2005

(face value of Rs. 10 per share)

Name of the shareholders Total Shares Percentage ofpre issue capital

JP Morgan Chase Bank (formerly Morgan GuarantyTrust Co. of New York) as Depository of GDR holders 147,083,292 15.85

Life Insurance Corporation of India 65,930,080 7.11

Turquoise Investments and Finance Pvt. Ltd. 63,951,970 6.89

Trapti Trading & Investments Pvt. Ltd. 56,088,430 6.05

Grasim Industries Ltd. 23,034,530 2.48

Pilani Investment and Industries Corporation Ltd 22,690,160 2.45

Birla Institute of Technology and Science 21,583,090 2.33

M and G Investment Management Ltd.A/c The Prudential Assurance Company Limited 19,327,244 2.08

HSBC Global Investment Funds A/c HSBC GlobalInvestment Funds Mauritius Limited 17,202,910 1.85

Aditya Birla Nuvo Limited (formerly Indian Rayonand Industries Limited) 16,316,130 1.76

Trustees holding shares under the scheme ofArrangement between HIL/IGCL/IGFL on behalfof Hindalco 16,316,130 1.76

Total 469,523,966 50.609

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b. Top Ten shareholders as on November 18, 2003

(face value of Rs. 10 per share)

Name of the shareholders Total Shares Percentage ofpre issue capital

JP Morgan Chase Bank (formerly Morgan GuarantyTrust Company of New York,) As Depository of GDRs 14,160,831 15.31

Life Insurance Corporation of India 6,530,238 7.06

Turquoise Investments & Finance Pvt. Ltd 6,395,197 6.92

Trapti Trading & Investments Pvt. Ltd 5,608,843 6.07

Unit Trust of India 3,530,238 3.81

Amexco Nominees Pvt Ltd 3,247,151 3.51

Grasim Industries Limited 2,303,453 2.49

Pilani Investment & Industries Ltd 2,269,016 2.45

Birla Institute of Technology & Science 2,158,309 2.33

Trustees holding shares under the scheme ofArrangement between HIL/IGCL/IGFL on behalfof Hindalco 1,631,613 1.76

Total 47,834,889 51.73

c. Top ten shareholders as on November 11, 2005

(face value of Re. 1 per share)

Name of the shareholders Total Shares Percentage ofpre issue capital

JP Morgan Chase Bank (formerly Morgan GuarantyTrust Co. of New York) as Depository of GDR holders 147,227,977 15.87

Life Insurance Corporation of India 65,932,480 7.11

Turquoise Investments and Finance Pvt. Ltd. 63,951,970 6.89

Trapti Trading & Investments Pvt. Ltd. 56,088,430 6.04

Grasim Industries Ltd. 23,034,530 2.48

Pilani Investment and Industries Corporation Ltd 22,690,160 2.45

Birla Institute of Technology and Science 21,583,090 2.33

M and G Investment Management Ltd.A/c The Prudential Assurance Company Limited 18,459,075 1.99

HSBC Global Investment Funds A/c HSBC GlobalInvestment Funds Mauritius Limited 17,452,910 1.88

Aditya Birla Nuvo Limited (formerly Indian Rayonand Industries Limited) 16,316,130 1.76

Trustees holding shares under the scheme ofArrangement between HIL/IGCL/IGFL on behalfof Hindalco 16,316,130 1.76

Total 469,052,882 50.56

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7. The total number of members of the Company as on November 18, 2005 were 239,474.

8. The present Issue being a rights Issue, as per extant SEBI guidelines, the requirement of promoters’ contributionand lock-in are not applicable.

9. The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue for incurringexpenditure on the Objects of the Issue.

10. The Promoters and Directors of the Company and Lead Managers of the Issue have not entered into anybuy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer.

11. The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the section“Terms of the Issue” on page 293 of this Letter of Offer.

12. At any given time, there shall be only one denomination of the Equity Shares of the Company and theCompany shall comply with such disclosure and accounting norms specified by SEBI from time to time. TheEquity Shareholders of the Company do not hold any warrant, option or convertible loan or debenture,which would entitle them to acquire further shares in the Company.

13. No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public issueor in any other manner which will affect the equity capital of the Company, shall be made during the periodcommencing from the filing of the Letter of Offer with the SEBI and the date on which the Equity Sharesissued under the Letter of Offer are listed or application moneys are refunded on account of the failure of theIssue. Further, presently the Company does not have any intention to alter the equity capital structure byway of split/ consolidation of the denomination of the shares on a preferential basis or issue of bonus orrights or public issue of shares or any other securities within a period of six months from the date of openingof the Issue.

14. The Issue will remain open for 31 days. However, the Board will have the right to extend the Issue period asit may determine from time to time but not exceeding 60 days from the Issue Opening Date.

15. The Promoters have confirmed that along with relatives and the companies controlled by the Promoters(together hereinafter referred to as “Promoter” in this clause) intend to subscribe to the full extent of theirentitlement in the Issue. The Promoter reserves the right to subscribe to their entitlement in the Issue eitherby themselves, their relatives or a combination of entities controlled by them, including by subscribing forrenunciation if any made within the promoter group to another person forming part of the promoter group.The Promoter will also apply for additional Equity Shares in the Issue, such that at least 90% of the Issue issubscribed. As a result of this subscription and consequent allotment, the Promoter may acquire sharesover and above their entitlement in the Issue, which may result in an increase of the shareholding beingabove the current shareholding with the entitlement of Equity Shares under the Issue. This subscription andacquisition of additional Equity Shares by the Promoter, if any, will not result in change of control of themanagement of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the TakeoverCode. As such, other than meeting the requirements indicated in the section on “Objects of the Issue” onpage 25 of this Draft Letter of Offer), there is no other intention/purpose for this Issue, including any intentionto delist the Company, even if, as a result of allotments to the Promoter, in this Issue, the Promoter shareholdingin the Company exceeds their current shareholding. The Promoter intends to subscribe to such unsubscribedportion as per the relevant provisions of the law. Allotment to the Promoter of any unsubscribed portion,over and above their entitlement shall be done in compliance with the Listing Agreement and other applicablelaws prevailing at that time relating to continuous listing requirements.

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OBJECTS OF THE ISSUE

To exploit the emerging global and domestic opportunities, we have chalked out a capital expenditure programaimed at taking the Company to the league of top 10 producers of alumina and aluminium in the world. In thisregard, we have announced various expansion plans, for which the proceeds to this Issue would be utilized asone of the means of finance. The objectives of the Rights Offering are to part finance following projects:

1. Expansion of following existing facilities:

● expanding the alumina capacity at Muri from 110,000 metric tpa to 450,000 metric tpa

● expanding the alumina capacity at Belgaum from 350,000 metric tpa to 650,000 metric tpa

● expanding the aluminium capacity at Hirakud from 65,000 metric tpa to 146,000 metric tpa

2. Building-up of new alumina and aluminium capacities through following greenfield projects:

● Aditya Alumina with capacity of 1,000,000 metric tpa expandable to 1,500,000 metric tpa

● Aditya Aluminium with capacity of 260,000 metric tpa expandable to 325,000 metric tpa

3. Building new alumina capacities through the following Joint Venture

● Utkal Alumina with total project capacity of 1,000,000 metric tpa to 1,500,000 metric tpa

4. Meeting issue expenses

The main objects and objects incidental or ancillary to the main objects set out in our Memorandum of Associationenable us to undertake our existing activities and the activities for which funds are being raised by us through thisIssue. The fund requirement and deployment is based on internal management estimates and has not beenappraised by any bank or financial institution. The fund requirement below is based on our current business planand would be monitored by the monitoring agency, Industrial Development Bank of India Limited (IDBI Bank). Inview of the highly competitive and dynamic nature of the industry in which we operate, we may have to reviseour business plan from time to time and consequently our fund requirement may also change. This may includerescheduling of our capital expenditure programmes and increase or decrease the capital expenditure for aparticular purpose vis-à-vis current plans at the discretion of our Management. In case of any variations in theactual utilization of funds earmarked for the above activities, increased fund deployment for a particular activitywill be met from internal accruals of the Company and debt.

The details of the proceeds of the Issue are summarized below:

Rs. in millions

Gross proceeds of the Issue 22,266

Issue related expenses 400

Net proceeds of the Issue 21,866

Substantial part of the proceeds of the Issue would be used for creating tangible assets in form of plant andmachinery.

The projects for which the proceeds of the issue are proposed to be utilised may require use of inputs includingcement for construction etc. While our group companies may be engaged in the business of supplying suchinputs and may supply such inputs for the purpose of the proposed projects, all such contracts would be enteredon an arm’s length basis.

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The Project wise requirement of funds as estimated by the Management is as under:

(Rs. in millions)

Capital Expenditure During Beyond Total (2)

Fiscal Fiscal Fiscal Fiscal Fiscal2005 2006(1) 2007(1) 2008(1) 2008(1)

Expansions

Muri Alumina 700 3,760 3,500 7,960

Hirakud Aluminium 320 3,250 4,710 1,840 260 10,380

Belgaum Alumina - - 1,020 5,010 2,400 8,430

Greenfield Projects

Aditya Aluminum 1,130 3,860 8,580 34,730 48,300

Aditya Alumina 1,070 5,070 8,250 17,320 31,710

Joint Venture

Utkal Alumina (3) 890 2,435 3,750 6,115 13,190

Total 1,020 10,100 20,595 27,430 60,825 119,970

(1) Estimated

(2) Including interest during construction

(3) Includes the Issuer’s share of equity in the project cost only

The details of the project cost are as under:

(Rs. in millions)

Land and Plant and IDC Contingency TotalLand related Machinery and Misc

Expansions

Muri Alumina 360 6,520 660 420 7,960

Hirakud Aluminium 1,250 7,930 270 930 10,380

Belgaum Alumina 640 6,430 450 910 8,430

Greenfield Projects

Aditya Aluminium 3,735 35,870 3,900 4,795 48,300

Aditya Alumina 4,855 21,145 2,260 3,450 31,710

Joint Venture

Utkal Alumina 13,190

Total 10,840 77,895 7,540 10,505 119,970

The above fund requirement is based on our current business plan and projects that are in advanced stages. Wemay have to revise our business plan from time to time and consequently its funds requirement may also change.This may include rescheduling of capital expenditure programs, starting non-planned new projects, more activelydevelop projects that may currently be at a nascent stage, terminating projects currently planned and increase ordecrease in the capital expenditure for a particular business unit vis-à-vis current plans at the discretion of theManagement. Please refer to section on “Risk Factors”.

Please refer to the section on “Business — Our Expansion Plans” for further details of currently planned andproposed expansion projects.

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Description of Projects

Expansions at Existing Facilities

Muri Alumina

We plan to increase the capacity at our Muri operations from 110,000 metric tpa to 450,000 metric tpa uponcompletion of the expansion. We have budgeted a sum of Rs.7,960 million for this expansion, which will be spentprimarily on the costs of the alumina refinery, the co-generation plant, and railway system for evacuation offinished goods and bringing in raw material. We plan to use technology obtained from Alcan, which is expectedto improve recovery and reduce consumption of raw material and energy. Consequently, we expect cash cost ofalumina production at this facility to decline sharply upon stabilization of expanded capacity.

We have made significant progress on project implementation. As of October 31, 2005, we had already spentRs.1,092 million. The project is likely to be implemented over the next two years and is expected to go on streamby fiscal 2007. We have already received most of the required approvals, including the “No Objection Certificate”from the Jharkhand State Pollution Control Board for water. We have already received environmental clearancesfrom the Ministry of Environment and Forests. The project being an expansion of our existing facility at Muri,does not involve significant land acquisition. Progress is being made on acquisition of land through the LandRevenue department and for water drawal permission from State Irrigation department.

The details of significant purchase orders placed for plant and machinery for this project are as follows:

Name of Machine Cost Name of Date of Date of Supply(Rs. in millions) Supplier Order

145 TPH Capacity CFBC 698 ISGEC John 17.02.05 Final BoilerBoilers (3 units) Thompson, Noida Commissioning by 30th

Nov-06

Supply of components, 264 Furnace Fabrica 07.04.05 By 30th Sept-06commissioning spares (India) Limitedand special tools & tacklesfor 1,300 TPD capacityHydrate Filtration &Calcination Plant withHydrate Storage Shed.

Supply, Erection & 223 FFE Minerals India 23.06.05Commissioning of Bauxite Pvt.Ltd.Handling & Crushing Plant

Complete design and basic 180 GEA Messo AG, 21.03.05engineering, manufacture, Switzerlandassembly, testing, supply ofimported components of 140TPH falling film evaporationplant

Supply, Erection & 177 FFE Minerals India 23.06.05Commissioning of 192 TPH LimitedBauxite Grinding Plant

Design and supply of the 157 Outokumpu 07.04.05 By 16th Aug-06proprietary Equipment Technology GMBHincluding CommissioningSpares for 1300 TPDcapacity Hydrate Filtration& Calcination Plant withHydrate Storage Shed.

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Name of Machine Cost Name of Date of Date of Supply(Rs. in millions) Supplier Order

Design, engineering & supply 155 T D Power Systems 31.03.05 By 30th April-06.of equipment for two 15MW Pvt.Ltd., Tokyo, Japansteam Turbine Generator sets

Complete design & detailed 138 Furnace Fabrica (India) 21.03.05 By 17th Jun-06engineering, manufacture, Ltd., Navi Mumbaiassembly, testing, supplyof indigenous componentsof 140 TPH falling filmevaporation plant

Complete design, 111 T D P Power Systems 31.03.05 Final TG Commissioningengineering & supply of Pvt.Ltd., Bangalore by 11th Aug-06materials & equipment fortwo 15MW steam TurbineGenerator sets

No second-hand machinery has been bought or is proposed to be bought for this project.

Orders remain to be placed for plant and machinery worth Rs. 2,340 million forming 36% of total cost of machineryfor this project.

Other significant contracts entered into for this project are as follows:

Nature of Contract Cost Name of Supplier(Rs. in millions)

Civil, Structural & Architectural work for Alumina Refinery. 272 Gannon Dunkerley & Co. Ltd.

Civil, Structural & Architectural work for Power House, 246 Gannon Dunkerley & Co.Ltd.Boiler Area Foundations, RCC Stock, Silo, TransformerYard Foundation, Auxiliary Plant Building and PumpHouse, Pipe rake, Road, Drainage, underground facilitiesand associated work for 2x 15 MW CGP.

Fabrication, erection and commissioning of Tanks/Silos/ 232 Bridge and Roof Co. (India) Ltd.Hoppers

Services for Engineering, Project Management,Procurement, Construction, Supervision & Commissioning. 185 Engineers India Limited

Technical Fees 184 Alcan

Hirakud Aluminium

We are in the process of increasing the capacity of our Hirakud smelter from its current capacity of 65,000 metrictpa to 146,000 metric tpa upon completion of our expansion plans. Our expansion plans involve a conversionfrom the ‘Soderberg’ technology to ‘pre-bake’ technology and also a transfer of idle pots from Belgaum toHirakud.

We have budgeted Rs.10,380 million, towards this project, which will be spent primarily on setting up the smelter,the power plant and coal mine development. The project is expected to be implemented over the next threeyears and is expected to be completed by fiscal 2008. As of October 31, 2005, we have spent approximatelyRs.1,936 million on this project.

The basic engineering package for the smelter expansion at Hirakud is expected to be completed by the chosentechnology supplier in the next six months and the detailed engineering will be completed subsequently. Theproject team has commenced work on other areas such as civil work and fume treatment plant and the constructionof the pot room column foundations is under progress.

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A “No Objection Certificate” has been received from the Orissa State Pollution Control Board and projectpresentation to the Ministry of Environment and Forest has been made already.

The project being an expansion of our existing facility at Hirakud does not involve significant land acquisition.

The details of significant purchase orders placed for plant and machinery for this project are as follows:

Name of Machine Cost Name of Date of Date of Supply(Rs. in millions) Supplier Order

155 TPH CFBC Boilers 699 ThyssenKrupp 26.05.04 Boiler No.6 by 78 weeksIndustries India from 26.05.04, BoilerPrivate Ltd No.7 by 86 weeks &

Boiler No. 8 by 95weeks.

2 * 90 KA, 50-850V DC 132 300 ABB Ltd 05.09.05 within 17.07.06KV Rectifier Substation- 1 No.100 MW STG - Supply 256 Demag Delaval 18.08.04 within 67 weeks from

Industrial 18.08.04TurbomachineryPvt Ltd

100 MW Steam Turbine 238 DDIT Industrieturbinen 18.08.04 already in transit in IndiaGmbH

FTP -3 169 Alstom Projects 11.08.05 within 07.12.06India Ltd

Alumina Handling System 123 China Aluminium 21.05.05 Within 21.05.06International Engg.Corporation Ltd

87.9 MVA , 73kv Rectifier 104 ABB Power 31.08.05 within 15.06.06Transformer - 2 Nos Technologies S.p.A100 MW Generator 100 Brush Electrical 28.07.04 already supplied

Machines Limited132 KV Switchyard &BOP-Electrical 97 Siemens Ltd 05.09.05 within 30.06.06

FTP -3 77 Alstom Norway AS 05.09.05 within 04.12.06

No second-hand machinery has been bought or is proposed to be bought for this project.

Orders remain to be placed for plant and machinery worth Rs. 4,324 million forming 55% of total cost of machineryfor this project.

Other significant contracts entered into for this project are as follows:

Nature of Contract Cost Name of Supplier(Rs. in millions)

Technology, Engineering , Technical Service 139 China Aluminium International& Training Fees Engg. Corporation Ltd

Civil & Structural Work 110 Gannon Dunkerley & CompanyLtd

Civil & Structural Work 109 Gannon Dunkerley & Co. Ltd

Belgaum Alumina

We plan to increase the capacity at our Belgaum operations from its current capacity of 350,000 metric tpa to650,000 metric tpa. We have estimated a capital expenditure of Rs.8,430 million for this expansion project, to bespent on the costs of the alumina refinery, the co-generation plant, the railway system and port facility for finishedgoods movements. We plan to use appropriate technology for improving recovery and reducing energyconsumption, in turn with the objective of reducing cash cost of our operations. We have received environmental

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clearances and have applied for and are awaiting the allotment of mining leases in the state of Maharashtra tostart the implementation.

The project being an expansion of our existing facility at Belgaum does not involve significant land acquisition.No significant orders have been placed for plant and machinery or other services relating to this project.

No second-hand machinery has been bought or is proposed to be bought for this project.

Greenfield Projects

Aditya Alumina and Aditya Aluminium

We have plans to set up an integrated greenfield aluminium project in Orissa, with a capacity to produce 1,000,000metric tpa of alumina and 260,000 metric tpa of aluminium upon completion. This will be supported by a 650megawatt dedicated power plant, backed by dedicated coal mines. We have budgeted a sum of Rs.80,010 million,to be spent over the next five years.

We have signed a Memorandum of Understanding with the Government of Orissa for grant of land, water,bauxite and coal mines, grid power back-up and approvals, clearances as well as other infrastructures requiredfor the project.

Further, we are working towards acquiring a dedicated coal deposit within the proximity of the proposed smelterand power plant in Lapanga, Orissa. We are evaluating technology options for both the alumina refinery and thealuminium smelter that could deliver benchmarked efficiencies and world-class productivity. As of October 31,2005, we have spent approximately Rs.79 million on this project.

2,012 acres of land have been identified for Aditya Alumina at eight villages in Rayagada and Koraput District,Orissa. 3,331 acres of land have been identified for Aditya Aluminium at ten villages in Sambalpur District, Orissa.The land identified has not been acquired and will be acquired through the Industrial Development Corporationof Orissa (“IDCO”) and is presently held by multiple holders.

No significant orders have been placed for plant and machinery or other services relating to this project.

No second-hand machinery has been bought or is proposed to be bought for this project.

Joint Ventures

Utkal Alumina – Our 55% Joint Venture with Alcan

We are setting up a global-sized greenfield alumina project in Orissa as a joint venture with Alcan. We own 55%of the equity in the joint venture with the rest being held by Alcan. The project, which is currently contemplatedto be an export-oriented unit, will have the capacity to produce 1,000,000 to 1,500,000 metric tpa of alumina uponcompletion and we are entitled to 55% of the output, in line with the joint venture agreement.

This project is expected to cost approximately Rs. 47,960 million and our share of the equity is estimated to beapproximately Rs. 13,190 million, based on certain debt to equity assumptions, to be spent over the next fouryears. The capital will be spent on the alumina refinery, the co-generation plant, bauxite mines, service facilities aswell as port and rail facilities.

The joint venture has already secured leases for 197.5 million metric tons of bauxite reserves at Baphlimali mines,which is approximately 20 kilometers away from the proposed refinery location at Doragurha, Orissa. We believethe Baphlimali bauxite reserve is amongst the finest quality reserves available in India and will help in achievingsuperior efficiencies and significantly lower costs of alumina production. We have completed the land acquisitionand are in the process of taking possession of the land so acquired. We have also started site development work.For the project affected persons, the government, in consultation with the affected parties, has finalized a reliefand rehabilitation package. This is being implemented by Utkal Alumina, under supervision of government agencies.As of October 31, 2005, we had contributed approximately Rs.652 million on this project.

Most of the government and regulatory clearances have been obtained.

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Scheduled Completion Dates for the Projects

Date of Completion of

Land Acquisition Installation of Plant Partial Startup Commercial& Machinery Production

Muri Alumina Note 1 July ‘06 August ‘06 October ‘06

Hirakud Aluminium Note 1 October ‘06- December ‘06 December ‘07October ‘07

Belgaum Alumina Note 1 December ‘08 February’09 April’09

Utkal Alumina October ‘05 October ’08 December ‘08 March ‘09

Aditya Alumina September ‘06 March ‘09- June ‘09 August ‘09 November ‘09

Aditya Aluminium September ‘06 March ‘09- September ‘09 March ‘10September ‘09

Note 1: Muri Alumina, Hirakud Aluminium, Belgaum Alumina being expansions at the existing facilities do not involve significant land acquisition

Details of Purchase of Property

There has been no purchase of property from the Promoters, directors, proposed directors, or person havingany direct or indirect interest in the company (including group companies) in the last 2 years.

Issue Expenses

The expenses for this Issue include issue management fees, underwriting commission, printing and distributionexpenses, legal fees, advertisement expenses, depository charges, trustee fee and listing fees to the StockExchanges, among others. The total expenses for this Issue are estimated not to exceed 1.80% of the Offering.

Means of Funding

We have made firm arrangements of finance in excess of 75% of the total fund requirements, excluding proceedsof the Issue, through syndicated debt, as indicated in the following table:

Means of Funding Amount (Rs. in millions)

Tied-up Debt comprising: 70,500

- Debt with executed loan agreements – Rs.49,500

- Debt for which sanction received – Rs.21,000

Net Cash and Cash equivalent(1)

(A) Cash and bank balances 7,504

(B) Investments in Mutual Funds 24,779

(C) Less Investments made from loans drawn down not yet invested in project (2,620)

Net Cash and Cash equivalent (A)+(B)-(C) 29,663

Net Issue Proceeds 21,866

Total Funds Available 122,029

Amount spent upto October 31, 2005 3,763

Further Amount to be Spent 11,207

Total Fund Requirements 119,970

(1) Net Cash Balance as on September 30, 2005

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Debt:

We have received sanction for Rs.70,500 million from 31 banks and financial institutions in response to our loansyndication exercise.

We have signed the loan agreement with 20 banks and financial institutions for total amount of Rs.49,500 million.The loan is a ten-year facility with an average maturity of eight years and has a draw-down period of two years.The loan is priced at the 5-year Government of India Securities yield plus 65 basis points. The company has anoption to prepay the loan on the reset date which falls at the end of the fifth year. The details of the loan facility areas follows:

Name of Bank / Institution Amount Sanctioned Amount Drawn-down(Rs. in millions) (Rs. in millions)

Allahabad Bank 2,000 200

Andhra Bank 1,000 100

Bank of Baroda 5,000 500

Canara Bank 5,000 500

Central Bank of India 2,000 200

Corporation Bank 2,500 250

IDBI Bank Limited 1,000 100

IDBI 5,000 500

Indian Bank 2,500 250

Indian Overseas Bank 1,500 150

Indusind Bank Limited 1,000 100

Oriental Bank of Commerce 3,000 300

Punjab National Bank 5,000 500

State Bank of Patiala 1,000 100

Syndicate Bank 3,500 350

The Bank of Rajasthan Limited 500 50

The Jammu and Kashmir Bank 2,000 200

UCO Bank 1,500 150

Union Bank of India 3,000 300

United Bank of India 1,500 150

Total 49,500 4,950

We have also received sanction letters from 13 banks and financial institutions for additional Rs. 21,000 million, forwhich we are currently in the process of finalising the loan documentation.

In case of any shortfall/cost overrun for the above projects or for any other development opportunities, we intendmeeting the fund requirements through our current cash surplus as well as our future internal accruals.

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Funds Deployed

The total expenditure, in Rs. millions, incurred on the projects as on October 31, 2005 as per the Certificate givenby Singhi & Co, Chartered Accountants is as follows:

Project Amount spent upto October 31, 2005

Muri Alumina 1,092

Hirakud Aluminium 1,936

Belgaum Alumina 5

Utkal Alumina(1) 652

Aditya Alumina and Aluminium 79

Total 3,763(1) Hindalco’s share in equity only

We have sourced a major portion of the above amount from our internal accruals and specific tie-ups of fundswere firmed up in March, 2005.

Interim Use of Proceeds

Pending any use as described above, we intend to invest the proceeds of this Issue in short-term liquid instruments/ securities. These investments would be authorized by our Board or a duly authorized committee thereof.

Working Capital

As regards working capital in respect of the projects we have existing banking relationships with two consortiumsof banks for our aluminium business with sanctioned fund based limit of Rs.5,500 million and with 14 banks forour copper business with drawals not exceeding Rs. 25,800 million as approved by the Board, which is adequateto meet our existing requirements. In the normal course of operations, we submit and would continue to submita detailed assessment of working capital on an annual basis to these banks. We believe this would be sufficient tomeet the annual requirement, including the enhanced needs of working capital arising out of the implementationof the Projects. We do not foresee any difficulty whatsoever in doing so.

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BASIS FOR ISSUE PRICE

Investors should also refer to the section “Risk Factors” and “Auditors’ Report” to get a more informed viewbefore making the investment decision. The price per share has been provided for Re. 1/- share face value.

Qualitative Factors

The Aluminium Business

● We are the fourth largest aluminium producing company based in Asia and the thirteenth largest in theworld by volume.

● We are amongst the lowest cost producers of aluminium in the world with our Renukoot plant, whichaccounted for 84% of our primary aluminium metal production in fiscal 2005, being amongst the top 15% ofthe lowest cost producers globally.

● We are a fully integrated aluminium producer with cost effective access to quality bauxite, low cost powerfrom our power plants, significant control over supplies of other key raw materials such as caustic soda andaluminium fluoride from subsidiaries and a comprehensive range of value-added products with proximity toend-use markets.

● Our existing refineries are located close to our bauxite reserves which are of good quality and providesignificant cost advantages in the production of alumina and aluminium.

● We have located our facilities close to coal deposits giving us access to low cost power, thereby giving us anadvantage in our power costs — the largest cost component in our production of aluminium.

● We are a leader in the domestic market with a 33% market share in the primary metals segment, a 63%market share in the rolled products segment and a 21% market share in the extrusions segment.

The Copper Business

● We are currently the largest producer of copper in India and expect to be amongst the top 10 producers ofcopper in the world, by installed capacity, by end of the calendar year 2005.

● We believe that we are a low cost copper smelter and are partially integrated with upstream copper mines.

● We add value to the by-products generated through copper smelting and produce and market value-addedproducts such as phosphatic fertilizers and precious metals like gold and silver.

● We benefit from significant freight advantage in catering to growth markets in Asia and also gain from a jettyin Dahej, owned by our wholly owned subsidiary, Dahej Harbour and Infrastructure Limited that can handlevessels up to 70,000 DWT and has a cargo handling capacity of approximately 3 million metric tons perannum depending upon jetty occupancy.

Other Factors

● We believe that our extensive knowledge of the aluminium and copper industries and project managementexpertise positions us well to leverage emerging opportunities in the aluminium and copper industries.

● Our management team includes some of the most experienced managers in the Indian aluminium andcopper industries and is well placed to provide strategic leadership and direction to explore new emergingopportunities in these sectors as well as constantly improve our current operations.

● We have had a consistent profitability track record with our net profit after tax increasing at a compoundedannual growth rate of 18% between fiscal 2001 and fiscal 2005.

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Quantitative Factors

Information presented in this section is derived from our unconsolidated audited restated financial statementsprepared in accordance with Indian GAAP.

1. Weighted average earnings per share (EPS) *

Financial Period EPS (Rs.) Weight

Year ended March 31, 2003 8.06 1

Year ended March 31, 2004 9.07 2

Year ended March 31, 2005 14.43 3

Weighted Average 11.58

* As per restated accounts adjusted for share split

EPS for the six months ended September 30, 2005: Rs. 6.48

2. Price Earnings Ratio (P/E Ratio)

a. P/E based on the year ended March 31, 2005: 6.7 times

b. Peer group(1) P/E(2)

(i) Highest: 35.7 times

(ii) Lowest: 8.5 times

(iii) Peer group average: 18.7 times

1) Peer group includes Madras Aluminium Company Limited, National Aluminium Company Limited and Sterlite Industries.

2) P/E ratios for peer group from “Capital Market” Volume XX/ 17 dated October 24, 2005 to November 6, 2005.

3. Weighted average return on net worth #

Financial Period Return on Net Worth (%) Weight

Year ended March 31, 2003 12.0% 1

Year ended March 31, 2004 12.2% 2

Year ended March 31, 2005 17.5% 3

Weighted Average 14.8%

# As per restated accounts adjusted for share split

4. Minimum Return on Increased Net Worth Required to Maintain Pre-Issue EPS.

The minimum return on increased net worth required to maintain pre-Issue EPS of Rs. 14.43 as on March31, 2005 is 15.96%.

Note: Assuming that the Equity Shares offered on a rights basis are fully subscribed and all calls are paid-up

5. Net Asset Value (NAV) @

a. NAV per Equity Share at March 31, 2005 is Rs. 82.54; NAV per Equity Share at September 30, 2005 isRs. 89.03.

b. NAV per Equity Share after the Issue is Rs.90.42 $.

c. Issue Price per Equity Share is Rs.96.

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d. NAV per Equity Share for the year ended March 31, 2003, 2004 and 2005 is as follows:

Financial Period Net Asset Value per Equity Share (Rs.) Weight

Year ended March 31, 2003 66.9 1

Year ended March 31, 2004 74.2 2

Year ended March 31, 2005 82.5 3

Weighted Average 77.1

@ As per restated accounts adjusted for share split

$ Assuming that the Equity Shares offered on a rights basis are fully subscribed and all calls are paid-up

6. Comparison of Accounting Ratios for the year ended March 31, 2005 with other listed companies

EPS P/E Return on Net Asset(Rs.) (times) Net Worth Value per

(%) Equity Share(Rs.)

Hindalco Industries Limited 14.4 6.7 17.5% 82.5

Madras Aluminium Company Limited 17.9 12.0 30.3% 68.1

National Aluminium Company Limited 18.6 8.5 29.2% 72.9

Sterlite Industries 19.2 35.7 8.8% 320.4

Group Average 17.5 15.7 21.4% 136.0

Industry Average – Aluminium &Aluminium Products * 6.7 5.3 14.2% 39.4

Source: Our EPS, P/E, Return on Net Worth and Net Asset Value per Equity Share is as per our audited restated financial statements

adjusted for the stock split, where applicable; Source for other information is “Capital Market” Volume XX/ 17 dated October 24,

2005 to November 6, 2005.

* Excluding Hindalco Industries Limited; Segment as per “Capital Market” Volume XX/ 17 dated October 24, 2005 to November 6,

2005.

The Lead Managers believe that the Issue Price of Rs. 96 per Equity Share is justified in view of the above qualitativeand quantitative parameters. See the section titled “Risk Factors” on page vii of this Letter of Offer and thefinancials of the Company including important profitability and return ratios, as set out in the Auditors Report onpage 126 of this Letter of Offer to have a more informed view.

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STATEMENT OF TAX BENEFITS

The tax benefits listed below are the possible benefits available under the current tax laws in India. Several ofthese benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under therelevant tax laws. Hence the ability of the Company or its shareholders to derive the tax benefits is dependentupon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose tofulfill.

The following tax benefits shall be available to the Company and the prospective shareholders under Direct Tax.

1. To the Company - Under the Income-tax Act, 1961 (the Act)

1.1 There is no additional benefit arising to the Company under the Income Tax Act, 1961, by proposed RightOffer of Equity Shares.

2. To the Members of the Company – Under the Income Tax Act

2.1 Resident Members

a) Under Section 10(34) of the Act, income earned by way of dividend from domestic company referred toin Section 115-O of the Act is exempt from income-tax in the hands of the shareholders.

b) Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a longterm capital asset being an equity share in the company or unit of an equity oriented mutual fund (i.e.capital asset held for the period of twelve months or more) entered into in a recognized stock exchangein India and being such a transaction, which is chargeable to Securities Transaction Tax, shall beexempt from tax.

c) In terms of Section 88 E of the Act, the securities transaction tax paid by the shareholder in respect ofthe taxable securities transactions entered into in the course of the business would be eligible for rebatefrom the amount of income-tax on the income chargeable under the head ‘Profits and Gains underBusiness or Profession’ arising from taxable securities transactions.

d) As per the provisions of Section 10(23D) of the Act, all mutual funds set up by public sector banks,public financial institutions or mutual funds registered under the Securities and Exchange Board ofIndia (SEBI) or authorized by the Reserve Bank of India are eligible for exemption from income-tax,subject to the conditions specified therein, on their entire income including income from investment inthe shares of the company.

e) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets [other thanthose exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specifiedtherein, if the capital gain are invested within a period of six months from the date of transfer in thebonds issued by –

(i) National Bank for Agriculture and Rural Development established under Section 3 of the NationalBank for Agriculture and Rural Development Act, 1981;

(ii) National Highways Authority of India constituted under Section 3 of National Highways Authorityof India Act, 1988;

(iii) Rural Electrification Corporation Limited, a company formed and registered under the CompaniesAct, 1956;

(iv) National Housing Bank established under Section 3(1) of the National Housing Bank Act, 1987; and

(v) Small Industries Development Bank of India established under Section 3(1) of the Small IndustriesDevelopment Bank of India Act, 1989.

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However,the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred orconverted into money within three years from the date of their acquisition.

f) Under Section 54ED of the Act, capital gain arising from transfer of long term capital assets, being listed

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securities or units [other than those exempt u/s 10(38)], shall be exempt from tax, subject to the conditionsand to the extent specified therein, if the capital gain is invested in public issue of equity shares issuedby an Indian Public Company within a period of six months from the date of such transfer. If only a partof the capital gain is so reinvested, the exemption shall be proportionately reduced. However, theamount so exempted shall be chargeable to tax subsequently, if the new equity shares are transferredor converted into money within one year from the date of their acquisition.

g) Under Section 54F of the Act, where in the case of an individual or HUF capital gain arise from transferof long term assets [other than a residential house and those exempt u/s 10(38)] then such capital gain,subject to the conditions and to the extent specified therein, will be exempt if the net sales considerationfrom such transfer is utilized for purchase of residential house property within a period of one yearbefore or two years after the date on which the transfer took place or for construction of residentialhouse property within a period of three years after the date of transfer.

h) Under Section 111A of the Act, capital gains arising from transfer of short term capital assets, being anequity share in a company, which is subject to securities transaction tax will be taxable under the Act @10% (plus applicable surcharge and educational cess).

i) Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains [notcovered under Section 10(38) of the Act] arising on transfer of shares in the Company, if shares are heldfor a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge andeducational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at10% (plus applicable surcharge and educational cess on income-tax) (without indexation), at the optionof the Shareholders.

2.2 Return of Income not to be filed in certain cases

Under provisions of Section 115-G of the Act, it shall not be necessary for a non-resident Indian to furnish hisreturn of income if his only source of income is investment income or long term capital gains or both arisingout of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible atsource has been deducted there from.

2.3 Other Provisions of the Act

a) Under Section 115-I of the Act, a non-resident Indian may elect not to be governed by the provisions ofChapter XII-A of the Act for any assessment year by furnishing his return of income under Section 139of the Act declaring therein that the provisions of the Chapter shall not apply to him for that assessmentyear and if he does so the provisions of this Chapter shall not apply to him. In such a case the tax oninvestment income and long term capital gains would computed as per normal provisions of the Act.

b) Under the first proviso to Section 48 of the Act, in case of a non-resident, in computing the capital gainsarising from transfer of shares of the company acquired in convertible foreign exchange (as per exchangecontrol regulations), protection is provided from fluctuations in the value of rupee in terms of foreigncurrency in which the original investment was made. Cost indexation benefits will not be available insuch a case.

c) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets [other thanthose exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specifiedtherein, if the capital gain are invested within a period of six months from the date of transfer in thebonds issued by –

(i) National Bank for Agriculture and Rural Development established under Section 3 of the NationalBank for Agriculture and Rural Development Act, 1981;

(ii) National Highways Authority of India constituted under Section 3 of National Highways Authorityof India Act, 1988;

(iii) Rural Electrification Corporation Limited, a company formed and registered under the CompaniesAct, 1956;

(iv) National Housing Bank established under Section 3(1) of the National Housing Bank Act, 1987; and

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(v) Small Industries Development Bank of India established under Section 3(1) of the Small IndustriesDevelopment Bank of India Act, 1989.

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced. However,the amount so exempted shall be chargeable to tax subsequently, if the new bonds are transferred orconverted into money within three years from the date of their acquisition.

d) Under Section 54ED of the Act, capital gain arising from transfer of long term capital assets, being listedsecurities or units [other than those exempt u/s 10(38)], shall be exempt from tax, subject to the conditionsand to the extent specified therein, if the capital gain is invested in public issue of equity shared by anIndian Public Company within a period of six months from the date of such transfer. If only a part of thecapital gain is so reinvested, the exemption shall be proportionately reduced. However, the amount soexempted shall be chargeable to tax subsequently, if the new equity shares are transferred or convertedinto money within one year from the date of their acquisition.

e) Under Section 54F of the Act, where in the case of an individual or HUF capital gain arise from transferof long term assets [other than a residential house and those exempt u/s 10(38)] then such capital gain,subject to the conditions and to the extent specified therein, will be exempt if the net sales considerationfrom such transfer is utilized for purchase of residential house property within a period of one yearbefore or two years after the date on which the transfer took place or for construction of residentialhouse property within a period of three years after the date of transfer.

f) Under Section 111A of the Act, capital gains arising from transfer of short term capital assets, being anequity share in a company, which is subject to securities transaction tax will be taxable under the Act @10% (plus applicable surcharge and educational cess).

g) Under Section 112 of the Act and other relevant provisions of the Act, long term capital gains [notcovered under Section 10(38) of the Act] arising on transfer of shares in the Company, if shares are heldfor a period exceeding 12 months, shall be taxed at a rate of 20% (plus applicable surcharge andeducational cess on income-tax) after indexation as provided in the second proviso to Section 48 or at10% (plus applicable surcharge and educational cess on income-tax) (without indexation), at the optionof the Shareholders.

2.4 Foreign Institutional Investors (FIIs)

a) By virtue of Section 10(34) of the Act, income earned by way of dividend income from another domesticcompany referred to in Section 115-O of the Act, are exempt from tax in the hands of the institutionalinvestor.

b) Under Section 115AD capital gain arising on transfer of short term capital assets, being shares anddebentures in a company, are taxed as follows:

(i) Short term capital gain on transfer of shares/debentures entered in a recognized stock exchangewhich is subject to securities transaction tax shall be taxed @ 10% (plus applicable surcharge andeducational cess); and

(ii) Short term capital gains on transfer of shares/debentures other than those mentioned above wouldbe taxable @ 30% (plus applicable surcharge and educational cess).

c) Under Section 115AD capital gain arising on transfer of long term capital assets, being shares anddebentures in a company, are taxed @ 10% (plus applicable surcharge and educational cess). Suchcapital gains would be computed without giving effect to the first and second proviso to Section 48. Inother words, the benefit of indexation, direct or indirect, as mentioned under the two provisos wouldnot be allowed while computing the capital gains.

d) Under Section 54EC of the Act, capital gain arising from transfer of long term capital assets [other thanthose exempt u/s 10(38)] shall be exempt from tax, subject to the conditions and to the extent specifiedtherein, if the capital gain are invested within a period of six months from the date of transfer in thebonds issued by –

(i) National Bank for Agriculture and Rural Development established under Section 3 of the National

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Bank for Agriculture and Rural Development Act, 1981;

(ii) National Highways Authority of India constituted under Section 3 of National Highways Authorityof India Act, 1988;

(iii) Rural Electrification Corporation Limited, a company formed and registered under the CompaniesAct, 1956;

(iv) National Housing Bank established under Section 3(1) of the National Housing Bank Act, 1987; and

(v) Small Industries Development Bank of India established under Section 3(1) of the Small IndustriesDevelopment Bank of India Act, 1989.

If only part of the capital gain is so reinvested, the exemption shall be proportionately reduced.However, the amount so exempted shall be chargeable to tax subsequently, if the new bonds aretransferred or converted into money within three years from the date of their acquisition.

e) Under Section 54ED of the Act, capital gain arising from transfer of long term capital assets, being listedsecurities or units [other than those exempt u/s 10(38)], shall be exempt from tax, subject to the conditionsand to the extent specified therein, if the capital gain is invested in public issue of equity shares issuedby an Indian Public Company within a period of six months from the date of such transfer. If only a partof the capital gain is so reinvested, the exemption shall be proportionately reduced. However, theamount so exempted shall be chargeable to tax subsequently, if the new equity shares are transferredor converted into money within one year from the date of their acquisition.

2.5 Venture Capital Companies/ Funds

As per the provisions of Section 10(23FB) of the Act, income of

● Venture Capital Company which has been granted a certificate of registration under the Securities andExchange Board of India Act, 1992 and notified as such in the Official Gazette; and

● Venture Capital Fund, operating under a registered trust deed or a venture capital scheme made by UnitTrust of India, which has been granted a certificate of registration under the Securities and ExchangeBoard of India Act, 1992 and notified as such in the Official Gazette set up for raising funds for investmentin a Venture Capital Undertaking is exempt from income tax.

2.6 Infrastructure Capital Companies/ Funds or Co-operative Bank

As per the provisions of Section 10(23G) of the Act, income by way of dividends, interest or long term capitalgains of

● Infrastructure Capital Company;

● Infrastructure Capital Fund; and

● Co-operative Bank

from investment made in share or long term finance in undertakings specified therein shall be exempt fromtax.

However, such income earned by an Infrastructure Capital Company shall not be exempt for the purpose ofcomputing tax on book profits u/s 115JB of the Act.

3. Wealth Tax Act, 1957

Shares in a company held by a shareholder will not be treated as an asset within the meaning of Section 2(ea) ofWealth Tax Act, 1957; hence, wealth tax is not leviable on shares held in a company.

4. The Gift Tax Act, 1957

Gift of shares of the company made on or after October 1, 1998 are not liable to tax.

Notes:

a) All the above benefits are as per the current tax law and will be available only to the sole/ first named holderin case the shares are held by joint holders.

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b) In respect of non-residents, taxability of capital gains mentioned above shall be further subject to any benefitsavailable under the Double Taxation Avoidance Agreement, if any between India and the country in whichthe non-resident has fiscal domicile.

c) In view of the individual nature of tax consequence, each investor is advised to consult his/ her own taxadviser with respect to specific tax consequences of his/ her participation in the scheme.

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INDUSTRY OVERVIEW

The information presented in this section relating to the global aluminium and copper industries has been extractedfrom CRU International Limited reports and publicly available information. The information presented in thissection relating to the Indian aluminium industry has been procured from Aluminium Association of India, unlessotherwise specified. The information presented in this section relating to the Indian copper industry has beenextracted from publicly available information, unless otherwise specified. These data have not been prepared orindependently verified by us or the Lead Managers or any of their respective affiliates or advisors. For this section,all references to a particular year are to the 12-month period ended December 31 of that year, unless mentionedotherwise. All references to a particular fiscal year are to the 12-month period ended March 31 of that year.Bracketed numbers indicate losses/ negative figures.

Global Aluminium Market

Background

Aluminium is a light weight, durable and corrosion resistant metal that can be extruded, rolled, formed andpainted for use in a wide range of applications. According to the International Aluminium Institute, approximately66% of global consumption is used in the construction, transportation and packaging sectors while the remaining34% is used in consumer, capital goods and electricity transmission.

Aluminium is produced from alumina, which is refined from bauxite, a mineral found in various parts of theworld. There are several types of bauxite with alumina content ranging from 35% to 60%. Bauxite is refined toproduce alumina predominantly through what is known as the Bayer process, although this process variesdepending on the type and quality of bauxite. Alumina is then converted into aluminium metal using an electrolyticprocess.

The global aluminium industry has experienced significant consolidation in recent years, including the recentmerger of Pechiney with Alcan. In 2004, the top five producers accounted for approximately 42% of worldprimary aluminium production, with the largest producer, Alcan, accounting for 12% of global production. Theother large producers are Alcoa, Russian Aluminium, Norsk Hydro and BHP Billiton, who together accounted for30% of global primary aluminium production in 2004.

Increasing Asian Aluminium Consumption

Global demand for primary aluminium has grown consistently at a compounded annual growth rate of 5.1%between 1999 and 2004. Global primary aluminium consumption was approximately 30.3 million metric tons in2004 as compared to 27.5 million metric tons in 2003. Driven by strong demand in end-use markets, globaldemand is expected to rise to 31.7 million metric tons by 2005, before increasing further to 37.8 million metrictons in 2009.

The following table sets forth the actual and estimated regional consumption of aluminium from 2003 to 2009.

Region Global Primary Aluminium ConsumptionYear ended December 31,

2003 2004 2005(1) 2009(1)

Volume % Volume % Volume % Volume %

(In thousands of metric tons, except percentages)

North America 6,465 23.5% 7,205 23.8% 7,374 23.2% 7,907 20.9%

Western Europe 6,431 23.3% 6,677 22.0% 6,753 21.3% 7,313 19.4%

China 5,130 18.6% 6,006 19.8% 6,763 21.3% 9,689 25.7%

Rest of Asia (2) 5,420 19.7% 5,918 19.5% 6,095 19.2% 7,123 18.9%

Latin America 941 3.4% 1,077 3.6% 1,155 3.6% 1,383 3.7%

Middle East 949 3.4% 1,027 3.4% 1,087 3.4% 1,276 3.4%

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Region Global Primary Aluminium ConsumptionYear ended December 31,

2003 2004 2005(1) 2009(1)

Volume % Volume % Volume % Volume %

(In thousands of metric tons, except percentages)

Eastern Europe 738 2.7% 841 2.8% 880 2.8% 1,086 2.9%

CIS (3) 735 2.7% 766 2.5% 814 2.6% 1,022 2.7%

Africa 360 1.3% 392 1.3% 411 1.3% 498 1.3%

Australasia 384 1.4% 388 1.3% 398 1.3% 454 1.2%

Total 27,553 100.0% 30,297 100.0% 31,730 100.0% 37,751 100.0%

(1) Estimated.

(2) Includes Japan.

(3) Commonwealth of Independent States.

In the 2004, North America, Western Europe and China together accounted for approximately 66% of globalprimary aluminium consumption. North American demand has been led by the United States, which in 2004accounted for 21% of global demand. Asia has shown the largest annual increases in consumption of primaryaluminium over the last five years, driven largely by increased demand from China and Japan, which haveemerged as the second and third largest aluminium consuming nations, accounting for 20% and 8%, respectively,of global primary aluminium demand in 2004.

Increasing Deficit in Asian market

According to the International Aluminium Institute, primary aluminium production has grown at a compoundedannual growth rate of 4.7% per annum between 1999 to 2004. Historically, industrialized nations accounted for alarge share of global production. However, changing dynamics in energy availability and the rising cost of aluminahave resulted in a shift in aluminium production to countries with access to greater bauxite supplies and affordablesources of power.

One region which is emerging as an attractive destination for aluminium smelting is Asia. From 1997 to 2004, theproportion of global primary aluminium production carried out in Asia (excluding the Middle East) increasedfrom 13% to 26%, while the proportion of global primary aluminium production carried out in North Americaand Western Europe in aggregate declined from 43% to 33%. Notwithstanding the rise in aluminium productionand capacities in the region, aluminium supplies in Asia have lagged behind demand, resulting in a supply deficitof 4.2 million metric tons during 2004. During this period, China witnessed a marginal surplus and the rest of Asiawitnessed a deficit of 4.8 million metric tons. Given expectations of continued strong growth in China and otherAsian markets, the demand-supply gap is likely to widen and is estimated to reach a high of 5.5 million metric tonsby 2009.

The following table sets forth the regional aluminium demand-supply balance from 2003 to 2009.

Region Global Aluminium Surplus/DeficitYear ended December 31,

2003 2004 2005(1) 2009(1)

Volume (In thousands of metric tons)

North America (951) (2,095) (1,985) (2,038)

Latin America 1,316 1,280 1,229 1,617

Western Europe (1,986) (2,037) (2,012) (2,712)

Eastern Europe (327) (361) (388) (438)

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Region Global Aluminium Surplus/DeficitYear ended December 31,

2003 2004 2005(1) 2009(1)

Volume (In thousands of metric tons)

CIS (2) 3,197 3,334 3,371 4,295

Middle East 378 460 685 1,647

China 316 580 665 (2)

Rest of Asia (3) (4,413) (4,806) (4,900) (5,523)

Australasia 1,814 1,858 1,860 1,847

Africa 1,068 1,318 1,331 1,698

(1) Estimated

(2) Commonwealth of Independent States

(3) Includes Japan

According to Metal Bulletin Research, the global deficit of alumina in 2004 was 338,000 metric tons, which wasapproximately 0.6% of global alumina consumption for the same period. However, the overall deficit was largerin Asia primarily due to the demand and supply dynamics in China. While Asia accounted for 26% of globalprimary aluminium production in 2004, it accounted for only 16.5% of global metallurgical grade alumina productionduring the same period, according to Metal Bulletin Research. This indicates a sharp rise in aluminium smeltingcapacity in Asia without a commensurate increase in alumina refining capacities. More significantly, aluminaimports accounted for approximately 45% of total metallurgical grade alumina consumption in China in 2004,with approximately 56% of the total imports being sourced from Australia. Going forward, China will remain thekey driver of demand growth in the region with a projected demand of approximately 18.0 million metric tons formetallurgical grade alumina in 2007, growing at a compounded annual growth rate of 10.9%. Furthermore,China will continue to be dependent on imports to meet its domestic alumina consumption.

Pricing

Aluminium is traded on the LME. While prices are determined by LME price movements, producers also chargea regional premium that generally reflects the cost of obtaining the metal from an alternative source. The followingtable sets forth the movement in the average aluminium price from 1995 to 2004.

Aluminium Prices

Year ended December 31,

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

(in US$ per metric ton)

LME Cash Price 1,805 1,504 1,598 1,357 1,362 1,549 1,444 1,349 1,431 1,716

% Change 22.0 (16.7) 6.3 (15.1) 0.4 13.7 (6.8) (6.6) 6.1 19.9

Alumina, however, is priced on the basis of negotiations, but usually determined with reference to the LME pricefor aluminium. Negotiated agreements generally take the form of long-term contracts, but fixed prices can benegotiated for shorter periods and a relatively small spot market also exists.

Indian Aluminium Market

Background

The aluminium industry in India has grown progressively, tracking the country’s economy over the years. Accordingto CRU estimates, domestic primary aluminium production will increase to a high of 943,000 metric tons incalendar year 2005, compared to 860,000 metric tons in calendar year 2004. CRU estimates production to reach1,113,000 metric tons by calendar year 2006.

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According to the Indian Minerals Yearbook 2003, India is home to the sixth largest bauxite deposit in the worldwith a reserve base of 1,400 million metric tons. Bauxite deposits are spread across the states of Orissa, AndhraPradesh, Jharkhand, Chhattisgarh, Gujarat and Maharashtra. Indian bauxite is of superior quality and is largelylocated on a single plateau, thus making bulk mining possible and resulting in significant cost advantages. In thepast, Indian producers suffered from high power costs, but with privatization of coal mines by the Governmentof India, new avenues have opened up for securing cost effective power for Indian producers. Backed by abundant,good quality bauxite and coal, as well as lower cost labour, Indian companies have emerged as low cost producersof aluminium.

The domestic aluminium industry consists of three primary producers: Hindalco, National Aluminium CompanyLimited, or NALCO, and Vedanta Resources Plc, which controls Bharat Aluminium Company Limited, or BALCO,and Madras Aluminium Company Limited, or MALCO, all of whom are integrated producers with a presenceranging from bauxite mining to aluminium metal production. In fiscal 2005, Hindalco was the market leader witha 40% market share in India, while NALCO and Vedanta Resources Plc accounted for approximately 23% and15%, respectively.

Domestic Demand and Consumption Pattern

Domestic demand for aluminium has grown at a compounded annual growth rate of 9.8% between fiscal 2002and fiscal 2005 to reach a high of 897,000 metric tons in fiscal 2005, which also includes scrap and metal importsof 201,000 metric tons. More importantly, the last two years have witnessed even stronger growth with annualgrowth rates of 20.6% and 9.5% for in fiscal 2004 and 2005 respectively.

The power sector is the largest user segment of aluminium, accounting for 45% of domestic consumption infiscal 2005. Historically, the power sector has accounted for a significant portion of aggregate domestic demandas high voltage current is usually transmitted through aluminium cables in India. However, as a result of thechanging growth dynamics and increasing acceptance of new applications, the proportion of aluminium consumedby other user sectors such as transportation, construction and packaging has increased in recent years. Thetransportation sector accounted for 21% of domestic demand in fiscal 2005, benefiting from higher volumes andincreased per vehicle usage of aluminium. The construction and packaging sectors accounted for 8% and 5%,respectively, of domestic demand in fiscal 2005.

Pricing and Tariff

Domestic aluminium prices track the global price trends as producers usually price the metal at a marginaldiscount to the landed cost of imported metal. Though value-added product prices also track metal price movement,they usually witness relatively less volatility and command a premium reflecting the degree of value addition andquality, as indicated by the brand.

Aluminium imports are subject to a customs duty of 10% and an additional surcharge on the customs duty at arate of 2%. This represents a significant reduction from the 25% customs duty charged as recently as fiscal 2001,bringing India more in line with customs duties charged by other countries in Southeast Asia.

Market Outlook

The domestic aluminium industry is expected to grow in the coming years, supported by growth in the Indianeconomy and increased domestic demand in end-user markets. CRU estimates that primary aluminiumconsumption in India will increase to 1,209,000 metric tons by 2009.

In addition, the Government of India is planning to significantly increase power generation capacity in the nextfew years. The Ministry of Power plans to double power capacity to 200,000 MW by 2012. As part of this plan,cumulative capacity of the transmission links will be enhanced from 4,800 MW to 30,000 MW by 2012. Coupledwith the increased demand resulting from the privatization of electricity transmission and distribution and agreater emphasis on improving the existing electricity distribution infrastructure in India, especially in rural areas,the power sector is expected to boost domestic aluminium demand.

This growth is also likely to be supported by increased use of aluminium in automobile and two-wheelermanufacturing as well as a potential growth in automotive component exports as major automotive manufacturersbegin to look to India as a sourcing base for their operations.

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The construction sector is also expected to witness continued growth for the foreseeable future. While thehousing segment has benefited from improved availability of more affordable financing, this sector is likely to geta further boost from the opening up of the real estate sectors to foreign direct investment in India. Backed byincreasing acceptance of aluminium as an alternative to wood, demand from this sector is poised to grow in thecoming years.

Moreover, the long term potential for the domestic markets is encouraging with the Indian per capita consumptiongrowing from approximately 627 grams in fiscal 2002 to 830 grams in fiscal 2005, as compared to 4,598 grams inChina and 21,286 grams in the United States in calendar year 2004.

Global Copper Market

Background

Copper is a non-magnetic metal with high conductivity, tensile strength and resistance to corrosion. Copperconsumption can be divided into three main product groups: copper wire rods, copper products and copperalloy products.

According to Brook Hunt, over the last 10 years, the predominant intermediate use of copper has been theproduction of copper wire rods, which accounted for approximately half of total copper production in 2004.Copper wire rods are used in wire and cable products such as energy cables, building wires and magnet wires.Copper alloy products were the next largest users of copper in 2004, accounting for 17% of total demand,followed by copper tubes at 11%. In addition, copper has several non-electrical applications such as tubes for airconditioners and refrigerators, foils for printed circuit boards and other industrial and consumer applications.

In 2004, the construction sector accounted for 37% of copper consumption, followed by the electrical andelectronic sectors at 26%, industrial machinery and equipment at 15%, transportation equipment at 11% andconsumer products at 11%. In addition to direct applications, copper is also used in a number of alloys, includingbrass (copper and zinc), bronze (copper and tin), nickel silver, phosphor bronze and aluminium bronze.

The copper industry can be divided into three broad categories:

● Copper mining which uses mined ore to produce copper concentrates, usually containing 25% to 40%copper;

● Copper custom smelting which smelts and refines copper from the concentrates obtained from coppermines; and

● Integrated copper producers, who undertake mining, smelting, and refining or leaching to produce copper.Integrated copper producers account for a large part of the copper capacity in the world.

Copper Consumption

Global consumption of refined copper has grown consistently at a compounded annual growth rate of 3.8%between 1994 and 2004. The consumption of 16.8 million metric tons in 2004 reflects an increase of 8.8% over2003. The key growth drivers are the continuing demand from the construction and power sectors. Globaldemand for refined copper is expected to reach 17.0 million metric tons in 2005, and to increase gradually to anestimated 19.6 million metric tons by 2009.

Western Europe, China, North America and the rest of Asia (including Japan and the Middle East) togetheraccounted for nearly 88% of global refined copper consumption. Europe and North America accounted for over50% of refined copper consumption during the 1980s, but robust growth in Asia, led by China and Japan, hasresulted in a significant change in global consumption patterns during the last decade. With a compoundedannual growth rate of 6.6% between 1994 and 2004, Asia has been amongst the fastest growing copper marketin the world. Driven by continuing growth in China and other regional markets, Asia is likely to witness continuedstrong growth over the next five years with regional consumption of refined copper estimated to reach 10.1million metric tons by 2009.

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The following table sets forth the regional consumption pattern of refined copper from 2003 to 2009 (estimated):

Region Global Consumption of Refined Copper

Year ended December 31,

2003 2004 2005(1) 2009(1)

Volume % Volume % Volume % Volume %

(In thousands of metric tons, except percentages)

Western Europe 3,579 23.2% 3,710 22.1% 3,608 21.2% 3,831 19.5%

China 3,056 19.8% 3,468 20.7% 3,815 22.4% 5,170 26.3%

North America 2,862 18.6% 3,164 18.9% 3,092 18.2% 3,378 17.2%

Rest of Asia (2) 2,973 19.3% 3,157 18.8% 3,215 18.9% 3,703 18.9%

Japan 1,202 7.8% 1,279 7.6% 1,240 7.3% 1,220 6.2%

CIS (3) 511 3.3% 669 4.0% 693 4.1% 758 3.9%

Latin America 493 3.2% 542 3.2% 554 3.3% 665 3.4%

Eastern Europe 353 2.3% 381 2.3% 397 2.3% 475 2.4%

Africa 203 1.3% 215 1.3% 215 1.3% 241 1.2%

Australasia 164 1.1% 169 1.0% 171 1.0% 181 0.9%

Total 15,396 100.0% 16,754 100.0% 17,000 100.0% 19,622 100.0%

(1) Estimated.

(2) Includes the Middle East.

(3) Commonwealth of Independent States.

Copper Supply

Global mine production is the principal source of copper, with scrap recycling accounting for only 11% to 13%of aggregate supplies. The five largest copper mining countries are Chile, USA, Peru, Australia and Indonesia,which together accounted for 64% of global copper mine production in 2004. Nearly one-third of global mineproduction is sold in the custom smelting market, with the rest being used for integrated production.

Integrated copper production is concentrated in countries such as Chile, Peru, Canada and Australia, whichtogether account for 25% of global smelter copper production and 29% of global refined copper production.The major custom smelting locations include China, Japan, South Korea, India, and Western Europe, whichtogether accounted for 42% of global smelter production in 2004 and thus are major importers of copperconcentrate.

Refined copper production has grown at a compounded annual growth rate of 3.5% between 1995 and 2004.Global production currently stands at 15.9 million metric tons, reflecting a growth of 4.5% in 2004. Traditionally,the Americas and Western Europe accounted for a majority of copper production, though their share has beenon the decline in recent years. Asian markets have witnessed strong growth in capacities during this period. In2004, China and the rest of Asia (including Japan and the Middle East) accounted for 13% and 19%, respectively,of global refined copper production while the Americas and Western Europe accounted for 37% and 12%,respectively.

In spite of strong production growth, Asian markets witnessed a supply deficit of 2.3 million metric tons in 2004.Of this, the supply deficit in China was 1.4 million metric tons.

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The following table sets forth the actual and estimated regional demand - supply balance from 2003 to 2009:

Region Global Copper Surplus/DeficitYear ended December 31,

2003 2004 2005(1) 2009(1)

Volume

(In thousands of metric tons, except percentages)

North America (793) (955) (706) (763)

Latin America 3,178 3,175 3,321 4,009

Western Europe (1,779) (1,888) (1,711) (1,873)

Eastern Europe 273 268 186 97

CIS (2) 816 758 747 772

Japan 220 104 335 477

China (1,217) (1,387) (1,404) (1,847)

Rest of Asia (3) (1,444) (1,563) (1,208) (1,347)

Australasia 318 348 333 342

Africa 252 289 368 656

(1) Estimated.

(2) Commonwealth of Independent States.

(3) Includes the Middle East.

Pricing

Copper is traded on the LME. Although prices are determined by LME price movements, producers normallycharge a regional premium that is market driven. The following table sets forth the movement in copper pricesfrom 1995 to 2004.

Copper Prices Year ended December 31,

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

(in US$ per metric ton)

LME Cash Price 2,937 2,296 2,279 1,654 1,572 1,814 1,578 1,558 1,779 2,866

% Change 27.3 (21.8) (0.7) (27.4) (5.0) 15.4 (13.0) (1.3) 14.2 61.1

For custom smelters, TcRc has a significant impact on profitability as prices for copper concentrate and prices offinished products are LME price net of TcRc or plus a premium, respectively. A significant proportion of concentratesare sold under frame contracts and TcRc is negotiated annually. The TcRc rates are influenced by the demand-supply situation in the concentrate market, prevailing and forecasted LME prices and mining and freight costs.

Indian Copper Market

Background

The Indian copper industry primarily consists of custom smelters as there are limited quality copper deposits inthe country. The available deposits are owned by the government-owned Hindustan Copper Limited, which wasthe only producer in India until 1995. However, the industry has transformed significantly since then with theentry of Birla Copper, now owned by Hindalco Industries Limited, and Sterlite Industries, part of Vedanta ResourcesPlc., who together accounted for 89% of domestic production in calendar year 2004. Reflecting this transformation,over the last 8 years, industry capacity has also grown approximately 8 times from a modest 72,000 metric tonsin 1997 to 566,000 metric tons in 2004.

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Consumption Pattern

Domestic refined copper consumption has grown at a compounded annual growth rate of only 7.2% between1999 and 2004. Overall growth has been hampered due to a sharp decline in domestic demand from the jellyfilled telecom cables, or JFTC, sector, the largest user of copper in India. The deeper penetration of the cellularindustry as well as a decrease in optic fiber prices led to a slow down in JFTC demand from government-ownedpurchasers, which in turn impacted copper consumption adversely. Supported by strong growth in other usersegments such as winding wires, power cables and other user applications, industry demand has reboundedstrongly during the last few years. CRU has estimated the aggregate refined copper consumption at 325,000metric tons in 2004, a growth of 5.9% from 307,000 metric tons reported in 2003.

Pricing and Tariff

Domestic copper prices track the global prices as the metal is priced on the basis of the landed costs of importedmetal. Copper imports are subject to a customs duty of 10% and an additional surcharge of 2% of the customsduty. The customs duty has been reduced from 15% to 10% in 2005. Domestic producers are also able to chargea regional premium, which is market driven.

Market Outlook

The Indian market outlook is expected to remain positive with strong growth in key user segments such as power,construction and engineering. According to CRU, domestic consumption of refined copper is expected to increasefrom 325,000 metric tons in 2004 to an estimated 378,000 metric tons by 2009, reflecting a compounded annualgrowth rate of 3.1% between 2004 and 2009. This growth is significantly lower than the historical averages,largely on account of negative growth in the telecom cable segment which continues to suffer from increasingpenetration of the cellular telecommunication and low prices of optic fibers in the international markets.

Indian producers, however, benefit from attractive opportunities in the regional markets, which had reported anaggregate supply deficit of 2.8 million metric tons in 2004. According to CRU, the Asian deficit is likely to widenfurther over the next few years, which offers promising prospects for exports.

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OUR BUSINESSOur fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12-monthperiod ended March 31 of that year. In this section, any reference to “we”, “us” or “our” refers to HindalcoIndustries Limited. Unless otherwise stated, the financial information used in this section is derived from ourunconsolidated audited financial statements under Indian GAAP, as restated.

Pursuant to a Scheme of Arrangement approved by the High Courts of Kolkata and Mumbai, all businesses ofIndal with the exception of business pertaining to the foils plant at Kollur, Andhra Pradesh were demerged into uswith effect from April 1, 2004. As a result, the financial statements for fiscal 2005 include the full year financialresults of the aluminium business of Indal and may not be comparable with those of fiscal 2004. Bracketednumbers indicate losses/ negative figures. In this section, any conversion from US Dollars to Indian Rupees hasbeen done based on the 12 PM Noon Exchange rate of 1US Dollar = 45.690 Indian Rupees on November 10,2005 as given by the Federal Reserve Bank of New York – Such conversions are for convenience purposes.

Business OverviewWe are the leading producer of aluminium and copper in India and are also one of the leading metals and miningcompanies in Asia. We are a flagship company of the Aditya Birla Group, which is one of the largest businessgroups in India. We were incorporated in 1958 and have been listed on the Indian Stock Exchanges since 1968and on the Société de la Bourse de Luxembourg since 1993. The listing and trading of our GDRs have beentransferred from the Bourse de Luxembourg (a market appearing on the list of regulated markets issued by theEuropean Commission) to the EuroMTF (which is regulated by Luxembourg Stock Exchange) with effect fromNovember 25, 2005.

We are a vertically integrated aluminium producer and according to CRU, our Renukoot plant, which accountedfor 84% of our primary aluminium metal production in fiscal 2005, is amongst the top 15% of the lowest costproducers globally. According to CRU of July 2005, we are the fourth largest aluminium producing companybased in Asia and the thirteenth largest in the world by volume. In our copper business, we are a custom smelterand are partially integrated with upstream copper mines. We are currently the largest producer of copper in Indiaand expect to be amongst the top 10 producers of copper in the world, by installed capacity, by end of thecalendar year 2005.

For fiscal 2005, our net sales and operating revenues were Rs.95,232.5 million out of which 55% was accountedfor by our aluminium business and 45% by our copper business. For the same period, our profit before interestand tax (PBIT) was Rs.20,832.4 million, with 77% and 12% accounted for by our aluminium and copper businesses,respectively. The remaining 11% was unallocable in nature. Our aluminium revenues and profit before interestand tax have grown at a compounded annual growth rate of 48% and 55%, respectively, since fiscal 2003. Weacquired our copper business at the end of fiscal 2003.

Our aluminium operations are based in India, with access to abundant, good quality bauxite and coal, as well asproximity to key consumer markets. Our total alumina production capacity is currently 1,145,000 metric tpa andour total aluminium production capacity is currently 455,000 metric tpa. Our production facilities comprise aluminarefineries, smelters and facilities for value-added products such as rolled products, extrusions, foils and wheels.Our facilities are supported by dedicated bauxite mines and our own power plants, which provide us withsignificant cost advantages.

Our copper smelting facility is based at Dahej, with a current capacity of 250,000 metric tpa. We have recentlycompleted the capacity expansion of our copper smelter to 500,000 metric tpa. We expect the full ramp up of thecapacity to be achieved by fiscal 2007. As part of our upstream integration efforts, we acquired two copper minesin Mt. Gordon in Queensland, Australia and Nifty in Western Australia in 2003 through our wholly owned subsidiaryBirla Mineral Resources Pty Limited which, in turn, wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon PtyLimited. Mt. Gordon commenced its supply of copper concentrate in August 2004 while Nifty is expected tocommence its supply of copper concentrate in the second half of fiscal 2006. As part of our efforts to add valueto the by-products of copper smelting, we also produce phosphatic fertilizers and precious metals like gold andsilver. Our copper business is also supported by a dedicated, all-weather jetty located at Dahej and owned by ourwholly owned subsidiary, Dahej Harbour and Infrastructure Limited.

We are currently embarking on a growth plan designed to make us a global-sized, globally-competitive metalsproducer. We plan to achieve this through a combination of expansion of existing facilities and greenfield projects,in both alumina and aluminium, backed by dedicated power plants. We also plan to make further investments in

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copper mines, as and when appropriate opportunities are identified. These expansions will increase our overallsize and capacity and help to reduce further our production costs, thereby improving our competitive position inthe global markets.

Besides our own expansion plans, it has been our policy to pursue certain expansion projects through oursubsidiaries and joint ventures. This strategy has helped us expand either directly through our subsidiaries or inconjunction with a joint venture partner. To strengthen these projects to maximise the shareholder value, we,from time to time, evaluate proposals that may include reviewing the expansion plans of our subsidiaries andjoint ventures, providing them technical and financial support (fund based and non fund based) to grow, facilitatingthe raising of funds by the subsidiaries and joint ventures either through private placements, preferential allotmentor public issues etc. Such proposals are evaluated by us on a regular basis in the interest of the project and mayrequire us to take certain actions as mentioned above.

The revenues from each of our business segments for the periods stated are as follows:

Business Segment RevenuesFiscal Year ended March 31,

2003 2004 2005

(Rs. in millions, except percentages)

Aluminium 23,920.4 48% 29,957.8 48% 52,520.9 55%

Copper 26,202.1 52% 32,125.8 52% 42,711.6 45%

Net Sales & Operating Revenues 50,122.5 100% 62,083.5 100% 95,232.5 100%

Our Competitive Strengths

We believe that we have delivered consistent growth and superior value to our shareholders over the years,despite volatility in the global metal markets. We believe that our historical success and potential for growth aredue primarily to the following competitive strengths:

Strengths in Our Aluminium Business

In our aluminium business, our competitive strengths include our globally competitive cost structure, fully integratedoperations, cost effective access to abundant supply of quality raw materials and domestic market leadership.

We are amongst the lowest cost producers globally. Given the commodity nature of our businesses, costcompetitiveness is a key determinant of profitability. According to CRU, our Renukoot plant, which accounted for84% of our primary aluminium metal production in fiscal 2005, is amongst the top 15% of the lowest costproducers globally. We believe that this has helped us in achieving operating margins that are amongst the bestin the industry.

Our operations are fully integrated. We have cost effective access to quality bauxite, low cost power from ourpower plants, which meet a large part of our power requirements and which are located on the pithead of coalmines, significant control over supplies of other key raw materials such as caustic soda and aluminium fluoridefrom subsidiaries and a comprehensive range of value-added products with proximity to end-use markets. Theseprovide us significant cost advantages in the production of aluminium, delivery of quality products, achievementof operating efficiencies that we benchmark against the best in the world through continual improvements andadoption of best practices. The integrated nature of our operations also provides us with flexibility to change ourproduct mix to take advantage of market opportunities.

We have cost effective access to quality bauxite. Our existing refineries are located close to our bauxite reserves.Based on our current requirements as well as proposed expansion of existing refineries at Muri and Belgaum, weexpect our total reserves, including bauxite deposits for which we are in the process of securing leases, to last forapproximately 22, 44 and 23 years, respectively at our Muri, Renukoot and Belgaum refineries. We believe that wewill be able to obtain access to additional reserves for our future needs. In addition, our bauxite reserves are ofgood quality and provide significant cost advantages in the production of alumina and aluminium.

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We have located our facilities close to coal deposits giving us access to low cost power. We also have costeffective access to coal deposits, providing us an advantage in our power costs, the largest cost component inour production of aluminium. This has helped us in generating uninterrupted power at a competitive cash costwhich, we believe, is significantly lower than the alternative sources of power supplies in India and comparableto power costs for many global aluminium smelters. Our largest power plant at Renusagar (near our integratedaluminium complex at Renukoot) is located on the pithead of its sourcing coal mine, which provides us withsignificant costs advantages in generating power for use in our facilities. Our other power plant, at Hirakud, hasa dedicated coal mine, which provides us with further cost advantages. Our Hirakud smelter accounted forapproximately 16% of the total aluminium metal we produced in fiscal 2005.

We are a leader in the domestic market. In addition to cost advantages, we also benefit from market leadershipacross the value chain. We are the domestic market leader in aluminium and have retained this position forseveral years now. In primary metals, our market share was approximately 33% in fiscal 2005. In the value-addedrolled product segment, our market share in fiscal 2005 was 63%. In the highly fragmented extrusions market, wehad a 21% domestic share in fiscal 2005. We have built this strong market position through our quality products,superior customer service and reliability of supplies.

Strengths in Our Copper Business

At the company level, we have the following competitive advantages in our copper business.

Cost advantage. We believe that we are a low cost copper smelter. Our expanded copper capacity will help usreduce our costs significantly.

By-product value addition. Another key competitive advantage is our ability to add value to by-products. Coppersmelting generates sulphuric acid, the disposal of which is generally a problem. We have turned this problem intoan opportunity by converting the sulphuric acid into phosphatic fertilizers, for which there is a growing market inIndia. Copper smelting also generates anode slime, which contain traces of gold and silver. Our in-house preciousmetal refinery helps in recovering these metals, which is an additional advantage over most custom smeltersworldwide.

Freight and handling cost advantage. We benefit from our proximity to growth markets in Asia, which havewitnessed a growing deficit in copper in recent years. The refined copper deficit in Asia was at 2.8 million metrictons in fiscal 2005. With alternative supplies possible only from distant locations, we benefit from significantfreight advantage in catering to growth markets in Asia. We further gain from the jetty in Dahej, owned by ourwholly owned subsidiary, Dahej Harbour and Infrastructure Limited, that can handle vessels up to 70,000 deadweighttons, or DWT, and has a cargo handling capacity of approximately 3 million metric tons per annum dependingupon jetty occupancy.

Other Company Strengths

We also benefit from the following other key strengths:

Proven ability to handle large projects and successful acquisitions

Since our inception, we have implemented several large expansions at existing facilities as well as greenfieldprojects, on schedule and within budget. We have also successfully completed and integrated several acquisitions,including the acquisition of Indian Aluminium Company Limited, the acquisition of our copper business fromIndo Gulf Corporation and the acquisition of two copper mines in Australia through our wholly owned subsidiaryBirla Mineral Resources Pty Limited which wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited.We believe that our knowledge of the aluminium and copper industries and project management expertisepositions us well to leverage emerging opportunities in the aluminium and copper industries.

Our people

Our management team includes some of the most experienced managers in the Indian aluminium and copperindustries. Most of our senior management team have substantial experience in their respective industries andhave been instrumental in the growth of our organization. We believe that our management team is well placedto provide strategic leadership and direction to explore new emerging opportunities in these sectors as well asconstantly improve our current operations. We have witnessed low attrition of key management personnel and

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have also recruited several professionals with domain expertise in critical areas. We believe these provide us witha significant competitive edge.

Our Strategy

Aluminium

Towards realizing our vision of attaining global size and further improve our cost competitiveness in the globalaluminium industry, we are embarking on several expansions at our existing facilities and greenfield projects,both in alumina and aluminium. These include:

1. Ongoing expansion of existing facilities, both in alumina and aluminium.

2. A greenfield joint venture alumina project with Alcan Inc., under implementation.

3. A planned fully integrated greenfield project in Orissa with the capacity to produce alumina and aluminium.

Our strategy is to support all of the above projects with low cost dedicated sources of key inputs, includingbauxite and coal for dedicated power.

Upon completion of our expansion plans, including the projects mentioned in the section “Objects of the Issue”on page 25 of this Letter of Offer, our aggregate alumina capacity is expected to increase from 1,145,000 metrictpa to 3,610,000 metric tpa. Aluminium smelting capacity is expected to increase from 455,000 metric tpa to765,000 metric tpa. Our power generation capacity is also expected to increase from 987.2 megawatt to 1,637.2megawatt. These projects together with other greenfield projects under evaluation are expected to significantlyreduce our costs and move us into the ranks of the top 10 global producers of alumina and aluminium, byvolume.

Copper

In the copper business, our strategy is to reduce costs through optimal utilization of expanded smelting capacity,currently under commissioning trials, and increase the extent of copper concentrate supply from the minesowned by our wholly owned subsidiary Birla Mineral Resources Pty Limited which wholly owns Birla Nifty PtyLimited and Birla Mt. Gordon Pty Limited, which, in turn, own copper mines in Australia. We will also consideropportunities to acquire copper mines so as to satisfy our copper concentrate requirements.

Our Aluminium Business

Our principal aluminium business products are alumina, primary aluminium and value-added products. In fiscal2005, we used over 66% of our alumina production for conversion into our aluminium products and sold thebalance to third parties, as metallurgical grade as well as specialty alumina and hydrate. An increasing proportionof our aluminium business revenues have come from our value-added aluminium products.

Products and Application Areas

We produce and sell alumina, primary aluminium and aluminium value-added products such as rolled products,extrusions, foils and wheels.

Alumina is refined from bauxite and is the key raw material for producing aluminium. In addition to metallurgicalgrade alumina, we also produce alumina as hydrate and value-added specialty alumina, which are custom madeto the requirements of specific end uses. We currently produce approximately 110 grades of value-added aluminaproducts for more than 300 customers in both the domestic and export markets.

Primary aluminium is produced from the smelting of metallurgical grade alumina. We produce primary aluminiumin the form of ingots, wire rods and billets. While ingots and billets are used extensively in the construction andtransportation industries, wire rods are used in various electrical applications especially in the form of electricalconductors and cables.

In addition to alumina and primary aluminium, we also produce value-added products such as rolled products,extrusions, foil and packaging and wheels. Rolled products are used for a variety of purposes in different industriesincluding the printing, transportation, consumer durables, building and architecture, electrical and communications,packaging and general engineering industries. Extrusions are utilized in architectural, electrical, industrial,transportation and consumer durable industries, while foils find packaging related applications including packaging

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used in the pharmaceutical, processed foods, cigarette and dentifrice industries as well as thin gauge rolledproducts for air conditioners and auto radiators. Value-added products reduce our exposure to LME aluminiumprice volatility. Our value-added aluminium revenues represented 42%, 36% and 55% of our aluminium metalrevenues for fiscal 2003, 2004 and 2005, respectively.

A summary of the different products relating to our aluminium business and their most frequent end uses isgiven below:

Products End Use

Alumina

Metallurgical grade alumina Primary aluminium production.

Specialty alumina Refractories/castables, grinding media, ceramic fibers, glass, polishingcompounds, high tension insulators and spark plugs.

Hydrates Water treatment chemicals, aluminium fluoride, refractory cement, zeoliteand as filler in various applications.

Primary Aluminium

Ingot / Billets Aluminium castings and fabrication. Various uses in the constructionand transportation industries.

Wire rods Electrical conductors and cables.

Value-added products

Rolled Products Printing industry (lithographic sheets), transportation industry (bus/truckbodies, radiator fins, miscellaneous automotive applications,development in railway wagons), consumer durables (utensils/pressurecookers, ceiling fans, refrigerators and washing machines), building andarchitecture (cladding, roofing, AC/ventilation ducting, insulation, flooringand new application of aluminium composite panel), electrical andcommunication (cable wrap, lamp cap, cable trays), packaging (bottle-cap stock, can-end stock, aerosol cap, vial cap), and general engineeringapplications.

Extrusions Architectural, electrical, industrial, transportation and consumer durable.

Foils and Packaging Packaging of pharmaceuticals, processed foods, cigarette and dentifriceindustries, kitchen foil, casseroles, thin gauge rolled products for airconditioners and auto radiators.

Wheels Automotive industry.

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Production Processes

The following diagram shows our production process from bauxite to alumina to aluminium to value-addedproducts:

Our Alumina Refining Process

We use the Bayer process to refine alumina from bauxite. The Bayer process is used in nearly all commercialrefineries and is considered the industry standard for production of metallurgical grade alumina because of itsproven application and efficient use of energy. In the Bayer process, caustic soda is used to extract the aluminacontent from ground bauxite, at temperatures suitable for the particular mineralogy of bauxite, after which theresultant sodium aluminate solution is separated from the undissolved residue called red mud. The solution isthen subjected to seeded precipitation to produce alumina hydrate, which is then calcined into alumina.

Our Primary Aluminium Production Process

There are two types of electrolytic cells commonly used to produce primary aluminium, “pre-baked” and “self-baking” cells. The two types of cells differ primarily in the fabrication and connection of the carbon anode. Mostmodern smelters rely on “pre-baked” reduction cells because primary aluminium can be smelted at lowerproduction costs and hazardous gases formed in the production process can be more effectively treated andcontained.

We use “pre-baked” reduction cells at the Renukoot smelter and are in the process of expanding the Hirakudsmelter by converting it from self-baking to pre-baked technology.

Alumina is converted into primary aluminium through a smelting process using electrolytic reduction. Thereduction process takes place in a reduction cell, referred to as the “pot,” where alumina is reduced to moltenaluminium. From the pot-line, the molten metal is tapped to the casting unit, where the metal is cast into requiredforms such as ingots, billets, rolling slabs and wire rods, depending on the requirements of our value-addedproduct operations.

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Our Value-Added Aluminium Products Manufacturing Processes

Our value-added manufacturing plants receive inputs, primarily in the form of ingots, rolling slabs and billets,from our own smelters, which helps ensure consistency of delivery and quality of inputs.

Rolling Mills. The rolling process involves the conversion of rolling ingots into sheets, coils, plates, circles andother value-added products. We use a two-part hot and cold rolling process, in addition to the steps of scalping,soaking, annealing and heat treatment. In all of our mills, the products are processed through various finishingline equipment, before being packed to customers’ requirements and dispatched.

Extrusions. The extrusion process involves heating of aluminium billets in an induction furnace or an oil-fired logheater to a temperature sufficiently high to allow external pressure to form the aluminium into desired shapesand sizes.

Foil and Packaging. The manufacturing of foil and packaging products involves rolling foil to a thickness rangingfrom 6.5 microns to 200 microns, with an intermediate annealing process and final slitting. Depending on theend-use, the foil is then converted into various packaging structures by means of lamination, coating, extrusionor printing. Our plants are equipped with the latest micro-processor-based gauge control system, multi-colorprinting, coater/laminator, twin-head poly extruder and electronic engraver.

Wheels. The basic raw material for alloy wheels is silicon-alloyed aluminium ingots. The manufacturing processinvolves melting of metal alloy ingots and casting of alloy wheels. The cast wheels then undergo x-ray testing,heat treatment and machining before they are finally tested in accordance with international standards for variousquality attributes. The wheels undergo surface treatment and painting before final packing.

Our Principal Locations

The following table sets out details of our principal locations and capacities as of March 31, 2005:

State Aluminium Business: Details of Locations and Capacities

Alumina Aluminium Redraw Rolling Extr- Foils Wheels Cogen- PowerRods Mills usions erated Plant

Power

(Mtpa) (Mtpa) (Mtpa) (Mtpa) (Mtpa) (Mtpa) (Pieces (MW) (MW)per

annum)

Renukoot Uttar Pradesh 685,000 345,000 40,000 80,000 13,700 - - 78 741.7

Belgaum Karnataka 350,000 31,000(1) - - - - - - -

Muri Jharkhand 110,000 - - - - - - - -

Hirakud Orissa - 65,000 - - - - - - 67.5 (3)

Alupuram Kerala - 14,000(2) 10,000 - 8,000 - - - -

Belur West Bengal - - - 45,000 - - - - -

Taloja Maharashtra - - - 45,000 - - - - -

Kalwa Maharashtra - - - - - 6,000 - - -

Silvassa Dadra &Nagar Haveli - - - - - 5,000 300,000 - -

Total 1,145,000 455,000 50,000 170,000 21,700 11,000 300,000 78 809.2

(1) Operations suspended since August 1992 due to an increase in power tariff because of which the operations became unviable.

(2) Operations suspended since August 2003 due to an increase in power tariff because of which the operations became unviable.

(3) Recently expanded by 100 MW

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The following table sets forth, for the periods indicated, information relating to the production volumes of ouralumina refineries, smelters, power plants and value-added semi-fabrication units:

Aluminium Business: Production volumes & Capacity utilization(1)

Year ended March 31

2003 2004 2005

(in metric tons, except where noted)

Production Utilization Production Utilization Production Utilization

Alumina refineries 501,270 76% 591,297 90% 1,159,664 101%

Smelters 317,626 91% 381,417 99% 471,460 93%

Rolling mills 73,171 91% 77,069 96% 175,734 103%

Extrusion plants 18,973 138% 18,194 133% 28,551 132%

Foil and packaging plants 19,235 385% 18,560 371% 26,177 238%

Wheel plant(2) 56,117 19% 99,091 33% 107,279 36%

Power plants(3) 5,223 6,160 6,936

(1) Installed capacity has been used for calculation of Capacity utilization

(2) Measured in pieces per annum

(3) Includes cogeneration; Measured in MU

Our Key Raw Materials and Manufacturing and Operating Expenses

Our key cost drivers are power and fuel, bauxite, carbon and caustic soda, which in aggregate accounted forapproximately 76% of our raw materials and manufacturing and operating expenses for alumina, aluminium andvalue-added products in fiscal 2005. The following table sets forth a breakdown of our key cost drivers for fiscal2003, 2004 and 2005:

Aluminium Business: Raw Material and Manufacturing & Operating Expenses

Year ended March 31,

2003 2004 2005

(in metric (Rs. in (in metric (Rs. in (in metric (Rs. intons) millions) tons) millions) tons) millions)

Power and Fuel 4,668 (1) 5,629.0 5,459 (1) 8,000.0 7,030 (1) 12,948.4

Raw Materials:

Bauxite 1,420,912 1,175.3 1,705,093 1,609.2 3,251,628 2,690.2

Carbon 136,721 1,855.2 158,509 2,221.4 205,422 2,872.4

Caustic soda 61,147 711.0 71,720 954.7 119,348 1,726.5

Other Raw Materials 1,814.6 809.1 3,027.2

Other Manufacturing &Operating Expenses 1,444.7 1,458.5 3,422.5

Total Raw Material andManufacturing &Operating Expenses 12,629.7 15,052.9 26,687.2

(1) Includes Cogeneration - Power consumed in MU

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Power and Fuel

Our power and fuel costs essentially consist of costs associated with production and procurement of electricity,coal and fuel oil. The cost of power and fuel accounted for 45%, 53% and 49% of our aluminium raw materialsand manufacturing and operating expenses during fiscal 2003, 2004 and 2005, respectively. Smelting primaryaluminium requires a substantial, continuous supply of electricity. A reliable and inexpensive supply of electricity,therefore, significantly affects the viability and profitability of our operations.

Our Power Plants

We have two power plants – one each at Renusagar and Hirakud — with an aggregate capacity of 809.2 megawatt.With support from co-generation plants, these two power plants currently meet 88% of our power requirements.With a capacity of 741.7 megawatt, our plant at Renukoot is our largest source of power and provides electricityat competitive costs, made possible due to its proximity to the pithead of its sourcing coal mine, high plant loadfactor of over 90% and low fixed costs.

Our Hirakud power plant had a capacity of 67.5 megawatt as on March 31, 2005. With the recent commissioningof a 100 megawatt unit the capacity now stands at 167.5 megawatt. Our Hirakud power plant provides electricityto our Hirakud smelter. As of March 31, 2005 the power plant operated at an 86.7% plant load factor. Our plantbenefits from its access to a dedicated coal mine that provide significant cost advantages. As we increase thecapacity of our Hirakud smelter, we intend to expand the capacity of our Hirakud power plant to meet ourgrowing electricity requirements. For details of our expansion plans, see “Objects of the Issue”.

Leveraging our significant advantages, we have been able to produce power at low costs. The average per unitcash cost of power at Renusagar and Hirakud was at Rs.1.19 per kilowatt hour and Rs.1.01 per kilowatt hour,respectively, in fiscal 2005.

We have made alternate arrangements with the Uttar Pradesh and Orissa State Electricity Boards to supply 42.2MVA and 40 MVA electricity to our plants at Renukoot and Hirakud, respectively, in case our captive power plantsat Renusagar and Hirakud are unable to supply power to Renukoot and Hirakud, respectively, including onaccount of reasons like shut down for maintenance etc. Further to protect our power plants from the occurrenceof severe frequency or voltage fluctuations we have also installed systems to isolate them from their respectivestate power grids.

Principal inputs for our power plants

Coal

Coal is the principal input for our power plants. We source all of our coal requirements for Renusagar from theNorthern coalfields and Central coalfields of government-owned Coal India Limited, which are approximately 8kilometers and 300 kilometers away from Renusagar, respectively. The coal is transported by dedicated aerialropeways from Northern Coalfields Limited and by rail and road from Central Coalfields Limited. The coalrequirements for Hirakud power plant is met through supplies from the dedicated Talabira coalfields, which isapproximately 45 kilometers away from Hirakud. The coal from Talabira coalfields to Hirakud is transported byroad.

During fiscal 2003, 2004 and 2005 our Renusagar power plant consumed 5.0 million metric tons, 5.4 millionmetric tons and 5.2 million metric tons, respectively, of coal. The Hirakud power plant consumed 0.4 millionmetric tons, 0.4 million metric tons and 0.5 million metric tons of coal during fiscal 2003, 2004 and 2005 respectively.We expect that our coal requirements will increase to approximately 7.2 million metric tons per year after consideringthe recent commissioning of a 100 megawatt unit and the proposed commissioning of an additional 100 megawattunit at Hirakud. During fiscal 2005, to produce one kilowatt hour of electricity, we required on average 0.98kilograms of coal. Coal costs represented an average of 77% of our cash cost of power generation during fiscal2005.

Suppliers of coal. The Government of India owns most of the coal mines in India, through its subsidiary, CoalIndia Limited. Users are provided with their coal under fuel supply agreements. The price and the quantityentitled by users are established by the Standing Linkage Committee (Long-Term) of the Ministry of Coal. Theseuser allocations are reviewed on a quarterly basis by the Ministry of Coal. We have not experienced any difficultiesin obtaining a sufficient amount of coal on reasonable terms in the past. However, the Ministry of Coal has

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recently reduced the entitlements under our supply agreement to 85% of our requirements. We are confidentthat we will be able to secure alternative supplies for the shortfall, given that India has a large reserve of recoverablecoal. We believe these reserves could satisfy our coal requirements in the event we are unable to obtain sufficientquantities of coal from our current sources. However, replacing our coal sources could substantially increaseour costs. See “Risk Factors – A significant portion of our energy requirements are met by our own power plantsand any disruptions to these operations could increase production costs.”

Water

Water is also an important input for our power plants. We source the water requirements of our Renusagarpower plant and smelters from the nearby Rihand dam. We also source the water requirements of our Hirakudpower plant and smelter from Hirakud dam. Our dedicated power plants have never been shut down due toinadequacy of water.

Bauxite

Bauxite, the primary raw material used for the production of alumina, is a naturally occurring heterogeneousmaterial composed primarily of aluminium hydroxide minerals together with iron oxide, titanium oxide and silica.We source most of the bauxite from our own mines while a portion is purchased from private mines. As of March31, 2005, our bauxite deposits under existing leases had approximately 47.93 million metric tons of proven andprobable reserves. We are in the process of securing leases for an additional 150.5 million metric tons in thestates of Orissa, Maharashtra, Jharkhand and Chhattisgarh (including 81.95 million metric tones for Aditya Greenfieldproject in Orissa). Based on our current requirements as well as proposed expansion of existing refineries at Muriand Belgaum, we expect our total reserves including the above mentioned additional quantity to last forapproximately 22, 44 and 23 years, respectively at our Muri, Renukoot and Belgaum refineries. Our bauxiterelated costs represented 10% of our aluminium raw materials and manufacturing and operating expenses infiscal 2005.

Our Third Party Purchases

As part of our long-term strategy, to conserve our resources and thereby to extend the life of our own bauxitemines, we source part of our bauxite requirements from third parties through dedicated long-term supply contracts.We have entered into bauxite supply contracts for period of one year or more with these third parties. We alsoprovide necessary geological and technical assistance to these third parties to ensure that bauxite supplies meetour quality requirements. The contracts include penalty/bonus clauses covering both quantity and quality ofbauxite supplies. We have no statutory or any other obligation relating to our third party suppliers of bauxite, butmeeting these statutory requirements is a prerequisite for their continued bauxite supply to us.

Our Bauxite Mining Methods

Our mining operations are conducted either as fully mechanized or semi-mechanized operations employingcontractors at different locations. In fully mechanized operations, we use either the “ripper-dozer-mobile crusher”combination with no blasting or the “drilling-blasting” with a “shovel-dumper-crusher” combination. In semi-mechanized operations, bauxite sorting and sizing are carried out through manual labour. The mined-out bauxiteis transported to the respective refineries either through road transport or a combination of road and rail transport.

Carbon

We use carbon in the process of electrolysis, in the form of cathodes and anodes, though the latter is the biggestcomponent of our carbon costs. Anodes are made up of carbonaceous material of high purity. For pre-bakedanodes, green carbon paste made of calcined petroleum coke and coal tar pitch is compacted or pressed into theform of anodes. These anodes are baked before their use in electrolytic cells, or pots.

We have in-house facilities for the manufacture of carbon anodes meeting our entire carbon anode requirements.The calcined petroleum coke, coal tar pitch and fuel oil, which are the key ingredients for the manufacture ofcarbon anodes are sourced primarily from the domestic markets. There is an adequate supply of these rawmaterials in India, though their prices are generally determined by the movement in global prices. Our carbonconsumption corresponded to approximately 11% of our overall aluminium raw materials and manufacturingand operating expenses for fiscal 2005.

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Caustic soda

Caustic soda is a key raw material used to dissolve the bauxite in the alumina refining process. The caustic sodarequirement varies significantly depending on the bauxite quality and technology employed. At our refineries,caustic soda consumption represented approximately 6% of our aluminium raw materials and manufacturing &operating expenses during fiscal 2005.

We source a majority of our requirements from our subsidiary, Bihar Caustic and Chemicals Limited, with thebalance being sourced from other domestic producers. In addition, we also have the flexibility of imports dependingon the price advantage from time to time.

Saudi Arabian contract prices for caustic soda increased from US$115 (Rs. 5,254.4) per dry metric ton in thesecond quarter of calendar year 2004 to US$280 (Rs. 12,793.2) per dry metric ton in the second quarter ofcalendar 2005. Import of caustic soda was stopped in fiscal 2005 due to very high international prices and anti-dumping duty on caustic soda, which made domestic prices more attractive. Consequently, we are now relyingonly on our own production and local suppliers, who have been our regular suppliers. Our caustic soda pricescan still be affected because these producers can raise their prices for caustic soda.

Other Raw Materials

We also use other raw materials such as fluorides and other chemicals. Other raw material costs representedapproximately 14%, 5% and 11% of our aluminium production costs during fiscal 2003, 2004 and 2005, respectively.For these raw materials, we have several sources of supplies in the domestic markets and do not foresee anydifficulty in securing supplies when needed.

Other Manufacturing and Operating Expenses

Our other manufacturing & operating expenses primarily consist of consumption of stores, spare parts and toolsas well as repairs, renewals and replacements of buildings and machinery. In fiscal 2005 these expenses constituted13% of our aluminium raw materials and manufacturing and operating expenses.

Logistics and Transport

We transport our raw materials and finished products through a combination of road, rail and sea, depending onthe sourcing location of our raw materials or the final destination of our products.

Our upstream production facilities are located close to our bauxite and coal mines while our value-added operationsare spread across the country with the objective of being close to either port locations or consumer end-markets.

Sales and Marketing

We sell alumina, aluminium and value-added products, both in the domestic and export markets. The followingtable sets forth our actual sales, in both tonnage and value terms, during fiscal 2003, 2004 and 2005:

Aluminium Business: Product-wise Sales

Fiscal year ended March 31,

2003 2004 2005

(in metric (Rs. in (in metric (Rs. in (in metric (Rs. intons) millions) tons) millions) tons) millions)

Alumina

Metallurgical grade alumina 0 0.0 0 0.0 113,343 1,475.1

Specialty alumina 0 0.0 0 0.0 109,237 2,413.4

Hydrates 0 0.0 0 0.0 100,248 1,807.0

Primary Aluminium

Ingot / Billets 121,713 9,311.2 170,319 13,653.1 158,519 14,374.8

Wire rods 50,268 4,146.3 58,778 4,990.6 62,841 5,908.0

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Aluminium Business: Product-wise Sales

Fiscal year ended March 31,

2003 2004 2005

(in metric (Rs. in (in metric (Rs. in (in metric (Rs. intons) millions) tons) millions) tons) millions)

Value-added products

Rolled products 51,343 5,040.3 58,175 5,851.7 144,158 16,380.0

Extrusions 19,001 1,921.6 18,352 1,927.1 28,453 3,379.3

Foils and Packaging 19,243 2,560.6 18,819 2,574.1 26,004 4,542.9

Wheels (1) 52,786 92.6 105,975 185.7 111,045 197.8

Domestic sales (2) 19,770.5 25,705.1 40,832.1

Export sales 3,736.8 3,869.7 10,853.2

1. In pieces

2. Includes conversion charges, trade sales and miscellaneous items, but excludes Net Export Incentives & Miscellaneous Receipts &

Claims

We sell alumina in excess of our own aluminium production requirements, in both the domestic and exportmarkets and have a broad customer base. The quality and reliability of our supplies are our key strengths inretaining these customers.

The export price of metallurgical alumina is determined with reference to prevailing and predicted internationalalumina prices. The majority of our contracts are short term, though we also supply under long term contracts.Domestic sales are normally conducted on the basis of a fixed price, determined from time to time. The domesticprice of alumina is normally higher than the export price due to smaller order sizes and other associated costs.

We do not grant any credit period for alumina exports. All payments by our domestic customers are in IndianRupees and by overseas customers in U.S. Dollars. For exports, deliveries are made through sea and materialsare moved by road to the port. For domestic sales, our customers are responsible for arranging and paying fortransportation from our alumina refinery.

We sell primary aluminium in the form of ingots, billets and wire rods, in both the domestic and export markets.The domestic markets, where we service a large and fragmented customer base, accounted for over 96% of ourprimary aluminium sales in fiscal 2005. Our exports are usually to large commodity traders, who accept deliveryin Singapore, before shipping to primary aluminium consumers in other countries. We have a broad customerbase for primary aluminium products in India.

We do not enter into any long-term contracts for domestic sale of primary aluminium. Our domestic pricing isbased on various factors, including average LME prices, exchange rates, domestic demand-supply outlook,inventory levels and prices offered by competitors.

The terms of our domestic sales are governed by an approved credit policy that may allow credit/secured credit/cash payment terms to different customers based on credit appraisal of customer accounts from time to time. Allpayments by our domestic customers are in Indian Rupees and exports are priced in U.S. Dollars, backed by anirrevocable letter of credit issued prior to shipment.

We sell value-added aluminium products in the form of rolled products, extrusions, foils and packaging materialsand wheels, in both the domestic and export markets.

In the domestic markets, we sell value-added products to manufacturers of consumer durables, bus/truck bodybuilding, industrial machinery, building and construction, packaging, and auto ancillary products. In addition, wesell products directly to end-consumers and have established brands such as Everlast roofing sheets, house foilssuch as Freshwrap, Superwrap and Freshpack and Aura alloy wheels. We have a broad and diversified customerbase for our value-added aluminium products.

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For exports, we have a strong market position in South Asia, South East Asia and the Middle East, with increasingsales in the United States, Africa and Europe as well. In fiscal 2005, our revenues from the export of value-addedaluminium products constituted 28% of our total value-added aluminium product revenues, and our future plansare to further grow our exports.

We avoid long-term contracts for value-added product pricing in India. We review domestic pricing on a monthlybasis, based on various factors, including average LME prices, production costs, exchange rates, domesticdemand-supply outlook, inventory levels and prices offered by competitors. In the export markets, prices arenegotiated on the basis of a mark-up over LME prices.

The terms of domestic sales are governed by our approved credit policy that may allow credit/secured credit/cash payment terms to different customers based on credit appraisal of customer accounts from time to time. Allpayments by our domestic customers are in Indian Rupees and exports are priced in U.S. Dollars or Euros,backed by an irrevocable letter of credit issued prior to shipment. Some export shipments are, however, madeagainst export credit guaranteed by an insurance company.

Our value-added product facilities are strategically located near smelters, ports or marketplaces, giving us inherentadvantages in logistic costs and delivery time. The products are moved by contracted transporters or customer-nominated truckers. An important part of our domestic distribution system is our network of channel partners,spread across the country.

Sales Organization

Our sales and marketing structure is geared to address market challenges. Our sales and marketing activities areoverseen from Mumbai with regional sales offices in Mumbai, Delhi, Bangalore and Kolkata. We have separateteams focusing on the domestic and export sales operations.

Competition

While there are only two major players in the alumina market in India, there is substantial competition in theprimary aluminium and value-added aluminium markets, both in India and internationally. For our alumina productssold in India, our only competitor is Nalco. In the export market, we compete with global alumina suppliers. Forour primary aluminium products, we compete primarily with Nalco, Balco and Malco in the domestic marketsand major international primary aluminium producers in the international markets. In the highly fragmentedvalue-added products market, we compete primarily with the leading primary metal producers as well as severalsmaller producers in the respective product categories. In addition, the end-user markets for certain value-addedproducts are highly competitive. Aluminium competes with other materials, particularly plastic, steel, iron, glass,and paper, among others, for various applications. In the past, customers have demonstrated a willingness tosubstitute other materials for aluminium. The willingness of customers to accept substitutes could have a materialadverse effect on our business, results of operations and prospects. See “Risk Factors – Any increase in competitionin our target markets could result in lower prices or sales volumes of the aluminium, aluminium products andcopper we produce, which may cause our profitability to suffer.”

Demerger of Indal

On August 23, 2004, our Board and the board of directors of Indal approved a Scheme of Arrangement whereinall the assets of Indal other than the foil unit at Kollur in Andhra Pradesh were to be demerged from Indal andmerged into us. The Scheme was approved by the requisite majority of the shareholders and creditors of boththe companies and also sanctioned by the High Court of Judicature at Bombay and the High Court at Calcutta onJanuary 14, 2005 and December 23, 2004 respectively. Pursuant to the Scheme, Hindalco issued shares to theminority shareholders of Indal in the ratio of one share of Rs. 10 each in Hindalco, credited as fully paid up forevery seven equity shares of Rs. 2 each held by the minority shareholder in Indal. The Scheme was madeeffective from March 7, 2005, and the appointed date was April 1, 2004.

Consequent to the merger, certain plants belonging to the erstwhile Indal came into our fold. These plants arelocated at Belgaum in Karnataka, Muri in Jharkhand, Hirakud in Orissa, Alupuram in Kerala, Belur in West Bengal,Taloja and Kalwa in Maharashtra. The merger resulted in augmentation of production, sales and balance sheetitems which were reflected in our financial statements for fiscal 2005. The key effects of this merger on thestatement of profit and loss and statement of assets and liabilities for fiscal 2005 are given below:

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1. Our net sales and operating revenues and other income rose by approximately 23% and 9% respectively.

2. Our PBIT was higher by approximately 24%.

3. Out net fixed assets (including Capital Work-in-Progress), investments and net current assets were higher byapproximately 21%, 22% and 28%.

4. Our overall balance sheet size increased by approximately 22%.

Key Technology Arrangements

Our aluminium business uses process and technologies that are used in nearly all commercial refineries and areconsidered industry standards for production. We entered into a license agreement dated April 13, 2005 withChina Aluminium International Engineering Corporation Limited (CAIECL) to convert our existing potlines atHirakud from Soderberg smelter into prebaked smelter, add 14 pots in those lines, and set-up an additionalpotline. The agreement covered the provision of technical services for implementation, licensed use of technology,basic engineering, detailed engineering and software for the new pot controllers including training to our personnel.Some of these were routed through Gauiyang Aluminium Magnesium Design & Research Institute (GAMI) ofChina which is a subsidiary company of CAIECL. In addition to the above, the erstwhile Indal entered into anagreement dated January 17, 2005 with Alcan International Limited of Montreal, Canada for the transfer of AlcanAlumina Technology and grant of license to use certain processes in the Muri plant. The agreement also coveredthe provision of technical information and engineering services.

Our Expansion Projects

We believe that our ongoing and planned capacity expansions will allow us to enhance our competitiveness byreducing our production costs and also improve our revenues and profitability. We are in the process of expandingour alumina capacity at our Muri facilities and our aluminium capacity at our Hirakud smelter. We have alsoidentified several other expansion projects to substantially increase our production capacities for alumina andaluminium, which, if completed, will significantly reduce our unit production costs for these products.

However, we have not received all the necessary approvals to carry out these projects and cannot assure youthat these projects will be undertaken or, if undertaken, will not be altered or completed beyond current time andcost expectations. We believe that our substantial experience with improving our capacity at our various facilitieswill enable us to undertake and complete our expansion projects efficiently and successfully.

Expansions at Existing Facilities

Our expansion of existing facilities includes the following key projects:

● expanding the alumina capacity at Muri from 110,000 metric tpa to 450,000 metric tpa.

● expanding the alumina capacity at Belgaum from 350,000 metric tpa to 650,000 metric tpa.

● expanding the aluminium capacity at Hirakud from 65,000 metric tpa to 146,000 metric tpa.

Muri Alumina

We plan to increase the capacity at our Muri operations from 110,000 metric tpa in fiscal 2005 to 450,000 metrictpa upon completion of the expansion. This would include alumina refinery, the co-generation plant, the railwaysystem and a port facility for evacuation. We plan to use technology obtained from Alcan, which is expected toimprove recovery and reduce raw material and energy consumptions. Consequently, we expect cash cost ofalumina production at this facility to decline sharply upon stabilization of expanded capacity.

Belgaum Alumina

We plan to increase the capacity at our Belgaum operations from its current capacity of 350,000 metric tpa to650,000 metric tpa. This would include alumina refinery, the co-generation plant, the railway system and portfacility for finished goods movements. We plan to use appropriate technology for improving recovery and reducingenergy consumption with the objective of reducing cash cost of our operations.

Hirakud Aluminium

We are in the process of increasing the capacity of our Hirakud smelter from its current capacity of 65,000 metric

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tpa to 146,000 metric tpa. Our expansion plans involve a conversion from the ‘Soderberg’ technology to ‘pre-bake’ technology and also a transfer of idle pots from Belgaum to Hirakud.

Greenfield Projects

Our greenfield expansions involve building up of new alumina and aluminium capacities through followingprojects:

● Aditya Alumina with capacity of 1,000,000 metric tpa which is expandable to 1,500,000 metric tpa.

● Aditya Aluminium with capacity of 260,000 metric tpa which is expandable to 325,000 metric tpa.

Aditya Alumina and Aluminium

We have plans to set up an integrated greenfield aluminium project in Orissa, with a capacity to produce 1,000,000metric tpa of alumina, which is expandable to 1,500,000 metric tpa. This project will also have a capacity toproduce 260,000 metric tpa of aluminum, which is expandable to 325,000 metric tpa upon completion. This willbe supported by a 650 megawatt dedicated power plant, backed by dedicated coal mines. Further, we areworking towards acquiring a dedicated coal deposit within the proximity of the proposed smelter and powerplant in Lapanga, Orissa.

Rajbar Aluminium

We are also evaluating implementation of a greenfield smelter with a capacity to produce 325,000 metric tons ofaluminium backed by dedicated power and coal mines in the State of Jharkhand. We have signed a Memorandumof Understanding with the state government of Jharkhand and are in the process of obtaining the necessarygovernment and regulatory approvals for the project.

Joint Ventures

Utkal Alumina – Our 55% Joint Venture with Alcan Inc.

We are setting up a global-sized greenfield alumina project in Orissa as a joint venture with Alcan Inc. with a totalproject capacity of 1,000,000 metric tpa to1,500,000 metric tpa. We own 55% of the equity in the joint venturewith the rest being held by Alcan and we are entitled to 55% of the output.

Apart from the projects described above we may acquire additional copper mines as and when we identifyappropriate ones. We have not currently identified a suitable mine for acquisition.

For more details on our planned expansion projects which are under various stages of implementation, pleasesee “Objects of the Issue.”

Our Copper Business

Our copper business accounted for approximately 45% of our revenues in fiscal 2005. We are a custom smelterand hence buy copper concentrate at LME linked prices for smelting and refining copper. We sell refined copperat LME linked prices in the domestic and export markets. TcRc, a major constituent of our copper net revenues,is influenced by global copper concentrate demand and supply, LME trends, LME-linked price participation andother factors. Our custom copper smelter is located at Dahej, Gujarat. We source our concentrates from variousglobal suppliers and our overseas mines.

Products and Application Areas

Our principal products are copper cathodes and continuous cast rods. As part of our efforts to add value to theby-products of copper smelting, we also produce phosphatic fertilizers and precious metals like gold and silver.

Our copper cathodes are square shaped with purity levels of 99.99% copper. These cathodes meet internationalquality standards and are registered as LME “A” Grade. The major uses of copper cathodes are in the manufactureof copper rods for the wire and cable industry and copper tubes for consumer durable goods. Copper cathodesare also used for making alloys like brass, bronze and alloy steel, with applications in defence, minting andconstruction.

Our copper continuous cast rods meet all the requirements of international quality standards. They are availablein 8, 11, 12.5, 16 and 19 mm diameters. The homogeneous structure and finer grain size of our continuous cast

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rods leads to outstanding drawability and it can be drawn to an ultra fine wire with high productivity. Ourcontinuous cast rods are currently used for power and communication cables, strips for power and distributionfor transformers, magnet wires and zari manufacturing. Our continuous cast rods of larger diameters (11, 12.5and 16 mm) are utilized for production of profiles and busbars. We are the only manufacturer of 19 mm diametercopper rods in India, which is largely used for groove conductors and profiles. Major uses of continuous castrods includes usage as basic raw material for manufacture of wire and cable like winding wire, telephone cables,power cables, wiring harnesses, house wiring cable, instrumentation and control cable. Continuous copper rodsare also used in the manufacture of strips that are used in transformers. Larger diameter rods are mainly used instrip making whereas 8 mm rods are used for wire and cable making. Continuous cast rods are also used inmanufacture of flats and sections for electrical and electronic applications.

We extract precious metals at our precious metal refinery also located at Dahej. Precious metals, like gold andsilver, have an affinity to copper ore and hence are found in certain quantities in the concentrate supplies. We payfor the gold and silver content based on prevailing international bullion market prices and other terms. These areextracted through the process after copper refining to produce 99.9% pure gold and silver as well as selenium.The residue after extraction of gold and silver contains traces of platinum and palladium and is sold as platinumgroup metal mix, commonly known as PGM.

As value-added products, we produce di-ammonium phosphate and NPK for use as fertilizer. Phosphoric acid isproduced at our phosphoric acid plant by chemical reaction of sulphuric acid from our smelting complex androck phosphate, which is imported. At our phosphatic fertilizer plant, phosphoric acid and ammonia are reactedto form di-ammonium phosphate. Addition of imported potash in required quantities is part of the chemicalprocess to produce NPK complexes.

We also sell sulphuric acid, copper slag, phosphogypsum and hydrofluosilic acid, which are by-products of ourproduction processes.

Our Production Processes

The following diagram illustrates the processes used in our copper facilities:

REFINERY

CONTINUOUS CAST COPPER RODS

DHIL (Jetty) W holly Owned Subsidiary

SM ELTER

SULPHURIC ACID PLANT

PRECIOUS M ETAL RECOVERY PLANT

PHOSPHORIC ACID PLANT

PHOSPHATIC FERTILIZER PLANT

OXYGEN PLANT

Gold, Silver, Selenium & PGM concentrate

Hydrofluosilic Acid

Phos. Acid

Am monia

Copper Anode Anode Scrap

Copper Slag

Cu concentrate

Acid sales

Rock Phosphate

Gypsum

Copper rods

Cu cathodes DAP

Anode Slime

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Our Principal Facilities

The following table sets out the details of our facilities, principal products and capacities as of March 31, 2005:

Location Copper Business: Details of Facilities, Principal Activities & Capacities

Fiscal year ended March 31, 2005

Principal Products Capacity

Dahej, Gujarat, India Copper cathodes 250,000 metric tpa

Continuous cast rods 97,200 metric tpa

Gold 7.5 metric tpa

Silver 75 metric tpa

Phosphatic fertilizers 400,000 metric tpa

Sulphuric Acid 735,000 metric tpa

Power plants 67.4 megawatt

In addition to the above, we own two copper mines located in East Pilbara and Queensland in Australia throughour wholly owned subsidiary Birla Mineral Resources Pty Limited which wholly owns Birla Nifty Pty Limited andBirla Mt. Gordon Pty Limited, which, in turn, owns and operates these mines. As on March 31, 2005 the Niftymine had proven and probable copper ore reserves of 34.59 million metric tons of 2.4% grade, while the Mt.Gordon mine had proven and probable copper ore reserves of 2.30 million metric tons of 3.0% grade.

The following table sets forth, for the periods indicated, information relating to the production volumes of oursmelter, refinery, phosphatic fertilizer plant and power plants:

Copper Business: Production volumes & Capacity utilization(1)

Year ended March 31,

2003 2004 2005

(in metric tons, except where noted)

Production Utilization Production Utilization Production Utilization

Copper cathode(2) 105,316 70% 101,179 40% 128,923 52%

Continuous cast rods 76,766 79% 91,380 94% 88,298 91%

Phosphatic fertilizers 315,785 79% 231,903 58% 286,264 72%

Gold 5 121% 7 92% 5 69%

Silver 31 68% 32 42% 37 49%

Sulphuric Acid(2) 176,341 39% 203,737 28% 261,882 36%

Power(3) 252 350 410

(1) Installed capacity has been used for calculation of Capacity utilization

(2) Production of copper cathode, sulphuric acid and phosphotic acid are net of 88,215 metric tons, 401,434 metric tons and 133,735 metrictons in fiscal 2005/ 85,431 metric tons, 323,969 metric tons and 100,476 metric tons in fiscal 2004/ 79,843 metric tons, 319,362 metric tonsand 104,641 metric tons in fiscal 2003 respectively, which had been captively consumed.

(3) Measured in MU.

Our Smelter

We own and operate a 250,000 metric tpa copper smelter in Dahej. The construction of the greenfield Dahejcopper smelting and refining complex with a capacity of 100,000 metric tpa was completed in 1998. Thereafter,cost effective expansions in two phases have increased the capacity to 250,000 metric tpa. Our smelter consistsof various plants divided into two production lines.

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We have recently completed the capacity expansion of our copper smelter to 500,000 metric tpa. We expect thefull ramp up of the capacity to be achieved by fiscal 2007. Based on current capacities of world smelters, a500,000 metric tpa complex would be the largest smelter in a single location in the world.

We use state-of-the-art technology for our smelters. For example, our greenfield smelter was set up with technologywe purchased from Outokompu, Finland. For our second expansion, we worked with Ausmelt, Australia. For thethird expansion from 250,000 metric tpa to 500,000 metric tpa, the technology supplier is Mitsubishi MaterialsCorporation, Japan. All the critical process equipment for the smelters is supplied by the respective technologysuppliers. Various other equipment have been supplied by leading international and Indian equipmentmanufacturers.

The sulphur content in the copper concentrate which is released during the smelting process as sulphur dioxideis converted to sulphuric acid at our sulphuric acid plant. Our sulphuric acid plant started commercial productionin 1998. It has a present capacity of 735,000 metric tpa (which is expected to increase to 1,470,000 metric tpa afterfull ramp up to 500,000 metric tpa of copper production) and is based on the double conversion double absorptionprocess. The plant design was provided by Monsanto Envirochem, USA. Three storage tanks are provided tostore the acid.

Our Copper Refinery

Our copper refinery at Dahej was commissioned in May 1998 as part of our greenfield copper smelting andrefining complex. Our copper refinery currently has a capacity to produce 250,000 metric tpa of copper. Anadditional copper refinery for 250,000 metric tpa has been built and is ready for commissioning.

During fiscal 2005, we produced 217,138 metric tons of copper cathodes with the ramp up of the capacity of ourcopper smelter and refinery. Our copper cathode production is first used to satisfy our own copper requirementsto produce continuous copper rods, which is a value-added product. The copper that remains after our internalconsumption is sold to third parties, in both the domestic and export markets as copper cathode.

We employ state-of-the-art technologies in the operation of our copper refinery and continuous copper rods toproduce quality products and reduce our production costs, such as:

1. ISA electro refining, a technology developed by Mount ISA, Australia, which is one of the most commonlyused and proven processes for refining copper; and

2. South Wire (USA) for continuous copper rods.

Precious Metal Refinery

Our precious metals refinery, with technology from Wenmec, Finland, has a capacity to produce 7.5 metric tpa ofgold and 75 metric tpa of silver of 99.9% purity. During fiscal 2005, we produced 5,156 kg of gold and 36,595 kgof silver.

Phosphatic Fertilizers

Our phosphatic fertilizer plant, located at Dahej, started commercial production in September 2000. Our phosphaticfertilizer plant has the capability of producing both dia-ammonium phosphate and NPK. As of March 31, 2005,the capacity at our phosphatic fertilizer plant was 400,000 metric tpa.

Our phosphoric acid plant, also located in Dahej, started commercial production in 1999. The plant has aninstalled capacity of approximately 180,000 metric tpa of phosphoric acid and 735,000 metric tpa of sulphuricacid. The plant also has a fluorine recovery section, which produces hydro fluosilic acid. The phosphoric acidproduced is entirely captively consumed for production of phosphatic fertilizers. Hydro fluosilic acid is sold toapproved users.

Our Power Plants

Electricity is an important cost element for producing copper. A reliable and inexpensive supply of electricity istherefore important. Since the commencement of our operations, the power tariff from the Gujarat state grid hasbeen high. As a result, we decided to build our own power plants. Our power plants are able to provide almostall of the electricity requirements of our smelter and a substantial portion of the electricity requirements of ourrefinery. The power plants operate on imported coal as well as indigenous coal. Steam from the waste heat boileris also utilized by the steam turbine to generate power.

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Our Key Raw Materials and Manufacturing & Operating Expenses

The principal inputs for our copper business are copper concentrate, rock phosphate, ammonia and utilities(electricity, compressed air and water).

We have been able to secure an adequate supply of the principal inputs for our copper production and ouroperations have not been significantly affected in the past from an inability to source any of these principalinputs. As a precautionary measure, we maintain a stockpile of each of the principal inputs for our copperproduction and coal for power generation. Depending on the amount used by our copper smelter and refineriesand the lead-time required to receive the input, we maintain a stockpile of principal inputs covering approximately30 to 40 production days.

The following table sets forth a breakdown of our key raw materials and manufacturing and operating expensesfor fiscal 2003, 2004 and 2005:

Copper Business: Raw Material andManufacturing and Operating Expenses

Fiscal year ended March 31,

2003 2004 2005

(in metric (Rs. in (in metric (Rs. in (in metric (Rs. intons) millions) tons) millions) tons) millions)

Power and Fuel 336 (1) 994.3 410 (1) 1,357.0 515 (1) 2,399.4

Raw Materials:

Copper Concentrate 555,884 15,618.1 614,343 22,737.8 741,358 32,854.5

Rock Phosphate 361,152 868.5 342,165 885.0 452,613 1,455.2

Ammonia 67,661 522.1 50,852 600.3 63,787 878.0

Other Raw Materials 671.5 1,191.3 720.9

Other Manufacturing &Operating Expenses 1,057.0 1,173.1 1,342.0

Total Raw Material andManufacturing &Operating Expenses 19,731.3 27,944.4 39,650.0

(1) Power consumed in MU

Copper Concentrate

Copper concentrate is the principal raw material for our copper smelter. In fiscal 2005, we sourced approximately10% of our concentrate requirement from two mines in Australia, owned through our wholly owned subsidiaryBirla Mineral Resources Pty Limited. The balance is procured from various other sources.

Our Copper Mines

Birla Mineral Resources Pty Limited, our wholly owned subsidiary, currently owns two copper mines in Australiathrough its wholly owned subsidiaries Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited. The Nifty mine,located in the Great Sandy Desert region of East Pilbara in Western Australia, was acquired in March 2003 and theMt. Gordon mine, in Queensland, Australia, was acquired in November 2003.

The Nifty mine consists of an open-pit mine, heap leach pads and a solvent extraction and electrowinning, orSXEW processing plant which produces copper cathode. In fiscal 2005, the Nifty mine produced 15,826 metrictons of copper cathode.

A copper sulphide deposit is located at the lower levels of the Nifty mine and we are currently developing anunderground mine and concentrator to mine and process copper ore from this deposit. This project is now in anadvanced stage and production of concentrate is expected to commence in the second half of fiscal 2006.

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The Mt. Gordon mine consists of an underground and open-pit mine, a copper concentrate plant and ferric leachplant. Until recently, this operation produced copper cathode through the ferric leach process. In 2004, a copperconcentrator was commissioned to provide concentrate for use at our operations in Dahej. For fiscal 2005,Mt. Gordon mine produced 35,135 metric tons of copper.

Mining Reserves

As on March 31, 2005 the Nifty mine had proven and probable copper ore reserves of 34.59 million metric tonsand estimated mineralized material not in reserves of 1.5 million metric tons. The Mt. Gordon mine had provenand probable copper ore reserves of 2.30 million metric tons and estimated mineralized material not in reservesof 12.72 million metric tons as on the same period. New reserves are expected to be proved on an annual basisas drilling advances ahead of mining.

Sources of Copper Concentrate

In fiscal 2005 we sourced approximately 76% of our copper concentrate requirement from long term suppliersand approximately 13% from spot purchases, compared to approximately 75% and 61% from long term suppliersand 25% and 40% from spot purchases in fiscal 2004 and fiscal 2003, respectively.

Long Term Agreements: In general, our long-term agreements run for a period of three to five years, and isrenewable at the end of the period. Quantity of supply for each contract year is fixed at the beginning and termslike TcRc and freight differential are negotiated each year depending upon market conditions. During fiscal 2005,we sourced approximately 76% of our copper concentrate requirements through long-term agreements.

Spot Purchases: We also purchase copper concentrate on a spot basis to fill any gaps in our requirements basedon production needs for quantity and quality. These deals are struck on the best possible TcRc during the periodand are specific for short-term supply. During fiscal 2005, we sourced approximately 13% of our copper concentraterequirements through spot purchases.

Power and Fuel

The electricity requirements of our copper smelter and refinery are primarily met from our own power generation.Our power plant is connected to the Gujarat state power grid for only short-term, emergency start-up electricityand to meet fluctuations in peak demand, pursuant to an agreement with the state power grid which provides forthe payment of a minimum demand charge.

Our coal is currently sourced from South Africa, Australia, China and India through an international competitivebidding process. Most of the coal is used for our power plant and a small portion of it is used for our smeltingprocess. Our plant meets a majority of its coal requirements through imports.

Ammonia

Our ammonia is sourced from Middle East countries including Qatar and Saudi Arabia pursuant to contractsrenewed on an annual basis and from Iran on a spot basis as and when required. The pricing is based on aformula and the price varies from time to time. The contract provides for minimum supply quantities with anoption to increase if required.

Rock Phosphate

Our rock phosphate is currently sourced from Jordon and Togo pursuant to contracts renewed on an annualbasis and the pricing is fixed for the year. The contract provides for minimum supply quantities with an option toincrease if required.

Logistics and Transport

Our Port Storage and Handling Facilities

Since 1999, our wholly owned subsidiary, Dahej Harbour and Infrastructure Limited, has been operating an allseason jetty located next to our facilities at Dahej, which is capable of handling more than three million metric tpaof cargo. It is used to handle the import of cargo such as copper concentrate, rock phosphate, ammonia and coalfor power plants and also export copper products as break bulk cargo. The jetty also has pipelines to facilitate theloading of phosphoric acid and sulphuric acid for export and import. Depending upon the need for our owncargo, the jetty can also handle commercial cargo.

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Sales and Marketing

In our copper segment we sell copper cathodes and continuous cast rods. We also sell precious metals like goldand silver, phosphatic fertilizers and other by-products like sulphurice acid. The following table sets forth ouractual sales, in both tonnage and value terms, during fiscal 2003, 2004 and 2005:

Copper Business: Product-wise Sales

Fiscal year ended March 31,

2003 2004 2005

(in metric (Rs. in (in metric (Rs. in (in metric (Rs. intons) millions) tons) millions) tons) millions)

Copper

Copper cathodes 105,316 9,051.8 101,033 10,486.8 126,451 17,965.5

Continuous cast rods 77,134 8,166.7 91,537 11,265.9 87,924 14,773.6

Precious metals

Gold 6 2,910.7 7 3,770.2 5 3,205.3

Silver 31 224.5 32 269.9 35 352.2

Phosphatic fertilisers 346,013 3,403.8 260,022 3,492.5 302,436 4,181.7

Other by-products

Sulphuric Acid 176,341 160.7 194,559 277.3 268,592 434.4

Domestic Sales (1) 16,134.6 18,537.4 22,985.7

Export Sales 7,806.6 11,101.6 18,322.6

(1) Includes trade sales and miscellaneous items, but excludes Net Export Incentives & Miscellaneous Receipts & Claims.

Sales of Our Copper Products

Our copper sales and marketing head office is located in Mumbai. Continuous cast rod sales at Rs.14,773.6million amounted to approximately 45% of our total copper sales for fiscal 2005 compared to 52% in fiscal 2004with the remaining being accounted for by copper cathodes.

During fiscal 2005, we sold approximately 82,304 metric tons of copper in India. Domestic sales are normallyconducted on the basis of a fixed price for a given month that we determine from time to time on the basis ofaverage LME price for the month, as well as domestic supply and demand conditions. The price for copper wesell in India is normally higher than the price we charge in the export markets due to the tariff structure on costs,smaller order sizes that domestic customers place and the packaging, storing and truck loading expenses that weincur when supplying domestic customers.

For domestic sales of copper, contracts are finalized for monthly quantities, monthly optional quantities, quotationalperiod, premium and pricing methodology.

Our export sales of copper are made on the basis of both long-term sales agreements and spot sales. The salesprice of our copper exports includes the LME price plus the producer’s premium.

We do not enter into fixed price long-term copper sales agreements with our customers. Rather, the price isbased on LME price for the agreed quotational period plus an agreed premium.

Typically, during the last three months of each year, we negotiate with our long-term customers a schedule forshipments with quantity for each period, the premium and the quotational period. Each year we set aside acertain portion of our copper production for sales in the spot market as a precautionary measure. This allows usto fulfill delivery obligations under our long-term sales agreements in the event of a disruption in our production,as well as to take advantage of sudden and unpredicted price surges in the global copper market. We believe thatthis practice is consistent with the standards adopted by other established exporters of copper. When not otherwise

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used to cover our long-term sales agreements, we sell this reserved amount on the spot market. We are constantlyin touch with our customers for availability of spot quantity and also receive enquiries for the same from time totime. We submit quotations, setting forth the quantity and delivery time of an allotment. We award the contractbased on agreement of best possible terms. Delivery is generally made within 30 to 90 days.

Most of our copper export sales are supported by an irrevocable letter of credit issued by a mutually agreeablefinancial institution prior to shipment. Our copper domestic sales are mostly paid for in full by the customer or aresupported by an irrevocable letter of credit or bank guarantee issued by a mutually agreeable financial institutionprior to our releasing the copper from our refinery, including interest for the period if credit is agreed upon. Allpayments by our domestic customers are in Indian Rupees and payments by our overseas customers are normallyin U.S. Dollars.

In certain cases where we have a long-term relationship with the export customer, we may agree for paymentagainst dispatch documents including bill of lading which is generally received within 15 days. However, wegenerally do not allow two shipments for which payment is pending from a specific customer. Delivery for allsupplies is generally effected within the agreed time period. However, from time to time, delivery period adjustmentsmay be made on mutual agreement.

During fiscal 2005, we sold 5,300 kilograms of gold and 34,900 kilograms of silver. The sale of gold and silver takesplace from our Mumbai office to various jewellers and precious metal private traders. Sales are made on the basisof international bullion market prices prevailing on the day of the sale plus premiums or discounts as agreed.Payments for gold and silver sales are collected in advance prior to dispatch from Dahej.

Our phosphatic fertilizer products are sold through private trade, cooperative societies and government institutions.Our primary marketing zones are the states of Gujarat, Maharashtra, Madhya Pradesh, Rajasthan, Punjab andHaryana. During the fiscal year 2005, we sold 302,436 metric tons of phosphatic fertilizers amounting toRs. 4,181.7 million in revenues.

Sulphuric acid produced is partially used in our phosphoric plant and the balance is sold to various companiesand traders on both one year contracts and spot sales on the basis of price lists published from time to timedepending on market conditions. During fiscal 2005, we sold 268,592 metric tons of sulphuric acid amounting toRs. 434.4 million.

Competition

For our primary refined copper sold in India, our competitors are Sterlite Industries Limited and Hindustan CopperLimited. In the export market we compete with global copper suppliers. For gold and silver, we compete primarilywith importers of these metals. For phosphatic fertilizers, we compete with numerous domestic producers,certain of which have larger capacities to service marketing focus areas. For sulphuric acid, we compete with afew domestic sulphur burning acid producers and one large domestic metal-based acid producer.

Key Technology Arrangements

We use a variety of technologies in relation to our copper business for which we have entered into technicalknow-how and technical assistance and services arrangements. For the conversion of copper concentrate intoanode we entered into the following key arrangements:

1) License agreement dated November 12, 1994 with Outokumpu Engineering Contractors OY of Finland forFlash Smelting Process for the Copper I smelter at Dahej.

2) License agreement dated September 5, 2001 with Ausmelt Limited of Australia for grant of license for theuse of the submerged lance smelting technology in the Copper II smelter at Dahej and provision of relatedtechnical information and advisory.

3) License agreement dated October 11, 2002 with Mitsubishi Materials Corporation of Japan for grant oflicense for the use of the Mitsubishi Continuous Smelting and Converting Process in the Copper III smelterat Dahej and provision of related technical information and advisory.

We entered into a license agreement with MIM Technology Marketing Limited of Australia dated December 20,1994 through Outokumpu Engineering Contractors OY for the use of the ISA process which is used in theconversion of copper anode into copper cathode. The agreement covered supply of the entire engineering

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package including the provision of related information and services. On July 22, 1995 we entered into an agreementwith M/S. Southwire Company of the USA for supply of license, basic engineering know how and trainingrelating to the establishment of our continuous cast copper rod plant at Dahej.

In addition to the above we also entered into the following key arrangements in relation to the by-products of ourcopper business:

1) Agreement dated July 7, 1999 with Outokumpu Wenmec OY of Finland for supply of equipment andcommissioning of our precious metals refinery at Dahej with technological guarantees.

2) License agreement dated November 12, 1994 with Outokumpu Engineering Contractors OY of Finland foruse of Monsanto technology in the sulphuric acid plant.

3) Agreement dated July 20,1995 with SNC Lavalin Europe N.V. for provision of proprietary equipment relatingto the phosphoric acid plant at Dahej.

4) License and know how agreement dated October 22, 1999 with INCRO S.A of Spain for use of INCROtechnology in the phosphatic fertilizer plant at Dahej.

Expansion Projects

We have recently completed the capacity expansion of our copper smelters to 500,000 metric tpa. We expect thefull ramp up of the capacity to be achieved by fiscal 2007. We may acquire additional copper mines as and whenwe identify appropriate ones. We have not currently identified a suitable mine for acquisition.

Quality Assurance

We believe that the quality of our products and processes are integral to our position as one of the leading metalsand mining companies in Asia and to our ability to retain and attract customers. We utilize modern systems toachieve this level of quality in our processes, as well as to monitor and maintain peak performance throughoutthe life of our operations. As a part of on-going efforts to attain continuous quality improvement, we employseveral on the job quality improvement initiatives.

All our aluminium plants are ISO 9001 and 14001 certified, and several have attained the OHSAS 18001 — theoccupational health and safety certification. On the export front, our aluminium business has been accorded aTrading House status by the Indian government.

Effective January 30, 2003, the London Metal Exchange listed our copper business as a Grade A copper brand.Our copper business has also been accredited with ISO 9001, ISO 14001 and OSHAS 18001 certifications.

We have received several awards and recognitions for our best practices including the “Best Safety PerformingPlant” award given by the International Aluminium Institute in 2004, the Rajiv Gandhi National Quality Award 2003in Large-Scale Manufacturing category, award by the Bureau of Indian Standards and the IMC Ramakrishna BajajNational Quality Award 2004 in the manufacturing category.

Pricing and Risk Management

Our businesses are exposed to commodity price, foreign exchange and interest rate risks. We are subject to LMEprice fluctuations of aluminium, copper and gold and silver, fluctuations in the exchange rates of Indian Rupeesto the U.S. Dollar, as well as the Japanese Yen, the Euro and the Australian Dollar, and volatility in interest rates(primarily in Indian Rupees but also for certain other currencies).

We use a variety of tools to hedge these risks, including swaps and options (for commodity price risks), forwards,options and dollar loans (for foreign exchange risks) and derivative transactions (for interest rate risks).

We have established a risk management framework to evaluate and monitor risks and returns in order to protectbudgeted earnings and costs and reduce earnings volatility, thereby increasing shareholder value. Our Board ofDirectors has ultimate responsibility for approving all risk management policies and guidelines, setting risk limitsand risk appetites, and ensuring that we establish effective risk management systems and procedures in line withapplicable standards. Our Board of Directors has set up the Risk Management Board to assist in managing thevarious risks that we face. This board is assisted by the Price Management Committee and the following operationaldepartments: the front office, back office and a compliance officer, who measure and monitor our risk profile andimplement our risk policies and procedures on a day-to-day basis.

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Our Risk Management Board is headed by our Managing Director and consists of a member of the Board ofDirectors, our Chief Financial Officer, the heads of various businesses. The board meets as necessary to evaluateperceived risks and to discuss reports from the Price Management Committee.

Our Price Management Committee approves all absolute price-risk hedging proposals, evaluates our prevailingprice risk exposures, reviews outstanding transactions and proposals and considers industry events and priceexpectations. Our front office is primarily responsible for executing trades. Our back office is a completelyindependent and separate department which confirms and reconciles all transactions, ensures compliance withour risk management policies and monitors outstanding hedging transactions. In addition to the foregoingcontrol, we also have the following safeguards: approval for transaction limits are set only by the Risk ManagementBoard, our commodity hedging transactions are conducted only with approved LME brokers, there is a monthlyreconciliation between physical metal and LME positions, periodic reviews and audits are undertaken by ourcompliance officer and an external risk management expert, an annual audit is undertaken by our internal auditorand we document the risk management objective and policy for every transaction. Our currency and interest ratederivate transactions are conducted through reputed banks.

Research and Development

In aluminium, we currently operate two research and development centers at Belgaum and Taloja. Our Belgaumresearch and development facility undertakes product development and application research in the areas ofBayer process technology, special alumina and hydrates. Our value-added operations facilities are supported bya government-recognized research and development center which is located at our Taloja plant. This centerworks in the areas of lubrication, metallurgy and testing of various types of oils which are crucial to our value-added operations. This laboratory is accredited to ISO 9001:2000, Quality Management and ISO 17025:1999,NABL accreditation for chemical and electrical testing of oils and lubricants.

The results of our research and development efforts have helped us in continuous improvement in processefficiencies, cost reduction as well as development of new applications and increased customer acceptance,both in the domestic and overseas markets.

In copper, we engage in research and development for improvement in efficiencies, productivity, environmentand quality as well as through-put in furnaces.

Our total expenditures for research and development was approximately Rs.19.1 million, Rs.40.9 million andRs.92.4 million for fiscal 2003, 2004 and 2005, respectively.

Patents and Trademarks

We currently hold the following patent:

● Patent No. 186716 dated January 12, 1992: A process for preparing cryolite by extracting flourine from spentpot filters. The patent is due to expire on January 16, 2012.

We have applied for the following patent in 2001:

● Patent No. 401/MUM/2001: A process for an alumina conveying system.

We have also invested significant resources to establish and develop brands for our value-added products aimedat consumer markets:

With the exception of Superwrap, which is a registered trademark, we have filed the brands for registration andapproval with the relevant Indian authorities.

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Serial Trademark Products StatusNumber

1. ‘Hindalco’ Group mark signifying all available Pending: Application has been filed.goods and services Examination report and reply by the

Company have been filed

2. ‘Birla Balwaan’ (i) word mark; (ii) slogan in four Pending: Application has beenlanguages and (iii) bag cover and accepted. Examination report and(iv) devise mark for chemicals used reply by the Company have been filedin agriculture, horticulture, manure,forestry, herbicides and for foodpreservation

3. ‘Freshwrapp’ (i) word mark; (ii) label mark of Pending: Application has beenstandard pack; (iii) label mark of accepted and correspondence numbercolours pack and (iv) label mark of allotted but no examination report haspopular pack been filed.

4. ‘Aura’ (i) slogan showcasing aura wheels; Pending: Applications have been(ii) banner showcasing aura wheels; accepted(iii) mark with the letter ‘A’ For: (i) Correspondence number is

allotted but no examination report hasbeen received.(ii) Letter of acceptance beforeadvertisement has been issued(iii) Examination report and reply by theCompany have been filed

5. ‘Superwrap’ Word mark for household foil Registered (in the name of Indal) :Registration No. 418944 issued onAugust 11, 1990; The registration isrenewed till March 12, 2015

6. ‘MaxLoader’ Word mark for body framework Registered (in the name of Indal) :of truck Registration No. 529859B issued on

May 17, 1990; The registration isrenewed till March 17, 2014

Employees

We believe that our success is significantly dependent on our ability to attract, develop and retain a superiorworkforce. We had a total of 13,752 employees at the end of fiscal 2003, 13,675 employees at the end of fiscal2004 and 19,687 employees as of March 31, 2005. We expect that the number of our employees will increase aswe complete our expansion projects. We believe that our relationship with our employees is good.

In addition to our full-time employees, we retain contract workers to assist us in various aspects of our business.The terms of engagement for our contract workers are different than that of our full time employees.

Recruitment. Our recruitment focuses on attracting and retaining high caliber individuals who are motivated toadvance within the organization and meet our evolving needs. We follow all modes in the recruitment approachi.e. press advertisement, campus recruitment, search through consultants, special recruitment drives andheadhunting agencies. The qualifications depend upon the job profile and vary from BTech / BE, MSc (puresciences), MCS, MCA, MTech & PhD for technical grades to MBA and degrees with specific specializations foradministrative grades. Primary consideration is given to qualifications, knowledge, skills and personal qualities,including the capacity to adapt and evolve over the longer term and the demands of the role to determinesuitability. The selection of candidates is generally conducted by an interview panel, which evaluates thequalifications and suitability of candidates.

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Training. The overall objectives of our training programs are to upgrade the skills of our employees so they canhandle broader tasks to better utilize our existing resources.

We believe that our emphasis on training and development helps our employees meet business challengeseffectively. During fiscal 2003, 2004 and 2005, our employee turnover rate was only 7.82%, 9.57% and 13.75%,respectively.

Union representation. Approximately 65% of our employees in our aluminium business are unionized. We haveentered into long-term agreements with terms of between three and five years with recognised unions at variouslocations. These agreements provide for standard terms and conditions of workers, including compensation,benefits and working hours. Our copper business employees are not members of any unions. Instead,management meets with the employees regularly and resolves all issues to mutual satisfaction.

Our industrial relations are cordial. We have not experienced any major disruptions in the last decade, due towork strikes or work stoppages at any of our major facilities.

Compensation. The remuneration package of our full-time employees is established in a systematic manner. Thestandard remuneration package for our full-time employees includes a:

● salary, which is increased in line with the performance of our business;

● bonus tied to our performance, the specific business unit in which the employee reports and individualperformance;

● various allowances and welfare benefits, including medical care, housing subsidies, child care and education,retirement and other social security benefits; and

● provident fund, pension fund and gratuity.

Annual compensation reviews are based on external factors, such as economic growth, sectoral growth anddemand and supply of skills and competencies, and internal factors, such as business performance, capacity ofthe business to pay as well as a performance grid for employees. We have a variable pay scheme for ourmanagerial staff to recognize and reward superior performance.

We do not have an employee stock option plan.

Community development. We actively participate in the operation of schools and hospitals at our various locationsand all our employees at those locations are entitled to access these facilities. We are also at the forefront ofvarious community development activities. At certain locations, our employees are also involved in facilitatingand nurturing self-help organizations in remote villages located close to our manufacturing facilities.

Environmental Matters

We are committed to the protection of the environment and have a well-drawn out environmental managementstrategy in place. All our installations are ISO – 14001 certified and most are also OHSAS – 18001 certified. Wehave installed state-of-the-art pollution control equipment to ensure cleaner operations at all our units. Similarly,in order to reduce effluent discharge, we have set-up effluent treatment systems in all our units. We have alsoundertaken several unique projects on an experimental basis jointly with local entrepreneurs for convertinghazardous waste into useful products. A well equipped environment management cell has been established withqualified personnel to oversee our environmental activities and projects. This cell is supported by sophisticatedcontrol laboratories set up to constantly monitor the quality of air emissions and water effluents at our facilities.We have received several awards and recognitions for our contribution to environmental conservation and safetyincluding the CII National Award for Excellence in Energy Management - 2004, National Energy ConservationAward - 2004 in the Aluminium Sector and Green Tech Gold Award 2003-04.

We are subject to national and provincial environmental regulations which control waste discharge, land repair,emissions disposal and mining control. We believe that our operations are in compliance with the present regulatoryrequirements.

We spent approximately Rs.1,771 million on pollution control equipment during fiscal 2005 and plan to spend anadditional Rs.2,924 million within a span of 3 years. The Government of India, however, may impose stricterregulations or increase its enforcement activities which could require us to spend additional amounts on

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environmental compliance. We have been subject to some environmental claims. For more details see “OutstandingLitigation and Defaults” on page 208 of this Letter of Offer.

Insurance

We currently maintain insurance coverage on our property and plants, our fixed assets, our transportation vehiclesand various assets that we consider to be subject to significant operating risks. The risk coverage is decided in ascientific manner taking help of experts from the Insurance and Risk Advisory Services industry.

We paid Rs. 365.0 million in fiscal 2005 towards insurance charges compared to Rs.335.3 million in fiscal 2004.

The employees at all our locations are covered against the risks of accident in the work place as per the laws ofthe land. Further, the company maintains hospitals at some locations to extend medical facilities to its employeesand in other locations, the employees are covered by suitable health insurance schemes.

See “Risk Factors – Our insurance does not cover all of the risks we face, and the occurrence of events that arenot covered by our insurance could cause us losses, which if significant, could adversely affect our financialcondition.”

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REGULATIONS AND POLICIES

Indian Regulations

We are governed by the Mines and Minerals (Development and Regulations) Act, 1957, or MMDR Act, and theMineral Concession Rules, 1960, or MCR Rules, in respect of mining rights and the operations of mines in India.The Government of India announced the National Mineral Policy, 1993, and has also made subsequent amendmentsto the National Mineral Policy, 1993 to reflect principles of sustainable development. The MMDR Act and the MCRRules have been amended from time to time to reflect the National Mineral Policy. Mining leases are grantedunder the MMDR Act, which was expressly enacted to provide for the development and regulation of mines andminerals under the control of the Union of India.

A mining lease must be executed with the relevant state government. The mining lease agreement governs theterms on which the lessee can use the land for the purposes of mining operations. If the land on which the minesare located belongs to private parties, the lessee would have to acquire the surface rights from such privateparty. If such private party refuses to grant such surface rights, the lessee is to inform the same to the StateGovernment and deposit the compensation for the acquisition of the surface rights with the State Government,and if the State Government deems that such amount is fair and reasonable, then the State Government willorder the private occupier to permit the lessee to enter the land and carry out such operation as may be necessaryfor the purpose of the mining lease. For determining compensation to be paid to such private party, the StateGovernment is guided by the principles of the Land Acquisition Act. In case of Government Land, the surfaceright to operate in the lease area is granted by the Government upon application and as per the norms of thatState Government. Surface rights of private land can also be directly negotiated with the owner and the rightsobtained.

If the mining operation in respect of any mining lease leads to a displacement of people, the mining project canbecome functional only after obtaining the consent of such affected persons and the resettlement and rehabilitationof the persons displaced by the mining operations and payment of other benefits is required to be carried out inaccordance with the guidelines of the relevant state governments, including payment for the acquired land,owned by those displaced persons.

Applications for a mining lease and a prospecting license has to be made to the concerned state government,containing certain mandatory details in accordance with the MCR Rules. In respect of bauxite, coal and otherminerals listed in the First Schedule of the MMDR Act, prior approval of the Government of India is required to beobtained by the State Government for entering into the mining lease. The approval of the Government of India isgranted on the basis of the recommendations of the state governments, though the Government of India has thediscretion to overlook the recommendation of the state Governments. On receiving the clearance of the Governmentof India, the state government grants the final mining lease and/or the prospecting license, as the case may be.The lease can be executed only after obtaining the mine plan approval and mine closure plan approval from theIndian Bureau of Mines (IBM). In case of coal this plan is approved by Ministry of Coal, Government of India. Incase if forest lands are involved, the mining lease can be executed only after obtaining the forest clearances asper Forest Clearance (Conservation) Act, 1980. The mine can be operational only when the project (>5 Ha area)receives the Environment Clearance from the Ministry of Environment and Forest, Government of India.

The maximum term for which a mining lease may be granted is 30 years. A mining lease may be renewed forfurther periods of 20 years or for a lesser period as per the request of the lessee. In respect of coal, prior approvalof the Government of India is required for any renewal. The renewals are subject to the lessee not being in defaultof any applicable laws (including environmental laws). The MMDR Act provides that if the holders of a mininglease are using the mineral for their “own industry”, then such holder would be entitled to a renewal of hismining lease for a period of 20 years unless he applies for a lesser period. The lessee has to apply to the relevantstate government for renewal of the mining lease at least one year prior to the expiry of the lease. However, theState Government can condone the delay in submitting an application for renewal of a lease provided that theapplication is made before the expiry of the lease. In the event that the State Government does not pass anyorders in relation to an application for renewal prior to the expiry of the lease, the lease will be deemed to beextended till the State Government passes its orders on such application for renewal.

A prospecting license for any mineral or prescribed group of associated minerals is granted for a maximum

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period of three years and for a maximum area of 25 square kilometers. A prospecting license can be renewed insuch a manner that the total period for which a prospecting license is granted does not exceed five years. In astate (province), a person can be granted a maximum area of 25 square kilometers in one or more prospectinglicense, but if the Government of India is of the opinion that in the interest of development of any mineral it isnecessary to do so, the maximum area limit can be relaxed. A person may obtain a prospecting license in variousstates simultaneously up to the state-wide area limits. However, a person acquiring a prospecting license in thename of another person that is intended for himself shall be deemed to be acquiring the prospecting license forhimself and the limits would apply accordingly. The person who undertakes prospecting under a prospectinglicense enjoys preferential right for the grant of the mining lease.

The MMDR Act also deals with the measures required to be taken by the lessee for the protection of environmentfrom any adverse effect of mining. The rules framed under the MMDR Act provide that every holder of a mininglease shall take all possible precautions for the protection of the environment and control of pollution whileconducting mining operations in the area. The environmental protection measures that are required to be takenin any mining operation includes, among others, prevention of water pollution, measures in respect of surfacewater, total suspended solids, ground water pH, chemicals and suspended particulate matter in respect of airpollution, noise levels, slope stability and impact on flora/fauna, local habitation etc.

Royalty Payable

Royalty on the mineral-mine and a dead rent component are payable to the state government by the lessee inaccordance with the MMDR Act. The mineral- royalty is payable in respect of an operating mine that has starteddispatching and is computed in accordance with a formula stipulated in this regard. The Government of India hasbroad powers to change the royalty scheme but cannot do so more than once every three years.

In September 2000, the central government changed the nationwide bauxite royalty scheme from a fixed fee toa variable fee formula, which was further revised upwards in October 2004 under the same formula. Thisformula takes into account LME aluminium price and percentage of aluminium in bauxite.

In addition, the lessee will be liable to pay the occupier of the surface of the land over which he holds the mininglease an annual compensation determined by the State Government, which varies depending on whether theland is agricultural or non-agricultural.

Compliance with other applicable laws:

We are also required to obtain clearances under the Environment (Protection) Act, 1986, the Forest (Conservation)Act, 1980, if any forest land is involved, and other environmental laws such as the Water (Prevention and Controlof Pollution) Act, 1974, Water (Prevention and Control of Pollution) Cess Act, 1977 and Air (Prevention and Controlof Pollution) Act, 1981, before commencing the operations of the mines. To obtain an environmental clearance,a no-objection certificate from the concerned state pollution control board must first be obtained, which isgranted after a notified public hearing, submission and approval of an environment impact assessment, or EIAreport and an environment management plan, or EMP, by the person as well as the mines. The EIA report spellsout all the operating parameters, including, for example, the pollution load etc. as well as their mitigative measuresfor that particular mine. Mining activity within a forest area is not permitted in contravention of the provisions ofthe Forest (Conservation) Act, 1980. The final clearance in respect of both forest and environment is given by theGovernment of India, through the Minister of Environment and Forest. However, all applications have to be madethrough the respective state governments who then recommend the application to the Government of India. Thepenalties for non-compliance range from closure or prohibition of mining activity in respect of the mines as wellas the power to stop supply of energy, water or other service and monetary penalties on and imprisonment of thepersons in charge of the conduct of the business of the company in accordance with the terms of the Environment(Protection) Act, 1986 and Forest Conservation Act, 1980.

Water (Prevention and Control of Pollution) Act, 1974

A lessee is also required to comply with the provisions of the Water (Prevention and Control of Pollution) Act,1974, which aims at the prevention and control of water pollution as well as restoration of water quality, throughthe establishment of state pollution control boards. Under the provisions of this act, any individual, industry orinstitution discharging industrial or domestic wastewater is required to obtain consent of the state pollution

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control board. The consent to operate is granted for a specific period after which the conditions stipulated at thetime of granting consent are reviewed by the state pollution control board. Even before the expiry of the consentperiod, the state pollution control board is authorized to carry out random checks on any industry to verify if thestandards prescribed are being complied with by the industry. If the standards are not being complied with, thestate pollution control board is authorized to serve a notice to the concerned person. In the event of non-compliance, the concerned state pollution control board may close the mine or withdraw its water supply to themine or cause magistrates to pass injunctions to restrain such polluters.

Water (Prevention and Control of Pollution) Cess Act, 1977

Mining is a specified industry under the Water (Prevention and Control of Pollution) Cess Act, 1977 and a lesseeis required to pay the surcharge as stipulated under the terms of the Water (Prevention and Control of Pollution)Cess Act, 1977. The assessing authority on the state level levies and collects the surcharge based on the amountof water consumed by such industries. The rate is also determined by the purpose for which the water is used.Based on the surcharge returns to be furnished by the industry every month, the amount of cess is assessed bythe relevant authorities. A rebate of up to 25% on the surcharge payable is available to those industries whoconsume water within the quantity prescribed for that category of industries and who also comply with theeffluents standards prescribed under the Water Act or the Environment (Protection) Act.

A lessee can draw water from bore wells or from water harvested in open pits within the lease area. However, asurcharge under the Water (Prevention and Control of Pollution) Cess Act, 1977 is to be paid by the lessee to thestate governments of the states in which the mines are located.

Air (Prevention and Control of Pollution) Act, 1981

A lessee is also required to comply with the provisions of the Air (Prevention and Control of Pollution) Act, 1981,under which any individual, industry or institution responsible for emitting smoke or gases by way of use as fuelor chemical reactions must apply in a prescribed form and obtain consent from the state pollution control boardprior to commencing any mining activity. The board is required to grant consent within four months of receipt ofthe application. The consent may contain conditions relating to specifications of pollution control equipment tobe installed.

For ensuring the continuation of the mining operations, a yearly consent certification from the state pollutioncontrol board is required both under the Air (Prevention and Control of Pollution) Act, 1981 and Water (Preventionand Control of Pollution) Act, 1974, as discussed above.

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HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS

Our Company is a flagship company of the Aditya Birla Group and was incorporated on December 15, 1958 asHindustan Aluminium Corporation Limited under the provisions of the Act with its registered office at IndustryHouse, 6th floor, 159 Churchgate Reclamation, Mumbai 400 020, India. We moved our registered office to CenturyBhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai 400 025, India effective from September 1, 1970.Wechanged our name from Hindustan Aluminium Corporation Limited to Hindalco Industries Limited on October 9,1989, as we had expanded our line of products and also proposed to diversify into other allied fields includingaluminium foils, steel plant etc. The Equity Shares of our Company with face value of Rs. 10 each were first listedon BSE. The listing agreement was signed with BSE on January 28, 1960. Thereafter, the Equity Shares with facevalue of Rs. 10 each were listed on the NSE.

In 1962 we set up collaboration with Kaiser Aluminium & Chemicals Corporation, USA when our integratedcomplex at Renukoot came on stream with a smelter capacity of 20,000 MTPA. It has since grown to become thelargest integrated aluminium producer in India with a smelter capacity of 345,000 MTPA. Our equity shareholdersand the equity shareholders of Renusagar Power Company Ltd. (“Renusagar”) approved a Scheme ofAmalgamation of Renusagar into our Company, wherein all the assets of Renusagar were merged into ourCompany. The Scheme was sanctioned by the High Court of Judicature at Bombay on April 22, 1993 and by theHigh Court of Allahabad. Our Company has undergone in-house expansions and modernization and set up a Foil& Wheel plant at Silvassa, near Mumbai, in 1997-98.

In the year 2000-01, our Company acquired a 74.6% stake in the Indian Aluminium Company Limited (“Indal”).Established in 1938, Indal started with India’s first aluminium sheet rolling mill at Belur, near Kolkata, West Bengal.Indal had a nationwide spread of plants and mines, operating through all stages of the aluminium value chainfrom bauxite mining, alumina refining, aluminium smelting with captive power to downstream sheet and foilrolling and extrusions. The country’s first scrap recycling facility was commissioned by Indal and reflected itscommitment to promoting aluminium as the eco-friendly metal that can be recycled over and over again, consumingless power and conserving natural resources. After increasing our stake in Indal from 95.9% to 96.5% at anadditional cost of Rs. 49.9 million, through an open offer made in accordance with regulatory requirements, onAugust 23, 2004, our Board and the Board of Directors of Indal approved a Scheme of Arrangement wherein allthe assets of Indal other than the foil unit at Kollur in Andhra Pradesh were to be demerged from Indal andmerged into our Company. The Scheme has already been approved by the requisite majority of the shareholdersand creditors of both the companies and also sanctioned by the High Court of Judicature at Bombay and theHigh Court at Calcutta on January 14, 2005 and December 23, 2004 respectively. Simultaneously the capitalreduction of the equity shares of Indal from Rs. 10 to Rs. 2 for per equity share was also approved by the HighCourt at Calcutta on December 23, 2004. Pursuant to the Scheme, Hindalco issued shares to the minorityshareholders of Indal in the ratio of one share of Rs. 10 each in Hindalco, credited as fully paid up for every sevenequity shares of Rs. 2 each held by the minority shareholder in Indal. The Indal shareholders will continue to holdtheir shares in Indal. Hindalco’s current share in the remaining Indal is 96.98%. The Scheme was made effectivefrom March 7, 2005, and the appointed date was April 1, 2004. Indal’s strength in downstream operationssupplements our operations and as a consequence, we now enjoy a 33% market share in primary aluminiummetals and 63% market share in the value-added rolled product segment.

Meanwhile, our equity shareholders and the equity shareholders of Indo Gulf Corporation Limited (IGCL) andIndo Gulf Fertilisers Limited (IGFL) approved a Scheme of Arrangement between IGCL, IGFL and our Company infiscal 2003, wherein the fertilizer business of IGCL was demerged and migrated to IGFL and the remaining businessof IGCL (including its copper business) was merged with our Company. The scheme was sanctioned by the HighCourt of Judicature at Bombay and by the High Court of Lucknow. Pursuant to the Scheme, the Company issuedshares to the minority shareholders of IGCL in the ratio of one share of Rs. 10 each in the Company, credited asfully paid up for every twelve equity shares of Rs. 10 each held by the minority shareholder in IGCL. The Schemewas made effective from February 12, 2003 and the appointed date being April 1, 2002.

Subsequently, with a strategic intent to achieve vertical integration, the copper business of Hindalco acquiredtwo captive copper mines in Australia – Nifty mine located in the Great Sandy Desert region of East Pilbara inWestern Australia, and Mount Gordon mine, in Queensland. The Nifty mine was purchased through acquisitionof Straits Nifty Pty Ltd. (Later renamed to Birla Nifty Pty Ltd. with effect from March 10, 2003) from Straits

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Resources Pty Ltd. in March 2003; and the Mt. Gordon copper mine was acquired from the Receivers andManagers of Western Metals Copper Ltd. in November 2003. Hindalco’s subsidiary Birla Minerals Resources PtyLtd. was used as a vehicle to acquire the two mines.

As on the date of filing this Letter of Offer, our Promoters hold 4,025,760 Equity Shares of Re. 1 each representing0.43 per cent of our pre-Issue equity (issued capital) and the Promoter Group holds 236,010,720 Equity Shares ofRe. 1 each of our Company representing 25.44 per cent of our pre-Issue equity (issued capital). As on the date offiling this Letter of Offer, out of the nine Directors on our Board, two directors represent the Promoters andpromoter group, one is an executive director, three are non-executive directors and three are independentdirectors.

Objects of our Company

Our objects as contained in our Memorandum of Association include

1. To manufacture and/or produce and/or otherwise engage generally in the manufacture or production of ordealing in alumina, aluminium and aluminium products and by-products and the sale dealing or otherdisposition of alumina, aluminium and aluminium products and by-products and to do all acts and thingsnecessary or required in the premises.

2. To conduct and carry on any business relating to electro-chemical products and metals, including aluminiumand sodium, and their alloys, including the production or manufacture of and trading and/or sale or dealingin such products and metals.

Changes in our Memorandum of Association

During the last ten years, the following changes have been made to our Memorandum of Association:

Date of shareholder approval Changes

August 2, 1995 Increase in authorized capital of the Company from Rs. 750 million to Rs. 1500million, vide an increase in the authorised equity capital of the Company fromRs. 700 million divided into 70 million Equity Shares of Rs. 10 each to Rs.1,450million divided into 145 million Equity Shares of Rs. 10 each.

August 6, 2005 Consequent to subdivision of Equity Shares from face value Rs. 10 to Re. 1,change in the authorised share capital of the Company from 145 million EquityShares of Rs. 10 each to 1450 million Equity Shares of Re. 1 each and 500,000(Five Lacs) Redeemable Cumulative Preference Shares of Rs. 100 each (RupeesOne Hundred Only) each carrying an appropriate rate of dividend as may bepermitted at law.

The details of the capital raised by our Company are given in the section entitled “Capital Structure” on page 15of this Letter of Offer.

Summary of Key Agreements

We have detailed below the key provisions of certain agreements for acquisitions, strategic investments anddivestments.

Our Acquisitions and Strategic Investments

1. On January 11, 2000, Indal, Hydro Aluminium a.s. (“Hydro”) and Utkal Alumina entered into a shareholdersagreement for the purpose of regulating the relationship between the shareholders of Utkal Alumina. OnJuly 3, 2003 Hydro sold its entire shareholding interest in Utkal Alumina to Alcan Inc (“Alcan”) and Indal.Further, Alcan sold a part of its shareholding in Utkal Alumina to Indal pursuant to agreements among Alcan,Indal and Hydro dated December 5, 2002 and among Alcan, Indal and Utkal Alumina of the same date.Pursuant to the scheme of amalgamation between Indal and the Company, which became effective fromMarch 7, 2005, all business of Indal (except the aluminium foils business in Andhra Pradesh) were transferredto the Company, including all of Indal’s shareholding in Utkal Alumina. The Company, Alcan and UtkalAlumina have since entered into an amended and restated shareholder agreement dated April 18, 2005 toamend the previous shareholders agreements in respect of Utkal Alumina and to regulate the relationship

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among the shareholders and the manner in which Utkal Alumina is to be managed.

2. The Company entered into a sale agreement dated January 24, 2003 with Straits Resources Limited, whichas amended and supplemented by the adherence deed dated March 6, 2003 between Straits, Hindalco andBirla Mineral Resources Pty Ltd. The agreements were entered into for purchase of all the shares held byStraits Resources Limited in Straits (Nifty) Pty Ltd. by Birla Mineral Resources Pty Ltd. Straits ResourcesLimited and Birla Mineral Resources Pty Ltd. have also entered into a Settlement and Release deed to settleany disputes that the parties had or may have in the future in respect of the aforesaid purchase of shares.

Our Joint Ventures

1. The Company, entered into an agreement with the Tamil Nadu Industrial Development Corporation (TIDCO)on October 4, 1980 to establish a joint venture company for the manufacture of aluminium fluoride. Pursuantto this agreement, the Company and other companies in the Aditya Birla Group have made investments inTanfac Industries Limited (formerly Tamil Nadu Flourine and Allied Chemicals Limited).

2. The Company is a party to the shareholders agreement dated December 15, 2000 entered into between theAT&T Wireless Group, the Aditya Birla Group and the Tata Group. Subsequently, the Cingular Wireless Inc.has acquired the AT&T Group. This agreement records the rights and obligations of the parties in relation tothe joint venture company formed pursuant to the agreement viz., Idea Cellular Limited.

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DIVIDENDS

We have been a dividend paying company and have paid dividends in each of the last 15 years. We expect tocontinue to pay dividends in the future. The following are the dividend payouts in last five years by our Company:

Financial Year Dividend per Equity Share of Amount (Rs. in millions)(1)

Rs. 10 each (Amount in Rs.)

2000-2001 12.00 893.59

2001-2002 13.50 1,005.21

2002-2003 13.50 1,248.42

2003-2004 16.50 1,525.84

2004-2005 20.00 1,855.61

(1) Excluding dividend tax where applicable

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MANAGEMENT

Board of Directors

The following table sets forth details regarding our Board of Directors as on November 18, 2005: -

Name, Designation, Address, Nationality Age Other Directorships in Indian companiesOccupation and Term (years)

1. Dr. Kumar Mangalam Birla Indian 38 Indian Public Limited Companies:1. Aditya Birla Nuvo Ltd (formerly

Designation: Chairman Indian Rayon & Industries Ltd.)(Non-executive) 2. Grasim Industries Ltd.

3. Indo Gulf Fertilisers Ltd.16-A, IL-Palazzo, 4. Indian Aluminium Company,Ltd.Little Gibbs Road, 5. Birla Sun Life AMC Ltd.Mumbai – 400 006 6. Birla Sun Life Insurance Company Ltd.Maharashtra 7. Tata Steel Ltd.

8. Ultra Tech Cement Ltd.Occupation: Industrialist 9. Maruti Udyog Ltd.

10. PSI Data Systems Ltd.First appointed on 11. Aditya Birla Management Corporation Ltd.November 16, 1992 12. Transworks Information Services Ltd.

13. Essel Mining & Industries Limited

Indian Private Limited Companies:

1. Trapti Trading & Investments Pvt. Ltd.2. Turquoise Investments & Finance Pvt. Ltd.3. Gwalior Properties & Estates Pvt. Ltd.4. Seshasayee Properties Pvt. Ltd.5. Birla Group Holdings Pvt. Ltd.6. TGS Investment & Trade Pvt. Ltd.7. Global Holdings Pvt. Ltd.8. Rajratna Holdings Pvt. Ltd.9. Vaibhav Holdings Pvt. Ltd.10. Vikram Holdings Pvt. Ltd.

2. Mrs. Rajashree Birla Indian 60 Indian Public Limited Companies:1. Grasim Industries Ltd.

Designation: Non-Executive 2. Aditya Birla Nuvo Ltd (formerlyDirector Indian Rayon & Industries Ltd.

3. Indo Gulf Fertilizers Ltd.16-A, IL- Palazzo, 4. Ultra Tech Cement LimitedLittle Gibbs Road, 5. Essel Mining & Industries LtdMumbai – 400006, 6. Aditya Birla Health Services Ltd.Maharashtra Indian Private Limited Companies:

1. Birla Group Holdings Pvt. Ltd.Occupation: Industrialist 2. Trapti Trading & Investments Pvt. Ltd.,

3. Turquoise Investments & Finance Pvt. Ltd.First appointed on 4. Gwalior Properties & Estates Pvt. Ltd.March 15, 1996 5. Seshasayee Properties Pvt. Ltd.

6. Vikram Holdings Pvt Ltd.7. TGS Investment & Trade Pvt. Ltd.,8. Global Holdings Pvt. Ltd.,9. Rajratna Holdings Pvt. Ltd.,10. Vaibhav Holdings Pvt. Ltd.

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3. Mr. D. Bhattacharya Indian 57 Indian Public Limited Companies:1. Aditya Birla Management Corporation Ltd.

Designation: Managing Director 2. Dahej Harbour and Infrastructure Ltd.3. Utkal Alumina International Ltd.

14/A, Woodlands, Peddar Road, 4. Birla Management Centre Services Ltd.Mumbai – 400 026, Maharashtra. 5. Birla Project Development Company Ltd.

6. Minerals & Minerals LimitedOccupation: Service

First appointed onApril 30, 2003

4. Mr. A.K. Agarwala Indian 72 Indian Public Limited Companies:1. Udyog Services Ltd.

Designation: Non-Executive 2. Bihar Caustic & Chemicals Ltd.Director 3. Tanfac Industries Ltd.

4. Renusagar Engineering & Power“Haveli”, Flat No.3, Services Ltd.L.D. Ruparel Marg, 5. Indian Aluminium Company,Ltd.-Mumbai – 400006 Vice ChairmanMaharashtra 6. Birla Project Development Company Ltd

(Additional Director)Occupation: RetiredProfessional

First appointed onSeptember 11, 1998

5. Mr. C.M. Maniar Indian 69 Indian Public Limited Companies:1. Chemtex Engineering of India Ltd.

Designation: Independent 2. Food & Inns Ltd.Director 3. Godfrey Phillips India Ltd.

4. Gujarat Ambuja Exports Ltd.Garden House, 1st Floor, 5. Varun Shipping Company Ltd.Dadyseth, 2nd Cross Lane, 6. Indo Euro Investment Co. Ltd.Chowpatty Band Stand, 7. Indian Card Clothing Co.Ltd.Mumbai – 400 007, 8. Machine Tools (India) Ltd.Maharashtra 9. Multi Commodity Exchange of India Ltd.

10. Vadilal Industries Ltd.Occupation: Solicitor 11. Pioneer Invest Corp Ltd.

12. Sudal Industries Ltd.First appointed on 13. Twenty First Century Printers Ltd.March 8, 1982 Indian Private Limited Companies:

1. Agfa India Pvt. Ltd.2. Akso Nobel Coatings India Pvt. Ltd.3. Lintas India Pvt. Ltd.4. Amsar Pvt. Ltd.5. HGC Foundation Pvt. Ltd.6. MAS Consulting Group Pvt. Ltd.7. Northpoint Centre of Learning Pvt. Ltd.

Name, Designation, Address, Nationality Age Other Directorships in Indian companiesOccupation and Term (years)

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6. Mr. E.B. Desai Indian 74 Indian Public Limited Companies:1. Birla Global Finance Ltd.

Designation: Non-Executive 2. Century Textiles & Industries Ltd.Director 3. Hercules Hoists Ltd.(Alternate Director)

4. Panasonic Battery India Company Ltd.Sonarica, 81-A, 5. Prudential ICICI Trust Ltd.Soviet Club Road, 6. Kennametal Widia (India) Ltd.Off. Peddar Road, 7. Supreme Industries Ltd. Mumbai - 400 006,Maharashtra Indian Private Limited Companies:

1. Bekaert Industries Pvt. Ltd.Occupation: Solicitor 2. Dolphin Fisheries & Trading Pvt. Ltd.

First appointed onApril 5, 1984

7. Mr. S.S. Kothari Indian 83 Indian Private Limited Company:1. Arihant Agencies Pvt. Ltd.

Designation: Non – ExecutiveDirector

87-B, Gaurav Nagar, Civil Lines,Jaipur - 302 006, Rajasthan

Occupation: Retired Professional

First appointed onDecember 22, 1988

8. Mr. M.M.Bhagat Indian 72 Indian Public Limited Companies:1. Zenith Exports Ltd.

Designation: Independent 2. VCK Share & Stock Broking Services Ltd.Director 3. Birla Insurance Advisory Services Ltd.

4. VCK Capital Market Services Ltd.13, Kabir Road,Kolkata - 700 026,West Bengal

Occupation: Retired Professional

First appointed onMarch 16, 1996

9. Mr. K. N. Bhandari Indian 63 Indian Public Limited Companies:1. Agriculture Insurance Company Ltd.

Designation: Independent 2. Andhra Cements Ltd.Director 3. Srei Venture Capital Ltd.

4. Suraj Diamond & Jewellery Ltd5, New Power House Road,Sector-7, Jodhpur – 342 003,Rajasthan

Occupation: Retired Professional

First appointed onAugust 1, 2001

Name, Designation, Address, Nationality Age Other Directorships in Indian companiesOccupation and Term (years)

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Brief Biography of our Directors

Dr. K.M. Birla has served on our Board of Directors since 1992 and became our Chairman in 1995. Dr. Birla wasawarded a Bachelor of Commerce degree and is a Fellow Member of the Institute of Chartered Accountants of India.He has also completed a Masters in Business Administration from the London Business School. Dr. Birla was appointedChairman of the Aditya Birla Group in 1995 and in addition to serving as Chairman of all of the Aditya Birla Group’sblue-chip companies in India, Dr. Birla also serves as a director on the boards of the Aditya Birla Group’s Internationalcompanies in Thailand, Indonesia, Malaysia, Philippines and Egypt. Dr. Birla is appointed to the board of severalprominent companies in India including Tata Steel Ltd. and Maruti Udyog Limited. Additionally, he is a member of theBoard of Governors of the Birla Institute of Technology & Science (BITS), Pilani, and the Indian Institute of Management,Ahmedabad. Dr. Birla has held and continues to hold several key positions on various regulatory and professionalboards, including The Prime Minister of India’s Advisory Council on Trade and Industry, the National Council of theConfederation of Indian Industry and the Advisory Council for the Centre for Corporate Governance. Dr. Birla is an“Honorary Fellow” of the London Business School, a title conferred upon him by the governing board of the LondonBusiness School. The Banaras Hindu University awarded him the D. Litt (Honor’s Causa) Degree, in 2004, in recognitionof his contribution to Indian business.

Mrs. R. Birla, wife of (Late) Mr. A.V. Birla, former Chairman of the Aditya Birla Group, was appointed to our Board ofDirectors in 1996. Mrs. Birla was awarded a Bachelors degree in Arts. Mrs. Birla serves on the board of directors ofGrasim, ABNL, Indo Gulf and Ultra Tech Cement Ltd. and on the boards of the Aditya Birla Group’s Internationalcompanies spanning Thailand, Indonesia, Philippines, Malaysia and Egypt. As Chairperson of the Aditya Birla Centrefor Community Initiatives and Rural Development, the apex body responsible for development projects, Mrs. Birlaoversees the Aditya Birla Group’s social and welfare-driven work across 30 companies.

Mr. A.K. Agarwala joined us in 1960 and was appointed to our Board of Directors in 1998. Mr. Agarwala is also adirector of several other companies including Udyog Services Ltd., Bihar Caustic & Chemicals Ltd., Tanfac IndustriesLtd., Renusagar Engineering & Power Services Ltd., Indian AluminiumCompany Ltd., and Birla Project DevelopmentCompany Ltd. He is a Trustee of G.D. Birla Medical Research and Education Foundation, Vaibhav Medical and EducationFoundation and Aditya Vikram Birla Memorial Trust and is also Chairman of Business Review Council of the AdityaBirla Group. Mr. Agarwala has held the post of President of AluminiumAssociation of India in the past and is amember of the International Primary AluminiumInstitute. Mr. Agarwala holds a degree in Commerce and Law fromCalcutta University and is a Fellow Member of the Institute of Chartered Accountants of India.

Mr. C.M. Maniar was appointed to our Board of Directors in 1982. A solicitor by profession, Mr. Maniar is a Partner ofthe Mumbai based firm of Solicitors, M/s. Crawford Bayley & Co. He is an independent member of our board and amember of our Audit Committee and Investors Grievances Committee. Mr. Maniar serves on the boards of severalother public and private companies, namely Chemtex Engineering of India Ltd., Foods & Inns Ltd., Godfrey PhillipsIndia Ltd., Gujarat Ambuja Exports Ltd., Varun Shipping Company Ltd., Indo Euro Investment Co. Ltd., Indian CardClothing Co. Ltd., Machine Tools (India) Ltd., Multi Commodity Exchange of India Ltd., Vadilal Industries Ltd., PioneerInvestcorp Ltd., Sudal Industries Ltd. and Twenty First Century Printers Ltd., Agfa India Pvt. Ltd., Akso Nobel CoatingsIndia Pvt. Ltd., Northpoint Centre of Learning Pvt. Ltd., Lintas India Pvt. Ltd., Amsar Pvt. Ltd., HGC Foundation Pvt. Ltd.and MAS Consulting Group Pvt. Ltd. Mr. Maniar was awarded Bachelor degrees in Commerce and Law and a Masterof Arts degree by Mumbai University.

Mr. E.B. Desai was appointed to our Board of Directors in 1984. He is a Solicitor and a Partner of the Mumbai basedfirm of Solicitors, Mulla & Mulla & Craigie Blunt & Caroe. Mr. Desai is a Non–Executive Director of the Board and amember of our Audit Committee and Investors Grievances Committee. He serves on the board of directors of severalIndian companies, namely Birla Global Finance Limited, Bekaert Industries Pvt. Ltd., Century Textiles & IndustriesLimited, Dolphin Fisheries & Trading Pvt. Ltd., Prudential ICICI Trust Limited, Supreme Industries Limited, PanasonicBattery India Company Limited and Kennametal Widia (India) Ltd. Mr. Desai was awarded a Bachelor of Arts and aBachelor of Law degree by Mumbai University.

Mr. S.S. Kothari was appointed to our Board of Directors in 1988 and was formerly our Company President. He is adirector of Arihant Agencies Pvt. Ltd. Mr. Kothari graduated with a Bachelor of Science degree from Agra University.

Mr. M.M. Bhagat was appointed to our Board of Directors as a nominee director in 1996 and is Chairman of our AuditCommittee. Mr. Bhagat has been the Chairman and Managing Director of United India Insurance Company Limited,Birla Insurance Advisory Services Ltd., Zenith Exports Limited, VCK Share & Stock Broking Services (P) Ltd. and VCK

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Capital Market Services Ltd. Mr. Bhagat received a Bachelor of Commerce degree and has attained ACII London andAIII Group Adviser-Insurance qualifications.

Mr. K.N. Bhandari has been a member of our Board of Directors since 2001. Since 2001 Mr. Bhandari has been anominee director of the General Insurance Corporation of India (as an Investor) and is on the board of directors ofAndhra Cement Co. Ltd., Suraj Diamonds and Jewellery Ltd., Srei Venture Capital Ltd. and Agriculture Insurance Co.of India Ltd. Previously, Mr. Bhandari held the post of Chairman and Managing Director of the New India AssuranceCo. Ltd. He graduated from Jodphur University with a Bachelor of Arts and a Bachelor of Law degree.

Mr. D. Bhattacharya has been a member of our Board of Directors since April 30, 2003 and was appointed ourManaging Director from 2003. Mr. Bhattacharya joined the Aditya Birla Group in 1998. Before he took charge of theMetals business as Managing Director of Hindalco, Mr. Bhattacharya held several key positions within the Aditya BirlaGroup, including Managing Director of the Aditya Birla Management Corporation and Managing Director of Indo GulfCorporation Limited. Mr. Bhattacharya has also been responsible for the Insulator business and has led group-widecorporate functions such as Global Marketing Strategy, Management Services and IT. Prior to joining the Aditya BirlaGroup, Mr. Bhattacharya spent approximately 30 years working for Unilever during which time he held several keyresponsibilities and worked in several roles, in its Indian and overseas operations. He led the Chemical business ofUnilever in India before moving to the Aditya Birla Group. He is a Chemical Engineer from Indian Institute of Technology(IIT).

Compensation of our Directors

The following tables set forth all compensation paid by us to our Directors for the fiscal year ended March 31, 2005.

A. Non-Executive Directors

Name of Director Commission Sitting Fees Total

Rs. in millions Meetings Amount (Rs.) Rs. in millionsAttended

Dr. K.M. Birla 11.18 5 25,000 11.20

Mrs. R. Birla 0.37 5 25,000 0.40

Mr. E.B. Desai 0.76 6 90,000 0.85

Mr. S.S. Kothari 0.37 5 25,000 0.40

Mr. T. K. Sethi (deceased) 0.11 1 10,000 0.12

Mr. C.M. Maniar 0.65 5 80,000 0.73

Mr. M.M. Bhagat 0.60 6 60,000 0.66

Mr. K.N. Bhandari 0.45 6 30,000 0.48(1)

Mr. A.K. Agarwala 0.51 6 60,000 0.57

(1) Paid to General Insurance Corporation of India, which has nominated Mr. Bhandari. Only the sitting fees were paid to Mr. Bhandari

directly.

B. Executive Director

Name of Director All elements ofremuneration Performance bonus Total

package

Rs. in millions Rs. in millions Rs. in millions

Mr. D. Bhattacharya 25.82 4.87 30.69

The appointment is subject to termination by three months notice in writing on either side. The appointment is for aperiod of five years with effect from October 2, 2003. No severance is payable to the Managing Director.

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Shareholding of our Directors in our Company

Our Articles of Association require our Directors to hold Equity Shares and/or preference shares or both, in the capitalof our Company of aggregate nominal value of Rs 2,500, which must be acquired within two months after hisappointment or election to the post of Directors. The following table details the shareholding of our Directors in theirpersonal capacity and either as sole or first holder, as at the date of this Letter of Offer.

Name of Director Number of Equity Shares Number of Equity Shares(Pre-Issue as on November 18, 2005) (Post-Issue)*

Dr. K.M. Birla 362,400 453,000

Mrs. R. Birla 241,140 301,425

Mr. A. K. Agarwala 64,160 80,200

Mr. C.M. Maniar 30,760 38,450

Mr. D. Bhattacharya 2,500 3,125

Mr. E. B. Desai 173,470 216,838

Mr. M. M. Bhagat 2,700 3,375

Mr. S. S. Kothari 44,080 55,100

Mr. K.N. Bhandari N.A (Nominee Director) -

* The number of shares for the column entitled number of Equity Shares (Post-Issue) has been calculated assuming full subscription torights entitlement in this Issue

Details of the transactions in Equity Shares by our Directors and their relatives during the last six months

Name of Director/Relative of Director Date of Details of No. of Equity Price per shareTransaction Transaction Shares of (in Rs.)

Rs. 10 each

Mr. A.K. Agarwala June 10, 2005 Sale 2,000 1,120

Mr. A.K. Agarwala June 25, 2005 Sale 700 1,177

Ms. R. Agarwala June 7, 2005 Purchase 600 1,096

Mr. Shailendra. S. Kothari June 9, 2005 Sold 663 1,130.12

Except for the above, none of our Directors have undertaken transactions in the Equity Shares of our Company duringthe last six months.

Changes in our Board of Directors during the last three years

Name Date of Appointment Date of Cessation Reason

Mr. T. K. Sethi September 17, 1974 August 25, 2004 Deceased

Mr. D. Bhattacharya April 30, 2003 - Appointed to Board

Corporate Governance

There are two Board Level Committees in our Company, which have been constituted and function in accordancewith the relevant provisions of the Act and the Listing Agreement. These are the (i) Audit Committee, and (ii) InvestorGrievance Committee. A brief on each Committee, its scope, composition and meetings for the current year is givenbelow:

(i) Audit Committee

Members

� Mr. M.M. Bhagat (Chairman),

� Mr. E.B. Desai

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� Mr. C.M. Maniar

Mr. Anil Malik, Company Secretary, acted as Secretary of the Audit Committee in terms of Clause 49 of the ListingAgreement.

The Audit Committee is comprised of two Independent Directors and one Non-Executive Director. The AuditCommittee met five times during the course of this fiscal year, on April 30, 2005, June 6, 2005, July 29, 2005September 20, 2005 and October 29, 2005.

Scope and terms of reference

The scope of the Audit Committee in companies is defined under Clause 49 of the Listing Agreement dealingwith Corporate Governance and the provisions of the Act. The Audit Committee acts as a link between themanagement, the statutory, cost and internal auditors and the Board of Directors and oversees the financialreporting process.

(ii) Investors Grievances Committee

Members

� Mr. E.B. Desai (Chairman)

� Mr. C.M. Maniar

The Investor Grievances Committee is comprised of one Independent and one Non-Executive Director. TheInvestors Grievances Committee did not meet during the course of this fiscal year.

Scope and Terms of Reference

The committee was constituted in terms of the mandatory requirement of Clause 49 of the Listing Agreement tolook into the redressal of grievances of investors like non receipt of share certificates, non-receipt of balancesheet, non-receipt of dividend warrants etc. During this fiscal year, our Company received 16 complaints fromshareholders, all of which stand resolved as on November 18, 2005. We have one pending complaint from thelast fiscal year, which is unresolved due to non receipt of required documents from the shareholder.

Remuneration Committee

The Company does not have a Remuneration Committee as it has only one Whole Time Director and hisremuneration is determined by the Board.

The Company has complied with SEBI guidelines in respect of corporate governance, specially with respect to broadbasing of the Board and constitution of Committees.

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Key Managerial Personnel

The details of our key managerial personnel are as follows:

Name Age Designation Qualifications Previous Employment Total Date of Gross Salary*years of Joining (Rs. in millions)Experience

Mr.R.K. Kasliwal 60 Group Executive B.Com, - 37 December 6.52President and F.C.A. 4, 1967Chief FinancialOfficer

Mr. S. Talukdar 53 Deputy Chief B.Sc., The GEC of India Ltd. 26 October 1, 2.59Financial Officer A.C.A. 1986

Mr. R.K.Shah 51 Chief Officer B.Tech. � Grasim Industries Ltd 27 August 18, 5.18Operations (Chem. Engg.); � Thai Carbon Black 2003

(Aluminium & M.S. ThailandPower- Renukoot) (Chem. Engg.) � Vikram Cement, M.P.,

� Aditya Cement� Rajashree Cement� Vikram Ispat,

Maharashtra

Mr. R.P. Shah 58 Executive President B.Tech. - 34 December 3.21and Chief (Chem. Engg.) 30, 1969ManufacturingOfficer

Mr. S.K. Maudgal 51 Chief Marketing B.Tech. � Asian Paints (I) Ltd. 26 February 4.89Officer (Chem. Engg.), � Hindustan Ciba- 14,

P.G. Diploma Geigy Ltd. 2001(Marketing & � Arvind Mills Ltd.Finance) � Ceat Ltd.

Mr. P. Balakrishnan 56 Executive President B.E. (Mech), � Hindustan Motors 34 June 11, 5.34P.G.Diploma in Limited, Chennai 2000Business � Kirloskar ElectricManagement Co. Ltd.

Mr. K. Freeman 52 Chief Operating B.Sc (Engg.) � Falconbridge Ltd, 30 April 1, 7.04**Officer (Mining Dalhousie Canada 2005Operations) University, � SouthernEra

Halifax, Resources Ltd.Nova Scotia, � Anglo American Corp.Canada; South AfricaB.Engg.(Mining) , � De Beers ConsolidatedTechnical Mines Ltd.University of � Debswana DiamondNova Scotia, Co. Pty Ltd.Halifax, Canada

Mr. P. Roy 52 Chief People Officer B.Sc, St Francis � Novartis India 27 December 1.41***Desales College; � Searle (India) Ltd. 21 , 2004Master in � General Electric IndiaPersonnel Air Freight LtdManagement and � Cadbury India Ltd.Industrial Reln,TISS, Mumbai

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Mr. S. M. Bhatia 51 Chief Operating B.Sc. Engg. Jindal Iron and Steel 29 September 2.42***Officer (Demerged (Mech.) Co. Ltd. 1, 2004Indal units)

Mr. S. Banerjee 49 Head, Foils and B.Tech (Hons) Larsen & Toubro 25 May 10, 1.93Wheels (Mech Engg), 1990

IIT Kharagpur

Mr. S.Ray 51 Head, Chemicals B.Tech (Chem), Assam Oil Co. 28 December 2.25and International IIT Kanpur, 15, 1977Trade PGDM,

IIM Kolkata

Mr. B. Marshall 52 Head, Risk BA, University � Hunter Douglas Group 32 May 2, 6.24**Management and of London, � Hydro Aluminium 2005Business School of � Metal TradingDevelopment Oriental and � Aluminium and Tin,

African Studies Amalgamated MetalCorporation

Mr. S.N. Bontha 56 Chief Executive B.E. (Elect.), � Vishakapatanam Steel 35 February 0.39*** Officer (Aditya P.G. Diploma Plant, 28, 2005Aluminium Project) in Management � Bokaro Steel Plant

� Hindustan SteelLimited at Bhilai SteelPlant

� Neelachal IspatNigam Ltd

Mr. A. Malik 43 Company Secretary LLB, C.S. - 10 October 4, 0.54

1995

* Gross Salary as on March 31, 2005 is computed in accordance with Section 217(2A) of the Companies Act, 1956 except if indicated

otherwise.

** Since the Key Managerial Personnel joined after March 31, 2005, the details of Gross Salary is from April 1, 2005/ date of joining up

to August 31, 2005 and in accordance with Section 217(2A) of the Companies Act, 1956

*** Gross Salary as on March 31, 2005 from the date of joining in accordance with Section 217(2A) of the Companies Act, 1956

All the abovementioned key managerial personnel are permanent employees of our Company. The remuneration ofeach of our key personnel is as per the statement pursuant to Section 217(2A) of the Act and the Companies (Particularsof Employees) Rules, 1975.

Name Age Designation Qualifications Previous Employment Total Date of Gross Salary*years of Joining (Rs. in millions)Experience

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Organizational Structure Chart

The organizational structure of our Company is given below:

Dr. K. M. Birla

Non-Executive Chairman

Board of Directors

40% Independent, 50% Non Executive

Audit Committee

75% Independent; 25% Non-Executive

Finance Committee

25% Independent; 50% Non-Executive

Investor Grievance C itt50% Independent

50% Non-Executive

Risk Management B d50% Non-Executive

Managing Director

CEO Birla

Minerals Australia

Executive President

Birla Copper

Head Chemicals Mumbai

Head Foils & Wheels Mumbai

COO Renukoot

COO Kolkata

CMO Mumbai

Chief Financial Officer

Chief People Officer

EFO Mumbai

COO Mining CEO-Aditya

Almn

Company Secretary

Shareholding of key managerial personnel in our Company as on November 18, 2005

Name of Key Managerial Personnel No. of Equity Shares held(Pre-Issue)

Mr. R.K. Kasliwal 57,220

Mr. R.K. Shah 12,800

Shareholding of persons related to our key managerial personnel in our Company

Name of Key Managerial Personnel Name of Equity Shareholder No. of Equity Shares heldrelated to Key Managerial (Pre-Issue)Personnel

Mr. R.K. Kasliwal Ms. M. Kasliwal 15,440

Mr. R.K. Shah Mr. B.L. Shah 5,000

Mr. R.K. Shah Ms. R.K.Shah 2,250

75% Independent;25% Non-Executive

25% Independent;50% Non-Executive

50% Independent;50% Non-Executive

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Interest of Promoters, Directors and key managerial personnel

Except as stated in “Related Party Transactions” on page 123 of this Letter of Offer, and to the extent of shareholdingin our Company, our Promoters and promoter group do not have any other interest in our business.

All Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them forattending meetings of the Board or a Committee. The Managing Director will be interested to the extent of remunerationpaid to him for services rendered by him as officer of the Company. All our Directors may also be deemed to beinterested to the extent of Equity Shares, if any, already held by them or their relatives in the Company, or that may besubscribed for and allotted to them, out of the present Issue in terms of the Letter of Offer and also to the extent of anydividend payable to them and other distributions in respect of the said Equity Shares. The Directors may also beregarded as interested in the Equity Shares, if any, held by or that may be subscribed by and allotted to the companies,firms and trust, in which they are interested as directors, members, partners and/or trustees. Further, Mr. Desai mayalso be deemed to be interested to the extent of fees payable to the firm of M/s Mulla & Mulla & Craigie Blunt & Caroe,of which he is a party, for services rendered to the Company from time to time for legal matters attended to by the firmon behalf of the Company. In the fiscal year 2004-2005 and 2005-2006 (till October, 2005), fees to the extent of Rs. 1.41million and Rs. 1.40 million respectively were paid by the Company to the firm for services rendered to the Companyfor legal matters attended to by the firm on behalf of the Company.

The key managerial personnel of our Company do not have any interest in our Company other than to the extent ofthe remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement ofexpenses incurred by them during the ordinary course of business and to the extent of the Equity Shares held bythem in our Company, if any.

Details of loans taken by key managerial personnel in our Company

Name Loan Amount as on Nature of LoanSeptember 30, 2005

(Rs. in millions)

Mr. R.K. Kasliwal Nil -

Mr. S. Talukdar 0.80 Housing loan

Mr. R.K. Shah Nil -

Mr. R.P. Shah Nil -

Mr. S.K. Maudgal 0.90 Housing loan1.5 Interest free loan

Mr. P. Balakrishnan Nil -

Mr. K. Freeman Nil -

Mr. P. Roy Nil -

Mr. S. M. Bhatia Nil -

Mr. S. Banerjee Nil -

Mr. S. Ray Nil -

Mr. B. Marshall Nil -

Mr. S.N. Bontha Nil -

Mr. A. Malik Nil -

Except as stated otherwise in this Letter of Offer, we have not entered into any contract, agreement or arrangementduring the preceding two years from the date of this Letter of Offer in which our Directors are interested directly orindirectly and no payments have been made to them in respect of these contracts, agreements or arrangements orare proposed to be made to them. Our Directors and our key managerial personnel have not taken any loan from ourCompany other than those mentioned above.

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Changes in our key managerial employees during the last three years

Name Designation Date of joining/leaving Reasons

For the Year 2002-2003

N.A. N.A. N.A. N.A.

For the Year 2003-2004

Mr. R.K. Shah Chief Officer Operations – August 18, 2003 Appointed(Aluminium & Power – Renukoot)

For the Year 2004-2005

Dr. S.K. Tamotia President & Chief Executive Officer – June 27, 2000 /Indal Units September 24, 2004 Retirement

Mr. S.M. Bhatia Chief Operating Officer – Indal Units September 1, 2004 Pursuant to Schemeof Arrangementwith Indal

Mr. S.N. Bontha Chief Executive Officer – February 28, 2005 AppointedAditya Aluminium Project

Mr. S. Talukdar Deputy Chief Financial Officer October 1, 1986 Pursuant to Schemeof Arrangementwith Indal

Mr. P. Roy Chief People Officer December 21, 2004 Transferred fromGroup

For the Year 2005-2006

Mr. K. Freeman Chief Operating Officer – April 1 , 2005 Appointed(Mining Operations)

Mr. B. Marshall Head, Risk Management & May, 2 2005 AppointedBusiness Development

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PROMOTERS AND PROMOTER GROUP

Promoters

The promoters of our Company are (i) Dr. Kumar Mangalam Birla and (ii) Birla Group Holdings Private Limited.

Dr. Kumar Mangalam Birla Dr. Kumar Mangalam Birla, aged 38 was appointed Chairman of the AdityaBirla Group in 1995 and, serves as Chairman of all of the Aditya Birla Group’sblue-chip companies in India, including our Company. For more details seethe section on “Management” on page 84 of this Letter of Offer.

Passport No.: Z 1464476

PAN No.: AEFPB 5926 H

Dr. K.M. Birla’s bank account number, PAN No. and passport number have been provided to BSE and NSE.

Birla Group Holdings Private Limited

Birla Group Holdings Private Limited (“BGHPL”) (formerly RSN Holdings Limited) was incorporated on November 21,1980 under the Act. Its name was changed from RSN Holdings Limited to Birla Group Holdings Private Limited onDecember 7, 1998. The main object of BGHPL is making investments and granting of loans. The promoters of theBGHPL are Dr. Kumar Mangalam Birla and his family members. The registered office of the company is situated atIndustry House, 159 Churchgate Reclamation, Mumbai – 400 020.

BGHPL, either itself or though its subsidiaries, holds equity holdings in major Aditya Birla Group Companies. BGHPLhas the following significant subsidiaries viz., (i) Trapti Trading & Investments Private Limited; (ii) Turquoise InvestmentsAnd Finance Private Limited and (iii) TGS Investment & Trade Private Limited.

Board of Directors

1. Dr. Kumar Mangalam Birla

2. Mrs. Rajashree Birla

3. Mr. Suresh Tapuriah

4. Mr. L.K. Daga

5. Mr. P.K. Jajodia

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Financial Performance

The operating results of BGHPL for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are ashereunder. Please note that bracketed numbers indicate losses/ negative figures:

(Rs. in millions)

Particulars As at and for the As at and for the As at and for the For the period year ended year ended year ended ended

March 31, 2003 March 31, 2004 March 31, 2005 September 30,2005

Total Income 38.24 40.43 43.65 15.79

Profit after Tax (28.45) (15.80) (10.30) (8.93)

Equity Share Capital(Par value Rs. 10/- per Share) 0.24 0.24 0.24 0.24

Reserves 432.26 416.46 406.16 397.23

Earnings Per Share ( Rs. ) (11,756) (6,529) (4,257) (3,690)

Net Asset Value 622.50 606.70 596.40 587.47

The Company being a private limited company, its shares are not listed on any stock exchange.

BGHPL’s PAN No. has been submitted to BSE and NSE.

Companies with which the Promoters have disassociated in the last three years:

The Promoters have not disassociated themselves from any company in the last three years.

Promoter Group

Relatives of the Promoter that are part of the promoter group

The following relatives form part of our promoter group:

Sl. Name Relationship No. of shares as Percentage ofNo. of September holding

30, 2005

1. Mrs. Rajashree Birla Mother of Dr. Kumar Mangalam Birla 241,140 0.03

2. Mrs. Vasavadatta Bajaj Sister of Dr. Kumar Mangalam Birla 66,020 0.01

3. Mrs. Neerja Birla Wife of Dr. Kumar Mangalam Birla 49,750 0.01

4. Ms. Ananyashree Birla Minor daughter ofDr. Kumar Mangalam Birla 15,000 0.00

5. Master Aryaman Vikram Birla Minor son ofDr. Kumar Mangalam Birla Nil 0.00

6. Ms. Advaitesha Birla Minor daughter ofDr. Kumar Mangalam Birla Nil 0.00

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The Equity Shares are held by our Promoters through companies, trusts, HUFs owned/controlled by them. The venturesforming part of the promoter group include:

S. No Name of Promoter Group Ventures

1. Aditya Birla Nuvo Limited (formerly Indian Rayon And Industries Limited)

2. Aditya Vikram Kumar Mangalam Birla HUF

3. BGH Exim Ltd

4. Birla Global Asset Finance Company Ltd.

5. Birla Global Finance Limited

6. Birla Institute of Technology and Science

7. Birla Technologies Ltd.

8. Birla TMT Holdings Pvt. Ltd.

9. Essel Mining & Industries Ltd.

10. Global Holdings Pvt. Ltd

11. Grasim Industries Ltd.

12. Gwalior Properties and Estates Pvt. Ltd

13. Heritage Housing Finance Ltd

14. HGI Industries Ltd

15. IGH Holdings Pvt. Ltd

16. Indo Gulf Fertilisers Limited

17. Kamal Trading Company Limited

18. Laxminarayan Investment Ltd.

19. Mangalam Carbide Ltd

20. Mangalam Services Ltd

21. Pilani Investment and Industries Corporation Ltd

22. Rajratna Holdings Pvt. Ltd

23. Samruddhi Swastik Trading & Investments Ltd.

24. Seshasayee Properties Pvt. Ltd

25. Sun Gold Trading and Investments Ltd

26. TGS Investment & Trade Pvt. Ltd.

27. Trapti Trading & Investments Pvt Ltd.

28. Trustee on behalf of Hindalco under scheme of arrangement of HIL/IGCL/IGFL

29. Turquoise Investments And Finance Pvt. Ltd.

30. Ultra Tech Cement Limited

31. Umang Commercial Company Limited

32. Vaibhav Holdings Pvt. Ltd

33. Vikram Holdings Pvt. Ltd

For details of shareholding of our Promoters and promoter group, refer to the section “Capital Structure” on page 15of this Letter of Offer.

Interests of Promoters and Promoter Group in the Company

Except as stated hereinbefore and in “Related Party Transactions” on page 123 of this Letter of Offer, and to the extentof shareholding in our Company, our Promoters and promoter group do not have any other interest in our business.

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GROUP COMPANIES

Hindalco is the flagship company of the Aditya Birla Group. The Aditya Birla Group is a true multinational corporation.Global in vision, rooted in Indian values, the Group is driven by a performance ethic pegged on value creation for itsmultiple stakeholders. The Aditya Birla Group is a dominant player in all of the sectors in which it operates. TheGroup’s products and services offer distinctive customer solutions such as viscose staple fibre, non-ferrous metals,cement, viscose filament yarn, branded apparel, carbon black, chemicals, fertilisers, sponge iron, insulators andfinancial services. Its 66 manufacturing units and sectoral services span India, Thailand, Indonesia, Malaysia, Philippines,Egypt, Canada, Australia and China. The Group has also made successful forays into the IT and BPO sectors.

Please note that pursuant to resolutions passed on September 11, 2005 by the respective board of directors of Aditya BirlaNuvo Limited (formerly Indian Rayon And Industries Limited) (“ABNL”), Indo Gulf Fertilisers Limited (“IGFL”) and BirlaGlobal Finance Limited (“BGFL”), IGFL and BGFL are proposed to be merged into ABNL and will stand dissolved by ascheme of amalgamation under Sections 391-394 of the Act. The scheme of amalgamation is subject to shareholderapproval of the respective companies, sanction of the Bombay High Court, Allahabad High Court, Lucknow Bench andGujarat High Court and clearance of the respective stock exchanges. Bracketed numbers indicate losses/ negative figures.

Details of our top five listed group companies in terms of market capitalisation are as under:

I. Grasim Industries Limited

Grasim Industries Limited (“Grasim”), was incorporated on August 25, 1947 under the Gwalior Companies Act in thename of Gwalior Rayon Silk Mfg (Wvg) Company Limited. The company changed its name to Grasim IndustriesLimited on July 22, 1986. Grasim ranks among India’s largest private sector companies, with a net turnover ofRs. 62,292.6 million in 2004-05. Starting as a textiles manufacturer in 1948, Grasim’s businesses today compriseViscose Staple Fibre (VSF), cement, sponge iron, chemicals and textiles. The company holds a dominant position inits businesses. On July 6, 2004, Larsen & Toubro Limited (L&T) and Grasim announced completion of the implementationprocess of the demerger of the cement division of L&T. On successful completion of its open offer, Grasim acquiredcontrolling stake in the newly formed company, UltraTech Cement Limited (UltraTech), the demerged cement businessof L&T.

Shareholding as of September 30, 2005

S. Name of the Shareholder No. of shares Percentage ofNo holding

1. Promoters and Persons Acting in Concert 22,897,134 24.98

2. Mutual Fund & UTI 7,869,230 8.58

3. Banks and FIs 13,184,487 14.38

4. FIIs 18,341,338 20.01

5. GDRs and others 10,364,638 11.31

6. Corporates 2,831,443 3.09

7. NRIs/OCBs 3,568,659 3.89

8. Individual shareholding 12,616,509 13.76

Total 91,673,438 100.0

Board of Directors

1. Dr. K.M. Birla

2. Mrs. R. Birla

3. Mr. M.L. Apte

4. Mr. B.V. Bhargava

5. Mr. R.C. Bhargava

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6. Mr. Y.P. Gupta

7. Mr. S.B. Mathur

8. Mr. C. Shroff

9. Mr. S.G. Subrahmanyan

10. Mr. S.K. Jain

11. Mr. D.D. Rathi

Financial Performance

The operating results of Grasim for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are ashereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and forthe year ended the year ended the year ended the period endedMarch 31, 2003 March 31,2004 March 31, 2005 September 30,

2005(i)

Equity Capital 916.7 916.7 916.7 916.7

Reserves (excl. revaluation reserves) 28,793.5 35,138.3 42,319.6 NA

Net Sales/ Income from operations 46,062.0 52,132.1 62,292.6 31,923.8

Profit After Tax (PAT) 3,675.8 7,792.6 8,857.1 4,386.0

Basic Earning per Share (EPS) 40.1 85.0 96.6 47.84

Net Asset Value (NAV) 324 393 472 NA

(i) Information as available in the unaudited published financials of the company, as required under clause 41 of the Listing Agreement.

Share - Quotation

The shares are listed on BSE and NSE. The details of the highest and lowest price on BSE and NSE during thepreceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 1,410 16-Sept-2005 1,028.8 24-May-2005

NSE 1,415 16-Sept-2005 1,010 7-July-2005

Source: Bloomberg

There has been no change in capital structure in the last six months.

II. UltraTech Cement Limited.

UltraTech Cement Limited (“UCL”) is a member of the Aditya Birla Group and a subsidiary of Grasim Industries Limited.ULC was incorporated on August 24, 2000 under the Act, in the name of L&T Cement Limited and the name waschanged to UltraTech Cemco Limited with effect from November 19, 2003. The company changed its name to UltraTechCement Limited on October 14, 2004. Its cement capacity is 17 million tonnes per annum. It manufactures and marketsOrdinary Portland Cement, Portland Blast Furnace Slag Cement and Portland Pozzolana Cement. It has five integratedplants, five grinding units and three terminals – two in India and one in Sri Lanka. It is the countries largest exporter ofcement and clinker.

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Shareholding as of September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoters and Persons Acting in Concert 63,542,320 51.08

2. Mutual Fund & UTI 3,523,129 2.83

3. Banks and FIs 8,449,853 6.79

4. FIIs 8,727,821 7.02

5. GDRs 964,406 0.78

6. Foreign Nationals 51,839 0.04

7. Corporates 17,884,146 14.38

8. NRIs/OCBs 624,934 0.50

9. Indian Public 20,630,173 16.58

Total 124,398,621 100.00

Board of Directors

1. Dr. K.M. Birla

2. Mrs. R. Birla

3. Mr. R.C. Bhargava

4. Mr. Y.M. Deosthalee

5. Mr. A.R. Gandhi

6. Mr. Y.P. Gupta

7. Dr. S. Misra

8. Mr. V.T. Moorthy

9. Mr. J.P. Nayak

10. Mr. S. Rajgopal

11. Mr. D.D. Rathi

Financial Performance

The operating results of UCL for fiscal 2004, 2005 and for the period ended September 30, 2005 are as hereunder. UCLwas not part of the promoter group as on March 31, 2003:

(Rs. in millions except per share data)

As at and for As at and for As at and for thethe year ended the year ended period endedMarch 31,2004 March 31, 2005 September 30, 2005(i)

Equity Capital 1,244.0 1,244.0 1,244.0

Reserves (excl. revaluation reserves) 9,505.4 9,427.3 NA

Net Sales/ Income from operations 22,511.3 26,810.5 14,224.0

Profit After Tax (PAT) 388.3 28.5 601.0

Basic Earning per Share (EPS) 3.12 0.23 4.83

Net Asset Value (NAV) 85.20 85.78 NA

(i) Information as available in the unaudited published financials of the company, as required under clause 41 of the Listing Agreement.

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Share Quotation

The shares are listed on BSE and NSE. The details of the highest and lowest price on BSE and NSE during thepreceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 495 22-Sept-2005 314 6-June-2005

NSE 498 26-Sept-2005 295.4 6-June-2005

Source: Bloomberg

There has been no change in capital structure in the last six months.

III. Aditya Birla Nuvo Limited (formerly Indian Rayon and Industries Limited)

Aditya Birla Nuvo Limited (formerly Indian Rayon And Industries Limited) was incorporated on September 26, 1956under the name of Indian Rayon Corporation Limited. The company changed its name to Indian Rayon And IndustriesLimited on January 23, 1987 and subsequently to Aditya Birla Nuvo Limited on October 27, 2005. ABNL is the AdityaBirla Group’s most diversified conglomerate, with a turnover in excess of Rs. 18,606 million in 2004-2005. It is aleading player in its key business segments, including viscose filament yarn (VFY), carbon black, branded garments,textiles and insulators. Over the past three years, ABNL through its subsidiaries has made successful forays intoinsurance, IT services and Business Process Outsourcing (BPO), striking a balance between manufacturing, brandsand services.

Shareholding as of September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoters and Persons Acting in Concert 17,150,514 28.63

2. Mutual Funds & UTI 5,550,536 9.27

3. Banks and FIs 9,444,928 15.76

4. FIIs 8,879,102 14.82

5. Corporates 1,831,671 3.06

6. NRIs/OCBs 887,920 1.48

7. Individuals 12,935,175 21.62

8. Others 3,209,406 5.36

Total 59,889,252 100.00

Board of Directors

1. Dr. K.M. Birla

2. Mrs. R. Birla

3. Mr. H.J. Vaidya4. Mr. B.L. Shah5. Mr. P. Murari

6. Mr. B.R. Gupta7. Ms. T. Vakil8. Mr. V. Rao

9. Mr. S.C. Bhargava10. Mr. G.P. Gupta11. Mr. A. Gupta

12. Mr. S. Aga

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Financial Performance

The operating results of ABNL for fiscal 2003, 2004, 2005 and the period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31,2004 March 31, 2005 September 30,

2005(i)

Equity Capital 598.8 598.8 598.8 598.8

Reserves (excl. revaluation reserves) 11,109.1 12,078.0 12,941.8 NA

Net Sales/ Income from operations 14,424.2 15,773.9 18,606.2 10,481.2

Profit After Tax (PAT) 1,053.3 1,312.8 1,137.2 693.3

Basic Earning per Share (EPS) 17.59 21.91 18.98 11.58

Net Asset Value (NAV) 196 212 226 NA

(i) Information as available in the unaudited published financials of the company, as required under clause 41 of the Listing Agreement.

Share Quotation

The shares are listed on BSE and NSE. The details of the highest and lowest price on BSE and NSE during thepreceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 650 12-Sept-2005 411.3 13-July-2005

NSE 675 2-Nov-2005 413 13-July-2005

Source: Bloomberg

There has been no change in capital structure in the last six months.

IV. Indo Gulf Fertilisers Limited

Indo Gulf Fertilisers Limited (“IGFL”), was incorporated on March 10, 1998 in the name of Kamal Syn Paper (India) Pvt.Ltd. The company changed its name to Rajashree Fertilisers Limited and subsequently to Indo Gulf Fertilisers Limitedon July 29, 2002. IGFL is among the largest private sector fertiliser companies in India. Located at Jagdishpur, nearLucknow, in the agriculture intensive Indo-Gangetic plain in Uttar Pradesh, IGFL manufactures and markets urea, anitrogenous fertiliser. The move to demerge the fertiliser business of erstwhile Indo Gulf Corporation Limited into anindependent entity and amalgamate the remaining copper business with Hindalco was a strategic initiative, aimed atenhancing shareholder value. As a result of the exercise, IGFL has emerged fully focused on fertilisers.

Shareholding as of September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoters and Persons Acting in Concert 26,252,248 58.22

2. Mutual Funds & UTI 4,464,265 9.9

3. Banks, FIs and Insurance Companies 3,355,840 7.44

4. FIIs 1,682,647 3.73

5. GDRs and others 725,112 1.61

6. Corporates 1,653,594 3.67

7. NRIs/OCBs 1,367,445 3.03

8. Individuals 5,591,652 12.4

Total 45,092,803 100.00

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Board of Directors

1. Dr. K.M. Birla

2. Mrs. R. Birla

3. Mr. B.N. Puranmalka

4. Mr. V.T. Purswani

5. Mr. V.N. Nadkarni

6. Mr. D.C. Gami

7. Mr. G.P. Gupta

8. Dr. R. Jain

Financial Performance

The operating results of IGFL for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31,2004 March 31, 2005 September 30,

2005(i)

Equity Capital 450.9 450.9 450.9 450.9

Reserves (excl. revaluation reserves) 4,390.4 5,150.6 5,575.6 NA

Net Sales/ Income from operations 6,752.1 5,785.2 6,783.5 3,169.4

Profit After Tax (PAT) 1,728.0 902.7 569.3 319.0

Basic Earning per Share (EPS) 38.3 20.0 12.63 7.07

Net Asset Value (NAV) 107.4 124.2 133.7 NA

(i) Information as available in the unaudited published financials of the company, as required under clause 41 of the Listing Agreement.

Share Quotation

The shares are listed on BSE and NSE. The details of the highest and lowest price on BSE and NSE during thepreceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 208 29-Sept-2005 117.75 11-May-2005

NSE 209 29-Sept-2005 105.4 15-June-2005

Source: Bloomberg

There has been no change in capital structure in the last six months.

V. Birla Global Finance Limited

Birla Growth Fund Limited was incorporated on June 26, 1986 in the name of Birla Growth Fund Limited. The companywas renamed as Birla Global Finance Ltd (“BGFL”) on December 13, 1994. Today BGFL is the flagship of the Group’sfinancial services, responsible for the promotion and development of the joint venture, with Sun Life of Canada – BirlaSun Life Asset Management Co. Ltd. Headquartered in Mumbai, the company has a network of branches across thecountry and marketing associates covering 130 centers. It is listed on the BSE and NSE.

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Shareholding as of September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoters and Persons Acting in Concert& Directors & Relatives 19,274,396 74.85

2. Mutual Funds & UTI 137,716 0.53

3. Banks, FIs and Insurance Companies 1,101 0.01

4. Corporates 1,804,790 7.01

5. NRIs/OCBs 97,119 0.38

6. Individuals 3,517,348 13.66

7. Others 99,131 0.38

Total 25,750,439 100.00

Board of Directors

1. Mr. B.N. Puranmalka

2. Mr. E.B. Desai

3. Mr. A.C. Dalal

4. Mr. S. Haribhakti

5. Mr. G.M. Dave

6. Mr. K.Vikamsey

7. Mr. S.K. Mitra

Financial Performance

The operating results of BGFL for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005(i)

Equity Capital 157.5 157.5 257.5 257.5

Reserves (excl. revaluation reserves) 442.4 431.6 619.7 NA

Income from operations 319.7 537.5 681.1 351.9

Profit After Tax (PAT) 15.3 31.2 309.8 124.7

Basic Earning per Share (EPS) (1.06) 0.44 14.26 4.84

Net Asset Value (NAV) 38 37 34 NA

(i) Information as available in the unaudited published financials of the company, as required under clause 41 of the Listing Agreement.

Share Quotation

The shares are listed on BSE and NSE. The details of the highest and lowest price on BSE and NSE during thepreceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 206 5-Oct-2005 80 6-July-2005

NSE 206 5-Oct-2005 78 8-July-2005

Source: Bloomberg

There has been no change in capital structure in the last six months.

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SUBSIDIARIES

We have fifteen subsidiaries being: (i) Bihar Caustic and Chemicals Limited, (ii) Birla Maroochydore Pty Limited, (iii)Birla Mineral Resources Pty. Ltd., (iv) Birla Mt. Gordon Pty Limited, (iv) Birla Nifty Pty. Ltd., (vi) Birla Resources Pty. Ltd.,(vii) Dahej Harbour & Infrastructure Ltd., (viii) Indian Aluminium Company,Ltd., (ix) Indal Exports Ltd, (x) LucknowFinance Company Ltd., (xi) Minerals & Minerals Ltd., (xii) Renuka Investment & Finance Ltd., (xiii) RenukeshwarInvestments & Finance Ltd., (xiv) Suvas Holdings Private Limited and (xv) Utkal Alumina International Limited. Bracketednumbers indicate losses/ negative figures.

I. Bihar Caustic & Chemicals Limited

Bihar Caustic & Chemicals Limited (BCCL) was incorporated under the Act on July 20, 1976, as a joint venture betweenBihar State Industrial Development Corporation (BSIDC) and Birla Group and its registered office is at Garhwa Road,P.O. Rehla - 822 124 Dist. Palamau. The company made a rights issue in 2003. For more details please refer to “Statutoryand Other Information” on page of 283 of this Letter of Offer.

The main business of Bihar Caustic & Chemicals Limited is manufacturing Caustic Soda, Liquid Chlorine and HydrochloricAcid

Board of Directors

1. Mr. A.K. Agarwala

2. Mr. S.V. Haribhakti

3. Mr. A.N. Jha

4. Mr. K.K. Maheshwari

5. Mr. V. Prakash

6. Mr. B. Choudhuri

7. Mr. P.P. Sharma

8. Mr. P.N. Ojha

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoter Shareholding 15,197,987 64.99

2. Mutual Funds & UTI 1,800 0.01

3. Banks, FIs and Insurance Companies 8,000 0.03

4 Corporates 1,394,506 5.96

5. NRIs/OCBs 113,715 0.49

6. Individuals 6,598,234 28.21

7. Others 72,258 0.31

Total 23,386,500 100

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Financial performance

The operating results of BCCL for fiscal 2003, 2004, 2005 and the period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 912.01 952.87 1,101.59 670.09

Profit after tax 75.12 86.26 264.52 192.75

Equity capital (par value Rs. 10 per share) 78.0 233.7 233.86 233.86

Reserves 302.34 375.84 619.22 811.96

Basic Earnings per share 8.37 4.84 11.31 8.24

Book value per Share (of Rs. 10 each) 47.26 24.21* 34.86 43.41

* Due to rights issue of 2:1

Share Quotation

The shares are listed on BSE. The details of the highest and lowest price on BSE during the preceding six months areas follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 85.7 5-Sept-2005 51.25 30-June-2005

Source: Bloomberg

II. Birla Maroochydore Pty. Limited

Birla Maroochydore Pty. Limited. was incorporated on February 24, 2003 under the Corporations Act, 2001 by the sealof the Australian Securities Commission and its registered office is at Level 2, 23 Ventnor Avenue, West Penrith WA6005, Australia.

Hindalco forayed into Australia by acquiring Straits (Nifty) Pty Ltd., which owned the Nifty Copper mines in Australia.The Nifty mine, located in the Great Sandy Desert region of East Pilbara in Western Australia, was acquired in March2003. Nifty mine consists of an open-pit mine, heap leach pads and a solvent extraction and electrowinning (SXEW)processing plant which produces copper cathode. In fiscal 2005, Nifty mine produced 15,826 tons of copper cathode.An agreement was entered with Straits Resources Ltd., a listed entity which owned 100% of Straits (Nifty) Pty Ltd. toform Birla Mineral Resources Pty Ltd. Birla Maroochydore Pty. Ltd. and Birla Nifty Pty Ltd. are subsidiaries of BirlaMineral Resources Pty Ltd. The company owns 51% stake in Maroochydore Property.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Dr. M.R. Ramsay

4. Mr. S. Loyalka

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 10,000,001 100

Total 10,000,001 100

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Financial performance

The operating results of Birla Maroochydore Pty. Ltd. for fiscal 2004, 2005 and the period ended September 30, 2005are as hereunder:

(in AUD except per share data)

As at and for As at the As at and forperiod the year ended period the ended

ended March 31, March 31, September 30,2004 2005 2005*

Total Income 1,927 1,068 -

Profit after tax /Loss before Tax (70,914) (126,282) (51,738)

Equity capital (par value AUD 1 per share) 10,000,001 10,000,001 10,000,001

Reserves (70,914) (197,196) NA

Earnings per share - - -

Book value per Share (of AUD 1 each) 0.99 0.98 NA

* Unaudited financials provided by management certification. The financials have been audited at the consolidated level viz., Birla Mineral Resources

Pty Ltd, the holding company in Australia.

III. Birla Mineral Resources Pty Ltd.

Birla Mineral Resources Pty Ltd. (BMRL) was incorporated on January 28, 2003 under the Corporations Act, 2001 bythe seal of the Australian Securities Commission and its registered office is at Level 2, 23 Ventnor Avenue, WestPenrith WA 6005 Australia.

The company forayed into Australia by acquiring Straits (Nifty) Pty Ltd, which owned the Nifty Copper mines inAustralia. An agreement was entered with Straits Resources Ltd, a listed entity which owned 100% of Straits (Nifty)Pty Ltd. to form Birla Mineral Resources Pty Ltd. Birla Maroochydore Pty. Ltd. and Birla Nifty Pty Ltd. are subsidiariesof Birla Mineral Resources Pty Ltd. BMRL issued 16 million equity shares to the Company in the six months endedSeptember 30, 2005.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Dr. M.R. Ramsay

4. Mr. S. Loyalka

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 159,820,001 100

Total 159,820,001 100

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Financial performance

The operating results of BMRL for fiscal 2004, 2005 and the period ended September 30, 2005 are as hereunder:

(AUD in millions except per share data)

As at and for As at the As at and forperiod the year ended period ended

ended March 31, March 31, September 30,2004(i) 2005(i) 2005(ii)

Total Income 3.95 0.61 -

Profit after tax/ Loss (16.74) 3.54 0.14*

Equity capital (par value AUD 1 per share) 113.82 143.82 159.82

Reserves (16.74) (13.20) NA

Earnings per share - - NA

Book value per Share (of AUD 1 each) 0.85 0.91 NA

(i) Stand alone audited financials.

(ii) Stand alone financials provided by management certification.

* Profit before tax

IV. Birla Mt Gordon Pty. Ltd.

Birla Mt Gordon Pty. Ltd. was incorporated on September 19, 2003 under the Corporations Act, 2001 by the seal of theAustralian Securities Commission and its registered office is at Level 2, 23 Ventnor Avenue, West Penrith WA 6005,Australia.

The Mt. Gordon mine, in Queensland, Australia, was acquired in November 2003. Mt. Gordon mine consists of anunderground and open-pit mine, a copper concentrate plant and ferric leach plant. Until recently, the operation producedcopper cathode through the ferric leach process. In 2004, a copper concentrator was commissioned to provideconcentrate for use at our operations in Dahej, Gujarat. For fiscal 2005, Mt. Gordon mine produced 35,126 tons ofcopper in cathode/concentrate.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Mr. P. Balakrishnan

4. Mr. S. Loyalka

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 24,000,001 100

Total 24,000,001 100

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Financial performance

The operating results of Birla Mt Gordon Pty. Ltd. for fiscal 2004, 2005 and the period ended September 30, 2005 areas hereunder:

(AUD in millions except per share data)

As at and for As at the As at and forperiod the year ended period ended

ended March 31, March 31, September 30,2004 2005 2005*

Sales Revenue 38.62 85.29 45.76

Profit after tax/ Loss before tax (6.54) (30.09) (14.44)

Equity capital (par value AUD 1 per share) 24 24 24

Reserves (6.54) (36.63) NA

Earnings per share - - -

Book value per Share (of AUD 1 each) 0.73 - NA

* Unaudited financials provided by management certification. The financials have been audited at the consolidated level viz., Birla Mineral Resources

Pty Ltd, the holding company in Australia.

V. Birla Nifty Pty. Limited

Birla Nifty Pty. Limited was incorporated on May 27, 1996 under the Corporations Law of New South Wales in thename of Straits (Whim Creek Operations) Pty Ltd, by the seal of the Australian Securities Commission and its registeredoffice is at Level 2, 23 Ventnor Avenue, West Penrith WA 6005, Australia. The company changed its name to Birla(Nifty) Pty Ltd. on March 10, 2003 and subsequently to Birla Nifty Pty Ltd. on June 26, 2003.

Hindalco forayed into Australia by acquiring Straits (Nifty) Pty Ltd., which owned the Nifty Copper mines in Australia.An agreement was entered with Straits Resources Ltd., a listed entity which owned 100% of Straits (Nifty) Pty Ltd. toform Birla Mineral Resources Pty Ltd. Birla Maroochydore Pty. Ltd. and Birla Nifty Pty Ltd. are subsidiaries of BirlaMineral Resources Pty Ltd.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Dr. M.R. Ramsay

4. Mr. S. Loyalka

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 87,413,924 100

Total 87,413,924 100

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Financial performance

The operating results of Birla Nifty Pty. Ltd. for fiscal 2004, 2005 and the period ended September 30, 2005 are ashereunder:

(AUD in ’000 except per share data)

As at and for As at the As at and foryear ended year ended period the ended March 31, March 31, September 30,

2004 2005 2005*

Sales Revenue (from financial, 2003) 79.85 50.43 42.13

Profit after tax /Loss before Tax 34.93 (20.70) 1.58(i)

Equity capital (par value AUD 1 per share) 41.41 71.41 87.41

Reserves 37.70 17.00 NA

Earnings per share 0.84 - NA

Book value per Share (of AUD 1 each) 1.91 1.24 NA

* Unaudited financials provided by management certification. The financials have been audited at the consolidated level viz., Birla

Mineral Resources Pty Ltd, the holding company in Australia.

(i) Profit before tax.

VI. Birla Resources Pty. Limited

Birla Resources Pty. Limited. was incorporated on December 22, 2000 under the Corporations Act, 2001 by the seal ofthe Australian Securities Commission and its registered office is at Level 2, 23 Ventnor Avenue, West Penrith WA6005, Australia.

Hindalco forayed into Australia by acquiring Straits (Nifty) Pty Ltd., which owned the Nifty Copper mines in Australia.An agreement was entered with Straits Resources Ltd., a listed entity which owned 100% of Straits (Nifty) Pty Ltd. toform Birla Mineral Resources Pty Ltd. Birla Maroochydore Pty. Ltd. and Birla Nifty Pty Ltd. are subsidiaries of BirlaMineral Resources Pty Ltd. The company provides advisory services to Birla Mineral Resources Pty Limited.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Dr. M.R. Ramsay

4. Mr. S. Loyalka

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 650,000 100

Total 650,000 100

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Financial performance

The operating results of Birla Resources Pty. Ltd. fiscal 2003, 2004, 2005 and for the period ended September 30, 2005are as hereunder:

(in AUD)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005*

Gross Income from OperatingActivities 783,673.57 (1,957.12) 30,317.81 113,333.03

Profit after tax 1,640.80 1,698.16 7.87 0.0

Equity capital (par valueAUD 1 per share) 650,000 650,000 650,000 650,000

Reserves 314.60 2,012.76 2,020.63 2,020.63

Earnings per share - - - -

Book value per Share (of AUD 1 each) 1 1 1 1

* Unaudited financials provided by management certification.

VII. Dahej Harbour and Infrastructure Limited

Dahej Harbour and Infrastructure Limited (DHIL) was incorporated under the Act on November 30, 1998 and itsregistered office is at P.O. Lakhigam - 392 130, Dahej, Dist. Bharuch, Gujarat.

Dahej Harbour and Infrastructure Limited was a subsidiary of Indo Gulf Corporation Ltd. (“IGCL”) and became a subsidiaryof Hindalco after the Company’s amalgamation with IGCL. Dahej Harbour and Infrastructure Limited provides cargohandling services to the industry and for the copper division of the Company.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. R.K. Kasliwal

3. Mr. P. Balakrishnan

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 50,000,000 100

Total 50,000,000 100

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Financial performance

The operating results of DHIL for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are ashereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Net Sales and other Income 528.16 460.44 564.24 291.19

Profit after tax (PAT) 131.48 126.77 257.75 137.47

Equity capital (par value Rs. 10 per share) 500.0 500.0 500.0 500.00

Reserves 236.84 363.61 621.36 758.83

Basic Earnings per share 2.63 2.54 5.16 2.75

Book value per Share (of Rs. 10 each) 14.74 17.27 22.43 25.18

VIII. Indian Aluminium Company, Limited

Indian Aluminium Company, Limited (“Indal”) was incorporated under the Indian Companies Act, 1913 on December17, 1938 and its registered office is at 1, Prafulla Chandra Sen Sarani (formerly Middleton Street) Kolkata – 700 071.

The main business of Indal is manufacture of aluminium foils. Pursuant to a scheme of Arrangement (“Scheme”)which has been approved by Bombay High Court and Calcutta High Court all the business undertakings (other thanthe aluminium foil business at Kollur, Andhra Pradesh) of Indian Aluminium Company, Limited have been transferredto the Company with effect from the appointed date i.e. April 1, 2004. The Scheme is made effective from March 7,2005.

Board of Directors

1. Dr. K.M. Birla

2. Mr. A.K. Agarwala

3. Mr. P.K. Choksey

4. Mr. N.J. Jhaveri

5. Dr. S. Misra

6. Mr. A.L. Mudaliar

7. Mr. B.L. Shah

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Shareholding as on September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 69,103,902 96.98*

2. LIC 940 0.0

3. UTI 1,025 0.0

4. GIC 100 0.0

5. Mutual Funds 1,270 0.00

6. Nationalised Banks 15,460 0.02

7. Government 203,325 0.29

8. Corporates and Individuals 1,874,375 2.63

9. Foreign shareholders 56,734 0.08

Total 71,257,131 100.00

* The difference in the shareholding of Hindalco as reflected in the shareholding pattern of Indal and the Investment of Hindalco in Indal

is due to pending transfers/escrow account.

Financial performance

The operating results of Indal for fiscal 2003, 2004, 2005 and for the period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 14,202.88 16,354.00 664.97 320.22

Profit after tax/Loss before tax 1,186.30 1,321.53 (15.45) (6.17)

Equity capital (par value Rs. 10 per sharein 2003 & 2004 and Rs. 2 per share in 2005) 712.57 712.57 142.51 142.51

Reserves 8,126.48 9,416.59 26.29 20.12

Earnings per share 16.65 18.55 (0.22) (0.09)

Book value per Share (of Rs. 10 eachin 2003 & 2004 and Rs. 2 per share in 2005) 123 141.01 2.32 2.23

IX. Indal Exports Limited

Indal Exports Limited was incorporated on June 21, 1989 under the Act and its registered office is at 1, PrafullaChandra Sen Sarani (formerly Middleton Street) Kolkata – 700 071. The company is a wholly owned subsidiary ofHindalco Industries Limited. The shares have been transferred from Indian Aluminium Company,Limited pursuant toa scheme of arrangement. The main activities of the company was essentially trading in aluminium and relatedproducts. However, since the last six years the main source of income for the company has been from investments.

Board of Directors

1. Mr. A.K. Basu

2. Mr. I. Pathak

3. Mr. A. Sen

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Shareholding as on September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 140,000 100.00

Total 140,000 100.00

Financial performance

The operating results of Indal Exports Limited for fiscal 2003, 2004, 2005 and for the period ended September 30,2005 are as hereunder:

(Rs. in ’000 except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 337 176 100 46

Profit after tax (263) (19) (18) (14)

Equity capital (par value Rs. 10 per share) 1,400 1,400 1,400 1,400

Reserves 3,770 3,751 3,733 3,719

Earnings per share (1.88) (0.14) (0.13) (0.10)

Book value per Share (of Rs. 10 each) 36.93 36.79 36.66 36.56

X. Lucknow Finance Company Limited

Lucknow Finance Company Limited was incorporated under the Act on May 31, 1989 and its registered office is at14-A/5, Park Road, Lucknow – 226 001. Lucknow Finance Company Limited is registered with the RBI as a NBFC.

Board of Directors

1. Mr. P. Balakrishnan

2. Mr. R.K. Kasliwal

3. Mr. N.L. Jain

4. Mr. R.A. Patodia

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 12,002,500 100

Total 12,002,500 100

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Financial performance

The operating results of Lucknow Finance Company Limited for fiscal 2003, 2004, 2005 and for the period endedSeptember 30, 2005 are as hereunder.

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 14.95 14.98 10.77 7.31

Profit after tax 3.13 8.49 1.02 2.44

Equity capital (par value Rs. 10 per share) 120.03 120.03 120.03 120.03

Reserves 19.25 27.73 28.75 31.19

Earnings per share 0.26 0.71 0.08 0.20

Book value per Share (of Rs. 10 each) 11.60 12.31 12.40 12.60

XI. Minerals and Minerals Limited

Minerals and Minerals Limited was incorporated under the Indian Companies Act on May 2, 1953. The companychanged its registered office from West Bengal to Bihar on October 3, 1970, and its present registered office is atLohardaga, Jharkhand. The company is engaged in raising bauxite from the mines which is supplied to the Company.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. R.K. Kasliwal

3. Mr. R.K. Shah

4. Mr. S.N. Sharma

5. Mr. K.K. Patodia

6. Mr. R. Mohnot (Additional Director)

Shareholding as on September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 50,000 100

Total 50,000 100

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Financial performance

The operating results of Minerals and Minerals Limited for fiscal 2003, 2004, 2005 and for period ended September30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 14.82 13.68 29.90 51.65

Profit after tax 2.05 0.41 0.56 0.17Equity capital (par valueRs. 10 per share) 0.5 0.5 0.5 0.5Reserves 8.84 9.25 9.92 10.09Basic Earnings per share 48.51 8.27 11.17 3.36

Book value per Share (of Rs. 10 each) 186.82 195.08 208.42 211.78

XII. Renuka Investments & Finance LimitedRenuka Investments & Finance Limited (RIFL) was incorporated under the Act on October 24, 1994 as a private limitedcompany. RIFL became a deemed public company on March 15, 1995 and its registered office is at P.O. Renukoot –231 217, Dist. Sonbhadra, Uttar Pradesh.

RIFL has investments in property at Ahura and in shares of Nalco and Bihar Caustic. It is not involved in any otherbusiness or operation and is registered with the RBI as a NBFC.

Board of Directors1. Mr. R.K. Kasliwal

2. Mr. R.A. Patodia

3. Mr. D.C. Kabra

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 9,250,000 100

Total 9,250,000 100

Financial performance

The operating results of RIFL for fiscal 2003, 2004, 2005 and for period ended September 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 26.99 135.54 65.78 3.98Profit after tax 7.90 113.68 61.07 2.63Equity capital (par valueRs. 10 per share) 92.5 92.5 92.5 92.5Reserves 11.85 125.53 186.61 189.24Basic Earnings per share 0.85 12.29 6.60 0.28Book value per Share (of Rs. 10 each) 11.28 23.57 30.18 30.46

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XIII. Renukeshwar Investments & Finance Limited

Renukeshwar Investments & Finance Limited is a Non-Banking Finance Institution incorporated under the Act onOctober 24, 1994 as a private limited company with its registered office at P.O. Renukoot – 231 217, Dist. Sonbhadra,Uttar Pradesh.

Board of Directors

1. Mr. R.K. Kasliwal

2. Mr. K.K. Patodia

3. Mr. A. Malik

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 4,795,000 100

Total 4,795,000 100

Financial performance

The operating results of Renukeshwar Investments & Finance Limited for fiscal 2003, 2004, 2005 and for period endedSeptember 30, 2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 16.47 150.79 19.46 0.14

Profit after tax 1.09 127.04 19.02 0.12

Equity capital (par value Rs. 10 per share) 47.96 47.96 47.96 47.96

Reserves 0.97 128.00 147.03 147.15

Earnings per share 0.22 26.49 3.97 0.03

Book value per Share (of Rs. 10 each) 10.20 36.70 40.67 40.68

XIV. Suvas Holdings Limited

Suvas Holdings Limited was incorporated on September 20, 2000 as a private limited company under the Act. Thecompany changed its status to a public limited company with effect from June 1, 2004. Its registered office is atChandramukhi Basement, Nariman Point, Mumbai – 400 021. The company is a joint venture with Laxmi OrganicsIndustries Limited with the main objective of setting up a power generation plant.

Board of Directors

1. Mr. S. Banerjee

2. Mr. R. Goenka

3. Mr. R. Goenka

4. Mr. S. Ray

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Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 188,700 51.00

2. Laxmi Organics Industries Limited 181,300 49.00

Total 3,70,000 100.00

Financial performance

The equity capital of the company was Rs. 3.7 million, Rs. 0.5 million and Rs. 0.1 million as on March 31, 2005, March31, 2004 and March 31, 2003 respectively. The company is in pre-operative stage and has not commenced business.

XV. Utkal Alumina International LimitedUtkal Alumina International Limited was incorporated on September 29,1993 under the Act as a private limited company,and its registered office is at J-6, Jaydev Vihar, Bhubaneshwar – 751 013. The Company became a deemed publiccompany under Section 43A of the Act and subsequently pursuant to shareholders resolution dated July 11, 2005 afresh certificate of incorporation was issued on August 22, 2005. The company is a joint venture with Alcan Inc.,Canada and has been established with the purpose of setting-up an alumina plant in the state of Orissa.

Indal entered into an agreement with Orissa Mining Corporation (“OMC”) dated February 8, 1993 in terms of which theOMC agreed to provide Indal certain services in relation to exploring and exploiting the deposits of bauxite in Orissafor the production of alumina (the “Project”) and also agreed to provide data and transfer a mining lease and theassociated rights to Indal or a new company incorporated by Indal for undertaking the Project. In consideration of thetransfer of the lease, it was also undertaken that Indal or the new company undertaking the Project would issue fullyconvertible cumulative preference shares, carrying a dividend of 15% amounting to Rs. 20 crores to OMC. A mininglease was executed between the Government of Orissa and OMC on February 17, 1998 in relation to a bauxite minefor the Project. Pursuant to the said agreement dated February 8, 1993 by a transfer deed dated November 10, 2000,all the rights, liabilities, covenants, stipulations and conditions contained in the said mining lease in the name of OMCwere transferred to Utkal Alumina in place of Indal, as Utkal Alumina was the said new company undertaking theProject. The shareholders of Utkal Alumina have subsequently authorized the board of directors to issue such preferenceshares to OMC. The terms of such preference shares are being finalized and such preference shares are pendingissuance.

Board of Directors

1. Mr. D. Bhattacharya

2. Mr. M.R. Prasanna

3. Mr. C.B. Agrawal

4. Mr. J. Demanche

5. Mr. T. Guelton

Shareholding as on September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Hindalco 81,133,756 55.00

2. Alcan Inc. 66,382,164 45.00

Total 147,515,920 100.00

Financial performance

The current paid-up capital of the company is Rs. 1,475,159,200. The paid-up equity capital of the company wasRs. 1,029,792,960 as on March 31, 2005, Rs. 663,835,300 as on March 31, 2004 and Rs. 663,835,300 on March 31,2003. The company is in pre-operative stage and has not commenced business.

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OUR JOINT VENTURE COMPANIES

I. Tanfac Industries Limited

Tanfac Industries Limited is a public limited company and was incorporated on December 20, 1972 under the Act inthe name of Tamil Nadu Fluorine and Allied Chemicals Limited. The company changed its name to Tanfac IndustriesLimited on July 29, 1992. The company is a joint venture between the Tamil Nadu Industrial Development CorporationLimited (“TIDCO”) and the Aditya Birla Group of companies, viz., Grasim Industries Limited, Hindalco IndustriesLimited and Pilani Investment Industries Corporation Limited. The company started commercial production in theyear 1985. As on June 30, 2005 we hold 9.8% of the equity share capital of Tanfac Industries Limited.

The company has a production facility at SIPCOT Industrial Complex, Cuddalore, Tamil Nadu, for the manufacture ofchemicals including aluminium fluoride, anhydrous hydrofluoric acid, cryolite, speciality fluorides, sulphuric acid andoleum.

Board of Directors

1. Mr. P. Yadav, IAS

2. Mr. S. Ramachandran, IAS

3. Mr. A.K. Agarwala

4. Mr. V.T. Moorthy

5. Mr. K.K. Maheshwari

6. Mr. A.M. Swaminathan

7. Mr. K.R. Viswanathan

8. Prof. Ramaswamy P. Aiyar

9. Dr. P. Ram

Shareholding as of September 30, 2005

S. Name of the Shareholder No. of shares Percentage of holdingNo.

1. Promoter and persons acting in concert 5,085,302 50.99

2. Mutual Funds & UTI 3,900 0.04

3. Banks, FIs and Insurance Companies 77,700 0.78

4. FIIs 650 0.01

5. Corporates 960,619 9.62

6. NRIs/OCBs 39,770 0.40

7. Individuals 3,805,009 38.14

8. Others 2,050 0.02

Total 9,975,000 100

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Financial Performance

The operating results of Tanfac Industries Limited for fiscal 2003, 2004, 2005 and for the period ended September 30,2005 are as hereunder:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 728.00 755.12 881.28 524.57

Profit after tax 38.93 33.88 3.50 (18.22)

Equity capital (par value Rs. 10 per share) 99.75 99.75 99.75 99.75

Reserves 319.82 343.57 263.49 245.27

Basic Earnings per share 3.90 3.40 0.35 (1.83)

Book value per Share (of Rs. 10 each) 42.06 44.44 36.41 34.59

Share Quotation

The equity shares of Tanfac Industries Ltd are listed on the BSE, Calcutta Stock Exchange Association and MadrasStock Exchange. The details of the highest and lowest price on BSE during the preceding six months are as follows:

Highest (Rs.) Date Lowest (Rs.) Date

BSE 75.5 5-Aug-2005 28 11-May-2005

Source: Bloomberg

II. Idea Cellular Limited.

Idea Cellular Limited is a joint venture with the Company. As on March 31, 2005 we hold 10.11% of the equity sharecapital. Idea Cellular Limited was incorporated on March 14, 1995 and has its registered office at Suman Towers, Plotnumber 18, Sector 11, Gandhi Nagar. The company is a joint venture between the Aditya Birla Group, the Tata Groupand AT&T Wirless Inc. of USA (now Cingular Wireless Inc). On September 28, 2005, ABNL acquired 371.8 millionequity shares in the company at an aggregate price of Rs. 6,607.3 million from AT&T Cellular Pvt. Ltd, Mauritius,raising its equity holding in the company from 4.28% to 20.74% and that of the Aditya Birla Group from 33.7% to50.15%.

The main objects of Idea Cellular Limited is to provide cellular mobile telephone services in eight telecom circles viz.,Maharashtra (including Goa and excluding Mumbai), Gujarat, Andhra Pradesh, Delhi, Madhya Pradesh, Kerala, Harayanaand Uttar Pradesh (West).

Board of Directors

1. Mr. D.D. Rathi

2. Mr. I. Hussain

3. Mr. K. Chaukar

4. Mr. M.R. Prasanna

5. Mr. R. Gopalakrishnan

6. Mr. S. Aga

7. Mr. T Graham

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Shareholding as of September 30, 2005

S . Name of the Shareholder No. of shares Percentage of holdingNo.

1. Aditya Birla Nuvo Limited (formerly Indian Rayonand Industries Limited) 468,597,140 20.74

2. Hindalco 228,340,226 10.11

3. Grasim Industries Ltd. 171,013,894 7.57

4. Birla TMT Holdings Ltd. 265,280,040 11.74

5. Tata Industries Limited 716,058,128 31.69

6. AT&T Cellular Pvt. Limited 371,780,750 16.45

7. Goodison Investments Ltd.(Formerly AIG (Mauritius) LLC) 38,456,441 1.70

8. Others 587 0.00

Total 2,259,527,206 100.00

Financial Performance

The operating results of Idea Cellular Limited for fiscal 2003, 2004, 2005 and the period ended September 30, 2005are as hereunder. Bracketed numbers indicate losses/ negative figures:

(Rs. in millions except per share data)

As at and for As at and for As at and for As at and for thethe year ended the year ended the year ended period endedMarch 31, 2003 March 31, 2004 March 31, 2005 September 30,

2005

Total Income 8,618.67 11,806.96 16,417.15 9,297.44

Profit after tax (1,598.08) (2,069.12) 260.53 210.29

Equity capital (par value Rs. 10 per share) 21,395.27 22,595.27 22,595.27 22,595.27

Reserves & Surplus (15,187.42) (17,256.54) (16,996.01) (16,785.72)

Basic Earnings per share (0.94) (1.19)* (0.12) (0.02)**

Book value per Share (of Rs. 10 each) 2.75 2.36 2.48 2.57

* as revised.

** For calculation of EPS, Profit for the period and the previous year is reduced by Rs. 266.38 million and Rs. 531.30 million respectively

on account of Preference Share Dividend as per Accounting Standard 20 - Earnings per Share

The equity shares of Idea Cellular Limited are not listed.

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RELATED PARTY TRANSACTIONS

We have various transactions with various parties including our subsidiary companies, joint venture companies, trustsand key management personnel. As a policy, we enter into transactions with related parties on an arm’s-length basis.

The list of related parties and the transactions entered into are as follows:

S. Particulars Name of PartyNo.

1. Subsidiary Company Indian Aluminium Company, LimitedIndal Exports LimitedMinerals and Minerals LimitedRenukeshwar Investments & Finance LimitedRenuka Investments & Finance LimitedDahej Harbour and Infrastructure Limited (From 2002-2003)Lucknow Finance Company Limited (From 2002-2003)Birla Maroochydore Pty Limited (From 2002-2003)Birla Mineral Resources Pty Limited (From 2002-2003)Birla Resources Pty Limited (From 2002-2003)Birla Nifty Pty Limited (From 2002-2003)Birla Mt Gordon Pty Limited (From 2003-2004)Bihar Caustic and Chemicals Limited (With effect from January 1, 2004)Utkal Alumina International Limited (With effect from July 1, 2003)Suvas Holdings Limited (From 2003-2004)

2. Trust Trident Trust (From 2002-2003)3. Joint Ventures Bihar Caustic and Chemicals Limited (upto December 31, 2003)

Tanfac Industries LimitedIDEA Cellular Limited (formerly Birla Tata AT&T Ltd.)

4. Key Managerial Personnel Mr. A.K. Agarwala (upto September 10, 2003)Mr. D. Bhattacharya - Managing Director (with effect from October 2,2003)

Details of Transactions with Subsidiary Companies are as below:

Transactions with Subsidiary Companies Six months Year ended March 31, ended

2003 2004 2005 September30, 2005

(Rs. in millions)

Sales and Conversion 747.2 1,114.0 327.7 206.7

Services rendered 45.6 17.8 24.7 43.1

Interest and dividend received 317.9 78.8 48.5 24.4

Interest paid 11.1 22.4 21.5 -

Purchase of materials 45.8 371.1 4,146.7 2,472.4

Services received 312.3 318.4 278.6 145.3

Investments, Deposits, loans and advancesmade during the year 4,419.9 1,111.2 1,117.7 886.0

Investments, Deposits, loans and advancesas at year end 15,738.2 16,462.3 5,877.9 6,762.8

Guarantees and Collateral securities given - 5,110.9 11,400.0 11,689.1

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Transactions with Subsidiary Companies Six months Year ended March 31, ended

2003 2004 2005 September30, 2005

(Rs. in millions)

Licence and Lease arrangements

a) Licence Fees - 4.9 4.9 2.5

b) Deposits - 44.5 54.9 54.9

Outstanding balances at year end

- Debit Balances 4.9 11.4 5.6 107.1

- Credit Balances 144.5 141.9 350.2 156.9

Details of Transactions with Joint Venture Companies are as below:

Transactions with Subsidiary Companies Six months Year ended March 31, ended

2003 2004 2005 September30, 2005

(Rs. in millions)

Sales and Conversion 0.2 0.6 108.4 84.9

Services rendered 0.1 0.2 0.0 -

Interest and dividend received 65.2 48.7 0.9 0.5

Interest paid - - - -

Purchase of materials 766.7 633.6 181.7 91.6

Services received 1.2 0.8 0.4 0.2

Investments, Deposits, loans and advancesmade during the year 1,541.5 700.0 - 0

Investments, Deposits, loans and advancesas at year end 2,732.9 2,293.4 2,293.4 2,293.4

Guarantees and Collateral securities given 2,131.4 850.0 875.0 875.0

Licence and Lease arrangements

a) Licence Fees - - - -

b) Deposits - - - -

Outstanding balances at year end

- Debit Balances 0.0 0.4 13.1 0.1

- Credit Balances 7.9 0.9 5.5 22.8

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Details of Transactions with the Trust are as below:

Transactions with the Trident Trust Six months Year ended March 31, ended

2003 2004 2005 September30, 2005

(Rs. in millions)

Beneficiary Interest in the Trust 344.5 344.5 344.5 344.5

Interest Received from Trust - - - 32.26

Details of Transactions with Key Management Personnel are as below:

Transactions with Key Management Personnel Six monthsYear ended March 31, ended

2003 2004 2005 September30, 2005

(Rs. in millions)Managerial Remuneration(including perquisites) 12.2 16.5 25.8 9.4

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AUDITORS REPORT

To,

The Board of DirectorsHINDALCO INDUSTRIES LIMITED

Dear Sirs,

As required by Part II of Schedule II of the Companies Act, 1956 and Guidelines titled Securities and ExchangeBoard of India (Disclosure and Investor Protection) Guidelines, 2000 issued by the Securities and Exchange Boardof India (SEBI) in pursuance of Section 11 of Securities and Exchange Board of India Act, 1992, we have examinedthe financial information contained in the statements annexed to this report which is proposed to be included inthe Letter of Offer of HINDALCO INDUSTRIES LIMITED (“The Company”) in connection with the proposedRights Issue and we report that :

The Company

We have examined the ‘Statement of Profit and Loss – Restated’ (Annexure-1) of the Company for six monthsended on September 30, 2005 and each of the years ended on March 31, 2001, 2002, 2003, 2004 and 2005 andthe ‘Statement of Assets and Liabilities – Restated’ as on those dates (Annexure - 2), the ‘Statement of Cash Flows– Restated’ for the period / years ended on those dates (Annexure - 3), and the related financial statementsschedules (Annexure 4 to 10) as extracted from the audited financial statements each of the financial years endedon March 31, 2001, 2002, 2003, 2004 and 2005, and adopted by the members of the Company and for thesix-month period ended on September 30, 2005, approved by Board of Directors of the Company and aftermaking the necessary and relevant disclosures and adjustments as appropriate and required to be made, in ouropinion in accordance with the provisions of Part II and Schedule II of the Companies Act, 1956 and SEBI Guidelines:

We have examined the following financial information relating to the Company proposed to be included in theLetter of Offer, approved by the Board of Directors and annexed to this report.

a. Details of Dividends paid by the Company (Annexure – 11)

b. Summary of accounting ratios based on the adjusted profits relating the earning per share, net asset valueand return on net worth. (Annexure – 12)

c. Capitalization statement of the Company. (Annexure – 13)

d. Details of other Income and Operating Revenues (Annexure - 14)

e. Tax shelter statement. (Annexure – 15)

Consolidated Group

We have examined the ‘Statement of Consolidated Profits and Losses – Restated’ (Annexure – 16) for six monthsended on September 30, 2005 and each of the financial years ended on March 31, 2002, 2003, 2004 and 2005, the‘Statement of Consolidated Assets and Liabilities – Restated’ (Annexure – 17) as on those dates, the ‘Statement ofConsolidated Cash Flow - Restated’ (Annexure – 18) for the period / years ended as on those dates and the relatedfinancial statements schedules (Annexure 19 to 21) as extracted from the Audited Consolidated Financial Statementsfor six months ended on September 30, 2005 and each of the Financial years ended on March 31, 2002, 2003,2004 and 2005 and approved by the Board of Directors of the Company and after making the necessary andrelevant disclosures and adjustments as appropriate and required to be made in our opinion in accordance withthe provisions of Part II of Schedule II of the Companies Act, 1956 and the SEBI Guidelines.

As stated in note No. B (3) of Annexure 4, the Company has not restated the financial information for the periodsprior to which, the Accounting Standards 11 (revised). ‘The effect of changes is Foreign Exchange Rates’;Accounting Standard 22 - ‘Accounting for Taxes on income’; and Accounting Standard 28 - ‘ Impairment ofAssets’; became applicable as required by clause (b) of paragraph 6.10.2.7 of the Securities and Exchange Boardof India (Disclosure and Investor Protection) Guidelines 2000 because of non applicability of these accountingstandards in those years.

In our opinion, the financial information of the Company and Consolidated Group read with notes to accounts

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and the above para, as attached to this report and as mentioned above have been prepared in accordance withthe provisions of Part II of Schedule II of the Companies Act, 1956 and SEBI guidelines.

This report is intended solely for the use of HINDALCO INDUSTRIES LIMITED, for the purpose of inclusion in theLetter of Offer in connection with the proposed Right Issue of the Company. This report may not be used or reliedupon by, or disclosed, referred to or communicated by yourself (in whole or in part) to, any third party for anypurpose other than the stated use, except with our written consent in each instance, and which consent, may begiven, only after full consideration of the circumstances at that time.

For Singhi & Co.Chartered Accountants

Dated: The 12th day of November, 2005

RAJIV SINGHI1B, Old Post Office Street PartnerKolkata – 700 001 Membership No. 53518

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 1

STATEMENT OF PROFIT AND LOSS – RESTATED

(Rs. in millions)

Six months Year Ended March 31,ended Sep 30,

2005 2005 2004 2003 2002 2001

Income:

Net Sales & OperatingRevenue:(net of excise)

Of products manufactured bythe Company 48,044.42 92,822.70 59,213.85 47,448.52 23,101.71 22,554.59

Of products traded in by the Company 37.94 170.95 - -

Operating Revenues 603.85 2,238.86 2,869.67 2,674.02 266.99 314.54

Total 48,686.21 95,232.51 62,083.52 50,122.54 23,368.70 22,869.13

Other Income 1,263.39 2,700.45 2,400.05 1,917.21 2,054.02 1,199.79

Increase (Decrease) in inventories 4,020.11 2,556.48 1,019.36 236.81 192.98 (88.81)

Total 53,969.71 100,489.44 65,502.93 52,276.56 25,615.70 23,980.11

Expenditure:

Raw material consumed 26,361.75 46,223.65 31,008.78 23,236.08 4,755.70 4,290.69

Goods Purchased 31.44 171.34 - - - -

Payment to and provision foremployees 2,252.76 4,126.34 2,370.56 2,228.45 1,671.64 1,523.16

Manufacturing and operating expenses 11,211.45 20,112.38 11,988.57 9,124.92 5,549.21 4,829.88

Selling, Distribution, Administrationand other overheads 1,926.39 4,390.74 2,732.27 3,052.91 1,589.87 1,492.95

Interest & Finance Charges 1,000.17 1,699.56 1,771.54 1,364.92 455.95 618.78

Depreciation 2,453.79 4,632.57 3,174.52 2,642.24 1,543.34 1,423.86

Total 45,237.75 81,356.58 53,046.24 41,649.52 15,565.71 14,179.32

Net profit before tax and exceptionalitems 8,731.96 19,132.86 12,456.69 10,627.04 10,049.99 9,800.79

Exceptional Items - (91.03) - (1,633.12) - -

Net profit before tax 8,731.96 19,041.83 12,456.69 8,993.92 10,049.99 9,800.79

Provision for current tax (2,262.50) (5,705.00) (2,606.40) (2,520.00) (2,570.00) (3,020.00)

Provision for deferred tax (411.70) (758.86) (1,461.00) (652.50) (620.00) 0.00

Provision for Fringe Benefits Tax (43.60) - - - - -

Provision for deferred tax ofearlier year/s written back (net) - 715.60 - - - -

Net profit after tax 6,014.16 13,293.57 8,389.29 5,821.42 6,859.99 6,780.79

Balance brought forward fromprevious year 550.00 550.00 550.00 550.00 550.00 550.00

Balance brought forward fromAmalgamating Company - - - 3,161.40 -

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Six months Year Ended March 31,ended Sep 30,

2005 2005 2004 2003 2002 2001

Proposed Dividend written-back due to buy-back ofequity shares - - 10.16 - -

Transferred from DebentureRedemption Reserve - 400.00 725.00 - - -

BALANCE AVAILABLE FORAPPROPRIATIONS 6,564.16 14,243.57 9,664.29 9,542.98 7,409.99 7,330.79

APPROPRIATIONS:

Debenture Redemption Reserve 960.00 920.70 428.42 721.50 521.50

Capital Redemption Reserve - - 7.53 0.06 -

Proposed Dividend on Equity Shares 1,855.61 1,525.84 1,248.42 1,005.21 893.59

Tax on Dividend Proposed/Paid 264.16 195.50 159.92 - 91.15

Transfer to General Reserve 10,613.80 6,472.25 7,148.69 5,133.22 5,274.55

Balance carried to balance sheet 6,564.16 550.00 550.00 550.00 550.00 550.00

6,564.16 14,243.57 9,664.29 9,542.98 7,409.99 7,330.79

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HINDALCO INDUSTRIES LIMITED

ANNEXURE – 2

STATEMENT OF ASSETS AND LIABILITIES – RESTATED

As at Sep As at March 31st

30, 2005 2005 2004 2003 2002 2001

A Fixed Assets

Gross Block 99,794.00 87,727.93 66,584.94 56,679.77 56,726.19 53,582.59

Less : Depreciation (33,095.87) (30,693.37) (19,182.79) (16,069.88) (24,858.27) (21,977.96)

Less : Impairment (999.27) (999.27) - - - -

Net Block 65,698.86 56,035.29 47,402.15 40,609.89 31,867.92 31,604.63

Less : Revaluation Reserve - - - - (11,358.08) (12,867.46)

Net Block after adjustment ofrevaluation reserve 65,698.86 56,035.29 47,402.15 40,609.89 20,509.84 18,737.17

Capital Work-in-progress 6,047.63 13,229.81 4,676.66 8,024.14 6,441.35 2,782.46

Total 71,746.49 69,265.10 52,078.81 48,634.03 26,951.19 21,519.63

B Investments 36,166.38 37,021.45 33,772.05 26,484.20 19,852.50 19,174.57

C Current Assets, Loans & Advances:

Inventories 29,640.11 23,745.18 11,913.43 10,022.22 3,771.75 3,473.54

Sundry Debtors 8,284.93 7,873.67 5,611.13 5,607.41 2,731.79 2,055.05

Cash & Bank Balances 7,504.13 4,009.69 2,279.02 3,031.42 3,870.28 2,658.08

Loans & Advances and othercurrent assets 7,912.49 9,135.71 9,058.99 9,112.46 6,199.13 4,899.00

Total 53,341.66 44,764.25 28,862.57 27,773.51 16,572.95 13,085.67

D. Liabilities and Provisions:

Secured Loans 27,676.72 29,523.38 17,259.35 20,492.70 9,280.03 6,940.36

Unsecured Loans 15,544.94 8,476.59 8,386.55 3,457.48 297.33 206.83

Deferred Tax Liability 11,708.69 11,296.98 9,951.35 8,490.35 4,443.15 -

Current Liabilities and provisions 23,730.26 25,181.93 10,537.18 8,540.29 3,540.50 2,844.47

Total 78,660.61 74,478.88 46,134.43 40,980.82 17,561.01 9,991.66

E. Net Worth 82,593.92 76,571.92 68,579.00 61,910.92 45,815.63 43,788.21

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ANNEXURE – 2

STATEMENT OF ASSETS AND LIABILITIES – RESTATED (Contd.)

As at Sep As at March 31st

30, 2005 2005 2004 2003 2002 2001

F. Represented by:

1. Share Capital 927.78 927.77 924.77 924.64 744.63 744.69

2. Reserves 81,752.17 75,738.01 67,654.23 60,986.28 56,429.08 55,910.98

Less : Revaluation Reserve - - - - (11,358.08) (12,867.46)

Less : Miscellaneous Expenditureto the extent not written-off oradjusted (86.03) (93.86) - - - -

Reserves (Net of RevaluationReserves & Miscellaneousexpenditure) 81,666.14 75,644.15 67,654.23 60,986.28 45,071.00 43,043.52

Networth 82,593.92 76,571.92 68,579.00 61,910.92 45,815.63 43,788.21

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HINDALCO INDUSTRIES LIMITED

ANNEXURE – 3

STATEMENT OF CASH FLOWS – RESTATED (Rs. in million)

Six months

ended Year Ended March 31,

Sep 30,2005 2005 $ 2004 2003 # 2002 2001

A. CASH FLOW FROM OPERATINGACTIVITIES

Net profit before tax andextraordinary items 8,731.96 19,132.86 12,456.69 10,627.04 10,049.99 9,800.79

Adjustment for :

Depreciation 2,453.79 4,632.57 3,174.52 2,642.24 1,543.34 1,423.86

Investment activities (1,136.72) (2,706.71) (2,091.28) (1,874.61) (1,957.34) (1,179.96)

Lease Rent Paid - - 97.25 162.78 - -

Foreign Exchange Loss 13.30 41.51 3.45

Provisions / Misc w/off 79.18 95.18

Interest charged 1,000.17 1,732.85 1,514.52 1,200.97 455.95 618.78

Operating profit before workingcapital changes 11,141.68 22,928.26 15,151.70 12,758.42 10,091.94 10,666.92

Changes in working Capital:

Trade and other receivables 1,031.47 (1,774.76) (2,462.76) (720.97) (731.01) (499.98)

Inventories (5,894.92) (9,377.40) (1,891.21) (1,861.82) (298.21) (190.26)

Trade payable (1,273.82) 5,273.79 1,920.23 1,830.07 551.76 184.92

Cash generated from operation 5,004.40 17,049.89 12,717.96 12,005.70 9,614.48 10,161.60

Direct taxes paid (125.21) 636.01 (1,589.23) (3,179.98) (2,311.18) (3,289.24)

Payment of compensation undervoluntary retirement scheme (26.38) (76.57) -

NET CASH GENERATED FROM

OPERATIONS 4,852.81 17,609.33 11,128.73 8,825.72 7,303.30 6,872.36

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STATEMENT OF CASH FLOWS – RESTATED (Contd.)(Rs. in million)

Six months

ended Year Ended March 31,

Sep 30,2005 2005 $ 2004 2003 # 2002 2001

B. CASH FLOW FROMINVESTMENT ACTIVITIES

Purchase of Fixed Assets (5,138.52) (11,733.39) (7,030.31) (9,901.50) (6,918.88) (2,869.04)

Sale of Fixed Assets 33.34 528.15 69.16 65.19 23.19 61.49

Purchase of shares ofSubsidiaries (784.97) (982.58) (906.58) (4,399.34) - (10,126.30)

Acquisition of Business* - 113.70 - (69.18) - -

Purchase of Investments(net) 1,832.37 (10,357.22) (5,583.52) (380.50) (286.93) 2,293.97

Loan repayment received fromSubsidiaries (Net) (130.96) 280.96 474.67 165.00 - -

Interest received 362.55 1,255.79 937.99 918.32 1,069.65 980.09

Dividend received 524.12 794.27 378.80 396.11 328.73 69.57

Lease rent received 5.70 10.82 - 17.83 - -

Cash flow beforeextraordinary items (3,296.37) (20,089.50) (11,659.79) (13,188.07) (5,784.24) (9,590.22)

Sale of investments(Shares of MRPL to ONGC) 211.52 - -

NET CASH USED ININVESTMENT ACTIVITIES (3,296.37) (20,089.50) (11,659.79) (12,976.55) (5,784.24) (9,590.22)

C. CASH FLOW FROM

FINANCING ACTIVITIES

Buy Back of Equity Share Capital - - - (553.15) (4.21) -

Share call money received 0.01 0.01 0.13 - - -

Proceeds from long termborrowings (net) (1,677.32) 8,146.22 (2,233.54) 4,321.88 2,033.08 1,331.21

Proceeds from short termborrowings (net) 6,899.52 (719.44) 4,280.95 1,198.11 - -

Interest paid (1,181.46) (1,740.32) (1,539.69) (994.13) (337.85) (538.36)

Lease Rent Paid - - (97.25) (162.78) - -

Dividend paid (2,115.72) (1,725.25) (1,408.34) (1,580.56) (984.74) (685.83)

NET CASH FROM FINANCINGACTIVITIES 1,925.03 3,961.22 (997.74) 2,229.37 706.28 107.02

FINANCING ACTIVITIES

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STATEMENT OF CASH FLOWS – RESTATED (Contd.)(Rs. in million)

Six months

ended Year Ended March 31,

Sep 30,2005 2005 $ 2004 2003 # 2002 2001

NET INCREASE IN CASH ANDCASH EQUIVALENTS 3,481.47 1,481.05 (1,528.80) (1,921.46) 2,225.34 (2,610.84)

CASH & CASH EQUIVALENTS-OPENING BALANCE 4,397.80 2,916.75 4,445.55 6,367.01 4,141.67 6,752.51

CASH & CASH EQUIVALENTS-CLOSING BALANCE 7,879.27 4,397.80 2,916.75 4,445.55 6,367.01 4,141.67

* Expense incurred on merger of “Demerged business of INDAL” in 2004-05 and “amalgamating business” in2002-03, net of its opening cash & cash equivalent has been shown as Acquisition of Business.

$ Refer Note No. 2 of Notes to Accounts (Annexure - 4)

# Refer Note No. 3 of Notes to Accounts (Annexure - 4)

Notes:

1 Cash and cash equivalent includes cash and bank balances and Deposits with Companies and interest accruedthereon.

2 Interest charged excludes and Purchase of Fixed Assets includes interest capitalised Rs.191.23 million in sixmonths ended Sep 30, 2005, Rs 342.35 million in 2004-05, Rs. 212.35 million in 2003-04, Rs.584.90 millions in2002-03 & Rs.436.48 millions in 2001-02

ANNEXURE - 4

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SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS

A) SIGNIFICANT ACCOUNTING POLICIES:

1. FIXED ASSETS

Fixed Assets are stated at cost. Cost includes borrowing costs and other related overheads incurred duringthe period of construction.

2. INTANGIBLE ASSETS

Intangible assets are stated at cost. Cost includes any directly attributable expenditure on making the assetready for its intended use.

3. DEPRECIATION AND AMORTISATION

(a) Depreciation on Fixed Assets has been provided for on Straight Line Method at the rates and mannerprescribed under Schedule XIV to the Companies Act, 1956, as amended.

(b) Leasehold land / mining rights are amortised over the period of lease.

(c) Assets where ownership vests with the Government Authorities are amortised at the rates of depreciationspecified in Schedule XIV to the Companies Act, 1956.

(d) Intangible assets are amortised over their estimated useful life.

4. IMPAIRMENT

Impairment loss is recognized wherever the carrying amount of an asset is in excess of its recoverableamount and the same is recognized as an expense in the statement of profit and loss and carrying amountof the asset is reduced to its recoverable amount.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that theimpairment losses recognized for the asset no longer exist or have decreased.

5. LEASES

(a) Assets taken on finance lease (including that prior to 1st April 2001) are capitalised and finance chargesare charged to statement of profit and loss on accrual basis.

(b) Lease payments under an operating lease recognized as expense in the statement of profit and loss asper terms of lease agreement.

6. INVESTMENTS

(a) Long term Investments are carried at cost after deducting provision, in cases where the fall in marketvalue has been considered of permanent nature.

(b) Current investments are stated at lower of cost and fair value.

7. INVENTORIES

(a) Inventories of stores and spare parts are valued at or below cost after providing for cost of obsolescenceand other anticipated losses, wherever considered necessary.

(b) Machinery spares which can be used only in connection with an item of Fixed Asset and whose use isnot of regular nature are written off over the estimated useful life of the relevant asset.

(c) Inventories of items other than those stated above are valued ‘At cost or Net Realizable Value, whicheveris lower’. Cost is generally determined on weighted average cost basis and wherever required, appropriateoverheads are taken into account. Net Realizable Value is the estimated selling price in the ordinarycourse of business less the estimated cost of completion and the estimated costs necessary to make thesale.

ANNEXURE - 4

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8. FOREIGN CURRENCY TRANSACTIONS

(a) Year-end balance of foreign currency transactions is translated at the year-end rates andthe corresponding effect is given in the respective accounts. Transactions completed during the yearare adjusted on actual basis.

(b) In respect of transactions covered by Forward Foreign Exchange Contracts, the difference between theforward rate and exchange rate at the inception of contract is recognized as income or expense overthe life of the contract except for contracts relating to liabilities incurred for purchase of Fixed Assets,the difference thereof is adjusted in the carrying amount of respective Fixed Assets.

(c) Transactions covered by cross currency swap and options contracts to be settled on future dates arerecognized at the year-end rates of the underlying foreign currency. Effects arising of swap contractsare being adjusted on the date of settlement.

9. RETIREMENT BENEFITS

(a) Year-end liability for Superannuation benefits to the eligible employees are provided and funded toapproved funds.

(b) Year-end liability on account of Gratuity is provided for on actuarial valuation basis. In respect of thealuminium business such amount is funded with an approved fund.

(c) Leave Encashment benefits are provided for on actuarial basis.

10. RECOGNITION OF INCOME AND EXPENDITURE

Income & Expenditure are recognized on accrual basis and provision is made for all known expenses.

11. BORROWING COSTS

Borrowing cost directly attributable to the acquisition or construction of qualifying assets are capitalised.Other borrowing costs are recognized as expenses in the period in which they are incurred.

12. TAXATION

Provision for current income tax is made in accordance with the Income Tax Act, 1961. Deferred tax liabilitiesand assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, ontiming difference, being the difference between taxable income and accounting income that originate inone period and are capable of reversal in one or more subsequent periods.

13. MANAGEMENT OF METAL PRICE RISK

In respect of copper division the company has adopted a policy to minimize the risks associated with fluctuationsin the price of copper and other precious metals by hedging mismatch on futures’ market. However, thecompany does not conduct speculative operations in the futures’ market. The results of metal hedgingcontracts /transactions are recorded at their settlement as part of raw material cost or sales as the case maybe. The settlement of these transactions generally coincides with the accounting of the underlying transactions.

14. PROVISION

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probablethat an outflow of resources will be required to settle the obligation, in respect of which a reliable estimatecan be made. Provisions are not discounted to present value and are determined based on best estimaterequired to settle the obligation at the balance sheet date. These are reviewed at each balance sheet dateand adjusted to reflect the current best estimates.

15. CONTINGENT LIABILITY

Contingent liabilities are not provided for in the accounts and are disclosed by way of Notes.

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B) NOTES TO ACCOUNTS

1. Pursuant to a Scheme of Arrangement u/s. 391 to 394 of the Companies Act, 1956 (the Scheme) which hasbeen approved by Hon’ble Bombay High Court and Kolkata High Court on 14th January, 2004 and 23rd

December 2004, respectively, all the business undertakings (other than the aluminium foil business at Kollur,Andhra Pradesh), hereinafter referred to as demerged undertaking, of Indian Aluminium Company, Ltd.(Indal) has been transferred to the Company with effect from the appointed date i.e. 1st April, 2004 on goingconcern basis.

Demerged undertaking is engaged inter alia in conducting and carrying on the business of mining, manufactureand sale of hydrate and alumina, alumina chemicals, aluminium, aluminium products including aluminiumsheets, extrusions and foil and generation of electricity.

2. A Scheme of Arrangement (the Scheme) between the Company, Indo Gulf Corporation Limited (IGCL) andIndo Gulf Fertilisers Limited (IGFL) and their respective shareholders and creditors which envisages thedemerger of the fertiliser business of IGCL to IGFL, and the subsequent amalgamation of the RemainingBusiness of IGCL with the Company, has been approved by the Hon’ble High Courts at Allahabad andMumbai vide their Orders dated 18th November, 2002 and dated 31st October, 2002 respectively. In terms ofthe scheme, the remaining business (hereinafter referred to as “amalgamating company”) comprising ofmanufacturing of copper and certain precious metals, the processing, producing, manufacturing andmarketing of certain types of chemicals (including diammonium phosphates) and rendering assistance andservices in relation to the same has been amalgamated and transferred and vested in the Company, on agoing concern basis with effect from the appointed date, i.e. from opening of business on 1st April, 2002.

3 Accounts are not restated for the periods prior to which the Accounting Standards, as stated under, becameeffective :

Accounting Standard Effective Date

Accounting Standard 11 (revised) - The Effects of Periods commencing on or after 1-4-2004Changes in Foreign Exchange Rates

Accounting Standard 22 - Accounting for Periods commencing on or after 1-4-2001Taxes on Income

Accounting Standard 28 - Impairment of Assets Periods commencing on or after 1-4-2004

Rs. in millions

Half Year endedSep 30, 2005 2004-05

4 Capital Commitments outstanding [Advance/Deposit paidRs.3,445.49 million (Rs. 3097.48 million in 2004-05)] 10,986.09 9,654.80

5 (I) Contingent Liabilities not provided for in respect of:(a) Claims/Disputed liabilities not acknowledged as debt:

Following demands are disputed by the Company andare not provided for:i) Demand notice by Asstt. Collector Central Excise

Mirzapur for excise duty on power generated bycompany’s captive power plant, Renusagar PowerCo. Ltd (Since amalgamated). 91.21 91.21* Writ petition pending with Delhi High Court, Delhi.

Earlier demand raised was quashed by Delhi High Court.The amount has been sequestered in the AluminiumRegulation account. According to the terms ofsettlement dated 5.12.83 between the Central Govt.

(Rs. in millions)

Rs.3,097.48

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Rs. in millions

Half Year endedSep 30, 2005 2004-05

and the Company, this amount will be reimbursedto the Company in the event the case is decidedagainst the Company.

ii) Demand of interest on past dues of the AluminiumRegulation account upto 31.12.1987. 63.29 63.29

* The demand is in dispute with Controller of

Aluminium Regulation Account.

iii) Retrospective Revision of Water Rates by UP JalVidyut Nigam Limited (April 1989 to June 1993 &Jan 2000 to Jan 2001) 40.80 40.80

* Writ petition pending with Lucknow Bench ofAllahabad High Court. The demand stayed videorder dated 11.5.2001

iv) Transit fees levied by Divisional Forest Officer,Renukoot on coal and bauxite 175.93 52.05

* Appeal pending with Allahabad High Court andpayment of transit fee has been stayed. According tolegal opinion received by the Company, the forestdepartment has no authority to levy such fee.

v) M.P Transit Fee on Coal demanded by Northern CoalFields Limited 124.90 112.48

* Writ petition pending with Jabalpur High Court.The Company has paid Rs 105.90 million to NCL underprotest subject to the final conclusion of the writ petition

vi) Withholding Tax on payment of fees on GDR issue. 91.56 91.56* Appeal pending before Income Tax Appellate Tribunal,

Mumbai. Demand adjusted against refund due tothe Company

vii) Imposition of Cess on Coal by Shaktinagar Special AreaDevelopment Authority. 35.36 31.40

* Appeal pending before Allahabad High Court,Allahabad. Demand and levy stayed. According to legalopinion received by the Company, the state has no powerto tax the mineral since this field is covered under Minesand Minerals Development and Regulation Act

(Rs. in millions)

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Rs. in millions

Half Year endedSep 30, 2005 2004-05

viii) Demand of Royalty on Vanadium by District Mining officer,Lohardaga. 53.40 12.90

* Appeal pending with Allahabad High Court, Allahabad.The demand stayed on certain conditions which havebeen fulfilled by the Company.

ix) Demand from District Mining office, Lohardaga & Gumlatowards payment of increased surface rent on Mining 31.90

* The notices have been replied by the company refutingthe demand on the grounds that Surface Renthas already been paid upto Dec’04 at the ratesspecified by the State Government

x) The demand of Excise Duty on gold 1,557.70 1,557.70

* Appeal pending with Customs, Excise and Servicetax Appellate Tribunal, West Zone, Mumbai

xi) Demand for non-payment of sales tax on leased assets. 260.50 212.26

* Writ petition admitted and stay granted byHigh Court, Ahmedabad

xii) Demand raised for reversal of difference between duty paidand Cenvat credit taken in returned material. 13.00

* Appeal to be filed with CESTAT

xiii) Claim by KSEB for difference between the actual demandand contract demand 26.73

* Company has submitted its representation to KSEB

xiv) Other Contingent Liabilities in respect of Excise, Customs,Sales Tax etc. each being for less than Rs. 10 millions 98.63 84.85

* The demands are in dispute at various legal forums

* Status indicating uncertainties

b) i) Bills discounted with Banks 385.53 468.14

ii) Guarantees outstanding (includes corporate guarantees ofRs.11,689.11 million (2004-05 Rs. 11399.76 million) given onbehalf of subsidiary companies) 12,796.99 12,595.15

iii) Letters of Credit Outstanding 675.65 684.17

iv) Bank Guarantees & Bonds 287.17 249.54

c) The Company has received supplementary bills on account ofrevision in rate of power for Main Supply from the UPSEB for theperiod 15th May 1976 to 30th June 1980 and the same remainsunprovided for as disputed by the Company 50.10 50.10

(Rs. in millions)

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(Rs. in millions)

Half Year endedSep 30, 2005 2004-05

d) In terms of the Schemes of Arrangement between the Company,the erstwhile Indo Gulf Corporation Ltd. (IGCL) and Indo GulfFertilisers Limited approved by the Hon’ble High Courts atAllahabad and Mumbai vide their orders dated 18thNovember 2002 and 31st October 2002 respectively andbetween the Company and Indian Aluminium Company, Ltd.(Indal) approved by the Hon’ble High Courts at Kolkata andMumbai vide their orders dated 23rd December 2004 and14th January 2005 respectively, the company may be liable topay a portion of disputed demands of Income Tax pertainingto IGCL & Indal.

e) 228,340,226 Equity Shares of Rs.10/- each fully paid up in IDEACellular Ltd. are held by the Company as investment. Out of theabove 115,187,999 shares of Rs. 10/- each have been pledgedfor securing financial assistance granted by the lenders to thatcompany.

II) Provisions:

For Excise duty on electricity (Additions and Deductionsduring the year – Nil) 54.73 54.73

III) The Company has given undertakings to various Financial Institutionsfor non-disposal of shares held in Bihar Caustic & Chemicals Ltd.,Tanfac Industries Ltd. and 57,085,060 shares of Rs 10/ each of IDEACellular Ltd. till the Institutional loans are repaid in full.

6 a) The Company has export obligations of Rs.7534.43 million(USD 169.54 million) [2004-05 Rs 7501.33 million (USD 171.46 million)]against the Import Licences taken for import of capital goods underExport Promotion Capital Goods Scheme.

b) The Company has export obligation of Rs.5,373.66 millions(USD 122.15 millions) [2004-05 Rs 2592.25 millions (USD 59.25 million)]against the Advance Licence.

Rs.7,534.43 million

Rs 7,501.33 million

Rs 2,592.25 millions

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7 As per the Accounting Standard (AS) 28 - Impairment of Assets, which came into effect from 1st April 2004,the Company carried the impairment test as of 1st April 2004 and provided for the impairment loss whererecoverable amount was lower than amount carried in the accounts by adjusting the same (net of deferredtaxes of Rs.336.29 million) against opening balance of revenue reserves as per the transitional provisions.Details are given below:

A) Aluminium

Nature of Asset Events/Circumstances Impairment Loss Basis ofAmount Recoverable

(Rs. in million) Amount

Certain assets Low return on Investments due to 164.00 Value in useof Foil units severe competition in the market place 120.20 Net Selling Price

Certain assets of Inadequate return on Investment due to 330.95 Net Selling PriceWheel Unit low demand

Certain assets of Inadequate return on Investment 143.39 Value in useSmelters mainly due to high cost of operation 146.43 Net Selling Price

Certain assets of Erosion in value 194.58 Net Selling PriceOther Units

B) Copper

Nature of Asset Events/Circumstances Impairment Loss Basis ofAmount Recoverable

(Rs. in million) Amount

Certain Assets of Higher carrying value than Value in Use 339.87 Value In useCopper Unit

For arriving at Value in Use discount rate of 9.5% has been used. Net Selling Price has been determinedbased on valuation report from external agencies.

As at Sep 30, 2005, the Company made an assessment to ascertain whether there is any indication that anasset may be impaired and found no such indication. However, a detailed assessment will be carried at theclose of financial year.

2004-05

8 Loan and Advances includes -

I) a) Due from a firm of Solicitors & Advocates in which oneof the Directors is a partner. -

(Maximum balance during the year Rs.0.13 million)

b) Due from Officers (Maximum balance during the year Rs.0.07 million) 0.07

c) Payments made to Rosa Power Supply Co. Ltd. Rs. 20.99 million (maximum balanceRs. 20.99 million) [2004-05 Rs. 20.99 million (maximum balance Rs. 20.99 million)],Bina Power Supply Co. Ltd. Rs. 391.44 million (maximum balance Rs. 491.44 million)[2004-05 Rs. 391.44 million (maximum balance Rs.391.44 million)] and Birla TelecomLtd. Rs.1.47 million (maximum balance Rs 1.47 million) [2004-05 Rs.1.47 million(maximum balance Rs 1.47 million)] to be adjusted against the value of the EquityShares to be issued by such companies in the event the relative projects areimplemented after receipt of all regulatory approvals.

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II) To Subsidiary Companies :(Rs. in millions)

As on Maximum As on Maximum30.09.2005 amount 31.03.2005 amount

outstanding outstandingduring the during the

period yearRenukeshwar Investments &Finance Limited 0.04 0.04 - 8.24Renuka Investments & Finance Limited - 54.03Bihar Caustic & Chemicals Ltd. 252.55 252.55 122.90 122.90Lucknow Finance Company Limited(without interest) 54.85* 54.85 54.85* 59.85Utkal Alumina International Limited 1.83 209.55 34.44 201.28Dahej Harbour and Infrastructure Limited - 330.00Indal Export Ltd. 0.04 0.13 0.08 0.08

* with no repayment schedule

III) Inter Corporate Deposits :

a) Inter Corporate Deposit aggregating to Rs.160.76 million (maximum balance Rs.160.76 million)[2004-05 Rs.160.76 million (maximum balance Rs.160.76 million)] made to Aditya Birla Power CompanyLtd. (formally Birla Project Development Corporation Ltd) on interest pursuant to MOU enteredinto with the company for development of new projects.

b) Inter Corporate Deposit aggregating to Rs.218.48 million (maximum balance Rs.218.48 million)[2004-05 Rs.200.71 million (maximum balance Rs.200.71 million)] made to Aditya Birla ManagementCorporation Ltd. (ABMCL) bearing interest.

c) The company is one of the promoter member of ABMCL, a company limited by guarantee whichhas been formed to provide a common pool of facilities and resources to its members, with a viewto optimise the benefits of specialisation and minimise cost for each member. The company hasparticipated in the common pool and has shared the expenses incurred by ABMCL and accountedfor these under appropriate heads

IV) Balances with Trident Trust representing 16,316,130 equity shares of the Company issued pursuant tothe Scheme of Arrangement approved by the Hon’ble High Courts at Mumbai and Allahabad vide theirOrder dated 31st October, 2002 and 18th November, 2002, respectively, to the Trident Trust, which iscreated wholly for the benefit of the Company and is being managed by trustees appointed by it.

9 a) Future obligations towards lease rentals under the lease agreements taken prior to 1st April 2001

(Rs. in millions)

Period Lease Payment Present ValueHY Ended 2004-05 HY Ended 2004-05

Sep 05 Sep 05

Not later than one year 80.41 68.05 76.73 64.92Later than one year and not Later than five years 21.60 20.09

b) Future obligations towards lease rentals under the lease agreements taken on or after 1st April 2001

(Rs. in millions)

Period Lease Payment Present ValueHY Ended 2004-05 HY Ended 2004-05

Sep 05 Sep 05

Not later than one year 0.29 0.29 0.27 0.27

Later than one year and not Later than five years 0.10 0.24 0.09 0.21

--

.

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c) In 2004-05, in line with Accounting Standard – 19 “Leases“, on April 1, 2004 the Company has capitalizedassets taken on finance lease in earlier years at their respective cost amounting Rs. 1728 million togetherwith their respective accumulated depreciation of Rs. 470.50 million.

d) The total of future minimum lease payment commitments under non-cancellable operating leaseagreement for a period of twenty years to use railway tracks along with locomotives for transportationof its materials are as under:

(Rs. in millions)

Period HY Ended 2004-05Sep 05

Not later than one year 4.00 4.00

Later than one year and not later than five years 16.00 16.00

Later than five years 46.67 48.67

The above amounts are exclusive of taxes and duties. During the year the company has chargedRs. 2.00 million (Previous year - Rs. 4.00 million) as rent in respect of this lease.

10 Disclosure in respect of jointly controlled entities in which the company is a joint venturer, in compliancewith AS-27 on Financial Reporting of Interest in Joint Ventures :

Rs in millions

HY Ended Sep-05 2004-05 2003-04 2002-03

Particulars Tanfac IDEA Tanfac IDEA Tanfac IDEA Tanfac IDEA BiharIndustries Cellular Industries Cellular Industries Cellular Industries Cellular Caustic

Limited Ltd Ltd Ltd Limited Ltd Limited Ltd &(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Chemicals

Ltd.

Country of incorporation India India India India India India India India India

Percentage of Share in Joint Venture 9.98% 10.11% 9.98% 10.11% 9.98% 10.11% 9.98% 9.83% 20.00%

Assets 91.39 5,313.41 97.83 4,234.85 96.90 3,784.28 82.63 3,179.26 333.37

Liabilities 56.95 4,306.96 62.73 3,180.91 51.64 2,756.53 40.75 2,109.47 259.65

Income 52.35 1,398.41 87.92 1,659.06 75.37 1,193.17 72.28 926.07 182.40

Expenditure 53.96 1,323.93 87.87 1,632.73 71.99 1,402.15 68.39 1,116.84 167.38

Capital Commitments (net of advance) 321.16 0.04 102.18 4.43 133.51 0.97 64.20 2.40

Contingent Liabilities 144.58 16.46 238.40 27.64 105.73 2.33 1,61.74 150.01

11 Deferred Tax

Major components of Deferred Tax arising on account of temporary timing differences along with theirmovement as at balance sheet date are :

(Rs. in millions)

Particulars HY Sep-05 2004-05 2003-04 2002-03 2001-02

Deferred Tax Assets (A)

Brought forward long term Capital Losses - - 36.58 100.52 163.51

Deferred Tax Liability (B)

- Depreciation 10,919.67 10,450.26 8,809.71 7,413.10 4,386.02

- Others 789.02 846.72 1,178.22 1,177.77 220.64

Net Deferred Tax Liabilities (B-A) 11,708.69 11,296.98 9,951.35 8,490.35 4,443.15

(Rs. in millions)

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12 Purchase of copper concentrate is accounted for provisionally pending finalisation of content in theconcentrate, price, and custom duty. Variations are accounted for in the year of settlement.

13 A part of electricity supplied by the company, which has been treated by UPPCL as sale, has been accountedfor on the basis of provisional rates. The effect of variation in the rate will be accounted for in the year inwhich rates are finalised by UPPCL.

14 Sale of Di-Ammonium Phosphate (DAP) and other complex fertilisers are covered under the concessionalschemes for decontrolled fertilisers of the Government of India. Pending declaration of final rate of concessionfor the quarter ended 30th September 2005 the claim for concession under the scheme for that period hasbeen accounted for provisionally based on final rates declared for the preceding quarter.

15 Exceptional items in 2004-05 represent Rs. 91.03 million on account of expenses incurred on amalgamationas per note no.1 and in 2002-03 represent loss of Rs.1467.27 million on sale of shares in Mangalore Refineryand Petrochemicals Limited and Rs.165.85 million towards expenses incurred on amalgamation as per NoteNo. 2.

Rs.1,467.27 million

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 5

SEGMENTAL REPORTING - RESTATED

(Rs. in million)

Six months ended 2004-05 2003-04 2002-03Sep 30, 2005

Particulars Aluminium Copper Total Aluminium Copper Total Aluminium Copper Total Aluminium Copper Total

R E V E N U E

External Sales & Operating

Revenue 27,547.18 21,141.48 48,688.66 52,520.90 42,711.61 95,232.51 29,957.76 32,125.76 62,083.52 23,920.40 26,202.14 50,122.54

Inter Segment Sales (2.45) - (2.45) - - - - - - - - -

27,544.73 21,141.48 48,686.21 52,520.90 42,711.61 95,232.51 29,957.76 32,125.76 62,083.52 23,920.40 26,202.14 50,122.54

Less: Inter Segment Sales - - - - - - - - - - - -

Total Revenue 27,544.73 21,141.48 48,686.21 52,520.90 42,711.61 95,232.51 29,957.76 32,125.76 62,083.52 23,920.40 26,202.14 50,122.54

RESULTS

Segment/Operating Results 8,729.00 (163.04) 8,565.96 15,957.41 2,538.00 18,495.41 8,905.94 3,097.00 12,002.94 6,605.28 3,839.54 10,444.82

Un-allocable Income

(Net of Expenses) 1,166.17 2,337.01 2,225.29 1,547.14

Interest Expenses (1,000.17) (1,699.56) (1,771.54) (1,364.92)

Non Recurring Expenses - (91.03) - (1,633.12)

Provision for Tax (including

Deferred Tax) (2,717.80) (5,748.26) (4,067.40) (3,172.50)

Net Profit 6,014.16 13,293.57 8,389.29 5,821.42

OTHER INFORMATION

Segment Assets 65,319.71 52,321.27 117,640.98 60,073.08 47,935.18 108,008.26 43,833.57 32,806.97 76,640.54 41,165.85 27,861.28 69,027.13

Un-allocable Assets 43,699.58 43,136.40 38,072.89 33,864.61

Total Assets 161,340.56 151,144.66 114,713.43 102,891.74

Segment Liabilities 6,441.91 8,388.78 14,830.69 4,944.08 10,121.80 15,065.88 3,172.07 5,185.22 8,357.29 2,663.58 3,847.11 6,510.69

Unallocable Liabilities &

Provisions 8,899.57 10,116.05 2,179.89 2,029.60

Total Liabilities 23,730.26 25,181.93 10,537.18 8,540.29

Depreciation 1,775.95 671.44 2,447.39 3,482.25 1,138.66 4,620.91 2,263.12 910.92 3,174.04 1,752.84 889.40 2,642.24

Un-allocable Depreciation 6.40 11.66 0.48

Total Depreciation 2,453.79 4,632.57 3,174.52 2,642.24

Capital Expenditure

including CWIP 3,064.97 1,908.31 4,973.28 4,980.49 5,990.14 10,970.63 3,486.88 3,203.40 6,690.28 7,699.46 2,673.63 10,373.09

SECONDARY SEGMENT REPORTING :

Secondary segment is based on geographical demarcation i.e. India and rest of the world:

HY Sep-05 2004-05 2003-04 2002-03

India 33,669.61 68,773.21 49,132.55 39,839.90

Rest of the world 15,019.05 26,459.30 12,950.97 10,282.64

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 6

Related Party Transactions :

A List of Related Parties

(a) Subsidiaries of the Company Remarks

Indian Aluminium Company, Limited

Annapurna Foils Limited For 2001-02

Indal Exports Limited

Minerals and Minerals Limited

Renukeshwar Investments & Finance Limited

Renuka Investments & Finance Limited

Dahej Harbour and Infrastructure Limited From 2002-03

Lucknow Finance Company Limited From 2002-03

Birla Maroochydore Pty Limited From 2002-03

Birla Mineral Resources Pty Limited From 2002-03

Birla Resources Pty Limited From 2002-03

Birla (Nifty) Pty Limited From 2002-03

Birla Mt Gordon Pty Limited From 2003-04

Bihar Caustic and Chemicals Limited w.e.f. 01.01.2004

Utkal Alumina International Limited w.e.f. 01.07.2003

Suvas Holdings Limited From 2003-04

(b) Trusts of the Company

Trident Trust From 2002-03

(c) Joint Ventures

Bihar Caustic and Chemicals Limited upto 31.12.2003

Tanfac Industries Limited

IDEA Cellular Limited (formerly Birla Tata AT&T Ltd.)

Manglore Refinary & Petrochemicals Limited For 2001-02

(d) Key Managerial Personnel:

Mr. A.K. Agarwala - Whole Time Director upto 10.09.2003

Mr. Debu Bhattacharya- Managing Director w.e.f. 02.10.2003

Mt.

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B The following transactions were carried out with the Related parties in the ordinary course of business:

(a) Subsidiary Companies and Joint Ventures : (Rs. in million)

Six monthsended Sep 05 2004-05 2003-04 2002-03 2001-02

Subsi- Joint Subsi- Joint Subsi- Joint Subsi- Joint Subsi- Jointdiaries Ventures diaries Ventures diaries Ventures diaries Ventures diaries Ventures

Transaction during the year

1 Sales and Conversion 206.67 84.86 327.73 108.36 1,113.98 0.59 747.15 0.24 1,432.08 56.1

2 Services rendered 43.14 - 24.72 0.02 17.77 0.24 45.64 0.09 3.59 5.59

3 Interest and dividendreceived 24.43 0.50 48.46 0.9 78.8 48.68 317.89 65.23 245.33 122.57

4 Interest paid - - 21.53 - 22.37 - 11.08 - 0 -

5 Purchase of materials 2,472.37 91.59 4,146.73 181.71 371.08 633.58 45.84 766.7 78.34 822.46

6 Services received 145.30 0.17 278.63 0.38 318.4 0.75 312.25 1.23 0.2 1.54

7 Investments, Deposits,loans and advancesmade during the year 886.04 0 1,117.69 - 1,111.15 700 4,419.94 1,541.5 281.92 1,414.32

8 Investments, Deposits,loans and advances asat year end 6,762.76 2,293.36 5,877.91 2293.36 16,462.25 2,293.36 15,738.23 2,732.90 10,652.22 5,076.30

9 Guarantees and Collateralsecurities given 11,689.11 875.00 11400 875 5,110.90 849.96 2,131.35 - 1,735.73

10 Licence and Leasearrangements

a) Licence Fees 2.46 - 4.92 - 4.92 - - - -

b) Deposits 54.85 - 54.85 - 44.45 - - - -

Outstanding balances at year end

1 Debit Balances 107.09 0.08 5.57 13.11 11.43 0.41 4.86 0.02 142.85 11.1

2 Credit Balances 156.97 22.75 350.23 5.49 141.93 0.89 144.52 7.86 5.8 10.86

(b) Trident Trust

Beneficiary Interest in the Trust 344.52 344.52 344.52 344.52

Interest Received from Trust 32.63

( c) Key Managerial Personnel:

Managerial Remuneration (including perquisites) 9.43 25.82 16.51 12.19 12.07

2,293.36

11,400 -

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 7

Principal terms of Loans and Assets Charged as security(Rs. in millions)

Particulars Balance as on Balance as on Rate of Repayment Security Remarks

Sept 30, 2005 March 31, 2005 Interest Schedule

Secured Loans:Secured 1,500.0 1,500.0 11.20% Redeemable on These debentures are secured by Put/call optionRedeemable 12th January, 2008 first charge on immovable properties of on 12th January, 2006Non-Convertible 2,000.0 2,000.0 9.75% Redeemable on aluminium plant situate at Renukoot,Debentures 2nd July, 2008 both present and future, ranking pari-passu Put/ call option on

500.0 500.0 9.00% Redeemable on save and except, some of the Workers’ 2nd July, 200617th September, 2008 Quarters and on fixed assets both present Put/call option on

600.0 600.0 7.95% Redeemable on and future ranking pari-passu of the 17th September, 200615th July, 2009 Aluminium plant situate at Renukoot. Put/ call option on

15th July, 2007- 250.0 6.95% Redeemable on Put/call option on

23rd August, 2007 23rd August, 2005

750.0 750.0 7.20% Redeemable on Put/call option on23rd August, 2007 23rd August, 2007(Rs. 500.00 million) & for Rs. 250.00 million only23rd August, 2009(Rs. 250.00 million)

1,050.0 1,050.0 6.40% Redeemable on Put/call option on29th November, 2009 29th November, 2007

500.0 500.0 9.95% Redeemable on The 9.95% and 6.60% debentures are secured14th June, 2006 by first charge on immovable properties of Belur

486.8 486.8 6.60% Redeemable on unit situate in the State of West Bengal , both20th November, 2007 present and future, ranking pari-passu and fixed

1,000.0 1,000.0 6.39% Redeemable on assets of the Belur Unit both present and future15th September, 2009 (save and except book debt) and 6.39% debentures

are secured / to be secured by first charge onimmovable properties of Hirakud Smelter andpower plant ,both present and future rankingpari-passu and fixed assets of Hirakund smelterand power plant both present and future.

600.0 600.0 12.75% Rs. 26.50 crore each on These debentures are secured/ to be secured by Put/call option on4th December, 2005 and first charge on immovable property of Copper 19th July, 20074th December, 2006 and Plant situate at Dahej both present and future rankingRs. 3.50 crore each on pari-passu with existing charge holders and a fixed12th December, 2005 & assets present and future ranking pai-passu of the Copper12th December, 2006 plant at Dahej. Further 12.75% debentures are secured

2,000.0 2,000.0 8.70% Redeemable on on movable properties subject to charge created/to be23rd April, 2007 created in favour of the Bankers for securing Working

1,000.0 1,000.0 8.10% Redeemable on Capital facilities.

19th July, 2009500.0 500.0 6.20% Redeemable on

8th January, 2008

500.0 500.0 5.95% Redeemable on14th January, 2008

2,500.0 2,500.0 6.50% Redeemable on6th September, 2009

Term loans from Government of 0.7 0.7 9.97% 2005-06 Rs.0.19 Million Secured by hypothecationUttar Pradesh under subsidised and balance in 2006-07 of Workers’ QuartersHousing Scheme for Industrial to 2010-11Workers

Cash Credit and ExportCredit Accounts 1019.99 1,775.7 As As per the nature Secured by hypothecation of stocks

negotiated of facility of Raw Materials, Consumable Stores,from time Spares, Work-in-Progress and Finishedto time Products of other than its Copper Division,with movable assets and book debts of its Copperrefrence Division, both present and future. Furtherto various secured/to be secured by way of joint equitablefacilities mortgage of the immovable assets, on second

charge basis, of the Copper Division, rankingpari-passu with other Lenders/Institutions.

1,019.99

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(Rs. in millions)Particulars Balance as on Balance as on Rate of Repayment Security Remarks

Sept 30, 2005 March 31, 2005 Interest ScheduleRupee term Loan fromvarious Banks 4,950.0 4,950.0 7.07% Rs. 99 millions, The loan is secured/ to be secured by first charge

Rs.148.5 millions, on all immovable properties of the Company bothRs.247.5 millions, present and future ranking pari-passu and hypothecationRs.247.5 millions, on all the assets both present and future of theRs.495 millions, Company ranking pari-passu.Rs.742.5 millions,Rs.990 millions andRs.1980 millionsevery year beginning2007-08 to 2014-15

Rupee term Loan 6.69 13.4 15.17% In 2005-06from UTI Bank

Rupee termLoan from UTI 2.2 4.4 15.17% In 2005-06 Rupee Term loans from Financial Institutions are

secured by joint and equitable mortgage /hypothecation of all properties (save & exceptbook debts) of the Copper Division of the Company,both present & future, ranking pari-passu inter-se,subject to prior charges created in favour of theCompany’s Bankers on specified movables assets forsecuring the borrowings for the working capitalfacilities and Hirakud Power assets

Rupee term Loan 75.4 105.8 11.00% 2005-06 -from IDBI Rs.60.8 millions

& 2006-07 -Rs.45 millions

Rupee term Loan 2.2 3.1 15.30% 2005-06 Rs.1.8from IIBI Ltd millions & 2006-07

- Rs.1.3 millions

Foreign Currency 351.9 700.0 Libor + In 2005-06 Foreign Currency Loan of USD 48 million from Banks,Term Loans - HSBC 55 bps ranking pari-passu and are secured by hypothecation

on Unit No.8 of power plant at Renusagar. USD 40million loan is secured by first charge on specificassets and USD 12.5 million loan is secured by tangiblemovable properties including movable plant &machinery and or equipments both present and futurelocated at factories, godowns and premises at Talojaand Kalwa. and JPY loan equivalent to USD 100 millionare secured by first charge on immovable properties ofthe Copper division situate at Dahej ranking pari-passuand hypothecation of fixed assets both present andfuture of Copper division at Dahej ranking pari-passu

Foreign CurrencyTerm Loans - SCB & BOA 399.5 793.1 6M Libor In 2005-06

+77.5 bps

Foreign Currency 594.0 602.4 6M Libor In 2006-07Term Loans - HSBC + 90bpsForeign Currency 2,300.0 2,300.0 6M Libor In 2008-09Term Loans - HSBC + 33 bps

Foreign Currency Term 1,119.3 1,119.3 6M Libor In 2010-11Loans - BNP Paribas + 60bps

Foreign Currency Term Loans 1,124.3 1,124.3 6M Libor In 2010-11- BNP Paribas + 60bpsForeign Currency Term Loans 243.7 294.4 5.95% Three equal Foreign Currency loan from a Financialfrom Financial institutions half yearly Institution is guaranteed by a bank guarantee

installments and such guarantee is secured by hypothecationof Rs.98.1 of all plant & machinery both present & futuremillions pertaining to the Copper Division. This is further

secured by joint equitable mortgage, on firstcharge basis, of all immovable properties ofthe Copper Division at Dahej both present &future.

27,676.7 29,523.4

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(Rs. in millions)Particulars Balance as on Balance as on Rate of Repayment Security Remarks

Sept 30, 2005 March 31, 2005 Interest ScheduleUnsecured Loans:

Employees’ and 269.8 268.3 7% to Withinother Deposits 7.50% a year

Rupee Loans 42.8 55.0 8% to Withinfrom Banks 12.75% a year

Foreign Currency 2,143.8 3,420.3 2.34% Within aLoans from Banks to 5.44% year

Foreign Currency Loans - 1,484.1 3.60% Within afrom Financial Institutions to 3.68% year

Buyers’ Credit 13,088.6 3,248.9 0.37% Withinto 3.45% a year

15,544.9 8,476.6Total Loans 43,221.7 38,000.0

Within a year

Within a year

Within a year

Within a year

Within a year

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 8

SUMMARY OF INVESTMENTS AS AT YEAR / PERIOD END

(Rs. in million)

Sep-05 2004-05 2003-04 2002-03 2001-02 2000-01

LONG TERM INVESTMENTS

UNQUOTED

Trade - Shares inSubsidiary Companies 1151.69 906.74 500.00 500.00 - -

Other than trade

Government Securities 0.37 0.37 0.39 0.41 0.41 0.37

Shares in Subsidiary 5229.31 4,691.57 3,569.02 2,816.57 142.00 96.65Companies

Other Shares, Debentures 2569.89 2,519.89 2,852.88 3,001.03 2,658.80 2,658.80and Bonds

QUOTED

Trade

Shares in SubsidiaryCompanies 124.54 122.26 122.26 - - -

Other Shares,Debentures and Bonds 9.96 9.96 9.96 27.95 27.95 27.95

Other than trade Government Securities 61.71 61.71 61.71 61.71 - -

Shares in SubsidiaryCompanies - - 12,021.11 11,971.25 10,126.30 10,126.30

Other Shares,Debentures and Bonds 2227.13 2,227.13 2,282.04 2,626.48 3,402.17 4,005.34

Units of Mutual Funds 13.1 13.10 - - - -

CURRENT INVESTMENTS

UNQUOTED

Other than trade

Other Shares,Debentures and Bonds - - - 250.00 49.60 444.37

Units of Mutual Funds 24,778.68 26,468.72 12,352.68 5,228.80 3,445.27 1,814.79

TOTAL 36,166.38 37,021.45 33,772.05 26,484.20 19,852.50 19,174.57

Aggregate Book Value :

Unquoted 8,951.26 8,118.57 6,922.29 6,568.01 2,850.81 3,200.19

Quoted 2,423.34 2,421.06 14,497.08 14,687.39 13,556.42 14,159.59

Units of Mutual Funds 24,791.78 26,481.82 12,352.68 5,228.80 3,445.27 1,814.79

36,166.38 37,021.45 33,772.05 26,484.20 19,852.50 19,174.57

Aggregate Market ValueQuoted 10,290.22 8,025.92 16,963.73 10,647.37 7,191.72 8,151.78

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ANNEXURE - 9

SUNDRY DEBTORS

(Rs. in millions)

As at Sep As at 31st March

Particulars 30, 2005 2005 2004 2003 2002 2001

Debts outstanding over six months

- Considered good 498.26 161.25 228.60 283.20 68.87 201.67

- Considered doubtful 85.41 94.70 19.07 17.41 6.85 -

Other Debts

- Considered good 7,786.67 7,712.42 5,382.53 5,324.21 2,662.92 1,853.38

- Considered doubtful - - - - - -

Provision for Doubtful Debts (85.41) (94.70) (19.07) (17.41) (6.85) -

Total Sundry Debtors 8,284.93 7,873.67 5,611.13 5,607.41 2,731.79 2,055.05

Receivable from Promoter /Promoter Group Co. 22.15 30.91 1.93 3.45 0.71 0.27

Others 8,262.78 7,842.76 5,609.20 5,603.96 2,731.08 2,054.78

Total Sundry Debtors 8,284.93 7,873.67 5,611.13 5,607.41 2,731.79 2,055.05

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ANNEXURE - 10

LOANS AND ADVANCES AND OTHER CURRENT ASSETS:

(Rs. in Millions)

As at Sep As at 31st March

Particulars 30, 2005 2005 2004 2003 2002 2001

Advance and Loan to Subsidiary Companies 344.72 212.27 555.65 928.27 385.25 207.27

Receivable from Promoter /Promoter Group Co. 421.63 400.08 515.46 386.80 42.36 113.10

Loan to Employees 205.78 201.77 13.86 - - -

Inter Corporate Deposits 599.24 631.47 726.16 1,815.11 3,425.82 2,026.17

Advances recoverable in cash or in kind or for value to be receivedand/or to be adjusted 2,538.31 2,597.96 2,006.95 1,292.89 996.90 1,051.87

Prepaid Expenses 289.47 214.67 1,270.09 1,008.75 183.59 146.35

Advance Income Tax Paid (Net) - - - 1,236.89 493.97 752.79

Balance with Customs, Port Trusts, Excise etc. 14.66 11.51 0.02 - - -

Security and other Deposits 735.70 729.09 403.62 403.70 199.09 142.99

Excise, Customs and other Claims Receivable 2,212.41 3,714.67 3,330.76 2,017.79 398.15 382.78

Accrued Interest 134.17 44.45 82.45 22.26 74.00 75.68

Accrued Export Incentives 416.40 377.77 153.97 - - -

TOTAL 7,912.49 9,135.71 9,058.99 9,112.46 6,199.13 4,899.00

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ANNEXURE - 11

DETAILS OF DIVIDEND PAID

Particulars Financial Year

2005 2004 2003 2002 2001

Number of Equity Shares (Nos. in millions) 92.77 92.48 92.48 74.46 74.47

Face Value Per Share (Rs.) 10 10 10 10 10

Paid up value per share (Rs.) 10 10 10 10 10

Rate of Dividend - % 200 165 135 135 120

Total Dividend Paid / Proposed (Rs. in millions) 1,855.61 1,525.84 1,248.42 1,005.21 893.59

Corporate Dividend Tax (Rs. in millions) 264.16 195.50 159.92 - 91.15

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 12

SUMMARY OF ACCOUNTING RATIOS

Rs. in milions (Except per share data)

Six MonthsSep-05 2005 2004 2003 2002 2001

1. Net Profit after tax before Exceptional Items

Net profit after tax 6,014.16 13,293.57 8,389.29 5,821.42 6,859.99 6,780.79

Add: Exceptional Items - 91.03 - 1,633.12 - -

Net Profit after tax before Exceptional Items 6,014.16 13,384.60 8,389.29 7,454.54 6,859.99 6,780.79

2. Weighted average number of Equity Shares 927.75 92.77 92.48 92.50 74.46 74.46 outstanding during the year / period

(Nos. in millions)

3. Number of equity shares outstanding at the 927.75 92.77 92.48 92.48 74.46 74.47 end of the year / period (Nos. in millions)

4. Networth 82,593.92 76,571.92 68,579.00 61,910.92 45,815.63 43,788.21

Before Share Split

Accounting ratios

Earning per Share -

Basic and diluted (1) / (2) 144.27 90.72 80.59 92.13 91.07

Net Asset Value per share (4) / (3) 825.35 741.59 669.49 615.30 588.03

Return on Networth (1) / (4) 17.48% 12.23% 12.04% 14.97% 15.49%

After Share Split

5. Weighted average number of Equity Shares

outstanding during the year / period

(Nos. in millions) 927.75 927.75 924.75 925.03 744.59 744.60

6. Number of equity shares outstanding at the

end of the year / period (Nos. in millions) 927.75 927.75 924.75 924.75 744.60 744.66

Accounting ratios

Earning per Share -

Basic and diluted (1) / (5) * 6.48 14.43 9.07 8.06 9.21 9.11

Net Asset Value per share (4) / (6) 89.03 82.54 74.16 66.95 61.53 58.80

Return on Networth (1) / (4) 14.56% 17.48% 12.23% 12.04% 14.97% 15.49%

* Not annualised

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ANNEXURE - 13

CAPITALISATION STATEMENT

Rs. in million

Pre-issue as at Adjusted for Sep 30, 2005 right issue

Borrowings:

Short Term 18,250.45 18,250.45

Long Term 24,971.25 24,971.25

Total Debts 43,221.70 43,221.70

Shareholders Funds

Equity Share Capital 927.78 1,159.72

Reserves and surplus 81,752.17 103,786.18

Less : Miscellaneous expenditure (86.03) (86.03)

(to the extent not written off)

Total Shareholders Funds 82,593.92 104,859.87

Long Term Debt / Equity Ratio 0.30 0.24

Note: Short term borrowings include installment of long term borrowings repayable within one year

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HINDALCO INDUSTRIES LIMITED

ANNEXURE - 14

Details of Other Income and Operating Revenues

(Rs. in millions)

Six month Year Ended March 31, Nature ofended Sep 30, 2005 2005 2004 2003 2002 2001 item

Other Income:

Rent Received 11.42 14.62 13.67 35.08 10.42 6.55 Recurring

Profit/(Loss) on sale/discarded of Fixed Assets (Net) (4.75) 77.66 (1.82) 7.63 - 1.59 Non recurring

Liabilities / Provisions no longer required written back - - - 25.35 57.26 13.28 Non recurring

Income from Investments

Interest 3.33 7.09 19.85 64.57 133.65 186.81 Recurring

Dividend 524.12 794.27 378.80 396.10 328.73 69.57 Recurring

Profit/(Loss) on sale of Investments (Net) 192.34 544.67 798.05 564.50 589.65 140.55 Recurring

Diminution in carrying cost of Investments/written back (Net) - - (0.09) 24.98 - - Non recurring

Interest on Inter Corporate Deposits and Deposit in Banks 63.40 208.90 267.81 490.88 562.77 570.41 Recurring

Interest from Others

From Income Tax Department 314.53 975.26 549.96 13.20 284.80 159.89 Non recurring

Others 67.75 77.98 373.82 294.92 86.74 51.14 Recurring

Miscellaneous Receipt 91.25 Non recurring

1,263.39 2,700.45 2,400.05 1,917.21 2,054.02 1,199.79

Six month Year Ended March 31,ended Sep 30, 2005 2005 2004 2003 2002 2001 Nature of item

Operating Revenues:

Exports Incentives 382.90 1,851.67 2,561.06 2,407.70 214.35 242.39 Recurring

Miscellaneous Receipts and Claims (Net) 220.95 387.19 308.61 266.32 52.64 72.15 Recurring

603.85 2,238.86 2,869.67 2,674.02 266.99 314.54

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ANNEXURE - 15

TAX SHELTER STATEMENT

(Rs. in millions)

PARTICULARS HY Sep-05 2005 2004 2003 2002 2001

Tax Rate 33.66% 36.59% 35.88% 36.75% 35.70% 39.55%

Net profit before Tax & exceptional items 8,731.96 19,132.86 12,456.69 10,627.04 10,049.99 9,800.79

Tax at Notional Rate 2,939.18 7,001.19 4,468.84 3,905.44 3,587.85 3,876.21

Adjustments:

Export Benefits - - 423.70 785.40 731.05 1,078.60

Difference between Tax Depreciation andBook Depreciation 1,310.93 2,362.00 3,896.60 1,926.70 649.55 604.00

Other Adjustments 699.40 1,180.23 872.50 1,056.70 1,471.45 482.40

Adjustments or rectifications resultingfrom Auditors Qualification - - - - - -

Net Adjustments 2,010.33 3,542.23 5,192.80 3,768.80 2,852.05 2,165.00

Tax saving on this difference 676.68 1,296.19 1,862.92 1,385.03 1,018.18 856.26

Total Taxation (Current Tax) 2,262.50 5,705.00 2,605.92 2,520.40 2,569.66 3,019.95

Exceptional items - 91.03 - 1,633.12 - -

Taxation on exceptional items - 6.66 - (12.20) - -

Tax on profit before exceptional items 2,262.50 5,698.34 2,605.92 2,532.60 2,569.66 3,019.95

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 16

STATEMENT OF CONSOLIDATED PROFIT AND LOSSES - RESTATED

(Rs. in millions)

Six months Year ended March 31,*ended Sep 30, 2005 2005 2004 2003 2002

Income :Net Sales 50,211.16 96,257.40 77,513.86 64,009.41 35,651.76Operating Revenues 2,220.80 4,797.24 4,718.85 304.64 93.55Net Sales & Operating Revenue 52,431.96 101,054.64 82,232.71 64,314.05 35,745.31Other Income 1,257.13 2,778.83 2,795.21 2,102.04 2,290.08Increase (Decrease) in inventories 4,821.21 3,021.03 3,188.54 418.76 377.64Total 58,510.30 106,854.50 88,216.46 66,834.85 38,413.03ExpenditureRaw material consumed 24,782.72 43,461.86 36,054.17 27,384.98 9,618.99Goods Purchased 35.21 182.22 8.42 0.56 -Payment to and provision for employees 2,695.03 5,051.26 4,598.62 3,797.39 2,864.67Manufacturing and operating expenses 14,172.24 24,965.24 20,293.47 13,213.39 8,373.00Selling, Distribution, Administration and other overheads 2,998.08 6,109.45 4,911.28 5,010.47 3,167.55Interest & Finance Charges 1,339.49 2,159.12 2,345.64 1,901.72 808.01Depreciation 3,589.62 6,324.93 5,140.34 3,711.31 2,175.10Total 49,612.39 88,254.08 73,351.94 55,019.82 27,007.32Net profit before tax and exceptional items 8,897.91 18,600.42 14,864.52 11,815.03 11,405.71Exceptional Items (Net) 2.50 130.55 10.04 1,613.17 71.77Net profit before tax 8,895.41 18,469.87 14,854.48 10,201.86 11,333.94Provision for current tax 2,304.72 5,418.81 3,233.51 2,669.49 2,843.91Provision for deferred tax 374.31 809.04 1,637.73 827.88 704.80Provision for Fringe Benefits Tax 46.95Provision for taxation for earlier year/s written back (net) (0.33) (715.94) 8.70 (0.03)Net profit after tax before Minority Interest 6,169.76 12,957.96 9,974.54 6,704.52 7,785.23Minority Interest 87.23 110.11 39.70 47.93 295.41NET PROFIT 6,082.53 12,847.85 9,934.84 6,656.59 7,489.82Balance brought forward from Previous year (1,192.52) 3,777.93 2,371.31 1,372.62 2,128.68Adjusted pursuant to the Scheme of Arrangement (4,488.22) - 3,288.22 -Transfer from Debenture Redemption Reserve 7.00 416.67 645.00 - -Proposed Dividend written back due tobuy-back of Equity Shares. 10.16Balance available for Appropriations 4,897.01 12,554.23 12,951.15 11,327.59 9,618.50AppropriationsDebenture Redemption Reserve 960.00 970.70 462.42 721.50Capital Redemption Reserve - - 7.53 0.06Special Reserve 0.49 38.28 1.70 0.63 -Proposed Dividend on Equity Shares 1,864.11 1,531.15 1,248.42 1,005.21Tax on Dividend Proposed /Paid 266.88 197.11 160.07 -Transfer to General Reserve (0.01) 10,617.48 6,472.56 7,077.21 4,995.24Balance Carried to Balance Sheet 4,896.53 (1,192.52) 3,777.93 2,371.31 2,896.49 4,897.01 12,554.23 12,951.15 11,327.59 9,618.50

* Figures for the financial year 2001-02 do not include proportionate share in Joint Ventures.

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 17

STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES - RESTATED

(Rs. in millions)

As at Sept As at March 31,*30, 2005 2005 2004 2003 2002

A Fixed Assets

Gross Block 122742.28 109,531.67 102,585.10 86,766.93 74,233.56

Less : Depreciation (41,742.38) (38,065.60) (30,412.75) (24,945.06) (30,532.77)

Less : Impairment (999.27) (999.27) - - -

Net Block 80,000.63 70,466.80 72,172.35 61,821.87 43,700.79

Less : Revaluation Reserve - - - (11,358.08)

Net Block after adjustment of revaluation reserve 80,000.63 70,466.80 72,172.35 61,821.87 32,342.71

Capital Work-in-progress 12303.96 16,386.94 7,115.58 8,776.43 7,160.96

92,304.59 86,853.74 79,287.93 70,598.30 39,503.67

B Investments 28,033.36 29,558.53 18,655.71 11,867.67 12,406.26

C Current Assets, Loans & Advances:

Inventories 33,637.42 26,970.41 17,033.69 14,490.85 6,326.71

Sundry Debtors 8,664.18 8,404.44 7,517.35 7,027.82 3,999.37

Cash & Bank Balances 8,523.10 4,730.47 2,831.20 3,537.04 3,957.84

Loans & Advances and other current assets 8,225.10 9,415.89 10,222.28 9,644.34 6,955.49

59,049.80 49,521.21 37,604.52 34,700.05 21,239.41

D. Liabilities and Provisions:

Secured Loans 30,560.83 32,310.15 24,385.11 27,736.81 13,143.57

Unsecured Loans 25,895.18 16,998.00 12,851.50 5,303.70 807.00

Deferred Tax Liability 11,501.98 11,342.46 11,952.61 10,258.67 5,979.52

Current Liabilities and provisions 27,873.85 27,910.83 15,119.27 11,648.96 5,170.96

95,831.84 88,561.44 64,308.49 54,948.14 25,101.05

E. Minority Interest 1,144.73 857.73 932.11 357.36 1,988.95

E. Net Worth 82,411.18 76,514.31 70,307.56 61,860.52 46,059.34

F. Represented by:

1. Share Capital 1,415.88 1,415.87 1,412.87 1,305.11 744.63

Advance against Equity Share Capital - - 112.82 -

2. Reserves 81,115.95 75,233.46 69,089.54 60,519.59 56,703.71

Less : Revaluation Reserve - - - (11,358.08)

Less : Miscellaneous Expenditure to the

extent written-off or adjusted (120.65) (135.02) (194.85) (77.00) (30.92)

Reserves (Net of Revaluation Reserves &

Miscellaneous expenditure) 80,995.30 75,098.44 68,894.69 60,442.59 45,314.71

Networth 82,411.18 76,514.31 70,307.56 61,860.52 46,059.34

*Figures for the financial year 2001-02 does not include proportionate share in Joint Ventures.

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 18

STATEMENT OF CONSOLIDATED CASHFLOWS - RESTATED

(Rs. in million)

HY Sep 05 2005 $ 2004 2003 # 2002A. CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax and extraordinary items 8,897.91 18,600.42 14,864.52 11,815.03 11,405.71 Adjustment for : Depreciation 3,589.62 6,223.14 5,028.03 3,711.31 2,175.10 Amortisation of Intangible Asset 101.79 112.31 - - Investment activities (1,163.86) (2,797.46) (2,535.62) (2,041.38) (2,057.56) Lease Rent Paid - - - - - Foreign Exchange Loss / (Gain) (98.55) 41.51 (120.21) (8.96) 45.24 Preliminary /Deferred expenses 7.43 696.04 85.89 27.53 10.62 Provisions / Misc w/off 88.23 127.73 112.74 36.75 4.09 Interest & Finance charges charged 1,331.07 2,208.47 2,185.87 1,900.56 808.01 Operating profit before working capital changes 12,651.85 25,201.64 19,733.53 15,440.84 12,391.21 Changes in working Capital: Trade and other receivables 871.54 (1,973.29) (2,981.94) (758.86) (663.34) Inventories (6,667.01) (9,925.91) (2,501.81) (3,736.91) (608.80) Trade payable 184.69 5,541.14 2,915.37 2,568.70 431.16 Cash generated from operation 7,041.07 18,843.58 17,165.15 13,513.77 11,550.23 Direct taxes paid (164.47) 580.04 (2,025.32) (3,325.68) (2,549.23) Payment of compensation under (27.84) (80.66) - - -

voluntary retirement scheme Cash flow before extraordinary items 6,848.76 19,342.96 15,139.83 10,188.09 9,001.00 Extraordinary items - - (10.04) (13.38) (19.78) Increase in deferred revenue expenditure 0.59 (9.01) (70.84) - NET CASH GENERATED FROM OPERATIONS 6,849.35 19,333.95 15,058.95 10,174.71 8,981.22B. CASH FLOW FROM INVESTMENT ACTIVITIES Goodwill on acquisition - (739.98) - - - Purchase of Fixed Assets (9,441.77) (17,801.74) (12,210.71) (15,797.19) (7,665.36) Sale of Fixed Assets 66.29 685.14 91.54 125.57 31.67 Purchase of shares of Subsidiaries ( net) - - (49.86) (1,848.67) - Disposal of investment in Subsidiaries 1.54 Acquisition of Business* /Subsidiary - (91.03) (35.86) (78.46) (9.45) Purchase of Investments(net) 1,721.79 (10,369.51) (6,123.90) 6.90 (445.16) Loan repayment received from Subsidiaries (Net) - - - - - Interest received 399.05 1,234.43 984.58 858.38 1,074.30 Dividend received 516.41 833.47 636.52 212.74 250.93 Lease rent received 3.24 10.82 - 17.83 - Cash flow before extraordinary items (6,734.99) (26,238.40) (16,707.69) (16,502.90) (6,761.53) Exceptional Items (2.50) (39.52) 211.52 NET CASH USED IN INVESTMENT ACTIVITIES (6,737.49) (26,277.92) (16,707.69) (16,291.38) (6,761.53)

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STATEMENT OF CONSOLIDATED CASHFLOWS - RESTATED (Contd.)

(Rs. in million)

HY Sep 05 2005 $ 2004 2003 # 2002C. CASH FLOW FROM FINANCING ACTIVITIES

Buyback of Equity Share Capital (553.15) (4.21)

Proceeds from issue of Equity Share 141.25 97.14 103.68 214.32 - Share call money received 0.01 0.01 - - -

Advance received against share Capital - - 0.13 112.18 -

Proceed from Rights Issue ( Net of Expenses) - 0.17 - (1.11) -

Proceeds from long term borrowings (net) 401.94 12,304.38 (90.77) 6,845.10 1,132.07 Proceeds from short term borrowings (net) 6,766.01 (54.62) 3,984.97 1,372.66 602.91

Repayment of Finance Lease Liabilities - - (1.07) -

Interest and Finance Charges paid (1,519.09) (2,189.53) (2,257.75) (1,714.90) (710.39)

Dividend paid (2,128.37) (1,733.11) (1,410.17) (1,654.37) (1,084.55)

NET CASH FROM FINANCING ACTIVITIES 3,661.75 8,424.44 330.09 4,619.66 (64.17)

NET INCREASE IN CASH AND CASH 3,773.61 1,480.47 (1,318.65) (1,497.01) 2,155.52EQUIVALENTS

CASH & CASH EQUIVALENTS-

OPENING BALANCE 5,112.41 3,631.94 4,950.59 6,447.60 4,300.36

CASH & CASH EQUIVALENTS-CLOSING BALANCE 8,886.02 5,112.41 3,631.94 4,950.59 6,455.88

-

* Expense incurred on merger of “Demerged business of INDAL” in 2004-05 and “amalgamating business” in2002-03, net of its opening cash & cash equivalent has been shown as Acquisition of Business.

$ Refer Note No.7 in Notes to Accounts (Annexure - 19)

# Refer Note No.8 in Notes to Accounts (Annexure - 19)

Notes :

1 Cash and cash equivalent includes cash and bank balances and Deposits with Companies and interestaccrued thereon.

2 Figures for the previous year have been regrouped / rearranged wherever found necessary.

3 Interest charged excludes and Purchase of Fixed Assets includes interest capitalised Rs.315.28 million in HYSep-05,Rs 464.30 million in 2004-05, Rs. 254.05 million in 2003-04, Rs.626.98 million in 2002-2003 and Rs.452.81million in 2001-02

4 Figures of 2001-02 do not included proportionate share in Joint Ventures.

5 Cash and cash equivalent for 2002-03 have been adjusted to remove Inter Corporate Deposits placed by theCompany in Joint Ventures.

6 For F.Y 2001-02 ,extraordinary items include Refund of Interest from DOT and new brand launch expenses

For F.Y 2002-03 ,extraordinary items from investment activities represents proceeds from sale of shares ofMRPL to ONGC

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 19

NOTES TO ACCOUNTS - CONSOLIDATED

1. PRINCIPLES OF CONSOLIDATION

a) The financial statements have been prepared to comply in all material aspects with applicable accountingprinciples in India, and the Accounting Standards issued by the Institute of Chartered Accountants ofIndia (ICAI).

b) CONSOLIDATED FINANCIAL STATEMENTS relates to Hindalco Industries Limited, the Company and itsSubsidiaries and Joint ventures (the Group).The Consolidated Financial Statements are in conformitywith the AS -21 and AS - 27 issued by ICAI and are prepared on the following:

i) The financial statements of the Company and its Subsidiaries and interest in Joint ventures havebeen combined on a line by line basis by adding together the book values of like items of assets,liabilities, income and expenses, after fully eliminating inter-company balances and transactionsincluding profits in year end inventories.

ii) The consolidated financial statements are prepared by adopting uniform accounting policies forlike transactions and other events in similar circumstances and are presented to the extent possible,in the same manner as the Company’s separate financial statements except otherwise statedelsewhere in this schedule.

iii) The excess of cost to the Company of its investments in the subsidiaries over its portion of equityof subsidiaries at the dates they become subsidiaries is recognised in the financial statements asgoodwill.

iv) The excess of Company’s portion of equity of the subsidiaries over the cost to the Company of itsinvestments at the dates they become subsidiaries is recognised in the financial statements ascapital reserve.

v) Minority Interests in the consolidated financial statements is identified and recognised after takinginto consideration :

- The amount of equity attributable to minorities at The date on which investments in a subsidiaryis made.

- The minorities’ share of movement in equity since the date parent- subsidiary relationshipcame into existence.

- The losses attributable to the minorities are adjusted against the minority interest in the equityof the subsidiary.

The excess of loss over the minority interest in the equity, is adjusted against General Reserve of theCompany.

c) Accounting Policies and Notes on Accounts of the Company and all the subsidiaries are set out in theirrespective financial statements.

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2. a) The Consolidated Financial Statements comprise the financial statements of Hindalco Industries Limitedand its subsidiaries and its interest in Joint Ventures as under:

Name of the company Extent of Company’s interest Country ofHY Sep-05 2004-05 2003-04 2002-03 2001-02 Incorporation

Subsidiaries:

Indian Aluminium Company, Limited 97.06% 97.06% 96.53% 95.96% 74.64% India

Utkal Alumina International Limited ** 55.00% 55.00% 53.10% India

Suvas Holdings Limited ** 51.00% 51.00% 49.24% India

Indal Exports Limited ö 100.00% 100.00% 96.53% 95.96% 74.64% India

Bihar Caustic and Chemicals Limited 54.65% 54.57% 54.57% India

Minerals and Minerals Limited 100.00% 100.00% 100.00% 100.00% 100.00% India

Renukeshwar Investments & 100.00% 100.00% 100.00% 100.00% 100.00% India

Finance Limited

Renuka Investments & Finance Limited 100.00% 100.00% 100.00% 100.00% 100.00% India

Dahej Harbour and Infrastructure Limited 100.00% 100.00% 100.00% 100.00% India

Lucknow Finance Company Limited 100.00% 100.00% 100.00% 100.00% India

Birla Maroochydore Pty Limited* + 100.00% 100.00% 100.00% 100.00% Australia

Birla Mineral Resources Pty Limited + 100.00% 100.00% 100.00% 100.00% Australia

Birla Resources Pty Limited 100.00% 100.00% 100.00% 100.00% Australia

Birla (Nifty) Pty Limited* 100.00% 100.00% 100.00% 100.00% Australia

Birla Mt. Gordon Pty Limited* % 100.00% 100.00% 100.00% Australia

Annapurna Foils Ltd. 67.00% India

Joint Ventures :

Tanfac Industries Limited 9.98% 9.98% 9.98% 9.98% ** India

IDEA Cellular Limited 10.11% 10.11% 10.11% 9.83% ** India

Bihar Caustic & Chemicals Ltd. 20.00% ** India

Financial year of all subsidiaries and joint ventures ends on 31st March

* Subsidiaries of Birla Mineral Resources Pty Limited.

** Have not yet commenced commercial production

ö was subsidiary of Indian Aluminium Company, Limited till 2003-04

+ Birla Maroochydore Pty Limited and Birla Mineral Resources Pty Ltd were incorporated on 24 Feb03 and 28 Jan 03, respectively and their first accounting period ended on 31st March, 2004.

% Birla Mt Gordon Pty. Ltd. was incorporated on 1st November, 2003

** Proportionate share in Joint Ventures were not included in consolidation for the financial year2001-02 as the Accounting Standard - 27 “Financial Reporting of Interests in Joint Ventures” becameapplicable from 01.04.2002.

b) For the purpose of consolidation, the Consolidated Financial Statements of Birla Mineral Resources PtyLimited which reflects the consolidation of Birla (Nifty) Pty Limited, Birla Mt Gordon Pty Limited andBirla Maroochydore Pty Limited has been prepared. In order to consolidate the audited consolidatedfinancial statements of Birla Mineral Resources Pty Limited, where considered material, been restatedto comply with Generally Accepted Accounting Principles in India.

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c) Year 2004-05

In accordance with the requirement of Accounting Standard – 11 (Revised) –“The effects of changes inforeign exchange rates”, operations of foreign subsidiaries have been considered as non-integraloperations and accordingly their financial statements have been converted in Indian Rupees at followingexchange rates :

(i) Revenue and Expenses: At the average exchange rate during the period.

(ii) Current Assets and Current Liabilities: Exchange rate prevailing at the end of the period.

(iii) Fixed Assets: Exchange Rate prevailing at the end of the period.

The resultant translation exchange difference has been transferred to foreign currency translation reserve.

Upto year 2003-04

In accordance with the requirement of Accounting Standard – 11 – “The effects of changes in foreignexchange rates”, financial statements of foreign subsidiaries have been converted in Indian Rupees atthe following exchange rates:

(i) Revenue and Expenses: At the average exchange rate during the period.

(ii) Current Assets and Current Liabilities: Exchange rate prevailing at the end of the period.

(iii) Fixed Assets: Exchange Rate at the date of acquisition.

The resultant translation exchange difference has been transferred to profit & loss account.

3. Accounts are not restated for the periods prior to which the Accounting Standards, as stated under, becameeffective :

Accounting Standard Effective Date

Accounting Standard 11 (revised) -The Effects of Periods commencing on or after 1-4-2004Changes in Foreign Exchange Rates

Accounting Standard 22 - Accounting Periods commencing on or after 1-4-2001for Taxes on Income

Accounting Standard 28 - Impairment of Assets Periods commencing on or after 1-4-2004

(Rs. in million)

HY Sep-05 2004-05

4. Capital Commitments outstanding [Advance/Deposit paid Rs.3,446.79millions (2004-05 Rs 3,201.96 millions)] 11,480.01 12,414.98

Joint Ventures (net of advances) 144.61 145.31

5. (I) Contingent Liabilities not provided for in respect of :

a) Claims/Disputed liabilities not acknowledged as debt

The Company and Subsidiaries :

Income Tax 108.28 108.28

Excise/Custom/Sales Tax 1,983.92 1,920.56

Others 1,581.82 1,106.34

Joint Ventures :

Income Tax 3.49 3.12

Excise/Custom/Sales Tax 109.25 102.07

Others 211.10 42.77

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b) i) Bills discounted with Banks 385.53 468.14

ii) Guarantees outstanding 2,995.44 2,770.39

Joint Ventures 30.33 40.02

iii) Letters of Credit Outstanding 675.65 684.17

Joint Ventures 12.84 12.84

iv) Bank Guarantees & Bonds 1,330.44 877.19

Joint Ventures 209.26 132.53

c) The Company has received supplementary bills on account of 50.10 50.10revision in rate of power for Main Supply from the UPSEB forthe period 15.5.1976 to 30.6.1980 and the same remainsunprovided for as disputed by the Company

d) In terms of the Schemes of Arrangement between the Company, the erstwhile Indo Gulf CorporationLtd (IGCL) and Indo Gulf Fertilisers Limited approved by the Hon’ble High Courts at Allahabad andMumbai vide their orders dated 18th November 2002 and 31st October 2002 respectively andbetween the Company and Indian Aluminium Company, Ltd (Indal) approved by the Hon’ble HighCourts at Kolkata and Mumbai vide their orders dated 23rd December 2004 and 14th January 2005respectively, the company may be liable to pay a portion of disputed demands of Income Taxpertaining to IGCL & Indal.

II) 228,340,226 Equity Shares of Rs.10/- each fully paid up in IDEA Cellular Ltd. are held by the Companyas investment. Out of the above 115,187,999 shares of Rs. 10/- each have been pledged for securingfinancial assistance granted by the lenders to that company.

III) The Company has given undertakings to various Financial Institutions for non-disposal of sharesheld in Tanfac Industries Ltd. and 57,085,060 shares of Rs 10/- each of IDEA Cellular Ltd. till theInstitutional loans are repaid in full.

6. a) The company and its subsidiaries and joint ventures has export obligations of Rs 7,534.43 million (USD169.54 million) [2004-05 Rs.7,501.33 million (USD 171.46 million)] and Rs.1.19 millions, respectively,against the Import Licences taken for import of capital goods under Export Promotion Capital GoodsScheme.

b) The company has export obligation of Rs 5,373.66 millions (USD 122.15 million) [2004-05 Rs 2,592.25millions (USD 59.25 million)] against the Advance Licence.

7. Pursuant to a Scheme of Arrangement u/s. 391 to 394 of the Companies Act, 1956 (the Scheme) which hasbeen approved by Hon’ble Bombay High Court and Kolkata High Court on 14th January, 2004 and 23rd

December 2004, respectively, all the business undertakings (other than the aluminium foil business at Kollur,Andhra Pradesh), herein after referred to as demerged undertaking, of Indian Aluminium Company, Ltd(Indal) has been transferred to the Company with effect from the appointed date i.e. 1st April, 2004 on goingconcern basis.

Demerged undertaking is engaged inter alia in conducting and carrying on the business of mining, manufactureand sale of hydrate and alumina, alumina chemicals, aluminium, aluminium products including aluminiumsheets, extrusions and foil and generation of electricity.

8. A Scheme of Arrangement (the Scheme) between the Company, Indo Gulf Corporation Limited (IGCL) andIndo Gulf Fertilisers Limited (IGFL) and their respective shareholders and creditors which envisages thedemerger of the fertiliser business of IGCL to IGFL, and the subsequent amalgamation of the RemainingBusiness of IGCL with the Company, has been approved by the Hon’ble High Courts at Allahabad andMumbai vide their Orders dated 18th November, 2002 and dated 31st October, 2002 respectively. In terms ofthe scheme, the remaining business (hereinafter referred to as “amalgamating company”) comprising ofmanufacturing of copper and certain precious metals, the processing, producing, manufacturing andmarketing of certain types of chemicals (including diammonium phosphates) and rendering assistance andservices in relation to the same has been amalgamated and transferred and vested in the Company, on agoing concern basis with effect from the appointed date, i.e. from opening of business on 1st April, 2002.

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9. As per the Accounting Standard (AS) 28 - Impairment of Assets, which came into effect from 1st April 2004,the Company carried the impairment test as of 1st April 2004 and provided for the impairment loss whererecoverable amount was lower than amount carried in the accounts by adjusting the same (net of deferredtaxes of Rs.336.29 million) against opening balance of revenue reserves as per the transitional provisions.Details are given below :

A) Aluminium

Nature of Asset Events/Circumstances Impairment Loss Basis ofAmount Recoverable

(Rs in million) Amount

Certain assets of Low return on Investments due to 164.00 Value In useFoil units severe competition in the market place 120.20 Net Selling Price

Certain assets of Inadequate return on Investment 330.95 Net Selling PriceWheel Unit due to low demand

Certain assets of Inadequate return on Investment mainly 143.39 Value In useSmelters due to high cost of operation 146.43 Net Selling Price

Certain assets Erosion in value 194.58 Net Selling Priceof Other Units

B) Copper

Nature of Asset Events/Circumstances Impairment Loss Basis ofAmount Recoverable

(Rs in million) Amount

Certain Assets of Higher carrying value 339.87 Value In useCopper Unit than Value in Use

For arriving at Value in Use discount rate of 9.5% has been used. Net Selling Price has been determinedbased on valuation report from external agencies

As at Sep 30, 2005, the Company made an assessment to ascertain whether there is any indication thatan asset may be impaired and found no such indication. However, a detailed assessment will be carriedat the close of financial year.

10. a) Future obligations towards lease rentals under the lease agreements taken prior to 1st April 2001

(Rs. in millions)Period Lease Payment Present Value

HY Sep-05 2004-05 HY Sep-05 2004-05

Not later than one year 80.41 68.05 76.73 64.92

Later than one year and not later than five years 21.60 20.09

b) Future obligations towards lease rentals under the lease agreements taken on or after 1st April 2001

(Rs. in millions)

Period Lease Payment Present ValueHY Sep-05 2004-05 HY Sep-05 2004-05

Not later than one year 3.22 3.50 3.17 3.32

Later than one year and not later than five years 23.13 21.02 14.47 15.15

Later than five years 3.82 2.23

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c) In 2004-05, in Line with Accounting Standard – 19 “Leases“, on April 1, 2004 the Company has capitalizedassets taken on finance lease in earlier years at their respective cost amounting Rs 1728 million togetherwith their respective accumulated depreciation of Rs 470.50 million.

d) The total of future minimum lease payment commitments under non-cancellable operating leaseagreement for a period of twenty years to use railway tracks along with locomotives for transportationof its materials are as under:

(Rs. in millions)

Period HY Sep-05 2004-05

Not later than one year 4.00 4.00

Later than one year and not Later than five years 16.00 16.00

Later than five years 46.67 48.67

e) Future minimum lease payment commitments for operating lease under the lease agreements for thefollowing period:

Period HY Sep-05 2004-05

Not later than one year 10.85 8.52

Later than one year and not Later than five years 13.62 11.08

11. Purchase of copper concentrate is accounted for provisionally pending finalisation of content in theconcentrate, price, and custom duty. Variations are accounted for in the year of settlement.

12. A part of electricity supplied by the company, which has been treated by UPPCL as sale, has been accountedfor on the basis of provisional rates. The effect of variation in the rate will be accounted for in the year inwhich rates are finalised by UPPCL.

13. Sale of Di-Ammonium Phosphate (DAP) and other complex fertilisers are covered under the concessionalschemes for decontrolled fertilisers of the Government of India. Pending declaration of final rate of concessionfor the quarter ended Sep 30, 2005 the claim for concession under the scheme for that period has beenaccounted for provisionally based on final rates declared for the preceding quarter.

14. Exceptional items in 2004-05 represents expenses of Rs.91.03 million incurred on demerger as per note no.6and disputed claim of Rs.39.52 million of earlier years accounted by one of the subsidiary.

15. Deferred Tax

Major components of Deferred Tax arising on account of temporary timing differences along with theirmovement are:

(Rs. in millions)

Particulars HY Sep-05 2004-05 2003-04 2002-03 2001-02

Deferred Tax Assets (A)

Brought forward long term Capital Losses 0.01 0.01 36.71 100.82 163.51

Others 301.45 303.96 -

Deferred Tax Liability (B)

- Depreciation 11,419.27 10,875.13 10,982.67 9,275.91 6,021.28

- Others 384.17 771.30 1,006.65 1,083.58 121.75

Net Deferred Tax Liabilities (B-A) 11,501.98 11,342.46 11,952.61 10,258.67 5,979.52

16. In view of different sets of environment in which subsidiaries namely Birla Mineral Resources Pty Limited,Birla (Nifty) Pty Limited, Birla Mt. Gordon Pty Limited, Birla Resources Pty Limited and Birla MaroochydorePty Limited are operating, Accounting policies followed in respect of following items by them are differentfrom the accounting policies mentioned in Schedule 23 of the Financial statements of the Company.

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Particulars Accounting Policies Amount (Rs. in million) ProportionCompany Subsidiaries HY Sep-05 2004-05 2003-04 2002-03 HY Sep-05 2004-05 2003-04 2002-03

Fixed Assets Carried at historical cost Carried at the fair value 6,614.59 6,670.66 5,372.43 3,453.71 9.47% 9.47% 7.44% 5.69%

Assets taken on In respect of assets taken Assets taken on finance NIL NIL 22.85 30.78 NIL NIL 0.03% 0.05%Finance Lease on finance lease prior to lease have been treated

1st April 2001, the element as part of the fixed assetsof lease rental applicable to recording them initially atthe cost of assets has been fair value and depreciatingcharged to the profit and it over its useful life.loss account over theestimated life of the assetsand financing cost has beenallocated over the life of thelease on an appropriate basis.

Depreciation Depreciation is charged on the Depreciation rates used 794.68 1,049.26 785.20 NIL 22.13% 16.59% 15.28% NIL& basis of rates and manner (ranging from 10% - 50%)Amortisation specified for each class of for each class of assets are

assets in Schedule XIV of the determined by the remainingCompanies Act, 1956, as expected life of mine. Theamended. carrying cost of the mine

properties itself is amortised onthe basis of production output basis.

Gain / Loss Exchange differences relating to Exchange differences relating to Nil Nil 22.57 NIL Nil Nil 21.61% NILrelating to amounts payable and receivable in amounts payable and receivableexchange foreign currencies are accounted for in foreign currencies are accounteddifferences as exchange gains or losses in the for as exchange gains or losses in

profit and loss account, except for the statement of financialamount relating to liabilities incurred performance.for purchase of fixed assets, thedifference thereof is adjusted in thecarrying amount of the fixed assets.

Environment The Cost of reclamation of mined A provision for environmental and 549.71 265.19 246.24 68.63 100% 100% 100% 100%& out land, Afforestation etc. is rehabilitation costs are made for therehabilitation treated as part of raw materials total estimated future costs ofexpenditure cost. environmental and rehabilitation

work required to be performed foreach operation and area of interestand a corresponding amount iscapitalised to mine properties,which is amortised over the lifeof the operation.

Expenses Mining cost are classified under Expenses relating to mining and 1,916.98 2,911.70 1,837.60 - 67.00% 65.16% 65.88% -raw material consumption and processing except power & fuel,production overhead are classified rates and taxes, insurance,functionally and disclosed under traveling expenses, royalty, freightprimary heads of accounts and forwarding are not classified

functionally and are shown underconversion, fabrication and otheroperating expenses

Investments Long term Investments are stated Investments in controlled entities - - - - -at cost after deducting provisions, are carried in the financialif any, in cases where the fall in statements at the lower ofmarket value has been cost and recoverable amount.considered of permanent nature. Dividends and distributions areCurrent investments are stated at brought to account in the profitlower of cost and fair value. and loss account when they are

declared by the controlled entities.

Recognition Forward rate agreement and Forward rate agreement and 503.32 539.79 Nil - 100% 100% NIL -of options are not marked-to options are marked to spot at year endHedging gain spot at year end. and the same is recognized as deferred / loss gain / loss in financial statements.

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17. Year 2002-03 being the first year of consolidation of financial statements of Joint Ventures with the Companyand its subsidiaries in line with the Accounting Standard - 27, applicable w.e.f. 1st April, 2002, figures for2001-02 are not comparable to that extent.

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 20

SEGMENTAL REPORTING - CONSOLIDATED

(Rs. in million)

Six months ended 2004-05 2003-04Sep 30, 2005

Particulars Aluminium Copper Others Total Aluminium Copper Others Total Aluminium Copper Others Total

R E V E N U E

External Sales 27,965.97 23,034.87 1,431.12 52,431.96 53,209.56 45,469.72 2,375.36 101,054.64 45,014.04 35,846.29 1,372.38 82,232.71

Inter Segment Sales 9.42 - 7.56 16.98 8.91 - 15.01 23.92 7.23 - 11.77 19.00

27,975.39 23,034.87 1,438.68 52,448.94 53,218.47 45,469.72 2,390.37 101,078.56 45,021.27 35,846.29 1,384.15 82,251.71

Less: Inter Segment Sales (9.42) - (7.56) (16.98) (8.91) - (15.01) (23.92) (7.23) - (11.77) (19.00)

Total Revenue 27,965.97 23,034.87 1,431.12 52,431.96 53,209.56 45,469.72 2,375.36 101,054.64 45,014.04 35,846.29 1,372.38 82,232.71

RESULTS

Segment/Operating Results 8,984.49 (189.42) 277.64 9,072.71 16,192.69 1,741.30 481.21 18,415.20 10,921.27 3,667.37 357.90 14,946.54

Un-allocable Income

(Net of Expenses) 1,164.69 2,344.34 2,263.62

Interest Expenses (1,339.49) (2,159.12) (2,345.64)

Non Recurring Expenses (2.50) (130.55) (10.04)

Provision for Tax (including

Deferred Tax) (2,725.65) (5,511.91) (4,879.94)

Net Profit 6,169.76 12,957.96 9,974.54

OTHER INFORMATION

Segment Assets 69,090.02 68,765.87 5,951.86 143,807.75 63,100.43 61,408.49 6,116.48 130,625.40 60,751.21 42,524.55 4,439.28 107,715.04

Un-allocable Assets 35,700.65 35,443.10 28,027.97

Total Assets 179,508.40 166,068.50 135,743.01

Segment Liabilities 6,849.57 11,110.73 857.14 18,817.44 5,253.76 11,633.03 778.20 17,664.99 5,230.89 6,797.67 596.28 12,624.84

Unallocable Liabilities

& Provisions 9,056.41 10,245.84 2,494.43

Total Liabilities 27,873.85 27,910.83 15,119.27

Depreciation 1,836.07 1,502.46 244.69 3,583.22 3,599.96 2,260.58 452.73 6,313.27 3,035.30 1,768.73 313.90 5,117.93

Un-allocable Depreciation 6.40 11.66 22.41

Total Depreciation 3,589.62 6,324.93 5,140.34

Capital Expenditure including

CWIP 3,896.46 5,178.17 237.22 9,311.85 5,327.95 9,714.12 604.74 15,646.81 5,545.65 5,822.11 402.03 11,769.79

Operating Results

(Net of Expenses)

Interest Expenses

Non Recurring Expenses

Segment Assets

Un-allocable Assets

Un-allocable Liabilities

Segment Liabilities

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2004-05 2003-04

Particulars Aluminium Copper Others Total Aluminium Copper Others Total

R E V E N U E

External Sales 32,678.35 26,101.78 4,037.52 1,191.76 64,009.41 31,593.87 4,057.89 35,651.76

Inter Segment Sales 9.94 - 1,060.15 243.32 1,313.41 - 904.24 904.24

32,688.29 26,101.78 5,097.67 1,435.08 65,322.82 31,593.87 4,962.13 36,556.00

Less: Inter Segment Sales (9.94) - (1,060.15) (243.32) (1,313.41) - (904.24) (904.24)

Total Revenue 32,678.35 26,101.78 4,037.52 1,191.76 64,009.41 31,593.87 4,057.89 35,651.76

RESULTS

Segment/Operating Results 7,479.87 3,838.87 870.13 251.31 12,440.18 9,658.31 756.77 10,415.08

Un-allocable Income (Net of Expenses) 1,276.57 1,798.64

Interest Expenses (1,901.72) (808.01)

Non Recurring Expenses (1,613.17) (71.77)

Provision for Tax (including Deferred Tax) (3,497.34) (3,548.71)

Net Profit 6,704.52 7,785.23

OTHER INFORMATION

Segment Assets 51,583.24 32,169.50 3,838.47 4,288.91 91,880.12 44,258.73 3,559.37 47,818.10

Un-allocable Assets 25,362.90 25,362.16

Total Assets 117,243.02 73,180.26

Segment Liabilities 3,646.24 4,606.68 492.84 291.01 9,036.77 3,145.62 467.07 3,612.69

Unallocable Liabilities & Provisions 2,612.19 1,558.27

Total Liabilities 11,648.96 5,170.96

Depreciation 2,262.55 889.40 190.09 345.37 3,687.41 1,990.66 164.13 2,154.79

Un-allocable Depreciation - 20.31

Total Depreciation 3,687.41 2,175.10

Capital Expenditure including CWIP 9,335.26 2,673.63 156.34 399.02 12,564.25 7,684.41 248.28 7,932.69

Note : During the year 2004-05, the Company re-identified primary business segment to reflect more appropriate presentation in line with

reorganisation of some subsidiaries and accordingly figures of 2003-04 were also regrouped to make them comparable.

Aluminium Copper Chemicals Others Total Aluminium Chemicals Total

2003-04

Less : Inter Segment Sales

Operating Results

Interest Expenses

Segment Assets

Un-allocable Assets

Un-allocable Liabilities & Provisions

Segment Liabilities

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HINDALCO INDUSTRIES LIMITED - CONSOLIDATED

ANNEXURE - 21

Related Party Disclosures - CONSOLIDATED

A List of Related Parties

(a) Trusts of the Company.

Trident Trust (From F.Y : 2002-2003)

(b) Joint Ventures

Tanfac Industries Limited

IDEA Cellular Limited (Formerly known as Birla Tata AT & T Limited)

Bihar Caustic and Chemicals Limited (From F.Y 2002-03 upto 31-12-2003)

Mangalore Refinery and Petrochemicals Limited ( F.Y -2001-2002)

Utkal Aluminium International Limited ( F.Y -2001-2002)

Associates :

Utkal Alumina International Limited ( From F.Y 2002-03 upto 02-07-2003)

Orissa Extrusions Limited ( F.Y -2001-2002)

Annapurna Foils Limited ( For the transactions during the period April 2001to October 2001)

(c) Key Managerial Personnel :

Mr.Debu Bhattacharya Managing Director (w.e.f 02-10-2003)

Mr. A.K.Agarwala Whole Time Director (upto 10-09-2003)

Dr. S.K.Tamotia President and CEO (FY 2001-02 to FY 2003-04)

Mr.G.Mukherjee Managing Director ( F.Y -2001-2002)

Mr.N .K.Choudhary Managing Director, (April 01, 2001 to November 28,2001)Operations

Mr.P.N.Ojha Managing Director (For HY Sep-05)

B The following transactions were carried out with the Related parties in the ordinary course of business

(a) Joint Ventures / Associates :

S. Transactions HY Sep-05 2004-05 2003-04 2002-2003 * 2001-2002 **

No. Joint Joint Joint Joint Associate Joint AssociateVentures Ventures Ventures Ventures Ventures

Transaction during the year 1 Sales and Conversion 84.86 97.54 77.63 87.44 - 56.10 87.71

2 Services Rendered - 0.02 0.33 0.09 - 9.18 1.72

3 Interest and Dividend received 0.50 0.81 42.69 57.43 - 123.29 3.76

4 Purchase of materials 91.59 163.57 433.55 675.71 - 822.46 -

5 Services Received 0.17 0.35 0.78 1.23 - 1.54 26.26

6 Investments, Deposits,loans &advances made during the year - - 700.00 1,541.50 4.30 1,446.96 132.89

7 Guarantees and Collateral securities given 875.00 875.00 849.96 2,131.35 - 1,735.73 -

Utkal Alumina International Limited

Transactions during the year

Sales and Conversion

Services Rendered

Interest and Dividend received

Purchase of materials

Services Received

Investmet, Deposits, loans &advances made during the year

Guarantees and Collateral securiteis given

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S. Transactions HY Sep-05 2004-05 2003-04 2002-2003 * 2001-2002 **

No. Joint Joint Joint Joint Associate Joint AssociateVentures Ventures Ventures Ventures Ventures

Outstanding Balance ason 31st March

1 Debit Balances 0.08 11.80 15.01 10.01 - 11.10

2 Credit Balances 22.75 4.94 0.80 7.29 10.86

3 Investments, Deposits,loans & advances - - - 529.21 47.57 5,311.54 1.92

(b ) Trident Trust

Beneficiary Interest in the trust 344.52 344.52 344.52 344.51

Interest received from Trust 32.63

( c) Key Managerial Personnel :

Managerial Remuneration (including perquisites) 19.28 25.82 26.61 20.46 27.00

* Net of eliminations ** Gross

Debit Balances

Credit Balances

Investments, Deposits, loans & advances

Net of eliminations

Beneficiary Interest in the trust

Interest received from Trust

Managerial Remuneration (including perquisites)

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STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY

Our Equity Shares are listed on the BSE and NSE. As our shares are actively traded on the BSE and NSE, ourstock market data have been given separately for each of these Stock Exchanges.

Whilst reviewing the information provided below, it should be noted that each Equity Share of Rs. 10 was splitinto ten Equity Shares of Re. 1 each pursuant to the resolution passed by the shareholders of our Company onAugust 6, 2005. Our Equity Shares commenced trading ex-split with effect from August 30, 2005.

The high and low closing prices recorded on the BSE and NSE for the preceding three years and the number ofEquity Shares traded on the days the high and low prices were recorded are stated below:

BSEYear ending High Date of Volume on Low Date of Volume on AverageMarch 31 (Rs.) High date of (Rs.) Low date of low price for

high (no. (no. of the yearof shares) shares) (Rs.)

2003 778 April 1, 2002 799 469.35 October 14, 2002 110,853 623.68

2004 1,503 January 9,2004 60,182 530.25 April 1, 2003 21,251 1,016.63

2005 1,487 January 3, 2005 136,005 725.00 May 17, 2004 112,088 1,106.00

April 1, 2005 1,460 August 18, 2005 42,584 1,066 June 2, 2005 91,013 1,236.00

to August 29, 2005

Equity Share of Rs. 10 split into ten Equity Shares of Re. 1 each

August 30, 2005 165.00 September 19, 1,061,481 112.60 October 31, 2005 1,271,773 138.80to 2005

November 21, 2005

NSEYear ending High Date of Volume on Low Date of Volume on AverageMarch 31 (Rs.) High date of (Rs.) Low date of low price for

high (no. (no. of the yearof shares) shares) (Rs.)

2003 785 April 1, 2002 8,403 460.00 October 30, 2002 29,100 622.502004 1,599 January 6, 2004 108,977 532.05 April 1, 2003 28,487 1,065.532005 1,499.7 January 4, 2005 220,283 720 May 17, 2004 265,525 1,109.85April 1, 2005 1,459.4 August 18, 2005 105,837 1,067 June 2, 2005 109,811 1,263.20toAugust 29, 2005

Equity Share of Rs. 10 split into ten Equity Shares of Re. 1 each

August 30, 2005 164.45 September 20, 4,734,026 112.65 October 31, 2005 3,804,158 138.55to 2005November 21, 2005

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The high and low prices and volume of Equity Shares traded on the respective dates during the last six monthsare as follows :

BSEMonth High Date of Volume on Low Date of Volume on AverageYear (Rs.) High date of (Rs.) Low date of low price for

high (no. (no. of the yearof shares) shares) (Rs.)

November 1, 2005 138.30 November 18, 2005 2,053,297 114.95 November 1, 2005 512,012 126.63toNovember 21, 2005

October 1, 2005 154.75 October 4, 2005 884,406 112.60 October 31, 2005 1,271,773 133.68toOctober 31, 2005

August 30, 2005 165.00 September 19, 2005 1,061,481 140.00 August 31, 2005 311,223 152.50toSeptember 30, 2005

Equity Share of Rs. 10 split into ten Equity Shares of Re. 1 each

August 1, 2005 to 1,460 August 18, 2005 42,584 1,250.5 August 1, 2005 14,566 1,355.25August 29, 2005

July, 2005 1,299.95 July 29, 2005 57,127 1,179 July 4, 2005 58,925 1,239.48

June, 2005 1,265.00 June 30, 2005 40,829 1,066 July 2, 2005 91,013 1,165.50

May, 2005 1,250.00 May 26, 2005 34,997 1,127 May 31, 2005 28,831 1,188.50

April, 2005 1,430.00 April 11, 2005 12,500 1,180 April 29, 2005 22,538 1,305.00

NSEMonth High Date of Volume on Low Date of Volume on AverageYear (Rs.) High date of (Rs.) Low date of low price for

high (no. (no. of the yearof shares) shares) (Rs.)

November 1, 2005 138.00 November 18, 2005 4,741,243 116.25 November 1, 2005 844,794 127.13toNovember 21, 2005

October 1, 2005 154.70 October 4, 2005 1,944,357 112.65 October 31, 2005 3,804,158 133.68toOctober 31, 2005

August 30, 2005 164.45 September 20, 2005 4,734,026 140.05 August 31, 2005 1,004,383 152.25

to

September 30, 2005

Equity Share of Rs. 10 split into ten Equity Shares of Re. 1 eachAugust 1, 2005 1,459.40 August 18, 2005 105,837 1,241.55 August 2, 2005 70,712 1,350.48to

August 29, 2005

July, 2005 1,315 July 29, 2005 180,025 1,177 July 4,2005 197,125 1,246.00

June, 2005 1,235 June 30, 2005 296,966 1,067 June 2, 2005 109,811 1,151.00

May, 2005 1,240 May 3, 2005 155,336 1,125 May 31, 2005 141,586 1,182.50

April, 2005 1,429.9 April 7, 2005 29,043 1,179 April 29, 2005 141,684 1,304.45

The market price was Rs. 130.65 on BSE on November 11, 2005, the trading day immediately preceding the dayon which the committee of the Board met to finalize the offer price for the Issue.

The market price was Rs. 130.8 on NSE on November 11, 2005, the trading day immediately preceding the dayon which the committee of the Board met to finalize the offer price for the Issue.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our selected financial and other operating data andour financial statements under Indian GAAP and the related notes, appearing elsewhere in this Letter of Offer andthe related notes to accounts and significant accounting policies that have been incorporated in the section titled“Auditor’s Report”. This discussion and analysis contains forward-looking statements that involve risks, uncertaintiesand assumptions. A description of what constitutes a forward-looking statement is provided in “Forward-LookingStatements”. Our actual results may differ materially from those anticipated in these forward-looking statementsas a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere inthis Letter of Offer. Unless otherwise stated, the financial information used in this section is derived from ourstandalone audited financial statements under Indian GAAP, as restated.

Our fiscal year ends on March 31 of each year, hence all references to a particular fiscal year are to the 12-monthperiod ended March 31 of that year. In this section, any reference to “we”, “us” or “our” refers only to HindalcoIndustries Limited. Bracketed numbers indicate losses/ negative figures. In this section, any conversion from USDollars to Indian Rupees has been done based on the 12 PM Noon Exchange rate of 1US Dollar = 45.690 IndianRupees on November 10, 2005 as given by the Federal Reserve Bank of New York – Such conversions are forconvenience purposes.

Pursuant to a Scheme of Arrangement approved by the High Courts of Kolkata and Mumbai, all businesses ofIndal with the exception of business pertaining to the foils plant at Kollur, Andhra Pradesh were demerged into uswith effect from April 1, 2004. As a result, the financial statements for fiscal 2005 include the full year financialresults of the aluminium business of Indal and may not be comparable with those of fiscal 2004. For details on theScheme of Arrangement and its financial implications, please see “Our Business” on page [-] of this Letter ofOffer.

Overview

We are the leading producer of aluminium and copper in India and are also one of the leading metals and miningcompanies in Asia. We are a vertically integrated aluminium producer and according to CRU, our Renukoot plant,which accounted for 84% of our primary aluminium metal production in fiscal 2005, is amongst the top 15% ofthe lowest cost producers globally. According to CRU, as of July 2005, we are the fourth largest aluminiumproducer in Asia and the fourteenth largest in the world by volume. In our copper business, we are a customsmelter and are partially integrated with upstream copper mines, which are owned and operated by Birla NiftyPty Limited and Birla Mt. Gordon Pty Limited, which, in turn, are owned by our wholly owned subsidiary BirlaMineral Resources Pty Limited. As a custom smelter, we buy copper concentrate at LME-linked prices for smeltingand refining copper and we sell refined copper at LME-linked prices in the domestic and export markets. Accordingto CRU, we are currently the largest producer of copper in India and expect to be amongst the top 10 producersof copper in the world, by installed capacity, by end of the calendar year 2005.

Our Business Segments

We evaluate and report our financial results in two business segments :

Aluminium: Our operations consist of bauxite mining, alumina refining, smelting and converting the primarymetal into value-added products. We have dedicated sources of critical raw materials such as bauxite,power and, to a limited extent, coal and have committed supply sources of auxiliary chemicals. In addition,we manufacture the anodes used in our smelter operations in-house. We also produce alumina that is inexcess of our requirements. We sell our excess alumina, primary aluminium in the form of ingots, billets andwire rods and value-added products such as rolled products, extrusions, foils and alloy wheels manufacturedby us as well as by our subsidiary Indian Aluminium Company, Limited.

Copper: Our operations consist of producing (through smelting, converting and refining copper from copperconcentrate) copper and manufacture of precious metals (gold, silver, selenium and platinum group mix),phosphatic fertilizers, and other by-products such as sulphuric acid generated by the copper manufacturingprocess. Our operations are supported by our wholly owned subsidiary Birla Mineral Resources Pty Limitedwhich wholly owns Birla Nifty Pty Limited and Birla Mt. Gordon Pty Limited, which, in turn, own coppermines in Australia. Our operations are also supported by an in-house jetty owned by our wholly owned

50

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subsidiary, Dahej Harbour and Infrastructure Limited and power plants located close to our copper smelterat Dahej, India. We sell the refined copper in the form of cathodes and continuous cast rods and also sell theprecious metals, phosphatic fertilizers and other by-products such as sulphuric acid.

We believe that we are a domestic leader in both metals and also a significant exporter.

The following table summarizes the proportion of our net sales & operating revenues and profit before interestand tax (PBIT) from the two business segments, for the periods indicated:

Segmental Net Sales & Operating Revenues and PBITYear Ended March 31,

2003 2004 2005Net Sales PBIT Net Sales PBIT Net Sales PBIT

& Operating & Operating & OperatingRevenues Revenues Revenues

Aluminium 48% 55% 48% 63% 55% 77%

Copper 52% 32% 52% 22% 45% 12%

Unallocable 13% 16% 11%

Total 100% 100% 100% 100% 100% 100%

Factors Affecting Our Results of Operations

Several factors affect our results of operations that may make it difficult to predict future financial results based onpast performance. These include commodity price movements, operating costs and efficiency, product andmarket mix, duties and taxes and exchange rates.

Commodity Prices

Commodity prices have significant impact on our results of operations. These are influenced by changes inglobal economic conditions, related industry cycles, demand-supply dynamics, attempts by individual producersto capture market share and also by speculation in the market. In addition to market fluctuations, our averageselling prices can be affected by contractual arrangements and hedging strategies. The commodity price fluctuationsand market cycles have historically had a material impact on our results of operations and are expected tocontinue to do so in the future.

LME Price for Aluminium

We sell primary aluminium in the domestic and export markets. We price our alumina and aluminium products byreference to domestic market prices or international market prices. Domestic pricing is influenced by the movementsin LME prices, regional premiums, exchange rates and customs duty changes. For more information on theimpact of customs duties on our net revenues, see “- Factors Affecting Our Results of Operations – GovernmentPolicy” below.

In the export markets, we sell primary metal with reference to LME prices, but are able to charge a regionalpremium that generally reflects the cost of securing the metal from an alternative source of supply.

Alumina prices are negotiated and are usually determined with reference to the LME price for aluminium. We sellboth under long-term contracts as well as in spot sales. The decision on the manner of sale is influenced by thedemand-supply and pricing outlook for alumina in the international markets.

LME prices for aluminium have been volatile and cyclical in the past and we expect this to continue. The followingtable sets out indicative average LME cash prices per metric ton for the periods indicated:

Average LME Cash Prices Year Ended December 31,

2002 2003 2004

(In currency per metric ton)

LME Aluminium US$1,349 Rs. 61,635.8 US$1,431 Rs. 65,382.4 US$1,716 Rs. 78,404.0

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LME Price for Copper

The prices we pay for copper concentrate and the prices we charge for our copper products are based on theLME price for copper. However, because we are a custom copper smelter, we attempt to make the LME price apass through for us as both our copper concentrate purchases and sales of finished goods are based on LMEprices.

Nevertheless, we are also exposed to differences in the LME price between the quotational periods for thepurchase of copper concentrate and sale of the copper, and any decline will adversely affect us. We attempt tohedge against such risks, but are still exposed to timing and quantity mis-matches. TcRc for some of our long-term copper concentrate supply contracts are also negotiated as a percentage of the prevailing LME price. Inaddition, some of our long-term copper concentrate supply agreements provide for price participation termswhich are linked to LME prices. As a result, any significant volatility in the LME price for copper could adverselyaffect our revenues and profitability.

The level of TcRc has a significant impact on the profitability of our copper business. We purchase copperconcentrates at the LME price for the relevant quotational period less TcRc. While our TcRc is negotiated betweenthe supplier and us, our TcRc is influenced by global TcRc, which is primarily the result of factors such as thesupply and demand of copper concentrates, prevailing and forecasted LME prices and mining and freight costs.We use a blend of long term and spot purchases to meet our copper concentrate requirements, which areinfluenced by contract and spot TcRc. Long term purchases accounted for approximately 75% and 76% of ourcopper concentrate requirements in fiscal 2004 and fiscal 2005 respectively. In addition, 10% of our concentraterequirements in fiscal 2005 were met from two mines in Australia, owned through our wholly owned subsidiaryBirla Mineral Resources Pty Limited. While contract rates are negotiated annually (substantially influenced by thebenchmark price set by certain large Japanese smelters), the spot price fluctuates depending on the concentratedemand-supply and LME price. Spot TcRc experienced a declining trend throughout fiscal 2003 and fiscal 2004although it witnessed a sharp recovery during the second half of fiscal 2005, and hence is difficult to predict. Ourspot purchases accounted for 25% and 13% of our requirements in fiscal 2004 and 2005, respectively.

We sell our products at a premium to LME price for the relevant quotational period, which is affected by globaldemand and supply of refined copper and prevailing freight costs. In the domestic market, we price copper at thelanded cost of imported metal that reflects LME, regional premiums, import duties and exchange rate. Anylowering on customs duties would thus have an adverse impact on domestic prices. For more information on theimpact of customs duties on our net revenues, see “Factors Affecting Our Results of Operations – GovernmentPolicy” below.

LME copper prices and TcRc have been volatile in the recent past and we expect this to continue. Significantmovements affect our revenues and profitability. The following table sets out indicative average LME cash pricesper metric ton of copper, average TcRc under long-term supply contracts for copper and average spot TcRc forcopper in U.S. dollars for the periods indicated:

Average LME Cash Prices and Average Long term & Spot TcRcYear Ended December 31,

2002 2003 2004

(In currency per metric ton)

LME Copper US$1,558 Rs.71,185.0 US$1,779 Rs.81,282.5 US$2,866 Rs.130,947.5

Long term TcRc US$399 Rs.18,230.3 US$333 Rs.15,214.8 US$243 Rs.11,102.7

Spot TcRc US$179 Rs.8,178.5 US$82 Rs.3,746.6 US$340 Rs.15,534.6

Operating Costs and Efficiency

Given the commodity nature of our businesses, operating costs and efficiencies are critical to maintaining ourcompetitiveness and profitability.

In our aluminium business, our costs can be broadly categorized into power and fuel, raw materials includingbauxite, carbon, caustic soda and other raw materials such as florides and chemicals and other manufacturing &operating expenses primarily consisting of stores, spare parts and tools as well as repairs, renewals and replacements

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of building and machinery. Of these, power and fuel, and raw materials were the primary cost drivers accountingfor 89%, 90% and 87% of our aluminium raw materials and manufacturing & operating expenses in fiscal 2003,2004 and 2005 respectively.

Power forms the largest component of the costs relating to our aluminium business. We benefit from low costand stable supplies from our power plants. In fiscal 2003, 2004 and 2005, dedicated power accounted for 99%,99% and 88%, respectively, of our total power needs. At 15,062 Kwh per metric ton of primary aluminiumproduction at Renukoot and at 16,303 Kwh at Hirakud, we believe that our efficiencies are comparable with thebest smelters using a similar technology in the world. However, any change in power cost and efficiencies willadversely impact us. See “Risk Factors – A significant portion of our energy requirements are met by our dedicatedpower plants and any disruption to these operations could increase our production costs.”

Bauxite quality, costs and availability have significant bearing on the costs and efficiencies relating to our aluminiumbusiness, thus impacting profitability. We source a large part of our requirements from own bauxite mines withthe rest coming from dedicated suppliers. Our present bauxite reserves are of good quality and based on ourcurrent requirements as well as proposed expansion of existing refineries at Muri and Belguam, we expect ourtotal reserves, including bauxite deposits for which we are in the process of securing leases, to last for approximately22, 44 and 23 years, respectively at our Muri, Renukoot and Belgaum refineries. The principal components ofbauxite costs are mining costs, royalties and freight. The Government of India has increased royalty payments inrecent periods and may do so again. Any increase in these costs will adversely impact our profit margins. See“Risk Factors – If we are unable to obtain a steady supply of bauxite at reasonable costs, our results of operationsmay be affected.”

Apart from copper concentrate, power and fuel are the biggest cost drivers of our copper business. We operateour dedicated power plant with imported coal, taking advantage of our coastal location. Coal prices have risen inthe last two years, exchange rates have been volatile with the appreciation of the Indian Rupee against the USDollar and freight rates have increased. Any change in global coal prices, exchange rates and freight costs couldaffect our operations in the future.

Product and Market Mix

The results of our operations are impacted by the product and market mix within each of our business segmentsand our profitability and return ratios will be affected by the mix of aluminium and copper in overall operations.

Our aluminium business margins are generally higher than our copper business margins due to the integratednature of our aluminium business which ranges from bauxite mining to value-added finished products. However,as a custom smelter, our copper business does not benefit from the same advantages. We expect that, in the nearterm, the product mix between aluminium and copper will change as our copper production will rise with therecent increase in capacity of our copper smelter at Dahej from 250,000 metric tpa which is expected to achievea full production capability of 500,000 metric tpa. Our aluminium expansion projects are expected to commenceproduction only after fiscal 2007. We also expect our copper margins to improve with the increased capacity.Thereafter, upon completion of our aluminium expansion projects, we currently expect that our product mix willchange again with the significantly increased production of aluminium products.

In the aluminium business, the market mix has a significant impact on our operations since domestic prices ofaluminium are determined with reference to landed cost of imported metal, which usually reflects the LME price,regional premium, and import duties. On the other hand, export selling prices equal the LME price and regionalpremium only. In addition, the product mix also impacts our results given that value-added products commandhigher prices due to mark-up over the LME price reflecting the extent of value addition. The growing share ofvalue-added products also helps in minimizing volatility in earnings. Recognizing this, we have focused on domesticsales and value-added products in recent years. In fiscal 2005, aluminium metal exports accounted for 17% ofaluminium metal revenues, up from 13% in fiscal 2004 and 16% in fiscal 2003, and value-added products accountedfor 55% of aggregate aluminium metal revenues in fiscal 2005, up from 36% in fiscal 2004 and 42% in fiscal 2003.

In the copper business, we also focus on increasing our production volumes of value-added products such ascontinuous cast rods, which accounted for 52% and 45% of copper revenues during fiscal 2004 and 2005,respectively. In fiscal 2005, copper exports accounted for 56% of our copper revenues and 62% of our salestonnage with the rest being sold in the domestic markets. As India is already a net exporter of copper, our

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increased production resulting from any capacity expansions will be sold primarily in the export markets. Inaddition, as our exports are primarily focused on regions that are at close proximity to India such as North Asia,Southeast Asia and the Middle East, our freight costs to such markets tend to be lower as compared to manyother copper exporting countries. We intend, however, to grow domestic volumes, through development of newapplications and increased sales to existing customers. We expect that we will produce more phosphatic fertilizersand precious metals for domestic sale with the expansion of our copper capacity to 500,000 metric tpa, which willalso affect our product and market mixes.

Duties and Taxes

Our results will be significantly impacted by changes in import duties, export incentives and taxes. Given that thedomestic pricing of both aluminium and copper are determined with reference to landed cost of imports, dutiesthereon influence our average selling prices and hence profitability. On the other hand, we gain from reductionin import duties on imports of key inputs such as copper concentrate, coal for our power plants which is used forour copper operations and caustic soda, fuel oil and coke for our aluminium operations. Also, our operations areimpacted by export incentives as we exported nearly 15% of our primary aluminium production and 43% of ourcopper production in fiscal 2005.

Import Duties

The import of aluminium currently attracts a basic duty of 10% while the import of copper attracts a basic importduty of 10%. Duties of customs attract a cess of 2% of the net amount payable. The basic import duty onconcentrate remains unchanged at 5% since fiscal 2000. The current import duty on coal is 5%.

The government of India may reduce customs duties even further and the timing and extent of such reductionscannot be predicted. Any such reduction will have a direct impact on domestic pricing and profitability of bothaluminium and copper operations.

Export Incentives

The government of India provides incentives on exports in the form of duty exemption, remission of duty onimport of inputs required for export production and concessional customs duty for import of capital equipmentwith accompanying export obligation. Further, the goods exported are not subject to excise duty, which isotherwise levied on goods removed from factory for domestic consumption.

At present, our operations benefit from export incentive schemes provided by the government of India such asDuty Exemption Scheme, Duty Remission Scheme and Export Promotion Capital Goods Scheme.

Any loss or reduction in these export incentives or duty exemptions would impact our profit margins.

Taxes and Royalties

Our results of operations are affected by the income tax we pay on our profits and, to a lesser extent, on dividenddistributions. Income tax on Indian companies is currently charged at a statutory rate of 33.66%, including asurcharge of 10% and a 2% education cess on the tax payable. The corporate tax rates were at 36.75%, 35.87%and 36.59% respectively in the fiscal 2003, 2004 and 2005 respectively.

We are also subject to other government royalties and taxes. We pay royalties on bauxite and coal mined. Thegovernment of India has powers to change the royalty, but cannot do so more than once every three years. InSeptember 2000, the government changed the nationwide bauxite royalty from a fixed fee to a variable feeformula, which was further revised upward in October 2004 under the same formula. Royalty is calculated as apercentage of the average metal price on the LME during the period. More recently, the Orissa state governmenthas started levying a tax on the annual value of mineral bearing land under the rural infrastructure and socio-economic development act 2004. For coal the tax is calculated at 15% on the annual value of mineral bearingland which is reckoned on the basis of average value of mineral produced over the last two years. This levywould be payable on our coal output in Orissa.

Any material changes in the taxes, royalties and surcharges described above will have a direct impact on ouroperations and profitability even in the future.

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Exchange Rates

We produce and sell commodities that are typically priced by reference to U.S. Dollar prices, both in the domesticand export markets. However, a majority of our costs are incurred in Indian Rupees and to a lesser extent inAustralian Dollars. We therefore benefit from the depreciation in the value of the Indian Rupee against the U.S.Dollar and suffer from its appreciation.

Though the Indian Rupee has historically depreciated against the U.S. Dollar, in recent times, the U.S. Dollar hasweakened against the Indian Rupee. If the trend continues, our revenues and profitability will be affected adversely.

Towards minimizing the impact of currency fluctuations, we hedge our currency exposures from time to time inline with our risk management policy. However, we cannot assure you that these measures will adequatelyprotect us against currency movements. Also, the policies of the Reserve Bank of India may change from time totime, affecting our ability to hedge currency exposures adequately.

Results of Operations

The following table sets forth selected information from our results of operations for the periods indicated:

Selected Results of OperationsYear Ended March 31,

2003 2004 2005(1)

(Rs. in millions)

Net Sales & Operating Revenues 50,122.5 62,083.5 95,232.5

Total Expenditure 37,405.6 47,080.8 72,468.0

Operating Profit 12,717.0 15,002.7 22,764.5

Other Income 1,917.2 2,400.1 2,700.5

Interest 1,364.9 1,771.5 1,699.6

Depreciation 2,642.2 3,174.5 4,632.6

Profit before Exceptional Items and Tax 10,627.0 12,456.7 19,132.9

Exceptional Items 1,633.1 0.0 91.0

Profit before Tax 8,993.9 12,456.7 19,041.8

Provision for Current Tax 2,520.0 2,606.4 5,705.0

Provision for Deferred Tax 652.5 1,461.0 758.9

Provision for Deferred Tax for earlier years written back 0.0 (715.6)

Net Profit 5,821.4 8,389.3 13,293.6

(1) Includes the full year financial results of the aluminium business of Indal which was demerged into us with effect from April 1,

2004.

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The following table sets out selected financial information on our aluminium and copper business segments forthe periods indicated:

Selected Segmental InformationYear Ended March 31,

2003 2004 2005(1)

(Rs. in millions)

Aluminium Business Segment

Net Sales & Operating Revenues 23,920.4 29,957.8 52,520.9

%age share 48% 48% 55%

Profit Before Interest & Tax (PBIT) 6,605.3 8,905.9 15,957.4

%age share 55% 63% 77%

Capital Employed 38,502.3 40,661.5 55,129.0

%age share 41% 39% 44%

Return on Capital Employed (%) 17% 22% 29%

PBIT Margin (%) 28% 30% 30%

Copper Business Segment

Net Sales & Operating Revenues 26,202.1 32,125.8 42,711.6

%age share 52% 52% 45%

Profit Before Interest & Tax (PBIT) 3,839.5 3,097.0 2,538.0

%age share 32% 22% 12%

Capital Employed 24,014.2 27,621.8 37,813.4

%age share 25% 27% 30%

Return on Capital Employed (%) 16% 11% 7%

PBIT Margin (%) 15% 10% 6%

Unallocable

Unallocable Income (Net of Expenses) 1,547.1 2,225.3 2,337.0

Capital Employed 31,835.0 35,893.0 33,020.4

Total

Net Sales & Operating Revenues 50,122.5 62,083.5 95,232.5

Profit Before Interest & Tax (PBIT) 11,992.0 14,228.2 20,832.4

Capital Employed 94,351.5 104,176.3 125,962.7

Return on Capital Employed (%) 13% 14% 17%

PBIT Margin (%) 24% 23% 22%

(1) Includes the full year financial results of the aluminium business of Indal which was demerged into us with effect from April 1,

2004.

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Year Ended March 31, 2005 Compared with Year Ended March 31, 2004

Net Sales & Operating Revenues and Segmental Profitability

Our net sales and operating revenues increased by 53% from Rs.62,083.5 million in fiscal 2004 to Rs.95,232.5million in fiscal 2005. Our revenues include sales from both our aluminium and copper business segments. Ouraluminium segment accounted for 55% of our revenues in fiscal 2005 as compared to 48% in fiscal 2004. Pursuantto a Scheme of Arrangement approved by the High Courts of Kolkata and Mumbai, all businesses of Indal withthe exception of business pertaining to the foils plant at Kollur, Andhra Pradesh were demerged into us witheffect from April 1, 2004. As a result, our financial statements for fiscal 2005 may not be comparable with those offiscal 2004. For details on the Scheme at Arrangement and its financial implications, please see “Our Business” onPage [-] of the Letter of Offer.

The revenues from each of our business segments for fiscal 2004 and fiscal 2005 are as follows :

Segment RevenuesYear Ended March 31,

2004 2005(Rs. in As a (Rs. in As a

millions) percentage millions) percentageof Net Sales of Net Sales& Operating & Operating

Revenues Revenues

Aluminum:

Alumina 0.0 0% 5,695.5 6%

Primary aluminum 18,643.6 30% 20,282.8 21%

Value-added aluminium products 10,538.5 17% 24,499.9 26%

Others (1) 775.6 1% 2,042.6 2%

Total aluminium revenues 29,957.8 48% 52,520.9 55%

Copper: 0%

Copper 21,752.7 35% 32,739.1 34%

Precious metals 4,040.1 7% 3,557.4 4%

Phosphatic fertilizers 3,492.5 6% 4,181.7 4%

Sulphuric acid 277.3 0% 434.4 0%

Others (1) 2,563.2 4% 1,799.0 2%

Total copper revenues 32,125.8 52% 42,711.6 45%

Net Sales & Operating Revenues 62,083.5 100% 95,232.5 100%

(1) Others includes net export incentives & miscellaneous receipts & claims, conversion charges, trade sales and miscellaneous items

Aluminium: Revenues from our aluminium business increased from Rs.29,957.8 million in fiscal 2004 to Rs.52,520.9million in fiscal 2005. Revenues rose by 15% on a comparable basis over fiscal 2004 even after excluding resultsof the newly merged Indal. We recorded the highest production across all aluminium product segments in fiscal2005. Our sales volumes crossed previous highs, except in sales of aluminium ingots and billets as more metalwas used in-house for value-added products. Realisations too registered an increase in all the product categories.The highlight of the year’s performance was the contribution of value-added products to sales. At 198,615 metrictons, excluding wheels tonnage, the value-added products segment constituted 47% of metal sales tonnage and54% of metal revenues.

Our alumina production stood at 1,159,664 metric tons while sales aggregated to 322,828 metric tons with balancecaptively consumed for metal production. Revenues from third party sale of our alumina were Rs.5,695.5 millionreflecting an average realisation of Rs.17,642.6 per metric ton.

Our primary metal production, consisting of aluminium ingots and billets, was at 409,068 metric tons, pegging

50

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the capacity utilisation level at 90% in fiscal 2005 compared to 94% in fiscal 2004. The sales tonnage at 158,519metric tons was 7% less compared to fiscal 2004, as a substantial part of our primary metal production was usedfor manufacturing value-added products. Total revenues from our primary metal sales rose by 5% on the back ofimproved pricing conditions. This is reflected in average metal realisation which grew 13% from Rs.80,161.5 permetric ton in fiscal 2004 to Rs.90,681.9 per metric ton in fiscal 2005. The realisations were higher on account ofthe strong LME prices. During the year, the average LME price increased by 19% from US$1,496 (Rs. 68,352.2)permetric ton to US$1,779 (Rs.81,282.5) per metric ton. However, this rise did not translate into an equivalent changein domestic prices due to the appreciation in the value of the Indian Rupee against the US Dollar and reduction inimport tariff to 15% in January 2004 before being cut to 10% effective from March 2005.

Our production of redraw rods rose by 7% to 62,392 metric tons in fiscal 2005 compared to 58,233 metric tons infiscal 2004. The stable demand from electrical sector ensured good off-take and helped increase the total salestonnage by 7% to 62,841 metric tons. Revenues surged 18%. Realisations increased by as much as 11% toRs.94,015.7 per metric ton from Rs.84,905.5 per metric ton during the previous year.

We have been striving to improve the share of value-added products, which accounted for nearly 50% of aggregatemetal sales in fiscal 2005. A well structured plan has been put into place to carry forward the strategy to expandthis market further including refinement and institutionalization of key account management practices, identificationof potential markets to substitute imports by customers, setting up of a large distribution network covering theentire country and plans to further improve the depth of coverage, de-risking of the distribution chain throughchannel financing and establishment of an “Aluminium Gallery” to showcase new products and applications inaluminium.

Rolled products constitute the largest segment of value-added products, contributing 73% to our total value-added products sales tonnage in fiscal 2005. A strong growth in the consumer durables and the transport sectorswere the main growth drivers. Coupled with aggressive marketing and support services, our rolled product salesvolume soared to 144,158 metric tons. Even adjusted for Indal merger effects in fiscal 2005, sales volume hasgrown by an impressive 23% compared to fiscal 2004. Exports accounted for 41% of the sales tonnage as thecompany penetrated deeper into the markets of the USA, the UAE and Taiwan. The realisations grew by 13%outperforming the trend in ingot realisations, due to higher mark-up and richer product mix. As a result, ourrevenues from the sale of rolled products jumped to Rs.16,380.0 million constituting 37% of our total metalrevenues.

Our foils business is the second largest value-added products segment and accounted for 10% of our total metalproducts sales in value terms in fiscal 2005. Aggregate sales volume climbed up to 26,004 metric tons garneringRs.4,543 million in revenues. The sales tonnage rose by 11% as compared to last year, even if adjusted for Indalmerger effects. Meanwhile, average realisation moved up 28% from Rs.136,786.2 per metric ton in fiscal 2004 toRs.174,699.8 per metric ton in fiscal 2005, reflecting a 93% higher realisation over the ingot realisations as comparedto 71% in the previous fiscal. The higher premium reflected the significant improvement in product mix anddeeper penetration into the profitable niche segments of the end-user sectors.

The total production of our extruded products stood at 28,551 metric tons and excluding the demerged Indal’sproduction, the output rose by 23%. Sales volume clocked 28,453 metric tons due to a high demand fromconstruction and automobiles sectors. Improved product range and development of new applications like shutteringsystems, auto components and aluminium truck & bus bodies also helped. Notably, this was achieved despiteindustrial unrest at our Alupuram plant, leading to a production loss of approximately 5 months. The problemhas since been resolved and the plant is currently operating at full capacity. Average realization improved by 13%compared to the previous period and pushed revenues to a new high of Rs.3,379.3 million.

Our wheels business operates in a highly competitive environment with four major players and imports as majorsupply source. Sales volumes of our wheels business increased by 5% and revenues by 6% to Rs.197.8 million infiscal 2005. The slow growth in realisations primarily reflects competitive pressures in the market as well as ourconscious strategy to widen product range, with a bias towards smaller cars in the popular segment. The lattermove was a conscious effort towards expanding the alloy wheels market for long term benefits.

LME prices started the year at US$1,723 (Rs. 78,723.9) per metric ton then declined to US$1,575 (Rs. 71,961.8) permetric ton in May before trending up to a high of US$2,032 (Rs. 92,842.1) per metric ton in March and subsequentlyclosed the year at US$1,973 (Rs. 90,146.4) per metric ton. Supported by the LME and high demand for value-

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added products, we realised better prices across all segments of value-added products, despite the appreciatingIndian Rupee and fall in import tariffs. Higher share of value-added products and a richer product mix resulted inhigher premiums over metal. Continuous efforts to improve efficiency, control costs and achieve higher volumesled to an all time high PBIT of Rs.15,957.4 million in fiscal 2005 compared to Rs.8,905.9 million in fiscal 2004. ThePBIT margin of our aluminium business was maintained at 30% in fiscal 2005, while return on capital employedrose from 22% in fiscal 2004 to 29% in fiscal 2005.

Copper: Revenues from our copper business increased from Rs. 32,125.8 million in fiscal 2004 to Rs. 42,711.6million in fiscal 2005. Aggregate copper sales tonnage rose to 214,375 metric tons in fiscal 2005 - a rise of 11%over 192,570 metric tons in fiscal 2004. With increasing penetration into the high deficit South East Asian and FarEastern markets, total export rose 16% to 132,071 metric tons.

Copper cathode production rose 16% from 186,611 metric tons in fiscal 2004 to 217,138 metric tons in fiscal 2005,as the Copper II achieved full stabilisation in February 2005. Our production of continuous cast rods declined by3.4% to 88,298 metric tons in fiscal 2005 compared to 91,380 metric tons in fiscal 2004, with the utilisation leveldeclining marginally from 94% to 91%. Volumes from the sale of copper cathodes increased by 25% to 126,452metric tons while that from the sale of continuous cast rods fell marginally by 4%. Domestic sales tonnage ofcontinuous cast rods increased by 9% and copper cathode exports rose by 34% in fiscal 2005 compared to fiscal2004.

To extract value from our phosphatic fertilizer business, we launched our fertilizer brand - Birla Balwan in fiscal2005. The exercise has already started showing results as our sales of phosphatic fertilisers crossed 300,000metric tons with a 16% increase and revenues by 20% to Rs.4,181.7 million.

The inverted duty structure for gold and silver makes their production an uneconomical proposition. Therefore,we consciously scout for concentrate with low gold content. In line with lower production, our gold revenueswere 15% lower at Rs.3,205.3 million and quantity sold declined by 19% from 6,556 Kgs to 5,301 Kgs.

The general increase in copper LME prices had a limited impact on the financials for the year, primarily due to thefact that LME is largely a pass through for custom smelters like us. In fact, the higher LME copper prices increasedour working capital requirement resulting in increased interest and financial charges. We continued to suffer onaccount of TcRc which hit a new low in the last quarter of fiscal 2004 before witnessing a sharp recovery duringthe second half of fiscal 2005. However, as our contracts had already been negotiated for a large part of the year,the impact of the recovery was not evident until the fourth quarter. The copper business continued to be effectedby the accelerated pace of tariff changes, which fell from 25% to 20% in January 2004, then further to 15% inJuly 2004 before being cut to 10% in February 2005. The appreciation of the Indian Rupee against the US Dollarand the reduction of export incentives to Rs.6,500 per metric ton in November 2004 also impacted the results ofour copper operations. Overall profitability was constrained as PBIT declined from Rs.3,097.0 million in fiscal 2004to Rs. 2,538.0 million in fiscal 2005, as a fallout of the difficult business conditions outlined above.

Other Income

Our other income rose by 13% to Rs.2,700.5 million, partly on account of inclusion of Indal, but mainly becauseof interest on income tax refund and higher income from current investments.

Interest

Our total interest expense declined by 4% from Rs.1,771.5 million in the previous year to Rs.1,699.6 million onaccount of repayment of debenture and foreign currency loans. We also capitalized Rs.342.4 million of interestalong with capital expenses.

Depreciation

Our depreciation charges have increased by 46% mainly due to the inclusion of Indal’s assets and full yeardepreciation on our Copper II plant at Dahej. The average depreciation rate for fiscal 2005 stood at 8.0% ascompared to 6.2% in fiscal 2004.

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Taxes

Our total effective tax rate at 34% in fiscal 2005 remained almost the same as last year’s 33%, even though thedeferred tax rate declined to 4% from 12%. This was due to an increase in effective current tax rate, from 21% infiscal 2004 to 30% in fiscal 2005, on account of lower tax depreciation and removal of export benefits under theIncome Tax Act, 1962. Reversal of the deferred tax on account of decrease in income tax rate resulted in a netaddition of Rs.715.6 million to our bottomline.

Extraordinary Items

We incurred expenses amounting to Rs.91.0 million for carrying out the scheme of amalgamation of demergedbusiness of Indal with itself.

Net Profit

As a result of the above, our net profit increased from Rs.8,389.3 million in fiscal 2004 to Rs.13,293.6 million infiscal 2005. Our earnings per share adjusted for exceptional items rose by 59% to Rs.144.26 per share in fiscal2005 as compared to Rs.90.71 in fiscal 2004.

Year Ended March 31, 2004 Compared with Year Ended March 31, 2003

Net Sales & Operating Revenues and Segmental Profitability

Our net sales & operating revenues increased by 24% from Rs.50,122.5 million in fiscal 2003 to Rs.62,083.5 millionin fiscal 2004. Our aluminium business accounted for 48% of our revenues for fiscal 2004, while the balance 52%came from the copper business.

The revenues from each of our business segments for fiscal 2003 and fiscal 2004 are as follows:

Segment RevenuesYear Ended March 31,

2003 2004(in Rs. As a (in Rs. As a

million) percentage million) percentageof Net Sales of Net Sales& Operating & Operating

Revenues Revenues

Aluminum:

Alumina 0.0 0% 0.0 0%

Primary aluminum 13,457.5 27% 18,643.6 30%

Value-added aluminium products 9,615.1 19% 10,538.5 17%

Others (1) 847.8 2% 775.6 1%

Total aluminium revenues 23,920.4 48% 29,957.8 48%

Copper:

Copper 17,218.5 34% 21,752.7 35%

Precious metals 3,135.2 6% 4,040.1 7%

Phosphatic fertilizers 3,403.8 7% 3,492.5 6%

Sulphuric Acid 160.7 0% 277.3 0%

Others (1) 2,283.9 5% 2,563.2 4%

Total copper revenues 26,202.1 52% 32,125.8 52%

Net Sales & Operating Revenues 50,122.5 100% 62,083.5 100%

(1) Others includes net export incentives & miscellaneous receipts & claims, conversion charges, trade sales and miscellaneous

items

(Rs. inmillions)

(Rs. inmillions)

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Aluminium: Revenues from our aluminium business increased by 25% from Rs.23,920.4 million in fiscal 2003 toRs.29,957.8 million in fiscal 2004. Leveraging strong supplies, our aggregate metal sales volumes increased by24% to 325,162 metric tons with domestic sales accounting for 85% of volumes in fiscal 2004 as against 82% infiscal 2003. This was possible due to better demand from end-users primarily on account of our marketing andbranding efforts and greater emphasis on quality and customer service.

Our production of aluminium ingots and billets grew 21% from 266,837 in fiscal 2003 to 323,184 metric tons infiscal 2004, backed by 18% higher production in Alumina. Production of rolled products grew by 5% to 77,069metric tons accompanied by a richer product mix. Our production of redraw rods surged 15% to 58,233 metrictons on better demand from the electrical sector. Our extrusion production declined by 4% to 18,194 metric tonsand foil production declined by 3.5% to 18,560 metric tons in fiscal 2004 mainly due to change in product mix.Alloy wheel production zoomed from 56,117 pieces to 99,091 pieces.

Our primary metal sales volume, consisting of aluminium ingots and billets, increased by 40% from 121,713metric tons in fiscal 2003 to 170,319 metric tons in fiscal 2004. Our revenues from the sale of ingots/ billets rose by47% from Rs. 9,311.2 million in fiscal 2003 to Rs. 13,653.1 million in fiscal 2004 primarily due to a 5% increase inaverage realizations which rose from Rs. 76,500.8 per metric ton in fiscal 2003 to Rs. 80,161.5 per metric ton infiscal 2004.

Taking advantage of the robust demand from the electrical sector, our volume sales of redraw rods increased by17% in fiscal 2004. Product revenues grew by 20%, mirroring higher realisations. In addition, we benefited fromthe improved demand in the electrical sector by supplying higher quantities of ingots to secondary producers ofredraw rods.

The continuing growth in the construction sector, a pick up in the consumer durables after a gap of two yearsand sustained strong demand from the packaging sector served to fuel the growth in our rolled products segment.Aggressive marketing and branding with a thrust towards the development and promotion of new applicationsand brands, and higher exports lead to an increase in the sales tonnage of our rolled products by 13%, from51,343 metric tons in fiscal 2003 to 58,175 metric tons in fiscal 2004.

Extrusion volumes were marginally lower due to a change in the product mix and reduced orders for strategicapplications. Reflecting rising LME and higher domestic metal prices, average product realisations rose marginallyamidst intense competition. Consequently, despite lower volumes, our product revenues were maintained atRs.1,927.1 million for fiscal 2004. As part of our application and product development efforts, we promoted theuse of extruded aluminium profiles in bus and truck bodies, especially with large automotive producers, includingthe largest chassis manufacturer in India.

Aggregate sales volumes in our foils segment declined marginally as we stayed away from unprofitable user/application segments. With a positive change in the product mix, average realisation moved up significantly andsustained product revenues despite lower volumes. The emphasis on new applications and brands continuedduring fiscal 2004 with the “Freshwrapp” kitchen foils brand making substantial in-roads into the market and thelaunch of an innovative “24 Hour Bacteria Protection” foil for the first time in India. To attain higher volumes thedistribution reach was extended to several smaller towns and far-off locations across the country.

In our wheels division, sales volumes rose from 52,786 pieces in fiscal 2003 to 105,975 pieces in fiscal 2004. Theacceptance of the “Aura” brand by a large number of automotive manufacturers helped improve our OEM sales.We also benefited from aggressive marketing and promotional efforts including successful campaigns like “MakeHeads Turn”. We obtained the ISO TS16949 certification in fiscal 2004 which aligns existing automotive qualitysystems in the US, Germany, France and Italy by specifying quality requirements for design and development,production, installation and servicing of automotive-related products.

Apart from strong volumes, we also gained from the rising trend in global metal prices. LME aluminium soaredfrom a low of US$1,315 (Rs. 60,082.4) per metric ton in April 2003 to a high of US$1,754 (Rs. 80,140.3) per metricton in February 2004 before settling at US$1,689 (Rs. 77,170.4) per metric ton at the end of fiscal 2004. Consequently,the annual average LME was higher by 10% at US$1,496 (Rs. 68,352.2) per metric ton in fiscal 2004 againstUS$1,354 (Rs. 61,864.3) per metric ton in fiscal 2003, attributable to a strong demand from China, rising aluminaprices, expectations of US recovery and increased fund demand. An unprecedented 5% appreciation in thevalue of Indian Rupee against the US Dollar and a 5% cut in import tariff on aluminium in January 2004 affected

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landed cost of imports and hence the pricing power. On the back of increasing realizations on primary aluminiumand improving demand for downstream products, we have been able to realise better prices in the value-addedproduct segments as well.

Copper: Revenues from our copper business increased by 23% from Rs.26,202.1 million in fiscal 2003 to Rs.32,125.8million in fiscal 2004. Total cathode production stood at 186,611 metric tons in fiscal 2004 compared to 180,876metric tons in fiscal 2003. Our production of value-added continuous cast rods rose from 76,766 metric tons to91,380 metric tons, enriching the product mix. We successfully commissioned an expanded smelter in February2004, raising the installed capacity to 250,000 metric tons per annum. The new smelter contributed marginallytowards volumes.

Aggregate copper sales volume grew by 6% to 192,570 metric tons, despite a decline in domestic sales volumes,from 83,916 metric tons in fiscal 2003 to 78,395 metric tons in fiscal 2004. A steep fall in demand from the JellyFilled Telecom Cable (JFTC) sector, the biggest user segment in India, deterred growth. Though other usersegments performed well, they could not compensate for the loss from the JFTC entirely. A surge in imports fromSri Lanka also put pressure on domestic volumes.

Amidst difficult market conditions, we leveraged our strong brand, product quality, LME accreditation and locationaladvantages to penetrate deeper into the deficit markets of Asia, especially South East Asia and the Far East. Ouraggregate exports grew 16% from 98,534 metric tons in fiscal 2003 to 114,175 metric tons in fiscal 2004.

We enriched our product mix, with value-added continuous cast rods accounting for 48% of copper sales volumesin fiscal 2004 as against 42% in fiscal 2003. Reflecting a positive change in the product mix, rising LME and higherpremiums, our average copper realizations grew by 20% to Rs.112,959.5 per metric ton, though a significant partof thiswas a complete pass through in nature and thus had little impact on business profitability.

We are a custom copper smelter and are dependent on TcRc for profits. Although cost effective conversion,premium over LME, value from by-products and the differential duty between raw material and finished goodsadd strength, TcRc remains the key determinant of profitability. Average spot TcRc dropped from US$144 (Rs.6,579.4) per metric ton in fiscal 2003 to US$67 (Rs. 3,061.2) per metric ton in fiscal 2004. Though the extent of fallwas relatively lower in case of average contract TcRc, it still slipped from an estimated US$360 (Rs. 16,448.4) permetric ton in fiscal 2003 to an estimated US$276 (Rs. 12,610.4) per metric ton in fiscal 2004. This affected theprofitability of custom copper smelters globally and was caused by the unfavourable supply situation resultingfrom the ongoing consolidation in global copper concentrate markets. However, through our strategy of sourcinga majority of our concentrate requirements through long-term contracts, we were able to minimize the effect ofthe TcRc meltdown.

The average copper prices on the LME increased from US$1,642 (Rs. 75,023.0) per metric ton in the first quarterof fiscal 2004 to US$2,731 (Rs. 124,779.4) per metric ton in the last quarter of fiscal 2004-an increase of 66%.Notwithstanding a sharp rise in LME copper during fiscal 2004, the PBIT margin of our copper business fell from15% in fiscal 2003 to 10% in fiscal 2004. As mentioned, LME prices are a pass-through in nature and in fact havean indirect negative impact due to the base effect. A significant reduction in conversion costs, improved operationalefficiencies and benefits of the low cost brownfield expansion, helped contain the fall.

Our Precious Metal Refinery produced 6,908 kilograms of gold and 31,513 kilograms of silver - a growth of 27%and 3% respectively. Profitability of our precious metals business remained negative due to higher import dutyon concentrates than finished goods, both for gold and silver. The production of phosphatic fertilisers was scaleddown consciously from 315,785 metric tons in fiscal 2003 to 231,903 metric tons in fiscal 2004. This was due to asignificant reduction in subsidy on fertilizers by the Government, which made its manufacture unviable usingimported phosphoric acid, as done by us.

Other Income

Our other Income increased by 25% from Rs.1,917.2 million in fiscal 2003 to Rs.2,400.1 million in fiscal 2004 asimproved availability of surplus funds was deployed in short term investments, aided by interest received onincome tax refunds and higher dividend receipts. Our other income also included profits realised on the sale ofentire stake in Indo Gulf Fertilisers Limited, another company of the Aditya Birla Group.

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Interest

Our gross interest charges increased marginally by approximately 2% from Rs.1,949.8 million in fiscal 2003 toRs.1,983.9 million in fiscal 2004. In accordance with the Accounting Standard (AS - 16), we capitalised a sum ofRs.212.4 million and thus charged a net interest of Rs.1,771.5 million to the revenue account in fiscal 2004.

Depreciation

Our depreciation charges rose 20% from Rs.2,642.2 million in fiscal 2003 to Rs.3,174.5 million in fiscal 2004. Asignificant portion of the increase was attributed to charges associated with the commissioning of the brownfieldexpansion in our copper smelter at Dahej and expansion of our existing capacities relating to our aluminiumbusiness. We added a sum of Rs.10,037.8 million to the gross block during fiscal 2004.

Current and Deferred Tax

As a result of the recently completed brownfield expansions in aluminium and copper, we were able to bringdown effective current tax rate from 23.7% in fiscal 2003 to 20.9% in fiscal 2004. Consequently, current taxesgrew only by 3% to Rs.2,606.4 million in fiscal 2004. We made an additional provision of Rs.1,461.0 milliontowards deferred taxes during the year.

Net Profit

As a result of the above, our net profit increased from Rs.5821.4 million in fiscal 2003 to Rs.8389.3 million in fiscal2005. Our earnings per share adjusted for exceptional items rose by 13% to Rs.90.71 per share in fiscal 2004 ascompared to Rs. 80.58 per share in fiscal 2003.

Liquidity and Capital Resources

The following table sets forth selected information from our cash flow statement for the periods indicated:

Selected Cash Flow StatementYear Ended March 31,

2003 2004 2005(1)

(in Rs. million)

Sources of cash

Cash from operations 8,825.7 11,128.7 17,609.3

Non-operating income 1,332.3 1,316.8 2,060.9

Net debt inflows 5,520.0 2,047.4 7,426.8

Extraordinary Items (Share call money received & sale of Investment) 211.5 0.1 0.0

Total 15,889.5 14,493.1 27,097.0

Application of Cash

Net capital expenditure 9,836.3 6,961.2 11,205.2

Investment in subsidiaries 4,303.5 431.9 587.9

Other treasury investments (Net) 380.5 5,583.5 10,357.2

Interest charges and lease rentals 1,156.9 1,636.9 1,740.3

Dividend payout 1,580.6 1,408.3 1,725.2

Equity buy back of equity shares 553.2 0.0 0.0

Total 17,811.0 16,021.9 25,615.9

Increase/ (Decrease) in cash and cash equivalents (1,921.5) (1,528.8) 1,481.0

(1) Includes the full year financial results of the aluminium business of Indal which was demerged into us with effect from April 1,

2004.

(Rs. in millions)

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Year Ended March 31, 2005

Sources of Cash

Cash from operations

Strong aluminium and copper prices combined with a better product and market mix significantly improved ourrealizations during fiscal 2005. As a result, the year ended with a sizeable Rs.17,609.3 million in cash generatedfrom operations.

Non-operating income

We manage a large treasury surplus, giving due considerations to safety, liquidity and returns in that order. Itturned in a cash inflow of Rs.2,060.9 million, constituting just approximately 8% of aggregate cash flows.

Net debt inflows

To finance our on going expansion projects, we tied up a 10 year loan facility for Rs.49,500 million, out of whichthe first tranche of Rs.4,950 million was drawn down in March 2005 Our net debt inflows during the years wereat Rs.7,426.8 million.

Application of Cash

Capital Expenditure

We made investments to the tune of Rs.11,205.2 million towards expansions and efficiency improvement projects.

Investment in Subsidiaries

We made net investments of Rs.587.9 million in subsidiary companies. A sum of Rs.981 million was invested inequity shares of Birla Minerals Resources Pty Limited, towards providing finance for the development of the NiftyandMt.Gordon mines. A sum of Rs.281 million was received from subsidiaries as repayment of loan. The balanceis accounted for by the cash and cash equivalents of the demerged Indal net of expenditure on the merger.

Other Investments

Our net investments rose by Rs.10,357.2 million primarily in the form of bonds and units of debt schemes ofdomestic mutual funds.

Interest

Interest and finance charges amounted to Rs. 1,699.6 million during the year, while the total payment towardsthese charges was Rs. 1,740.3 million.

Dividend

During the year, we paid Rs. 1,725.2 million towards dividend and dividend tax for fiscal 2004, which includedRs. 1,721 million towards dividend (incl. Dividend tax) for fiscal 2004 and the balance for earlier years.

Year Ended March 31, 2004

Sources of Cash

Cash from operations

Our cash from operations rose to Rs.11,128.7 million, accounting for 77% of total source of cash in fiscal 2004.This was achieved on the back of higher volumes in both businesses and improved realisations in aluminium.

Non-operating income

Approximately 9% of our aggregate cash flows were accounted for by non-operating income comprising ofdividend on long term as well as short term investments and interest on short term Investments.

Net debt inflows

We raised approximately Rs.2,300 million through External Commercial Borrowing (ECB) at benchmark rates forgeneral corporate requirements. Long term debts worth Rs.2,233.5 million were repaid. Net of repayments, debtinflows were at Rs.2,047.4 million in fiscal 2004. Notwithstanding this, debt-equity ratio was maintained at 0.36 infiscal 2004 compared to 0.37 in fiscal 2003. Net of cash and cash equivalents, gearing fell from 0.20 in fiscal 2003to 0.14 in fiscal 2004.

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Application of Cash

Capital Expenditure

The aggregate capital expenditure of Rs.6,961.2 million, including Rs.212.3 million of interest capitalised, accountedfor 43% of cash utilisation in fiscal 2004.

Investment in Subsidiaries

During the year, we made an additional investment of Rs.906.6 million in subsidiary companies. A sum of Rs.49.9million was invested in equity shares of Indian Aluminium Company, Limited, towards increasing holding furtherfrom 95.9% to 96.5% in fiscal 2004. Further, for acquisition of additional copper mines in Australia, an additionalsum of Rs.752.5 million was invested in Birla Mineral Resources Pty Limited, our wholly owned subsidiary. Anadditional sum of Rs.104.3 million was invested in the equity shares of Bihar Caustic and Chemicals Limited,which became our subsidiary. A sum of Rs. 474.7 million was received from subsidiaries as repayment of loan.

Other Investments

We sold our entire holding of 3,915,871 equity shares of Indo Gulf Fertilisers Limited for an aggregate value ofRs.293.5 million through open market transactions during the year. Net investment grew by Rs.5,583.5 millionand was primarily in the form of bonds and units of debt schemes of domestic mutual funds.

Interest and Lease Rents

We effected interest payments (net of capitalised interests) of Rs.1539.7 million, accounting for approximately10% of aggregate cash utilisation in fiscal 2004. Total interest accrued but not due as at the year-end was Rs.557.3million, as against Rs.582.5 million in the previous year. Lease rentals of Rs.97.3 were also paid.

Dividend

A sum of Rs.1,408.3 million was utilised for payment of dividend and corporate tax on dividend for fiscal 2003.

Indebtedness

Our total indebtedness as on September 30, 2005 stood at Rs. 43,221.7 million compared to Rs. 38,000.0 millionin fiscal 2005, Rs. 25,645.9 million in fiscal 2004 and Rs.23,950.2 million in fiscal 2003. While our total debt to equityratio rose from 0.36 in fiscal 2004 to 0.47 in fiscal 2005, the ratio, when adjusted for cash and cash equivalents,actually declined from 0.14 to 0.07.

We tap both the domestic and offshore markets for our long term funding needs. Since we have sizeable importsand exports, we access both import and export credits, based on cost effectiveness, both in the Rupee andForeign Currencies, to take care of our short term fund requirements. We have both secured and unsecuredborrowings, with our secured borrowings being generally Rupee denominated bonds.

The following table presents our secured debt as of September 30, 2005 :

S. Secured Debt as ofNo. September 30, 2005

Amount % of totalOutstanding secured debt

(in Rs.millions)

1. Secured Redeemable Non-Convertible Debentures 15,486.8 56.0%2. Term Loans from Government/ Government Agencies 0.7 0.0%3. Cash Credit and Export Credit Accounts 1,020.0 3.7%4. Rupee Term Loans from Scheduled Banks 4,956.7 17.9%5. Rupee Term Loans from Financial Institutions 79.8 0.3%6. Foreign Currency Term Loans from Banks 5,889.0 21.3%7. Foreign Currency Term Loans from Financial Institutions 243.7 0.9%

Total Secured Debt 27,676.7 100.0%

(Rs. inmillions)

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The following table presents our unsecured debt as of September 30, 2005:

S. Unsecured Debt as ofNo. September 30, 2005

Amount % of totalOutstanding secured debt

(in Rs.millions)

1. Fixed Deposits 269.8 1.7%

2. Rupee Loans from Banks 42.8 0.3%

3. Foreign Currency Loans from Banks 2,143.8 13.8%

4. Foreign Currency Loans from Financial Institutions 0.0 0.0%

5. Buyer’s Credit 13,088.6 84.2%

Total Unsecured Debt 15,544.9 100.0%

The following table presents details of our outstanding debt as of September 30, 2005 with corresponding maturitiesin the fiscal years indicated:

S.No. Maturities of Outstanding Debt

Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010 Beyond Fiscal 2010

(in million Rs.)

1. Secured Debt 3,659.3 4,038.6 7,059.3 2436.2 3722.8 6760.5

2. Unsecured Debt 15,544.9 0.0 0.0 0.0 0.0 0.0

For further detail on our indebtedness, see the section titled “Description of Certain Indebtedness” in this Letter ofOffer.

Capital Expenditures

The following table sets forth our capital expenditures by segments for the years ended March 31, 2003, 2004 and2005 and the capital expenditures in each segment as a percentage of our total capital expenditures in suchyears :

Historical Capital Expenditure in each SegmentYear ended March 31, Total

2003 2004 2005

Rs. Percent Rs. Percent Rs. Percent

(in million Rs., except percentages)

Aluminium 7,699.5 74% 3,486.9 52% 4,980.5 45% 16,166.8

Copper 2,673.6 26% 3,203.4 48% 5,990.1 55% 11,867.2

Total 10,373.1 100% 6,690.3 100% 10,970.6 100% 28,034.0

We expect to spend approximately Rs.58,125.0 million in capital expenditures during fiscal 2006, 2007 and 2008and Rs. 60,825.0 million beyond fiscal 2008 on the following projects, which are covered under “Objects of theIssue”:

increase the capacity of our alumina refinery in Muri from 110,000 metric tpa to 450,000 metric tpa, whichwe expect to complete in fiscal 2007;

increase the capacity of our aluminium smelter in Hirakud, Orissa, from 65,000 metric tpa to 146,000 metrictpa, which we expect to complete in fiscal 2008;

(Rs. inmillions)

(Rs. in millions)

(Rs. in millions except percentages)

2,436.2 3,722.8 6,760.5

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increase the capacity of our alumina refinery in Belgaum from 350,000 metric tpa to 650,000 metric tpa,which we expect to complete in fiscal 2008;

develop a greenfield alumina facility in Utkal, Orissa in a joint venture with Alcan Inc. which will have aluminaproduction capacity of 1000,000 metric tpa to 1,500,000 metric tpa upon completion. This facility is currentlyexpected to start commercial production in March 2009. We are entitled to 55% of the output, pursuant toour joint venture agreement;

develop an integrated greenfield aluminium project in Orissa, with a capacity to produce 1000,000 metrictpa of alumina (expandable to 1,500,000 metric tpa) and 260,000 metric tpa of aluminium (expandable to325,000 metric tpa) upon completion. This will be supported by a 650 megawatt dedicated power plant,backed by dedicated coal mines. The project is expected to start commercial production in March 2010.

Further to the above, we also have certain other expansion plans, which though conceived have not yet beenfirmed up. For details of these projects please refer to “Our Business – Our Aluminium Business – Our ExpansionProjects” and “Our Business – Our Copper Business – Expansion Projects”.

As regards working capital in respect of the project we have existing banking relationships with two consortiumof banks for our aluminium business with sanctioned fund based limit of Rs.5,500 million and with 14 banks forour copper business with drawals not exceeding Rs. 25,800 million as approved by the Board, which is adequateto meet our existing requirements. In the normal course of operations, we submit and would continue to submita detailed assessment of working capital on an annual basis to these banks. We believe this would be sufficient tomeet the annual requirement, including the enhanced needs of working capital arising out of the implementationof the Project. We do not foresee any difficulty whatsoever in doing so.

The following table sets forth our estimated capital expenditures for each of the years ended March 31, 2006,2007 and 2008:

Estimated Capital Expenditure in each Segment Year ended March 31,

2006 2007 2008

Rs. (1) Percent Rs. (1) Percent Rs. (1) Percent

(in million Rs., except percentages)

Aluminium 14,870 86% 24,915 99% 30,220 100%

Copper 2,480 14% 190 1% 20 0%

Total 17,350 100% 25,105 100% 30,240 100%

(1) Estimated

Actual capital expenditures may differ materially from these planned amounts. We may adjust the amount of ourcapital expenditures based on our cash flow from operations, the progress of our expansion plans and marketconditions.

Our anticipated cash flows from operations are dependent on a number of factors beyond our control, such asaluminium and copper prices quoted on the LME, TcRc prices, prevailing economic conditions in the industrieswhich consume aluminium and copper and the costs of our principal inputs. We may, therefore, need to raiseadditional capital. If so, we may not be able to raise additional capital on terms acceptable to us or at all. Further,any sale of our equity or equity-linked securities may result in dilution to our shareholders. We may also have torevise our business plan from time to time and consequently its funds requirement may also change. This mayinclude rescheduling of capital expenditure programs, starting non-planned new projects, more actively developingprojects that may currently be at a nascent stage, terminating projects currently planned and increase or decreasein the capital expenditure for a particular business unit vis-à-vis current plans at the discretion of the Management.

For more details on our planned expansion projects, please see “Objects of the Issue”, “Our Business – OurAluminium Business – Our Expansion Projects” and “Our Business – Our Copper Business – Expansion Projects”.

(Rs. in millions except percentages)

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Significant Developments Subsequent to the Last Financial Year

Six Months Ended September 30, 2005 Compared with Six Months Ended September 30, 2004

Our first half for fiscal 2006 ended on September 30, 2005. The paragraphs below provide the management’sdiscussion and analysis of the audited stand-alone financials for the six months ended September 30, 2005compared with the unaudited stand-alone financial statements for the six months ended September 30 2004 forwhich the auditors have performed a limited review in accordance with applicable standards in India.

The following table sets forth selected information from our results of operations for the periods indicated:

Selected Results of OperationsSix Months Ended September 30,

2004 2005

(in million Rs.)

Net Sales & Operating Revenues 45,175.4 48,686.2Total Expenditure 35,159.4 37,763.7Operating Profit 10,016.0 10,922.5Other Income 1,580.2 1,263.4Interest 878.6 1,000.2Depreciation 2,142.7 2,453.8Profit before Tax 8,575.0 8,732.0Provision for Current Tax 2,476.0 2,262.5Provision for Deferred Tax 763.0 411.7Provision for Fringe Benefits Tax 0.0 43.6Net Profit 5,336.0 6,014.2

The following table sets out selected financial information on our aluminium and copper business segments forthe periods indicated:

Selected Results of OperationsSix Months Ended September 30,

2004 2005 (in million Rs.)

Aluminium Business SegmentOperating Revenues 24,509.8 27,544.7%age share 54% 57%Profit Before Interest & Tax (PBIT) 6,904.4 8,729.0%age share 73% 90%Capital Employed 53,089.1 58,877.8Return on Capital Employed (%) 26% 30%PBIT Margin (%) 28% 32%Copper Business SegmentOperating Revenues 20,665.6 21,141.5%age share 46% 43%Profit Before Interest & Tax (PBIT) 1,102.0 (163.0)%age share 12% -2%Capital Employed 33,774.1 43,932.5Return on Capital Employed (%) 7% -1%PBIT Margin (%) 5% -1%UnallocablesUnallocable Income (Net of Expenses) 1,447.2 1,166.2TotalOperating Revenues 45,175.4 48,686.2Profit Before Interest & Tax (PBIT) 9,453.6 9,732.1PBIT Margin (%) 21% 20%

(1) Annualised

(Rs. in millions)

(Rs. in millions)

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Net Sales &Operating Revenues and Segmental Profitability

Our net sales & operating revenues increased by approximately 8% from Rs. 45,175.4 million for the six monthsended September 30, 2004 to Rs. 48,686.2 million for the six months ended September 30, 2005. Our aluminiumsegment accounted for 57% of our revenues in the six months ended September 30, 2005 as compared to 54%in the six months ended September 30, 2004.

The revenues from each of our business segments for the six months ended September 30, 2004 and in the sixmonths ended September 30, 2005 are as follows :

Segment RevenuesSix Months Ended September 30,

2004 2005(in Rs. As a (in Rs. As a

million) percentage million) percentageof Net Sales of Net Sales& Operating & Operating

Revenues Revenues

Aluminum:

Alumina 2,601.6 6% 3,435.5 7%

Primary aluminum 9,671.3 21% 9,999.6 21%

Value-added aluminium products 11,452.2 25% 12,828.4 26%

Others (1) 784.7 2% 1,281.3 3%

Total aluminium revenues 24,509.8 54% 27,544.7 57%

Copper:

Copper 15,642.1 35% 16,919.5 35%

Precious metals 1,676.2 4% 2,009.9 4%

Phosphatic fertilizers 2,036.6 5% 1,647.9 3%

Sulphuric acid 189.5 0% 205.5 0%

Others (1) 1,121.2 2% 358.7 1%

Total copper revenues 20,665.6 46% 21,141.5 43%

Net Sales & Operating Revenues 45,175.4 100% 48,686.2 100%

(1) Others includes net export incentives & miscellaneous receipts & claims, conversion charges, trade sales and miscellaneous

items

Aluminium: Revenues from our aluminium business increased by 12% from Rs. 24,509.8 million for the sixmonths ended September 30, 2004 to Rs.27,544.7 million for the six months ended September 30, 2005. Enlargedvolumes, improved realisations assisted by buoyancy in the LME prices and a richer product mix, were the keydrivers for growth. Average LME prices increased by approximately 7% compared to the previous period andwere at US$ 1,822 (Rs. 83,247.2) per metric ton for the six months ended September 30, 2005. Aluminiumproduction increased considerably, driven by de-bottlenecking of our expanded capacities at Renukoot andsynergies from integrated Hindalco-Indal operations. However, our aluminium business faced cost pressures dueto unilateral reduction in coal linkages by the Ministry of Coal necessitating purchases from e-auctions at higherprices, significantly higher caustic soda prices compared to the previous period, a steep rise in furnace oil pricesmirroring the upward trend in global oil prices and appreciation in the value of the Indian Rupee against the USDollar. Inspite of these cost pressures, the PBIT for our aluminium segment increased by 26% from Rs.6,904.4million for the six months ended September 30, 2004 to Rs.8,729.0 million for the six months ended September30, 2005 primarily due to better operating efficiencies and focused cost control measures. The PBIT marginincreased from 28% for the six months ended September 30, 2004 to 32% for the six months ended September

(Rs. inmillions)

(Rs. inmillions)

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30, 2005, while the return on capital employed increased from 26% to 30% on an annualized basis.

Our alumina production stood at 586,055 metric tons for the six months ended September 30, 2005 as comparedto 569,734 metric tons for the six months ended September 30, 2004. Inspite of increased captive consumption ofalumina, sales tonnage increased by 21% to 181,052 metric tons compared to 149,935 metric tons in the previousperiod. Revenues from external sale of our alumina were Rs.3,435.5 million reflecting an improved averagerealisation of Rs.18,975.1 per metric ton for the six months ended September 30, 2005 compared to Rs.17,351.5per metric ton for the six months ended September 30, 2004. Realisations were positively impacted by theincreased sale of alumina specials during the period, which is consistent with our strategy of optimizing ourproduct mix in favour of value-added products.

Our primary metal production, consisting of aluminium ingots and billets, was at 213,368 metric tons for the sixmonths ended September 30, 2005 compared to 197,283 metric tons for the six months ended September 30,2004. Consistent with our endeavor of utilizing primary metal for more profitable downstream value addedproducts, the sales tonnage at 73,635 metric tons for the six months ended September 30, 2005 was approximately2% less compared to the six months ended September 30, 2004. Inspite of this, the revenues from our primarymetal sales increased marginally on the back of improved price realisation per metric ton. This was achievedprimarily on account of improvement in the average realisation, which grew by 4% from Rs.88,804.7 per metricton for the six months ended September 30, 2004 to Rs.92,173.2 per metric ton for the six months ended September30, 2005. The realisations were higher on account of the stronger LME prices for the period, which was partlyoffset by import duty reduction and appreciation of the Indian Rupee against the US Dollar.

Our production of redraw rods increased by 7% to 33,628 metric tons for the six months ended September 30,2005 compared to 31,549 metric tons for the six months ended September 30, 2004. The stable demand from theelectrical sector helped increase the total sales tonnage by 4% to 33,320 metric tons while revenues increased by8%. Realisations increased by 4% to Rs.96,411.8 per metric ton from Rs.92,859.2 per metric ton during theprevious period.

In line with our strategy, value-added products continued to account for a large portion of our aggregate metalsales during the six months ended September 30, 2005.

Our rolled product sales volume (net of captive consumption) increased to 72,442 metric tons for the six monthsended September 30, 2005 compared to 68,463 metric tons for the six months ended September 30, 2004 withproduction at 93,043 metric tons against 85,815 metric tons. The realisations grew by 5% resulting in revenues ofRs.8,502.9 million representing 37% of our total metal revenues for the period.

Aggregate sales volume of our foils business climbed up to 12,983 metric tons garnering Rs.2,353.6 million inrevenues. Meanwhile, average realisation moved up 6% from Rs.170,455.7 per metric ton for the six monthsended September 30, 2004 to Rs.181,281.4 per metric ton for the six months ended September 30, 2005. Thehigher realisations reflected our efforts in product development and deeper penetration into profitable, highgrowth segments such as the packaging sector. Production remained more or less stable at 13,189 metric tonscompared to the previous period.

The total production of our extruded products stood at 15,206 metric tons per metric ton for the six monthsended September 30, 2005 reflecting an increase of 12% over the previous period. Assisted by increasing demandfrom the construction and automobiles sectors, a wide product range and niche capabilities, sales volume increasedby 12% to 14,872 metric tons. Average realisation improved by 7% compared to the previous period and increasedrevenues from extruded products to a new high of Rs.1,826.5 million.

Our sales of alloy wheels increased by 50% to 76,166 pieces for the six months ended September 30, 2005compared to 50,746 pieces for the six months ended September 30, 2004 reflecting improved market acceptanceof our product ranges and brands in this category. Production also doubled from 47,929 pieces to 85,979 pieces.Revenues from alloy wheels increased by 65% from Rs. 87.9 million for the six months ended September 30, 2004to Rs. 145.3 million for the six months ended September 30, 2005 with a 10% increase in average realisations.

Copper: Revenues from our copper business marginally increased by approximately 2% from Rs.20,665.6 millionfor the six months ended September 30, 2004 to Rs.21,141.5 million for the six months ended September 30,2005. Despite benefiting from higher TcRc and LME prices, our copper business faced challenging conditions dueto import duty reduction, appreciation in the Indian Rupee against the US Dollar and production shortfall and

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consequent backwardation losses compared to the previous period. The unprecedented floods in Gujarat,underperformance of our 180,000 metric tpa smelter I at Dahej due to temporary shutdowns resulting fromfurnace related issues and lower than anticipated utilization of our 70,000 metric tpa smelter II due to refractorylife stabilisation issues, resulted in a shortfall in the production. Furthermore, the performance of our copperbusiness was also impacted by the slow ramp-up process associated with the commissioning of our new 250,000metric tpa copper smelter III at Dahej. We expect these refractory life stabilisation issues to continue into the thirdquarter of this fiscal. Ramping-up of our copper smelter III will also continue into the third quarter of this fiscal.The shortfall in production resulted in revenue and contribution loss, which along with expenses relating to theramp up phase of our smelter III and high backwardation prevailing throughout the period impacted our resultsadversely. Consequently, our copper business incurred a loss before interest and tax of Rs. 163.0 million for thesix months ended September 30, 2005 compared to a profit before interest and tax at Rs. 1,102.0 million for thesix months ended September 30, 2004.

Net production of copper cathode fell 10% from 62,074 metric tons for the six months ended September 30, 2004to 55,801 metric tons for the six months ended September 30, 2005. Our production of continuous cast rodsdeclined by approximately 9% to 42,282 metric tons for the six months ended September 30, 2005 compared to46,237 metric tons for the six months ended September 30, 2004. The declines in production were primarily dueto underperformance in our copper I and II smelters. Volumes from the sale of copper cathodes decreased by10% to 55,664 metric tons while that from the sale of continuous cast rods fell by 10% to 41,520 metric tons.However, inspite of the decline in volumes, revenues from the sale of copper cathodes increased by 10% toRs.9.172.5 million and that from the sale of continuous cast rods increased by 6% to 7,747.0 million for the sixmonths ended September 30, 2005 compared to the previous period primarily on account of better realisations.

We sold 122,302 metric tons of phosphatic fertilizers for the six months ended September 30, 2005 compared to152,342 metric tons for the six months ended September 30, 2004. The sales tonnages for the said period reflectedthe production trends with total production falling from 145,502 metric tons to 124,900 metric tons. Revenuesdeclined by 19% from Rs.2036.6 million for the six months ended September 30, 2004 to Rs.1,647.9 million for thesix months ended September 30, 2005.

Revenues from the sale of gold and silver increased by approximately 21% and 6% respectively for the sixmonths ended September 30, 2005 compared to the previous period with sales tonnage rising by 19% and 3%respectively. Gold production was at 2.838 metric tons in the current period as compared to 2.676 metric tons inthe previous period, while production of silver declined to 16.109 metric tons from 17.659 metric tons. We alsosold 117,852 metric tons of sulphuric acid aggregating Rs.205.5 million in revenues for the six months endedSeptember 30, 2005 compared to 132,164 metric tons of sulphuric acid sold for the six months ended September30, 2004 aggregating Rs.189.5 million in revenues.

Other Income

Our other income declined by 20% to Rs.1,263.4 million for the six months ended September 30, 2005 comparedto Rs.1,580.2 million for the six months ended September 30, 2004, notwithstanding better yields and higherincome on treasury investments. The decline was primarily on account of higher one time income during the sixmonths ended September 30, 2004, which was in the form of interest on income tax refund.

Interest

Our gross interest and finance charges increased by approximately 17% to Rs. 1,191 million for the six monthsended September 30, 2005 from Rs. 1,022 million for the six months ended September 30, 2004 consequent toincrease in working capital requirement relating to our copper business necessitated by the rising LME prices.Our net interest expense witnessed an increase of approximately 14% from Rs.878.6 million for the six monthsended September 30, 2004 to Rs.1,000.2 million for the six months ended September 30, 2005.

Depreciation

Our depreciation charges increased by 15% from Rs.2,142.7 million for the six months ended September 30,2004 to Rs.2,453.8 million for the six months ended September 30, 2005 primarily owing to capitalization ofHirakud power plant and Dahej copper smelter expansions.

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Taxes

Our total effective tax rate declined from 38% for the six months ended September 30, 2004 to 31% for the sixmonths ended September 30, 2005. The effective current tax rate declined from approximately 29% in the for thesix months ended September 30, 2004 to 26% for the six months ended September 30, 2005. These declineswere primarily due to increased depreciation and interest expenditure and a decline in the marginal tax ratecompared to the previous period. Fringe benefits tax to the extent of Rs.43.6 million was also incurred for the sixmonths ended September 30, 2005.

Net Profit

Despite the various adverse factors enumerated above relating to our copper business, our net profit increasedby 13% from Rs.5,336.0 million for the six months ended September 30, 2004 to Rs.6,014.2 million for the sixmonths ended September 30, 2005 against the backdrop of improved performance of our Aluminium Segment,both in terms of volume and realisations.

Comparison of Liquidity and Capital Resources

The following table sets forth selected information from our cash flow statement for the periods indicated:

Selected Cash Flow StatementSix Months Ended September 30,

2004 2005

(in million Rs.)

Sources of cash

Cash from operations 11,721.4 4,852.8

Non-operating income 1,112.7 892.4

Net debt inflows 4,223.7 5,222.2

Extraordinary Items (Share call money received & sale of Investment) 0.0 0.0

Total 17,057.8 10,967.4

Application of Cash

Net capital expenditure 6,506.1 5,105.2

Investment in subsidiaries 1,232.4 915.9

Other treasury investments (Net) 7,298.7 (1,832.4)

Interest charges and lease rentals 946.8 1,181.5

Dividend payout 1,725.2 2,115.7

Equity buy back of equity shares 0.0 0.0

Total 17,709.2 7,485.9

Increase/ (Decrease) in cash and cash equivalents (651.4) 3,481.5

Sources of Cash

Cash from operations

Our net cash generated from operations declined by approximately 59% from Rs. 11,721.4 million for the sixmonths ended September 30, 2004 to Rs. 4,852.8 million for the six months ended September 30, 2005. This wasprimarily due to an increase in working capital requirement for our copper business necessitated by the risingLME. The cash generated from operations for the six months ended September 30, 2004 was higher on accountof refunds of income tax.

(Rs. in millions)

Net Profit

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Non-operating income

Our non-operating income declined by approximately 20% from Rs.1,112.7 million for the six months endedSeptember 30, 2004 to Rs.892.4 million for the six months ended September 30, 2005 due to higher refunds ofincome tax during the previous period.

Net debt inflows

Our net debt inflows were at Rs.4,223.7 million for the six months ended September 30, 2004 compared toRs.5,222.2 million for the six months ended September 30, 2005. The net debt inflows for the period wereprimarily on account of the working capital requirements of our copper business.

Application of Cash

Capital Expenditure

We made investments to the tune of Rs.5,105.2 million for the six months ended September 30, 2005 compared toRs.6,506.1 million for the six months ended September 30, 2004 towards expansions and efficiency improvement projects.

Investment in Subsidiaries

We made net investments of Rs.915.90 million for the six months ended September 30, 2005 compared toRs. 1,232,4 million for the six months ended September 30, 2004 in subsidiary companies. Purchase of shares ofsubsidiaries for the period consisted of Rs. 244.60 million in Utkal, Rs. 537.7 million in Birla Mineral ResourcesPrivate Limited and Rs. 2.3 million in Bihar Caustic and Chemicals Limited.

Other Investments

Net cash outflow from other investments was Rs.1,832.4 million primarily from the sale of bonds and units of debtschemes of domestic mutual funds.

Interest

Interest and finance charges amounted to Rs.1,181.5 million for the six months ended September 30, 2005,compared to Rs. 946.8 million for the six months ended September 30, 2004.

Dividend

For the six months ended September 30, 2005, we paid Rs.2,115.7 million towards dividend for fiscal 2005 anddividend tax as compared to Rs.1,725.2 million for the six months ended September 30, 2004 for fiscal 2004.

Other key developments subsequent to the last financial year

Stock Split

On August 6, 2005 the shareholders of the Company approved the subdivision of Equity Shares of the Companyfrom Rs. 10 per share to Re 1 per share. Consequent to the subdivision of Equity Shares, the authorised sharecapital of the Company changed from 145 million Equity Shares of Rs. 10 each to 1450 million Equity Shares ofRe. 1 each. Our Equity Shares commenced trading ex-split with effect from August 30, 2005.

Purchase of assets of Sangam Aluminium Limited

On September 8, 2005 we together with nominees, purchased certain assets of Sangam Aluminium Limited- acompany under liquidation with its factory located at Kalukondapalli, Honsur-Thally Road, P.O.: Belgagondapalli –635 115, Dist. Dharmapuri, Tamil Nadu, for a consideration of Rs.49 million. The High Court, Chennai appointedan official liquidator for the winding up of Sangam Aluminium Limited. We incurred 80% of the total considerationfor purchase of certain plant and machinery including an extrusion press manufactured by CELCIM of Franceand ancillary equipment, while nominees incurred the remaining 20% for purchase of immovable assets includingland and building as well as residual plant and machinery. The plant and machinery purchased would be used atour existing facilities and would not be used as part of the project forming the Objects of this Issue.

We the directors of Hindalco Industries Limited hereby state that in our opinion there have not arisen anycircumstances since the date of the last financial statements as disclosed in the prospectus which materially andadversely affect or is likely to affect the trading or profitability of the our company, or the value of its assets, or itsability to pay its liabilities within the next twelve months.

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Information as required by Government of India, Ministry of Finance, Circular No. F2/5/SE/76 dated February5, 1977 as amended vide their circular of even number dated March 8, 1977 is given below:

1. Working Results of the Company

Audited financial results for the six months ended September 30, 2005 :

(Rs. million)

Total Sales 48,686.2

Other Income 1,263.4

Total Income 49,949.6

PBDIT 12,185.9

Interest 1,000.2

Provision for Depreciation 2,453.8

Profit/(Loss) Before Tax 8,732.0

Provision for Tax 2,717.8

Estimated /(Loss)Net Profit 6,014.2

2. Save as stated elsewhere in the Letter of Offer, there are no material changes and commitments, which arelikely to affect the financial position of the Company since September 30, 2005 (i.e. last date up to whichaudited information is incorporated in the Draft Letter of Offer)

3. a) Week end prices of Equity Shares of the Company for the last four weeks on the BSE and NSE are asbelow:

Week ended on Closing Rate BSE (Rs) Closing Rate NSE (Rs)

October 28, 2005 118.05 118.00

November 4, 2005 120.70 120.70

November 11, 2005 130.65 130.80

November 18, 2005 136.50 136.55

b) As per the notice no. 20051114-18, issued by the BSE, the transactions in the equity shares of theCompany would be done on an ex-right basis with effect from November 21, 2005. The closing Price ofthe Equity Shares of the Company on the BSE and NSE on November 21, 2005 was Rs. 125.20 perequity share and Rs. 125.30 per equity shares (ex-rights Price) respectively.

c) Highest and Lowest Price of the Equity Share of the Company on BSE and NSE during the periodNovember 22, 2004 to November 21, 2005 (for the last year):

BSE

Market Price Date

High Rs. 165.00 September 19, 2005

Low Rs. 106.60 June 2, 2005

NSE

Market Price Date

High Rs. 164.45 September 20, 2005

Low Rs. 106.70 June 2, 2005

Note : Market Prices have been adjusted for stock split where applicable.

Defaults in the payment/refunds of debentures, fixed deposits, interest on fixed deposits, debenture interestand institutional dues

There are no defaults, non-payment/ overdues of statutory dues, institutional/Company dues and dues towardsholders of debentures, bonds and fixed deposits and arrears of preference shares, etc, other than unclaimedliabilities of the Company, its subsidiaries, its other ventures, promoters, Group companies and companiespromoted by the promoter.

(Rs. in millions)

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MATERIAL DEVELOPMENTS

Stock Split

On August 6, 2005 the shareholders of the Company approved the subdivision of Equity Shares of the Companyfrom Rs. 10 per share to Re. 1 per share. Consequent to the subdivision of Equity Shares, the authorised sharecapital of the Company changed from 145 million Equity Shares of Rs. 10 each to 1450 million Equity Shares ofRe. 1 each. Our Equity Shares commenced trading ex-split with effect from August 30, 2005.

Purchase of assets of Sangam Aluminium Limited

On September 8, 2005 we together with nominees, purchased certain assets of Sangam Aluminium Limited – acompany under liquidation with its factory located at Kalukondapalli, Honsur-Thally Road, P.O.: Belgagondapalli –635 115, Dist. Dharmapuri, Tamil Nadu, for a consideration of Rs.49 million. The High Court, Chennai appointedan official liquidator for the winding up of Sangam Aluminium Limited. We incurred 80% of the total considerationfor purchase of certain plant and machinery including an extrusion press manufactured by CELCIM of Franceand ancillary equipment, while nominees incurred the remaining 20% for purchase of immovable assets includingland and building as well as residual plant and machinery. The plant and machinery purchased would be used atour existing facilities and would not be used as part of the project forming the Objects of this Issue.

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INFRASTRUCTURE

Property

We have several premises which are owned, leased or rented in various locations in India and abroad.

Office Premises of our Company:

We have various offices, including in Kolkata, Ahmedabad, Bangalore, Bhubaneswar, Chennai, Coimbatore,Hyderabad, Mirzapur, Mumbai, New Delhi, Pune, Belgaum, Ernakulam, Ranchi, Raigad, Howrah, Thane, Sambalpur,Kolhapur, Allahabad, Lucknow, Secunderabad and Lohardaga. . These premises are held by us on freehold andleasehold basis.

Residential Premises of the Company:

We have various residential properties at Kolkata, Bangalore, Chennai, Coimbatore, Hyderabad, Mumbai, NewDelhi etc. which are on leasehold and freehold basis. We have guest houses and holiday homes which are onleasehold and freehold basis in various places including Goa, Gurgaon, Mumbai, Bangalore, Kolkata, Digha, Puriand Agrapara for use by our senior management and officers.

Commercial Premises of our Company:

A summary of our properties in India is given below.

(i) Manufacturing Facilities

The following table sets forth information regarding our manufacturing plants and related facilities:

Name of the Plant Location Nature of Holding Area (in Acres)

Alupuram Kerala Owned 121.14

Leased 0.88

Belgaum Karnataka Owned 1112.92

Leased 60.46

Muri Jharkhand Owned 333.51

Belur West Bengal Owned 12.27

Kalwa Maharashtra Owned 34.6

Hirakud Orissa Owned 24.38

Leased 375.69

Taloja Maharashtra Leased 102

Renukoot Uttar Pradesh Owned 98.99

Leased 1609.53

Renusagar Uttar Pradesh Owned 378.45

Leased 284.42

Dahej Gujarat Owned 4 .25

Leased 517.859

Silvassa Dadra & Nagar Haveli Owned 93.78

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(ii) Mines

The following table sets forth the details of our mines:

SL. No. State Name of Mine Area in Acres Nature of Mine

1. Chhattisgarh Kudag 931.88 Bauxite

2. Chhattisgarh Samri 5,304.73 Bauxite

3. Chhattisgarh Tatijharia 3,011.62 Bauxite

4. Jharkhand Amtipani 471.85 Bauxite

5. Jharkhand Bagru 186.34 Bauxite

6. Jharkhand Bhusar 161.38 Bauxite

7. Jharkhand Chiro Kukud 377.01 Bauxite

8. Jharkhand Gurdari 1,449.08 Bauxite

9. Jharkhand Hisri (new) 35.95 Bauxite

10. Jharkhand Hisri (old) 33.06 Bauxite

11. Jharkhand Jalim & Sanai 29.99 Bauxite

12. Jharkhand Kujam-I 199.83 Bauxite

13. Jharkhand Kujam-II 388.89 Bauxite

14. Jharkhand Orsapat 764.02 Bauxite

15. Jharkhand Pakhar 284.34 Bauxite

16. Jharkhand Pakhar (38.50) 38.49 Bauxite

17. Jharkhand Pakhar (84.38) 19.99 Bauxite

18. Jharkhand Pakhar (96.25) 86.81 Bauxite

19. Jharkhand Serengdag 346.09 Bauxite

20. Jharkhand Shrengdag 385.01 Bauxite

21. Maharashtra Dhangarwadi 303.01 Bauxite

22. Maharashtra Durgmanwadi 504.09 Bauxite

23. Maharashtra Kasarsada 271.82 Bauxite

24. Maharashtra Mogalgad 39.54 Bauxite

25. Maharashtra Nagartaswadi 103.78 Bauxite

26. Orissa Talabira-I 420.83 Coal

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The Company has made applications for the following mines, which are various stages of the approval process:

State Lease Name Area in Nature of

Acres Mine

Chhattisgarh Jokapat 760.17 Bauxite

Jharkhand Amptipani-Narama 229.88 Bauxite

Jharkhand Amtipani-Chirodi 406.34 Bauxite

Jharkhand Hanrup 703.95 Bauxite

Jharkhand Kechki 946.36 Bauxite

Jharkhand Koira-Bimrala 750.01 Bauxite

Jharkhand Pakhar 270.61 Bauxite

Jharkhand Tuimu 44.55 Bauxite

Maharashtra Dhangarwadi (part) 1,752.82 Bauxite

Maharashtra Iderganj 1,195.99 Bauxite

Maharashtra Udgiri 1,490.22 Bauxite

Orissa Lakharshi 590.71 Bauxite

Orissa Kodingamali 1,766.98 Bauxite

Orissa Maliparbat 662.51 Bauxite

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(Rs. in millions)

(Rs. in millions)

DESCRIPTION OF CERTAIN INDEBTEDNESS

Short Term Borrowings

Our short term unsecured borrowings outstanding as of September 30, 2005 are as follows :

(In Rs. million)

S. No. Particulars Amount Outstanding as Interestof September 30, 2005

1. Employees and other deposits 269.8 Fixed

2. Rupee Loans from Banks 42.8 Fixed

3. Foreign Currency Loans from Banks 2,143.8 Fixed

4. Foreign Currency Loans fromFinancial Institutions - -

5. Buyers Credit 13,088.6 Fixed

Total Short Term Borrowings 15,544.9

Long Term Borrowings

a) Our foreign currency long term borrowings outstanding as of September 30, 2005 are as follows:

(In Rs. million)

S. Particulars Currency Amount Outstanding InterestNo. as of September 30, 2005

1. BA Asia Ltd USD 351.9 Annual USD LIBOR plus55 basis points per annum

2. SCB and BOA USD 399.5 6 Months USD LIBOR plus 77.5basis points per annum

3. HSBC JPY 594.0 6 Months JPY LIBOR plus 90basis points per annum

4. HSBC JPY 2,300.0 6 Months JPY LIBOR plus 33

basis points per annum

5. BNP Paribas JPY 1,119.3 6 Months JPY LIBOR plus 60 basispoints per annum

6. BNP Paribas JPY 1,124.3 6 Months JPY LIBOR plus 60 basispoints per annum

7. Leonia Corporate USD 243.7 5.95% per annum Fixed Rate

Bank Plc

8. Sub Total 6,132.7

(Rs. in millions)

(Rs. in millions)

DESCRIPTION OF CERTAIN INDEBTEDNESS

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b) Our long-term rupee borrowings outstanding as of September 30, 2005 are as follows :

(In Rs. million)

S. Particulars Amount Outstanding as InterestNo. of September 30, 2005

1. IDBI Bank Limited syndicated Term Loan 4,950.0 7.07%

2. Term Loan from Government of Uttar Pradesh

under subsidised Housing Scheme for

Industrial Workers 0.7 WeightedAverage

Rate

of 9.97%

3. UTI Bank 6.69 15.17%

4. UTI Asset Management Co. Ltd. 2.2 15.17%

5. IDBI 75.4 11.00%

6. IIBI Limited 2.2 15.30%

7. Subtotal 5,037.19

Secured Redeemable Non-Convertible Debentures

(In Rs. million)

S. Particulars Amount Outstanding as InterestNo. of September 30, 2005

1. 11.20 % NCD 1,500.0 11.20%

2. 9.75 % NCD 2,000.0 9.75%

3. 9.00 % NCD 500.0 9.00%

4. 7.95 % NCD 600.0 7.95%

5. 7.20 % NCD 250.0 7.20%

6. 7.20 % NCD 500.0 7.20%

7. 6.40 % NCD 1,050.0 6.40%

8. 9.95% NCD 500.0 9.95%

9. 6.6% NCD 486.8 6.6%

10. 6.39% NCD 1,000.0 6.39%

11. 12.75% NCD 600.0 12.75%

12. 8.70% NCD 2,000.0 8.70%

13. 8.10% NCD 1,000.0 8.10%

14. 6.20% NCD 500.0 6.20%

15. 5.95% NCD 500.0 5.95%

16. 6.5% NCD 2,500.0 6.50%

17. Subtotal 15,486.8

(Rs. in millions)

(Rs. in millions)

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OUTSTANDING LITIGATIONS AND DEFAULTS

Except as described below, there are no outstanding litigation, suits or criminal or civil prosecutions, proceedings ortax liabilities against our Company, our Directors, our Promoters or group companies and there are no defaults, nonpayment of statutory dues, over dues to banks/ financial institutions, defaults against banks/ financial institutions,defaults in dues payable to holders of any debentures, bonds or fixed deposits, issued by our Company (includingpast cases where penalties may or may not have been awarded and irrespective of whether they are specified underparagraph (i) of part 1 of Schedule XIII of the Companies Act, 1956). The following are the outstanding or pendinglitigations or suits or proceedings against the Company involving a claim of Rupees One million and more, andcriminal complaints or cases, defaults, non-payment or overdues of statutory dues, proceedings initiated for anyeconomic or civil offences and disciplinary action taken by SEBI or stock exchanges against the Company, itssubsidiaries and other group companies and the outstanding or pending litigations or suits or proceedings againstthe subsidiaries and other group companies. The compiled position of claims against the Company involving anamount of less than Rupees One million are given separately.

I. The Company

A. Criminal cases

(a) Criminal cases filed against the Company

1. The Central Excise Department., Madurai has launched prosecution in CCZ26/99 against Indal and Mr. A. Jayagopal,Manager, Indal for alleged evasion of excise duty in the Sessions Court, Madurai. Indal filed an application underSection 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC”) in Crl 17682/02 in theMadras High Court to quash the said proceedings. A stay order with respect to the proceedings in the SessionsCourt has been granted by the Madras High Court on July 26, 2002. The proceedings in the High Court havebeen transferred to the Madurai bench. The next date of hearing has not been listed.

2. The State of Jharkhand has filed case bearing No. Crl 221/92 in the Court of the Sessions Judge, Ranchi inrelation to private land transfer in the Lohardaga. The case has been filed against the Mines Manager of theCompany. No proceedings have commenced in this regard.

3. Deolal Sahu has filed a case bearing compensation case No. 216/99 against the Company on December 8, 1999in the Court of the additional District and Sessions Judge, Lohardaga under Section 140 of the Motor VehiclesAct for compensation of Rs. 25,000 due to loss caused in a jeep accident. The matter is pending for hearing inthe Court. The next date of hearing is yet to be listed.

4. The Mining Officer, Lohardaga, Jharkhand has filed criminal case No. 1/1999 in the Sessions Court against theCompany for alleged encroachment of public road in the mines. The Company moved the Jharkhand High Courtin Crl Misc No. 8892/1999. The matter is pending in the High Court. The next date of hearing has not been listed.The Deputy Commissioner, Lohardaga has filed separate proceedings in relation to the alleged encroachment,which was decided against the Company. The Company appealed against the aforesaid order to the Commissioner,which was also rejected. The Company has filed Writ Petition No. 3/2002 in the High Court of Ranchi against theaforesaid order of the Commissioner. The matter is pending.

5. The District Forest Officer, Kolhapur has filed a criminal case No. 78/1998 in the Radhnagiri Court, Maharashtraagainst the Mines Manager and others for alleged breach of forest laws while mining. The matter is pending.

6. The Inspector of Factories launched prosecution against the Company in Crl No. 15240/87 in the Court of theMagistrate, Thane under the Factories Act, 1948 for failing to appoint a Welfare Officer as required by the statute.The matter is pending.

7. The Inspector of Factories filed criminal prosecution in Crl. No. 893/1988 under the relevant provisions of theFactories Act, 1948 against the Company pursuant to an explosion in the powder section of the Kalwa plant. Thesaid matter is pending in the Court of the Chief Judicial Magistrate, Thane.

8. Bitain Nagesia and Sangeeta Nagesia have filed compensation case No. 24/04 and 27/04 respectively against theCompany in the Court of the District and Sessions Judge, Lohardaga under Section 140 of the Motor VehiclesAct claiming a compensation of Rs. 50,000 on account of the fact that their family member was killed in a motoraccident caused by a dumper truck belonging to the Company. The matter is pending for appearance of theclaimants’ witnesses.

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9. R. N Tiwari and dismissed Badli workmen of Potroom Plant II have filed Crl.Misc. No. 5479/2000 against theCompany, the State and others in the Allahabad High Court. Before this, a criminal complaint No.2361/99 wasfiled by the Company against the said R.N Tiwari under Section 630 of the Companies Act, 1956 in the Court ofthe Spl. CJM, Allahabad on grounds of encroachment of land of the Company. The concerned workman challengedthe maintainability and proceedings of the said case by challenging summoning order dated September 25,1999 in Criminal Revision No. 116/2000 before the Sessions Judge Allahabad, which was rejected by the Courtvide order dated July 25, 2000. Aggrieved by the said order, he filed the present petition under Section 482 ofthe CrPC challenging the orders dated September 25, 1999, July 25, 2000 and January 6, 2000 passed by theSessions Judge Allahabad. The High Court Allahabad stayed the proceedings in Case No. 2361/99 vide orderdated October 10, 2000. Counter has been filed. The matter is pending.

10. Ram Lal Rajbhar has filed a Crl. Misc. Petition No. 4301/2001 against the State of Uttar Pradesh and the Companyin the Allahabad High Court challenging the order of the Additional Sessions Judge, Allahabad in criminal revisionno. 1801/2001 which went against the Petitioner. The petitioner, formerly a workman in the Company, was theaccused in Crl. Complaint No. 2360/99 filed in the Court of Spl. CJM Allahabad under Section 630 of the CompaniesAct by the Company on the grounds that the concerned workman encroached upon the Company’s land afterhis dismissal. He challenged the summoning order dated September 25, 1999 and the maintainability of thesame in criminal revision 1801/2001 before Addl. Session Judge Allahabad on the ground that the land in questionhas been purchased by his wife and she is in possession over the land as owner. The said revision was rejectedby the Court vide order dated July 25, 1999. Aggrieved by the order of Addl. Session Judge Allahabad, thepetitioner has filed the instant case. The wife of Ram Lal Rajbhar has also filed a civil suit No. 25/93 before CivilJudge (Senior Division) Sonbhadra, which is pending. The High Court vide its interim order dated August 16,2001 stayed the proceedings before the magistrate. A counter affidavit has been filed in this regard, but norejoinder has been filed. The matter is pending.

11. The State of Uttar Pradesh has filed Criminal Case No. 569/90 before the Munsif-Magistrate, Dudhi against I.NKapoor, who is the Factory Manager of the Renusagar Power Division on the grounds of non-compliance ofstanding orders of the Company in respect of classification of workmen, termination of service and notificationon notice board of the name of officers appointed for granting leave of absence to workmen. The said I.N.Kapoor has filed Cri. Misc. App. No. 14722/92 in the Allahabad High Court. The High Court has issued a stayorder staying the proceedings in 569/90 vide order dated November 18, 1992. The matter has not been listed forfurther hearing.

12. The State of Uttar Pradesh has filed Criminal Case No. 1834/91 before the Munsif-Magistrate, Dudhi against theMr. I.N. Kapoor and Mr. S.S. Kothari as Occupier of the Renusagar Power Division for non-compliance rulesrelating to methods of work as prescribed and causing the fatal accident of Late Prabhat Chander Sharma onApril 10, 1990. Mr. Kothari and factory manager of the Company have filed Cri. Misc. App. No. 14721/92 in theAllahabad High Court, which has issued a stay order staying the proceedings in 1834/91 vide order dated November18, 1992. The matter was not listed for further hearing.

13. The State of Uttar Pradesh has filed Criminal Case No. 1866/91 against Mr. I.N. Kapoor and Mr. S.S. Kothari fornon-compliance of Sections 7 (A) and 36 of Factories Act and U.P. Rules 1950 leading to the fatal accident of LateShankar Dayal Sharma on December 13, 1990. Mr. Kothari and factory manager of the Company have filed, Cri.Misc. App. No. 14736/92 in the Allahabad High Court, which has issued a stay order staying the proceedings in1866/91 vide order dated November 18, 1992. The matter has not been listed for further hearing.

14. The State of Uttar Pradesh has filed case No. 3658/2003 in the Court of the CJM, Sonbhadra at Robertsganjagainst Colonel Pushpendra Singh and others on the grounds that on May 24, 2003, the accused, who aresecurity guards in the Company attacked some miscreants who were attempting to hinder the task of repairingthe boundary wall of the Company. Cross FIRs were filed by both sides. A charge sheet against the CompanySecurity Officers was filed under Sections 147, 148, 149, 307, 504, 506 and 427 of the I.PC. The CJM, vide orderdated August 5, 2003 issued summons to the said security officers. Against this order, the Company SecurityOfficials filed Criminal Revision No. 3194/2003 before the Allahabad High Court, which vide its order datedNovember 5, 2003 stayed the operation of order dated August 5, 2003 passed by CJM. Against this order, theCompany Security Officials filed writ petition No. 3057 of 2003, which vide its order dated June 5, 2003 stayedthe operation of order dated August 5, 2003 passed by CJM. By order dated July 12, 2004 the matter before theHigh Court is to be listed in next cause list. The stay order issued in criminal revision has been extended till the

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hearing of the writ petition. At present the proceedings of the case at C.J.M court has been stayed and matterbefore the High Court is to be listed in next cause list. In a related case, the Civil Judge (Junior Division) Sonebhadra,has passed an ad interim injunction against the interference with the property of the Company against therespondents in the abovementioned petition.

15. The State of Uttar Pradesh has filed case No. 1484/94 against K.K. Rathi in the court of the C.J(JD)-Dudhi. Thematter arose because the security guard Tribhuvan Singh killed a Kabari by firing at him with a company gun. Hewas acquitted by Sessions Court on December 22, 1993. A criminal case was subsequently filed against K.K.Rathi,who is the licensee of the gun on behalf of the Company. The Court of C.J.M.,-Sonbhadra vide order datedMarch 19, 1991 summoned K.K Rathi for appearance before the court. K.K Rathi filed Criminal Revision No. 454/91 before the High Court at Allahabad against this order of summons by the CJM and for quashing of proceedings.The High Court at Allahabad vide order dated October 7, 1995, stayed the operation of the order of CJM exemptingpersonal appearance before the court. The order is effective till date and case is pending before Munsif, Dudhifor trial.

16. The State of Jharkhand has filed Case No. F 23/99 against N.K.Birla and twelve others of Manduapat Mines onJuly 16, 1999 in the Court of the SDJM, Lohardaga under Sections 26 and 63 of the Indian Forests Act and 2, 3A,and 3B of Forest Conservation Act for illegal mining and loading of illegally mined out bauxite on a truck fromexpired lease area of Manduapat mines on the instructions of N.K.Birla and the Mines Manager. A criminalmiscellaneous No.7767/99(R) was filed by the accused in the Jharkhand High Court to pray for the quashing ofthe said proceedings in the SDJM on October 12, 1999. The Cr. Misc was heard and admitted on April 18, 2000,whereby the High Court stayed the proceedings of lower court. The next date for hearing is December 4, 2005.

17. The State of Jharkhand has filed case No. F 32/2001 and F 37/2001 against V. K Agarwal and others of PakharMines on November 10, 2001 under Sections 25 and 26(d) of I.F. Act and F.C. Act in the Court of the CJMLohardaga alleging that the Company loaded various trucks with bauxite inside the Pakhar Bauxite Mines despitethe letter from District Forest Officer (DFO) bearing No. 722 dated February 13, 2001, which directed the Companynot to transport bauxite out of the said mine. The matter is pending for cross examination of prosecutionwitnesses.

18. The State of Jharkhand has filed case No. F 42/2001 against N.K.Birla and others of Pakhar Mines. On November10, 2001 in the Court of the CJM, Lohardaga under Sections 26 and 63 of Indian Forests Act and 2 and 3(c) ofForest Conservation Act on grounds of making roads and dumping in Pakhar reserve forest. On February 20,2004, the Company filed Cr. Rev. No. 01/03 in the Court of the District and Sessions Judge Lohardaga, wherein itprayed to drop the proceedings of the order taking cognizance because it was time barred. But it was rejectedon the ground of Sec. 470(3) of Cr.P.C. Subsequently, on March 04, 2004, the Company filed W.P.(Cr.) No.86/04 inthe Jharkhand High Court for the quashing of the order of District Judge and Cognizance order. The case washeard on September 02, 2004 and the HC stayed the proceedings of the case pending in CJM Court, Lohardaga.The matter is pending.

19. The State of Jharkhand has filed a case in F 17/02 in the Court of the CJM, Lohardaga against NK Birla and otherson June 12, 2002 under Section 33 of I.F.Act and 2, 3A and 3B of F.C. Act on the grounds that a Culvert Pipe wasbeing set illegally after cutting nala on Kasiyadih- Pakhar Forest Road near Ledra Tongri. The Company filedW.P.(Cr.) No.204/05 on June 20, 2005 in the Jharkhand High Court at Ranchi against the order dated May 28,2005 of A.D.J. Lohardaga, cognizance order dated October 29, 2002 and for quashing of entire criminal proceedingsas the order taking cognizance is time barred. The High Court partly heard the case on July 18, 2005 and orderedthat the proceedings of this case in CJM court to be stayed till further order. The matter is pending.

20. The State of Jharkhand has filed a case in C I 12/2001 in the Court of the CJM, Gumla against R Mishra and othersof Gurdari mines on February 18, 2001 under Section 33, 41 and 42 of I.F. Act for illicit felling of Sal Tree andloading on Dumper. The Court is awaiting sanction of D.F.O. because the forest department had only sent theoffence report in the court of CJM for information of the case. The CJM can take cognizance only after sanctionof D.F.O, which is still awaited.

21. The State of Jharkhand has filed a case in C I 43/2001 in the Court of the CJM, Gumla against Aikat and others ofJalim and Sanai Mines and others on May 9, 2001 under Section 33 of the IF Act on the grounds of illegal miningfrom Jalim P.F. Plot No.562, outside lease area and loading on a truck. On February 20, 2002, the Company fileda quashing petition No. Cr.M.P. No.252 of 2002 in the Jharkhand High Court at Ranchi which was heard and

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admitted on July 29, 2002 whereby the Court stayed the proceedings of lower Court. Now the quashing petitionis pending at Jharkhand High Court at Ranchi for final hearing. The next date for hearing is October 22, 2005.

22. The D.F.O Ranchi West Division has filed two confiscation cases in No. 7/2000 against V.K. Agarwal on February18, 2001 and 1/2005 against G.M.(M.O) and others on March 3, 2005 under Section 52 of the IF Act on thegrounds of illegally loading firewood from forest area on a Dumper and alleging Forest offence under 33 ofI.F.Act and 2 of F.C.Act committed by using Dumpers respectively before the District Forest Officer (“DFO”),Ranchi. 7/2000 is pending for hearing in D.F.O. Court, Lohardaga. With respect to the matter bearing No. 1/2005,the Company had filed W.P.(Cr) No.146/05 in the Jharkhand High Court, Ranchi on April 19, 2005 against theorder dated March 3, 2005 of the D.F.O. This writ petition was partly heard on May 12, 2005 and the High Courtordered to stay the confiscation proceedings of case No.01/05 pending in the court of D.F.O. Now the writpetition is pending in High Court for further hearing.

23. The State of Jharkhand has filed case no. C I 06/05 against A.K. Sinha and others on February 26, 2005 u/s. 33 ofI.F.Act and Sec.2 of F.C.Act in the Court of the CJM, Gumla on the grounds that the said AK Sinha and others wereconstructing a road in Kathupani P.F.of Gurdari after clearing bushes. The CJM is awaiting sanction of D.F.O as hecannot take cognizance of the offence without the sanction of the DFO.

24. Sri Radhey Shyam, who was a worker in the Industrial Engineering Department (painting section), died due to afall from a height of 20 feet on March 27, 1978 on the factory premises. The factory Inspector made the necessaryinvestigations and launched a prosecution case No. 665/80 in the Court of the Judicial Magistrate Dudhi againstD.N Himmatramka as the occupier of the Factory on grounds of violation of several provisions of the FactoriesAct. The Magistrate decided the matter in favour of the said D.N Himmatramka vide order dated May 20, 1981.The State has filed an appeal against the said order in GA No. 2764/81 in the High Court of Allahabad. The matteris pending before the High Court.

25. R.P Chaubey has filed criminal Application No. 2466/2004 under Section 482 of the CrPC in the Allahabad HighCourt. The matter is relating to the death of Amrit Chaubey, an employee of the Company on October 17, 2001who met with a fatal accident in Remelt shop. The brother of the deceased employee, filed an application underSection 156(3) of CrPC in the Court of CJM, Sonbhadra stating that that the Crane Operator RP Chaubey deliberatelycaused the death of the deceased in collusion with Senior officials of the Company and therefore, directions beissued for registration of case by Police for investigation. By order dated December 24, 2001, the CJM directedthe Police to investigate the matter. A criminal misc application No. 4886 was filed by the Company before theCJM, Sonbhadra. Allowing the application, the judge stayed the arrest of the accused till the police had filed areport under Section 173(2) of the CrPC vide order dated May 20, 2002. On the basis of the investigation report,the Police registered a chargesheet only against the applicant and exonerated the other named officers of theCompany on January 17, 2002. Subsequently, case No. 2046/02 was registered under Sections 287 and 304A ofIPC against Shri RP Chaubey in the Court of CJM, Sonbhadra. RP Chaubey filed Application No. 2466/2004under Section 482 of the CrPC challenging the registration of the chargesheet and named the officials of theCompany as one set of respondent parties. The Court, vide its order dated March 26, 2004 has stayed theproceedings in the case No. 2046/2002 pending before CJM Court, Sonbhadra till further orders. A counteraffidavit has been filed by the Respondent No. 2, Shri Nagehswar Chaubey in the month of May 2004. TheCompany has filed its rejoinder affidavit in the second week of July 2004. The matter is pending.

(b) Criminal cases filed by the Company

1. The Company has filed case no. 2360/99 against an ex-employee Ram Lal Rajbhar on September 9, 1999 beforethe court of Special Chief Judicial Magistrate (Spl CJM), Allahabad under Section 630 of the Act on grounds ofencroachment of Company’s land and unauthorized construction by the accused, who was dismissed fromservice by the Company. The special C.J.M issued summons to the accused. Against this summoning orderRamlal filed Criminal Misc. Appl. No. 4301/2001 u/s 482 Cr. P.C before the High Court of Allahabad. The HighCourt vide order dated August 16, 2001 stayed the proceedings before the Special C.J.M. The Company hasfiled a counter affidavit in this regard, but no rejoinder has been filed. The matter was last listed on October 6,2004 and has not been listed since then.

2. The Company has filed case No. 2361/99 against Rabindra Nath Tiwari on September 9, 1999 in the Court ofSpecial. Chief Judicial Magistrate, Allahabad. under Section 630 of the Companies Act on grounds of encroachmentof Company’s land and unauthorized construction by the accused, who was dismissed from service by the

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Company. The Magistrate court issued summons to the accused. The accused filed Criminal Misc. Appl 5479/2000 before the Allahabad High Court- against this summoning order. The High Court has issued a stay orderdated October 10, 2000 in this case. The matter is pending.

3. The Company has filed case No. 125/89 in the Court of the Special Chief Judicial Magistrate, Allahabad on March28, 1989 under Section 630 of the Companies Act against Thakurji Pandey who was dismissed from services onNovember 16, 1988. The case was filed on the grounds that he failed to vacate the quarters allotted to him. Thecourt issued summons for appearance of the accused. Against this order, the accused filed Criminal Misc. Appl.No. 3761 of 2000 in the Allahabad High Court for cancellation of complaint and obtained a stay order against trialcourt proceeding. The said writ petition was dismissed ex-parte. The stay order granted in Criminal Misc. Appl.No. 3761 of 2000 for stay of trial court proceeding was vacated by an order dated November 27, 2003. The saidorder has been filed before the Special Chief Judicial Magistrate Allahabad. At present the proceedings beforethe court of Special Chief Judicial Magistrate Allahabad have started. The matter is listed for hearing on November20, 2005.

4. The Company has filed case No. 673/93 under Section 630 of the Companies Act in the Court of the Special ChiefJudicial Magistrate (Spl CJM) on October 29, 1993 against Shivajee Singh, who was dismissed from services onApril 10, 1993. The case was filed on grounds of failure to vacate quarters allotted to him upon dismissal fromservice. The said Shivajee Singh filed a Writ Petition in the Allahabad High Court for cancellation of complaint onApril 12, 1994 and obtained stay. The said Writ Petition was dismissed on May 16, 1997. He also filed CriminalMisc. Application No. 1083 of 1999 and obtained stay order. The appeal was dismissed by an order datedJanuary 27, 2003, which was filed before the Special CJM. Shivajee Singh appeared before the Court. A non-bailable warrant has been issued against the accused and the next date of hearing has been fixed for November22, 2005.

5. The Company has filed four cases bearing Nos. 735/94, 171/95, 46/96 and 49/96 against former employees ofthe Company in the Court of the Special CJM, Allahabad under Section 630 of the Act on the grounds of failureto vacate houses allotted to them despite being dismissed from service. In each of these cases, the Court hasrecorded the Company’s statement and has issued a non-bailable warrant against the accused persons.

6. The Company has filed three cases bearing No. 301/97, 222/94 and 2359/99 against former employees of theCompany in the Court of the Special CJM, Allahabad under Section 630 of the Act against on grounds ofencroachment of Company’s land and unauthorized construction. In each of these cases, the Company’s statementhas been recorded and the accused has appeared before the Court. Non-bailable warrants have been issuedagainst the accused in both the cases and the matters are due to come up for hearing on October 27, 2005 andNovember 22, 2005 respectively.

7. The Company has filed two cases No. 1860/98 and 1867/98 against former employees of the Company underSection 630 of the Act in the Court of the Special CJM, Allahabad on grounds of failure to vacate quarters allottedto them despite being dismissed from service. In both these cases, the Company’s statement has been recordedand non-bailable warrants have been issued for the appearance of the accused. The matters are pending.

8. The Company has filed case No. 273/2001 in the Court of the Special CJM, Allahabad on March 20, 2001 underSection 630 of the Act against Mustafa Khan on grounds of failure to vacate the house allotted to him despitebeing terminated from service. The Company’s statement has been recorded and the accused has madeapplication challenging maintainability of case. The case is due to come up for disposal on November 11, 2005.

9. The Company has filed case No. 801/2001 on May 30, 2001 against Smt. Nirmala Singh under Section 630 of theCompanies Act in the Court of the Special Chief Judicial Magistrate, Allahabad on grounds of failure to vacatepremises allotted to her late husband by the Company despite the death of her husband. The Company’s statementhas been recorded and summons have been issued to the accused. The accused has not yet appeared beforethe Court. The next date of hearing has been fixed for November 20, 2005.

10. The Company has filed four cases No. 2809/2002, 3859/2002, 1865/2003, and 412/2005 against former employeesof the Company under Section 630 of the Act in the Court of the Special CJM, Allahabad on grounds of failure tovacate houses allotted to them despite being dismissed from service. In 2809/2002 and 3859/2002, summonshave been served on the accused. In 412/2005, the Company’s statement under Section 200 of the CrPC andsummons have been issued to the accused. In case No. 2809/2002 and Case No. 3859/2002 the matter is pending

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for the appearance and recording of statement of the accused. In 412/2005, the Company’s statement underSection 200 of the CrPC and summons have been issued to the accused. The accused has filed Criminal Misc.Appl. No. 7120/2005 under Section 482 for quashing the whole proceedings of Company’s complaint No. 412/2005 before the Allahabad High Court which has issued notice fixing September 27, 2005 for the disposal aforesaidapplication. In Case No. 1865/03 the statement of Company has been recorded and November 22, 2005 hasbeen fixed for appearance of the accused.

11. The Company has filed case No. 1124/2003 in February, 2003 against Vinod Kumar under Section 630 of theCompanies Act in the Court of the Special CJM, Allahabad on grounds of failure to vacate the house allotted tohim despite being dismissed from service. The accused filed a Criminal Misc. Appl. No. 5227/2004 under Section482 of the Code of Criminal Procedure before the High Court—Allahabad for quashing the proceedings . TheHigh Court has granted stay order, whereby the proceedings of the trial court has been stayed.

12. The Company has filed two cases bearing No. 1659/2002 and 1864/03 against former employees of the Companyunder Section 630 of the Act in the Court of the Special CJM, Allahabad on grounds of failure to vacate thehouses allotted to them despite having resigned from the Company. In 1659/2002, the Company’s statement hasbeen recorded and summons have been issued. The accused has not appeared in both the cases. In case no.1864/2003 court has fixed November 22, 2005 for the appearance of the accused. The next hearing of 1659/2002is yet to be fixed.

13. The Company has filed four cases bearing No. 1424/2004, 303/2005, 416/2005 and 415/2005 against formeremployees of the Company under Section 630 of the Act in the Court of the Special CJM, Allahabad on groundsof failure to vacate the houses allotted to them despite having retired from the Company. In each of these cases,the Company’s statement under Section 200 of the CrPC has been recorded. These matters were due to comeup for hearing on August 6, 2005. In case No. 1424/2004 court has fixed September 26, 2005 and in Case No.303/2005 and in Case No.416/2005 court has fixed September 22, 2005 for appearance of accused and Case No. 415/2005 has been finally disposed off as the accused has vacated the Company’s quarters. The others cases arepending hearing.

14. The Company has filed two cases No. 1982/2003 and 1984/2003 against former employees of the Company ongrounds of failure to vacate the houses allotted to them despite having retired from the Company under Section630 of the Companies Act in the Court of the Special CJM, Allahabad. Summons have been issued to theaccused in this regard. The matters are pending.

15. The Company has filed case No. 704/2005 in June 2005 against Renu Singh and others under Section 630 of theAct in the Court of the Special Chief Judicial Magistrate, Allahabad on grounds of encroachment of Companyland and unauthorized construction. An earlier case bearing No. 2450/99 was filed on September 25, 1999against one S. P. Singh, who was dismissed from services of the Company. The said case abated due to thedeath of the said S.P Singh. Therefore a fresh case was filed against his legal heirs. The Company’s statementhas been obtained under Section 200 of the CrPC and summons have been issued to the accused. The next dateof hearing is November 16, 2005 for the appearance of the legal heirs of the original accused.

16. The Company has filed case No. 3861/2002 on November 16, 2002 against Vijai Kumar Singh under Section 630of the Act in the Court of the Special Chief Judicial Magistrate, Allahabad on grounds of failure to vacate quartersdespite expiry of sanction. The summons were not served as the said quarters were locked. The accused filed aCriminal Misc. Application. No 5229/2004 u/s 482 Cr. P.C for quashing the proceedings under Company’s complaintNo. 3861/2002. The High Court has granted a stay, which is presently in force and the matter is pending.

17. The Company has filed two cases bearing No. 2557/98 and No. 2560/98 against wives of former employees ofthe Company under Section 630 of the Companies Act for wrongfully withholding Company’s property, i.e.quarters allotted to their husbands. The said matters are pending in the Court and are listed for hearing onDecember 13, 2005 for non-bailable warrant.

18. The Company filed an FIR in the Police Station Lohardaga against Sri Vinod Kumar Tiwary and others on August10, 1999. Based on the same, proceedings were initiated bearing No. G.R.293/99 in the Court of the CJM, Lohardagaon September 28, 1999 under Sections 341, 379 and 323/34 of the IPC on grounds that the personnel officer ofthe Company was assaulted by the accused while he was entering the Company’s office premises during theperiod of an agitation and strike on September 28, 1999. The case is pending in the Court of the CJM, Lohardagafor deposition of prosecution witnesses. The matter is pending.

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19. The Company has initiated proceedings in Cr. Misc. No.7767/99(R) against the State of Bihar and Cr.M.P. No.252/02, Cr.M.P. No.1100/02 and W.P.(Cr.) No. 86/2004 against the State of Jharkhand in the Jharkhand High Court,Ranchi under Section 482 of the CrPC for quashing criminal proceedings commenced against the Company andits personnel in several cases, namely forest case No. F23/99, forest case No. C I 43/01, G.R. No.274/00 and orderdated February 20, 2004 (including the cognizance order) made by District and Sessions Judge, Lohardaga in Cr.Rev. No.01/03. In Cr. Misc. No.7767/99(R), Cr.M.P. No.252/02 and W.P.(Cr.) No. 86/2004, the Court heard andadmitted the applications and stayed the proceedings of the lower Court on April 18, 2000, July 29, 2002 andSeptember 2, 2004 respectively. In Cr.M.P. No.1100/02, hearing of the matter is pending before the High Courtand on August 8, 2003, the High Court passed an order not to take any coercive steps against the Company. Thecases are pending for final hearing in the High Court.

20. The Company has filed WP (Cr) 146/05 on April 19, 2005 and W.P. (Cr.) No. 204/05 on June 20, 2005 in theJharkhand High Court for quashing of criminal proceedings in confiscation case No. 01/05 and for quashingorder dated April 13, 2005 passed by DFO West Division, Lohardaga whereby the authority had directed theCompany to surrender the vehicle within a week in WP (Cr) 146/05 and for quashing of order dated May 28, 2005passed by the A.D.J., Lohardaga in Cr. Rev. No.04/03 and also for quashing for entire criminal proceedings andcognizance order in Forest case No. 17/02, as the case is time barred in W.P. (Cr.) No. 204/05. In the first matter,the Court heard the matter on May 12, 2005 for issue of notice to opposite party and stayed the proceedings inthe lower court. In the second matter, the Court heard the same on July 18, 2005, stayed the proceedings of thelower Court and ordered the State to file counter affidavit within 4 weeks. The matters are pending.

21. The Company has filed a criminal writ petition bearing No. 7259/2004 against the State of Uttar Pradesh prayingfor the quashing of FIR dated August 27, 2004 in Crime No. 178/2004 under Section 447 of the IPC in SonebhadraPolice Station. The Writ Petition was filed praying that the Court direct the State not to harass the Company in thesaid criminal case as the boundary wall of coal reject area is situated on the land of Renusagar Power Divisionwhich has been constructed as per joint measurement done in presence of Govt. Revenue Officials, staff ofRihand Reservoir and representatives of RPD and subsequently a no-objection certificate was issued in thisregard by the DRO, Rihand Bandh. On September 18, 2004, the High Court stayed the arrest of the officials of theCompany till the date of the further listing of the writ petition. Further, the counter affidavit on behalf of theInvestigating Officer, Anpara was filed in the Court. The case is yet to be listed for hearing.

22. The State of Uttar Pradesh has filed three cases against one Sarvjeet Singh for offences committed as a workerof CITU in the Court of the Chief Judicial Magistrate, Robertsganj on the basis of complaints made by the Company.Case No. 2656/2001 has been filed on the grounds of having attacked the houses of Shri G.P. Singh, Dy GM(P&IR) and Shri T.C. Prasad, Chief Engineer (Oprn) and Case No. 3578/94 and Case No. 2683/2001 have beenfiled on grounds of forcible occupation of Control Room (Plant) by CITU. All the said matters are pending and areposted for evidence by witnesses. All the aforesaid matters are pending before the Court of the Chief JudicialMagistrate, Robertsganj.

23. The Company has also filed Case No. 3579/94 against Vinod Tiwari in the on the basis of a complaint made bythe Company on grounds of having attacked the houses of Shri G.P. Singh, Dy GM (P&IR) and Shri T.C. Prasad,Chief Engineer (Oprn). The said matter is pending with a hearing every month. The matter is pending for evidenceby witnesses.

24. Based on a Complaint made by the Company, the State of Uttar Pradesh has filed case No. 2708/94 againstTarkeshwar Ojha (Parasi Village) on grounds of Blockade of road near village Parasi and Gherao of Mr. C.P.Harlalka, Vice President, Mr. V.K. Sharma, Vice President and Mr. I.N. Kapoor, Factory Manager on November 20,1991 and Case No. 2740/94 against R. Antony on grounds of Criminal assault on Shri I.N. Kapoor, Factory Manageron April 3, 1991 in the Court of the Chief Judicial Magistrate, Robertsganj. The cases are pending and are postedfor hearing almost every month. Both these matters are pending.

25. The State has filed Case No. 49/92, 4786/94, 67/99 Tarkeshwar Ojha and other CITU activists in the Court of theMunsif Magistrate, Dudhi on grounds of threatening and abusing Shri D.R. Mishra, Assistant at Time Office. Thesaid matter is pending.

26. The security officials of the Company filed Cr. Revision No. 3194/2003 against the State of Uttar Pradesh in theAllahabad High Court. The matter arose as a result of an FIR being lodged against Company officials resultingfrom a situation where the boundary wall of the Company was being repaired and some miscreants tried to

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hinder the work. The security officers who tried to restrain the miscreants were assaulted and attacked in responseto which crime No. 205/03 was registered at Renukoot Police outpost, P.S. Pipri, District Sonbhadra under Sections147, 148, 149, 307, 392, 323, 504 and 506 of IPC against the security officers. A charge was framed upon completionof investigation upon deletion of Section 392 from the charge and a Case No. 3658/03 was registered againstCompany officials in the Court of CJM, Sonbhadra. Criminal Revision No. 3194/2003 under Sections 397 and 401of the Code of Criminal Procedure was filed for quashing the charge framed against the Company’s securityofficials. The criminal revision has been admitted and the summons issued by the Trial Court for the appearanceof the accused has been stayed vide order dated November 11, 2003. On July 12, 2004, and later on August 28,2005 the stay was extended by the High Court, Allahabad till listing of the case in the next cause list.

27. Cases bearing No. 2021/2000 and 2022/2000 are cross cases of each other filed in the Court of the CJM, Sonbhadraunder Section 323 read with 147 of the I.P.C as a result of an assault that took place on the night of October 3,1999 between Company’s security guards and encroachers over Company land. Another cross case has beenfiled with respect to the same incident in 3657/2003 where the charge is under Sections 147, 336, 427 and 504.Next date to be fixed for prosecution evidence.

28. The State of Uttar Pradesh has filed case No. 4788/2004 against one Shiromani in the Court of the CJM, Sonbhadra.The cause of action arose when the Company Gypsy Jeep, while on official duty, met an accident on September11, 2004 near Robertsganj, which was rashly hit by a truck that was being driven by Shiromani, (the accused inthe present case) resulting injury to the Company driver. A charge-sheet has been filed against the truck driverunder Sections 279, 337, 338 and 427 of the I.P.C. The case is pending hearing.

29. Criminal case No. 4494/99 has been filed before the Sessions Judge, Bangalore against Agents AluminiumCompany Ltd. for the recovery of Rs. 3.7 million. An order was passed in favour of Indal in 2004. The oppositeparty has preferred an appeal.

30. Criminal case No. 147/98 has been filed before the Sessions Court in Hyderabad against Zephyr Containers Pvt.Ltd. involving Rs. 1.4 million. The trial court has decreed the matter in favour of the Company. The opposite partyhas appealed this decision.

31. Mr. S.S. Kothari, director of the Company and another officer of the Company have filed Criminal MiscellaneousApplication No. 15369/92 under Section 482 of the CrPC in the High Court of Allahabad against the MunsiffMagistrate, Dudhi and the Additional Inspector, Factories, Dudhi praying for the quashing of proceedings incomplaint case No. 1819/81 pending on the file of the Munsiff Magistrate, Dudhi. The said proceedings in complaintcase No. 1819/1981 were filed under various Sections of the Factories Act alleging that the employees of a dairyin the Company were not included on the rolls and were not given leave cards. The High Court stayed theproceedings before the Magistrate. The matter is pending and there have been no further orders as to listing.

32. The Company has filed W.P. (Cr.) 5633/04 against the Company in the High Court at Ranchi against the order ofD.C. Latehar dated July 24, 2004 which directed the Company to pay five times penalty of the deficit amount paidtowards stamp duty on the deeds executed in the year 1999. The High Court, vide stay order dated October 15,2004, directed the D.C. Latehar not to take coercive step against the petitioner company. The matter is pendingbefore the High Court.

33. The Company has filed thirty-three cases under Section 138 of the Negotiable Instruments Act, 1881 amountsaggregating Rs. 11.49 million.

B. Labour suits

(a) Labour cases filed against the Company

1. Thirty-six contract workers at the Taloja plant canteen filed ULP No. 637 of 1998 in the Industrial Tribunal, Thaneclaiming permanence of employment. The Industrial Court passed an order dated February 16, 2004 rejectingtheir complaint and the contact labourers moved Bombay High Court vide appeal No. 2999 of 2004. The HighCourt has granted a stay against the order of the Industrial Tribunal. The case is pending final hearing at theBombay High Court. The Company meanwhile, has filed Writ Petition No. 573/04 challenging the notificationdated October 10, 2003 issued by the Government of Maharashtra due to which engagement of contract labourin the canteen of Taloja plant had to be abolished. The matters are pending in the Bombay High Court along withthe above matter.

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2. A workman at the Belgaum plant was dismissed for sabotage and filed a petition No. 39617 in the Karnataka HighCourt claiming reinstatement with back-wages amounting to approximately Rs. 1.5 million. The case is pendingat the Karnataka High Court.

3. The Company declared a lock-out on April 29, 1980 as a consequence of an illegal strike by issuing a notice oflockout. Thereafter the Labour and Conciliation Officer issued a notice dated April 30, 1980 commencingconciliation proceedings and as the conciliation ended in a failure, a failure report was sent to the Government ofKarnataka which passed an order of reference dated June 10, 1980 referring the dispute to the Industrial Tribunal,Hubli for adjudication. The tribunal passed an award dated December 14, 1999 holding that the Company wasjustified in declaring the lock-out and that the workmen were not entitled to any wages. The Indal PotroomWorkers Union challenged the award of the Industrial Tribunal by filing W.P. No. 6339 of 1991. The learned SingleJudge passed an order dated February 7, 2005 reversing the findings of fact recorded by the tribunal and declaredthat the lock-out declared by the Company was illegal and unjustified and directed the Company to pay 50 percent wages for the period of lockout. The Company has filed a writ appeal No. 2104 of 2005 before the KarnatakaHigh Court against this order dated February 7, 2005. Certain workmen at the Belgaum plant were dismissed inconnection with the lock-out in 1980 and filed WP No. 2549/2005 and 32819/02 in the Karnataka High Courtclaiming reinstatement with back-wages amounting to approximately Rs. 4.5 million. The cases are pending atthe Karnataka High Court.

4. An industrial dispute arose between the Company and its workmen from the Alupuram plant over the issue ofjustifiability of the lay off of workmen and the quantum of lay off compensation. The Government of Keralaissued an order dated March 27, 1996 referring the dispute for adjudication before the Industrial Tribunal,Alappuzha. The Government of Kerala issued another order dated March 30, 2004 invoking Section 10B of theIndustrial Disputes Act directing the Company to provide alternative work for the maximum number of workmenwho had been laid off and make payment to those workmen who were laid off at the rate of full monthly salarywhich they were entitled to for the month of January 1996 treating the 50% share as an ex gratia. The Companyhas filed a writ petition No. 6384 of 1996 dated April 6, 1996 before the High Court of Kerala at Ernakulam againstthese orders. The petition is pending disposal. The aggregate claim of the workmen against the Company isapproximately Rs. 3 million.

5. An employee at Alupuram plant filed a complaint No. 16/1999 in the Industrial Tribunal. The Tribunal passed anorder in favour of the Company. Aggrieved by the award of Industrial Tribunal, the workman filed OP No. 10704/2003 in the Kerala High Court claiming an aggregate amount of Rs. 1.5 million against the Company.

6. An industrial dispute arose between the Company and its workmen from the Alupuram plant over the issue ofconfirmation of twelve temporary and casual workers from the Alupuram plant. The Government of Keralaissued an order dated December 6, 2003 referring the dispute for adjudication before the Labour Court, Ernakulum.The Labour Court has registered Industrial Dispute No. 16/2003 and the matter is pending disposal. The workershave claimed wages aggregating to Rs. 1.2 million.

7. The Employees State Insurance Corporation issued a notice of demand dated September 20, 1997 to the Companydemanding an aggregate Rs. 1.56 million plus interest at the rate of 15 per cent from June 1, 1997 for the sameon account of Employee State Insurance for the period July 1994 to November 1996. The Company filed a writpetition No. 3022 of 1997 before the Patna High Court at Ranchi for quashing the notice and for restraining theEmployee State Insurance Corporation from realizing any amount as per the notice. The High Court passedorder dated December 16, 1997, staying the demand of Rs. 1.56 million on the condition that the Companydeposit a sum of Rs. 0.5 million. and further directed that Company was to furnish security other than cash andbank guarantee to the satisfaction of the Court. The matter is pending disposal.

8. V.N. Pandey was discharged from the services of the Company due to long absence. He filed a case against theCompany before District Judge, Mirzapur that was decided in favour of the Company. Aggrieved by this he fileda petition against the order of District Judge and second appeal No. 2840/86 in the Allahabad High Court. Thematter is pending before the High Court.

9. Purshottam, a former workman, was terminated from service. The Labour Court upheld the termination and theworkman filed W.P. No. 8503 of 1982 in the Allahabad High Court against such order of termination. The Companyserved a notice to the workman to hand over the quarter allotted to him. On failure of the workman to vacate thepremises, the Company filed a civil suit praying for eviction of workman. The suit was decreed in favour of

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Company and the first appeal filed by the workman against the order was also dismissed. Aggrieved by theorders of the lower court the workman filed a second appeal No. 972/90 before the Allahabad High Court claimingthat he was a tenant and not a licensee. The matter is pending before the High Court.

10. The Government enhanced the E.S.I. coverage to the employees drawing wages Rs.6500/- per month videnotification dated December 23, 1996. The Dakshanichal Majdoor Kalyan Samiti, challenged this notification inW.P. No. 14987/97 in the Allahabad High Court claiming that the Company should be exempted from the saidnotification and that the court should direct the Company not to curtail the existing medical facilities. The HighCourt in its interim order dated May 5, 1997 directed the Company to not to reduce in any manner, directly orindirectly, the perquisites and facilities including medical facilities of employees except as provided by regulation.The matter is pending before the High Court.

11. The Company issued a charge sheet in the name of one Mohan Lal Soni for not vacating Company’s quarters asordered. An enquiry was held and he was dismissed from the service of the Company with effect from March 11,1987. The Labour Court, Allahabad decided Adjudication Case No.23/88 against the workman. Aggrieved by theaward of Labour Court, the workman filed W.P. No. 34221/99 in the Allahabad High Court inter alia on the groundthat the enquiry violated principles of natural justice and that the punishment was disproportionate and hasprayed for reinstatement with back wages. The matter is pending before the High Court.

12. Hindalco Workers Union raised a dispute in adjudication case No.14/89 regarding regularization of 150 temporaryworkmen of the construction division, who were employed for the expansion of the Factory. The IndustrialTribunal, Allahabad (I) rejecting the claim of the trade union, passed an award dated March 26, 1998 that tradeunion was not competent to espouse the cause and that the Company could not be forced to create new posts.Aggrieved by the award, the trade union filed W.P. No. 41851/98 in the Allahabad High Court. The case is pendingat the High Court and no interim order has been passed.

13. Seventeen staff members were terminated due to anti-management activities. Eight of the staff members settledtheir cases, while the remaining 9 staff members contested their cases through the Hindalco Staff Associationon grounds of unfair dismissal and prayed for continuity of service. The Industrial Tribunal (I), Allahabad passedan award dated June 25, 1999 in adjudication case No. 25 of 91 rejecting the claim of the staff members on theground that they were not workmen under the Uttar Pradesh Industrial Disputes Act, 1947. Aggrieved by the saidorder, the staff members filed W.P. No. 21357 of 2000 in the Allahabad High Court asking for the setting aside ofthe order dated March 26, 1998 and continuity in service. The matter is pending before the High Court.

14. Sukhranjan Haldar was appointed as junior labour supervisor in the construction division on sanction from timeto time. After expiry of the sanction, he was discharged on January 18, 1989. He challenged the termination andraised a dispute which was referred to the Labour Court. The Labour Court in its award dated September 7, 1998held that it being a fixed term appointment, there was no retrenchment. The workman filed W.P. No. 7150/ 2000in the Allahabad High Court, challenging the award of the Labour Court on the ground that the principle of “lastcome first go” has not been followed and that his work was of permanent nature and has prayed for regularizationof work. The case involves the issue of applicability of 2 (oo) (bb) of Industrial Disputes Act, 1947.

15. One Fula Devi has filed W.P. No. 16331/2002 against the Life Insurance Corporation, the Company and others inthe Allahabad High Court on the ground that she is entitled to the insurance amount as the beneficiary of thethree life insurance policies taken by her husband, Parasnath Yadav, a workman in the Company, who died inAugust 2001. The petitioner claimed that the premium was deducted from her husband’s salary by the Company,but the Company failed to remit the same to Life Insurance Corporation of India. Hence the petitioner contendsthat the default in payment of insurance premium is the fault of the Company. The matter is pending before theHigh Court.

16. Hindalco Pragatisheel Mazdoor Sabha has filed W.P. No. 16760 (C) of 85 in the Allahabad High Court challengingthe award dated May 16, 1985 passed by the Industrial Tribunal, Allahabad I in Adjudication Case No. 29/83wherein the tribunal rejected their contention that contractor labourers working in the Company canteen shouldbe allowed wages and other facilities similar to those available to other workmen of the establishment of theCompany. Counter and rejoinder to the same have been filed. The matter has been part heard and the next dateof listing has not been fixed.

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17. Fifty-one contract workers have filed Civil Misc. WP No. 10063/1987 in the Allahabad High Court, through theHindalco Workers Union against the Company and others on the grounds of termination of service due to thefact that the contract given out to M/s Doodh Nath Prasad came to an end on March 25, 1987. Counter andrejoinder have been filed. The next date of hearing is yet to the decided.

18. Shanker Upadhyay, worked as substitute workman of the Company and was taken on probation for six monthsin the post of U Man. His services were terminated on account of unsatisfactory work. He raised an industrialdispute and a settlement was arrived at, to take him back into employment on probation for a further period ofthree months. His services were again terminated with effect from December 11, 1987 and he was reverted backto the post of substitute workman (Badli). His services were again terminated from the post of a U Man witheffect from March 15, 1988. He raised an industrial dispute in Adj. 280/88 challenging this in the Labour Court,Varanasi on the grounds that it amounted to termination of service. The Labour Court held that since he was onthe roll of the Company his services were not terminated. The workman challenged the award in the High Courtin WP 24044/92 before the Allahabad High Court. The Allahabad High Court held that there was no provision inthe Standing Order under which a Badli could be promoted to the post of U Man, and therefore held that hisappointment as U Man was a fresh appointment and hence his reversion to the post of Badli amounted totermination. The High Court has remanded the case back to the Labour Court to decide the case on merits. Thecase is pending before the Labour Court at Varanasi.

19. There are thirteen cases in the Labour Court, Allahabad under adjudication filed by workmen, challenging theirtermination on various grounds.

20. There are seven cases in the Labour Court, Allahabad under adjudication filed by contract labourers, challengingtheir termination of services by the concerned contractor on various grounds. The Company is a party to theseproceedings.

21. There are three cases filed before the Industrial Tribunal (I) at Allahabad, by workmen raising industrial disputesin respect of their dismissal by the Company.

22. There are twenty cases filed by former workmen of the Company on various grounds, all of which are pendingbefore the Labour Court, Varanasi.

23. There are four cases filed before the Labour Court, Bharuch by former security guards, challenging terminationof their service by the contractor and claiming an aggregate amount of approximately Rs. 3.48 million. There isone case filed before the Labour Court, Bharuch by a security supervisor in respect of resignation from serviceand claiming an aggregate amount of Rs. 3.84 million.

24. The President of CBW Union raised a dispute before Assistant Labour Commissioner (C), Ranchi regardingpayment of wages for the alleged lock-out period from May 17, 2000 to June 10, 2000. After failure of conciliationbefore Assistant Labour Commissioner the case was forwarded to Secretary, Ministry of Labour, Govt. of India.The case bearing No. L – 43011/3/2000/IR(M)is now pending before the CGIT, Dhanbad.

25. A restoration application in case No. CGIT/LC/M/2/2003 was filed by the Joint Secretary CBW Union for restorationof original case No.R/83/2000 relating to termination of the services of a workman, wherein an award was issuedin favour of the Company in terms of settlement with CBW Union. The case is in the process of settlement withthe applicant workman.

26. Seven cases have been filed by person who allegedly worked at Katni bauxite mine. The claimants contend thatthey were taken on work for quality check of bauxite at Katni up to February 1996. These persons were laterrelieved from work and have initiated conciliation proceedings before Conciliation Officer. After failure ofconciliation, the Central Government has referred the matter for adjudication before Industrial Tribunal cumLabour Court, Jabalpur.

27. The Government of Karnataka has by order of reference No. 265 dated December 2, 1998 transferred a labourcomplaint filed by an association of 218 employees who have been retired under the voluntary retirement schemedemanding better benefits than those offered under the Scheme to the Additional Labour Court Hubli. By itsreply dated September 18, 2000, the Company has disputed the legality of the reference. The Company hasfiled its affidavit of evidence on April 29, 2003.

28. The Deputy Director, Employee State Insurance, Kanpur confirmed a demand of Rs. 2.05 million on account of

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payments made for Hindalco Dairy, Vishram Griha (Allahabad) and Building Construction Department vide orderdated August 12, 2005. The Recovery Officer has issued Recovery Notice dated September 26, 2005 for recoveryof said amount along with interest of Rs. 2.29 million. The Company has filed an appeal on October 19, 2005before the ESI Court at Mirzapur after depositing 50 per cent of the demand amount and interim stay has beengranted till October 29, 2005. The case is pending hearing.

Labour cases filed against the Company for claims under Rs. 1 million

In addition to the above cases, there are sixty-three labour related cases which have been filed against the Companyfor claims aggregating to Rs. 17.45 million, which are pending in various fora.

(b) Labour cases filed by the Company

1. Twenty-seven contract labourers from the Kalwa plant filed complaint No. 132 dated March 6, 1996 in the IndustrialCourt, Thane, claiming permanence of work. The Industrial Tribunal in its order dated October 15, 1998 allowedthe plea of the complainants. The Company filed a writ petition before a single judge of the High Court challengingthe order of the Industrial Court. The Single Judge passed an order dated January 25, 1999 rejecting the writpetition at the admission stage. The Company filed Letters Patent Appeal No. 58 of 1999 before a Division Benchof the Bombay High Court, challenging the order of the Hon’ble Single Judge. The Division Bench vide its orderdated March 22, 1999 rejected the appeal of the Company. The Company filed a special leave petition No. 9244of 1999 in the Supreme Court. The Supreme Court passed an order dated October 25, 1999 allowing the appealand remitting the matter back to the High Court for deciding the Letters Patent Appeal on merits. The DivisionBench of the High Court summarily dismissed the Letters Patent Appeal by an order dated January 20, 2000. TheCompany filed special leave petition No. 2560 of 2000 and No. 6410/2000 in the Supreme Court. The SupremeCourt has granted a stay against the order of the Industrial Tribunal. The case is pending final hearing at theSupreme Court.

2. An industrial dispute arose between the Company and its workmen from the Alupuram plant over the issue thejustifiability of the lay off of workmen and the quantum of lay off compensation. The Government of Keralaissued an order dated March 27, 1996 referring the dispute for adjudication before the Industrial Tribunal,Alappuzha. The Industrial Tribunal, Alappuzha proceeded with the adjudication and passed an order dated March10, 1999 against the Company. The Company filed writ petition No. 33450 of 2000 before the High Court ofKerala at Ernakulum against these orders. The petition is pending disposal.

3. An industrial dispute arose between the Company and its workmen from the Alupuram plant over the issue of acharter of demands for long term settlement which ultimately resulted in a strike. The Government of Keralaissued an order dated November 24, 2004 referring the dispute for adjudication before the Industrial Tribunal,Alappuzha. On the recommendation of the Labour Commissioner, Thiruvananthapuram the Government of Keralaissued an order dated November 24, 2004 prohibiting the continuance of the strike as well as an order datedNovember 24, 2004 invoking Section 10B of the Industrial Disputes Act directing the Company to pay an interimrelief of Rs. 1,600 per month per worker till the passing of the award by the Industrial Tribunal in the dispute onthe condition that Rs. 1,600 per month is to be fully adjusted towards the revision of emoluments to be effectedas per the award of the Industrial Tribunal. The Company has filed a writ petition No. 426 of 2004 dated December27, 2004 before the High Court of Kerala at Ernakulam against these orders. The petition is pending admission.

4. The Company has filed a writ petition challenging the award passed by Industrial Tribunal (I), Allahabad inAdjudication Case No. 40/89 dated April 29, 1991 directing the Company to pay 10% of the basic salary as houserent allowance to permanent workmen who have not been allotted accommodation. The tribunal ordered thathouse rent allowance be paid from the date of their appointment till accommodation is provided. The writpetition has been filed on the ground that the service conditions do not provide for giving any housingaccommodation.

5. A certain workman was absent from duty and accordingly lost his claim to his original post and was placed as asubstitute workman with effect from December 21, 1991 under clause 15(4) (h) of the Certified Standing Ordersof the Company. The Labour Court, Varanasi in Adjudication Case No. 291/92 directed the Company to reinstatehim with full back wages on the ground that neither domestic enquiry was held nor charge sheet nor explanationwas issued while removing him from the rolls of permanent workman. The Company filed WP No. 3332/98 in theAllahabad High Court, challenging the order of the Labour Court. He filed a case before the Labour Court, Varanasi

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which was decided in the favour of the Company. He has filed Writ Petition No. 48328/99 challenging the saidorder of the Labour Court, Varanasi, which was dismissed vide order dated March 20, 2002. However, the workmanfiled a petition for restoration, which was accepted by the Court. Vide an interim Order dated April 2, 2004 theHigh Court kept the question of current wages open and left the same at the liberty of the Company.

6. Services of the staff in Super Bazaar were terminated after paying retrenchment compensation, due to closure ofthe medicine counter of Super Bazaar. The Labour Court, Varanasi in Adjudication Case No. 100/91 passed anaward on February 13, 1998 holding that the principle of “last come first go” has been violated and that requiredapproval under Chapter V B of Industrial Disputes Act, 1947 was not taken and therefore held that the terminationwas illegal and ordered reinstatement of the workmen with back wages. The Company filed WP 39143/98challenging the award of the Labour Court, on the ground that the Super Bazaar and the Company are twoseparate entities and hence the provisions of Chapter V B of Industrial Disputes Act, 1947 and principle of “lastcome first go” are not applicable. The Allahabad High Court vide its interim order dated February 1, 1999 hasstayed the award of the Labour Court, on the condition that (i) 50% of the back wages, amounting to Rs. 0.08million be deposited with the Labour Court, which shall invest it in an interest bearing account; (ii) that theworkman be paid wages from the date of award till January 1999 amounting to Rs. 0.02 million and (iii) that theCompany complies with Section 17 B Industrial Disputes Act, 1947. The Company in compliance with the orderof the High Court has deposited the back wages amounting to Rs. 0.08 million as directed above in the form ofa bank draft with the Labour Court for depositing it in an interest bearing account. However, the Labour Court hasreturned the same and has asked the Company to make a fixed deposit receipt. The Company has filed anapplication in the High Court to direct the Labour Court to accept the bank draft in compliance with the orders ofthe High Court.

7. A particular workman’s services were terminated with effect from February 1, 1989 after enquiry on grounds ofabsence from duty. The workman raised an industrial dispute that his services were terminated orally. TheLabour Court in its award dated March 31, 1998 decided the case in favour of the workman. Aggrieved by theaward, the Company filed W.P. No. 7328/99 in the Allahabad High Court challenging the competency of thePresiding Officer of the Labour Court on the ground that an I.A.S. officer is not competent to hold the post ofPresiding Officer of the Labour Court.

8. The Company filed a civil suit for eviction against the Pragatishel Mazdoor Sabha for eviction from a buildingowned by the Company that was being used by the union as its office as licencee. The licence was terminated bya notice dated March 17, 1982. The civil suit was decided against the Company and an appeal was preferredbefore District Judge Mirzapur. The District Judge vide its order dated December 3, 2003 rejected the appealholding that the unless the union was derecognized by the Labour Court in accordance with the provisionsIndian Trade Unions Act, 1926 it could not be evicted from the building as per agreement dated December 10,1973 arrived at between the Company and the union. Aggrieved by the order the Company filed a second appealbearing case No. 19/2002 before the Allahabad High Court. The matter is pending.

C. Tax proceedings

(a) Income Tax

The Company does not have any material contingent liability in respect of the following Income tax proceedings.

Before the Income Tax Appellate Tribunal

(i) Appeals filed by the Company before the Income Tax Appellate Tribunal

The Company has filed the following major appeals before the Income Tax Appellate Tribunal (“ITAT”), for amountsaggregating approximately Rs. 1,805.01 million, which are as follows:

1. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1986-87 aggregating tax impact of approximately Rs. 6.04 million, inter alia upholding the order of theassessing officer on the issues of disallowance of certain expenses and deductions made under Section 80I of the IT Act, deductibility of profits from export of vanadium sludge and gallium metal under Section 80HHC of the IT Act for all. This appeal is pending.

2. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1987-1988 aggregating tax impact of Rs. 0.35 million, inter alia on the issues of deductibility of profits from

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export of vanadium sludge and gallium metal under Section 80 HHC of the IT Act, allowance of certainexpenses. The matter is pending before the ITAT.

3. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1988-89 aggregating tax impact of Rs. 100.02 million, inter alia on the issue of applicability of Section 115J of the IT Act, to the profits of the Company for the relevant assessment year. The matter is pending beforethe ITAT.

4. The Company has filed an appeal before the ITAT, against the order of CIT(A) for the assessment year 1989-90 aggregating tax impact of Rs. 1.70 million, inter alia on the issues of disallowance of deductions madeunder Section 80 I of the IT Act. The matter is pending before the ITAT.

5. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1990-91 aggregating tax impact of Rs. 9.04 million, inter alia on the issue of allowance of benefit underSection 32AB of the IT Act and some disallowances. The matter is pending before the ITAT.

6. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1991-92 aggregating tax impact of Rs. 1.92 million, inter alia on the issue of calculating the deduction underSection 80 HHC of the IT Act. The matter is pending before the ITAT.

7. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1992-93 aggregating tax impact of Rs. 11.75 million, inter alia on the issue of deduction under Section 80HHC of the IT Act. The matter is pending before the ITAT.

8. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1993-94 aggregating tax impact of Rs. 73.64 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and deduction under Section 80 I of the IT Act. The matter is pending before the ITAT.

9. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1994-95 aggregating tax impact of Rs. 71.71 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and deduction under Section 80 I of the IT Act. The matter is pending before the ITAT.

10. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1995-96 aggregating tax impact of Rs. 127.56 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and deduction under Section 80 I of the IT Act. The matter is pending before the ITAT.

11. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1996-97 aggregating tax impact of Rs. 165.32 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and deduction under Section 80 I of the IT Act. The matter is pending before the ITAT.

12. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1997-98 aggregating Rs. 22.30 million, inter alia on the issue of disallowance of deduction under Section 80O in respect of royalty received and the issue on disallowance of depreciation and expenses. The matter ispending before the ITAT.

13. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1998-99 aggregating tax impact of Rs. 25.08 million, inter alia on the issue deduction under Section 80 HHCof the IT Act and issue of disallowance of deduction under Section 80 O in respect of royalty received. Thematter is pending before the ITAT.

14. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1999-2000 aggregating tax impact of Rs. 32.48 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and issue of disallowance of certain expenses. The matter is pending before the ITAT.

15. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2000-2001 aggregating tax impact of Rs. 10.14 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and issue of disallowance of certain expenses. The matter is pending before the ITAT.

16. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2001-2002 aggregating tax impact of Rs. 453 million, inter alia on the issue of deduction under Section 80HHC of the IT Act and issue of disallowance of certain expenses. The matter is pending before the ITAT.

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17. The Company has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2002-2003 aggregating tax impact of Rs. 367.53 million, inter alia on the issue of deduction under Section80 HHC of the IT Act and disallowance of certain expenses. The matter is pending before the ITAT.

18. The Company has filed an appeal before the ITAT, against the order of the Commissioner of Income Tax(Appeals) for the assessment year 2003-2004 aggregating tax impact of Rs. 233.77 million, inter alia upholdingthe order of the assessing officer on the issues of disallowance of write off of Inter Corporate Deposits,deduction under Section 80 HHC of the IT Act and disallowance of certain expenses. The matter is pendingbefore the ITAT.

19. The Company has filed appeals before the ITAT, on the issue of withholding tax on the GDR issue expensesaggregating tax impact of Rs. 48.43 and 43.13 million for the assessment year 1994-95 and 1995-96respectively. The matter is pending before the ITAT. In addition, the Company has also filed appeals withthe ITAT on the issue of withholding tax on the remittances of fees and expenses to foreign parties.

In addition, appeals have been filed against the orders of the tax / appellate authorities in respect of the erstwhileRenusagar Power Company for the assessment years 1979-80 and 1980-81.

(ii) Appeals filed by the Department before the Income Tax Appellate Tribunal

The Department has filed the following major appeals before the Income Tax Appellate Tribunal (“ITAT”) , foramounts aggregating Rs. 8,009.43 million.

1. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1986-87 aggregating tax impact of Rs. 2.86 million, inter alia on the issue of allowance of depreciation onroads, construction and mobile equipment, trucks and tractors and additional depreciation and grant ofinvestment allowance. The matter is pending before the ITAT.

2. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1986-87 aggregating tax impact of Rs. 6.65 million, on the issues of deduction of interest on borrowed fundunder Section 36(1) (iii) of the IT Act, commission paid to stockists and allowance of deductions underSection 80 M of the IT Act. The matter is pending before the ITAT.

3. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1987-88 aggregating tax impact of Rs. 1.34 million, inter alia on issues of allowance of certain expensesand deletion of disallowance of sales tax under Section 43 B of the IT Act. The matter is pending before theITAT.

4. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1987-88 aggregating tax impact of Rs. 7.60 million, inter alia on commission paid to stockists and the issueof deduction of interest on borrowed fund under Section 36(1) (iii) of the IT Act. The matter is pendingbefore the ITAT.

5. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1988-89 aggregating tax impact of Rs. 10.58 million, inter alia on issues of deletion of addition on accountof Modvat credit and deletion of income under Section 41(1) of the IT Act. The matter is pending before theITAT.

6. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1988-89 aggregating tax impact of Rs. 11.98 million, inter alia on commission paid to stockists, deductionunder Section 80 M and on the issue of deduction on borrowed fund under Section 36(1) (iii) of the IT Act.The matter is pending before the ITAT.

7. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1989-90 aggregating tax impact of Rs. 17.48 million, inter alia on issues of deletion of addition on accountof Modvat credit, deletion of income under Section 41(1) of the IT Act and set off of loss. The matter ispending before the ITAT.

8. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1989-90 aggregating tax impact of Rs. 18.99 million, inter alia on commission paid to stockists, deductionunder Section 80 M and on the issue of deduction of interest on borrowed fund under Section 36(1) (iii) of

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the IT Act. The matter is pending before the ITAT.

9. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1990-91 aggregating tax impact of Rs. 29.80 million, inter alia on issues of deletion of addition on accountof in Modvat credit and set off of losses. The matter is pending before the ITAT.

10. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the reassessmentyear 1990-91 aggregating tax impact of Rs. 31.64 million, inter alia on commission paid to stockists, deductionunder Section 80 M and on the issue of deduction of interest on borrowed fund under Section 36(1) (iii) ofthe IT Act. The matter is pending before the ITAT.

11. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1991-92 aggregating tax impact of Rs. 9.18 million, inter alia on issues of deletion of addition on account ofModvat credit. The matter is pending before the ITAT.

12. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1992-93 aggregating tax impact of Rs. 9.04 million, inter alia on issues of deletion of addition on account ofModvat credit and depreciation. The matter is pending before the ITAT.

13. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1992-93 aggregating tax impact of Rs. 138.08 million, inter alia on issues of deductions under Section 80 Iof the IT Act, deduction under Section 80 M of the IT Act and on the issue of deduction of interest onborrowed fund under Section 36(1) (iii) of the IT Act. The matter is pending before the ITAT.

14. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1993-94 aggregating tax impact of Rs. 158.35 million, inter alia on issues of deletion of addition on accountof Modvat credit and deduction of interest on borrowed fund under Section 36(1) (iii) of the IT Act. Thematter is pending before the ITAT.

15. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1994-95 aggregating tax impact of Rs. 133.07 million, inter alia on issues of commission paid to stockistsand issue of deduction of interest on borrowed fund under Section 36(1) (iii) of the IT Act. The matter ispending before the ITAT.

16. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1995-96 aggregating tax impact of Rs. 141.90 million, inter alia on issues of deletion of addition on accountof Modvat credit and deduction of interest on borrowed fund under Section 36(1) (iii) of the IT Act. Thematter is pending before the ITAT.

17. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1996-97 aggregating tax impact of Rs. 121.83 million, inter alia on issues of deletion of addition on accountof Modvat credit commission paid to stockists, deductions under Section 80 M of the IT Act and deductionof interest on borrowed fund under Section 36(1) (iii) of the IT Act. The matter is pending before the ITAT.

18. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1997-98 aggregating tax impact of Rs. 169.36 million, inter alia on issues of deletion of addition on accountof Modvat credit commission paid to stockists, deductions under Section 80 M of the IT Act and interest onborrowed fund under Section 36(1) (iii) of the IT Act. The matter is pending before the ITAT.

19. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1998-99 aggregating tax impact of Rs. 140.39 million, inter alia on issues of allowance of claim underSection 80 IA interest on borrowed funds and computing deduction under Section 80 HHC of the IT Act.The matter is pending before the ITAT.

20. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year1999-2000, aggregating tax impact of Rs. 993.74 million, inter alia on issues of allowance of claim underSection 80 IA interest on borrowed funds and computing deduction under Section 80 HHC of the IT Act.The matter is pending before the ITAT.

21. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2000-2001, aggregating tax impact of Rs. 1543.64 million, inter alia on issues of allowance of claim underSection 80 IA interest on borrowed funds and computing deduction under Section 80 HHC of the IT Act.

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The matter is pending before the ITAT.

22. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2001-2002, aggregating tax impact of Rs. 2276.48 million, inter alia on issues of deletion of addition onaccount of Modvat credit, allowance of claim under Section 80 IA interest on borrowed funds, deduction ofinterest capitalization and computing deduction under Section 80 HHC of the IT Act. The matter is pendingbefore the ITAT.

23. The Department has filed an appeal before the ITAT, against the order of the CIT(A) for the assessment year2002-2003, aggregating tax impact of Rs. 2035.45 million, inter alia on issues of deletion of addition onaccount of Modvat credit, allowance of claim under Section 80 IA interest on borrowed funds, deduction ofinterest capitalization and computing deduction under Section 80 HHC of the IT Act. The matter is pendingbefore the ITAT.

In addition, the Department has filed seven appeals in respect of the erstwhile Renusagar Power Companyagainst the orders of the Assessing Officer, for the assessment years 1978-79, 1979-80, 1980-81 and 1988-89.

Income Tax Proceedings in respect of demerged undertaking of Indian Aluminium Company Limited

Pursuant to a Scheme of Arrangement approved by the High Courts of Kolkata and Mumbai, all businesses of Indalwith the exception of business pertaining to the foils plant at Kollur, Andhra Pradesh were demerged into us witheffect from April 1, 2004.

(a) Appeals filed before the High Court and Supreme Court

1. For assessment years 1974-75 and 1979-80, the Supreme Court in a matter relating to Section 80 J of the ITAct and aggregating Rs. 17.37 million in favour of the Income Tax Department. The Department order ispending which will follow after the Income Tax Appellate Tribunal relays the judgment.

2. For assessment year 1987-88, the Company filed a writ petition in the Calcutta High Court questioning theapplicability of special audit under Section 142(2A) of the IT Act. The matter is pending before the HighCourt and the assessment is also pending.

3. For assessment year 1990-91, the company filed a reference application before the Calcutta High Courtagainst the order of the ITAT aggregating to Rs. 33.45 million on various grounds including deductionunder Section 80 HHC, deduction under Section 80I, deduction under Section 32AB and prior yearexpenditure. The matter is pending before the High Court.

4. For Assessment Year 1981-82, the department filed an application u/s 256(2) with the Calcutta High Courton the issue of allowability of transit house expenses for Rs. 0.48 million. The matter is pending before theHigh Court.

(b) Appeal filed with the ITAT

The Company has filed an appeal with the ITAT for assessment year 1995-96 against an order passed by theCommissioner of Income Tax under Section 263 of the IT Act for an amount of Rs. 8.5 million on account ofalleged excess deduction allowed under Section 80M of the IT Act. The matter is pending before the ITAT.

(c) Appeals filed with the Commissioner of Income Tax (Appeals)

Six appeals have been filed with the Commissioner of Income-tax (Appeals), details of which are given below:

1. For assessment year 1996-97, the assessing officer disallowed Rs. 26.7million towards excise duty underSection 147 of the IT Act. The matter is pending before the Commissioner of Income Tax (Appeals).

2. For assessment year 1997-98 the assessing officer disallowed Rs. 32.04 million towards excise duty underSection 147 of the IT Act. The matter is pending before the Commissioner of Income Tax (Appeals).

3. For assessment year 1998-99 the assessing officer disallowed Rs. 24.6 million towards excise duty underSection 147 of the Income-tax Act. The matter is pending before the Commissioner of Income Tax (Appeals).

4. The Company has filed an appeal against the regular assessment order of the assessing officer forassessment year 2000-01 aggregating to Rs. 231 million on various grounds including disallowance forcurrent repairs, VRS expenses, bad debts written off, etc. The matter is pending before the Commissioner

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of Income Tax (Appeals).

5. The Company has filed an appeal against the regular assessment order of the assessing officer for assessmentyear 2001-02 aggregating to Rs. 284 million on various grounds including disallowance for current repairs,deduction under Section 80IA and 80IB of the IT Act, interest on borrowing for construction, etc. Thematter is pending before the Commissioner of Income Tax (Appeals).

6. The Company has filed an appeal against the regular Assessment Order of the Assessing Officer forassessment year 2002-03 aggregating to Rs. 858 million on various grounds including disallowance underSection 80IA and 80IB, deduction under Section 80HHC, deduction on account of commission, currentrepairs, etc. The matter is pending before the Commissioner of Income Tax (Appeals).

(b) Wealth Tax

There are wealth tax appeals in respect of the Company for claims of less than Rs. 1 million.

(c) Central Excise

1. The Commissioner of Central Excise & Customs, Vadodora – II has issued a Show Cause Notice (“SCN”) to theCompany for the amount of Rs. 1.64 million that is sought to be recovered from the Company under Section 11Aof the Central Excise Act, 1944. The Commissioner has also sought to impose penalty under Section 11AC andcharge interest at the rate as fixed by the Board under Section 11AB of the Central Excise Act, 1944. The Companyhad allegedly not reversed the credit amounting to Rs. 0.82 million, which it had originally availed, and whichwas in excess of the correctly admissible credit of duty. The Commissioner determined that an amount ofRs. 0.82 million in terms of Section 11A of the Central Excise Act, 1944, imposed a penalty of Rs. 0.82 millionwere payable and ordered payment of interest. The Additional Commissioner confirmed the order of theCommissioner vide Order-in-Original No. 48/Demand/ADC/D-BRH/03 dated August 26, 2003. The Commissioner(Appeals), Central Excise and Customs, Vadodara, vide Order-in-Appeal Commr.(A)/31/VDR-II/2004 dated January30, 2004 allowed the appeal and set aside the order of the Additional Commissioner. The Commissioner, CentralExcise & Customs, Vadodara – II has now filed a ‘Memorandum of Appeal’ before the Customs Excise and SalesTax Appellate Tribunal (“CESTAT”), against this Order-in-Appeal. The Company has filed cross-objections againstthis appeal on May 17, 2004. The matter is pending before the CESTAT.

2. The Deputy Commissioner of Central Excise (Rebate), Mumbai – I, has issued deficiency memo-cum-SCN-cum-call for personal hearing F. No. V(15)/Reb/Ch.-74/2004/3072 dated November 10, 2004 on 37 rebate claims forthe months of July and August 2004 on the grounds that the Company has not submitted final assessmentcertificate issued by the Assistant Commissioner, Bharuch as well as duty payment certificate and duplicateARE-1 was not submitted in the tamper proof sealed covers. Personal hearing was held on December 22, 2004.The Company has submitted a letter to the Deputy Commissioner requesting him to settle the rebate claimskeeping in abeyance the cess amount, till appropriate clarifications issued by the Central Board of Excise &Customs, New Delhi. The rebate claim on the cess amount will be allowed thereafter. The Deputy Commissioner,Central Excise, Raigad has issued two Order-in-Original Nos. 419/05-06/D.C.(R)/RAIGAD and 420/05-06/D.C.(R) /RAIGAD both dated June 16, 2005 settling thereby the rebate claims for the period July, 2004 to November, 2004amounting to Rs. 945.9 million without education cess amounting to Rs. 8.13 million, stating that education cesspaid during July 10, 2004 to September 6, 2004 cannot be allowed as rebate. The Company has filed appealsbefore the Commissioner of Excise (Appeals), Mumbai and presentation for issuing clarification is pendingbefore the Central Board of Excise & Customs, New Delhi.

3. The Commissioner, Central Excise & Customs, Vadodara – II, has confirmed the demand of Excise Duty ofRs. 1.09 billion being the duty payable on the clearances of the gold bars for the period from May 2000 toFebruary 2003. The Commissioner ordered the appropriation of the amount of Rs. 634.34 million already paid bythe Company and ordered the Company to pay the differential amount of Rs. 459.35 million and imposed apenalty of Rs. 1.09 billion as well as interest. The Company filed an appeal along with an application for a stayand a request for early hearing with CESTAT, Mumbai on July 21, 2003. Personal hearing on the stay applicationwas held on July 31, 2003 and an unconditional stay was granted. Personal hearing was held on October 19,2004 and October 20, 2004 at CESTAT, Mumbai and written arguments have been submitted on November 24,2004. An order has since been delivered in June 2005, wherein one member of CESTAT has not confirmed thedemand whereas the other member has confirmed the demand of duty but set aside the penalty. In view of thedifference of opinion, the matter will be referred to a third member.

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4. The Additional Commissioner, Central Excise, has issued a SCN No. V Ch.74(4)80/R-IV/D-Brh/Commr/2003 datedJune 27, 2003 demanding an aggregate amount of Rs. 3.08 million at the rate of 16 per cent on gold manufacturedand cleared without payment of duty in respect of which supplementary invoices were issued in March 2003.Subsequently, the Additional Commissioner, Central Excise issued an Order-In Original dated December 22,2003 confirming the SCN and further imposed a penalty of Rs. 3.08 million. The Company filed an appeal datedMarch 11, 2004 before the Commissioner (Appeals). Personal hearing was held on March 22, 2004. TheCommissioner (Appeals) granted an unconditional stay till the decision of the matter before the CESTAT, Mumbaiin the case (3) above. Personal hearing was held on June 17, 2004 where the Company requested theCommissioner (Appeals) to issue the necessary directions to be operative till the matter was pending before theCESTAT, Mumbai. The matter was decided against the Company on February 25, 2005. The Company filed anappeal along with an application for stay before the CESTAT, Mumbai on April 29, 2005. The department hasissued a letter regarding the recovery of dues against confirmed demand on June 17, 2005. The CESTAT, Mumbaihas granted a stay on the recovery of dues on June 21, 2005. The case is pending hearing.

5. The Assistant Commissioner, Central Excise, Mirzapur, served a demand notice No. V (3) 16-demand /94/257dated February 16, 1994 on the Company calling upon it to pay a sum aggregating Rs. 145.9 million in respect ofexcise duty on the electricity purchased by the Company from Renusagar on the ground that the excise onmanufacture of electricity by Renusagar has been included in the prices of aluminium from time to time fixed bythe Central Government in the relevant period. The demand notice stated that out of the total sum of Rs. 145.9million of the demand dated September 30, 1984, the Company has made provision for Rs. 54.70 million in itsaccounts and the balance amount has been sequestered in the Aluminium Regulation Account constituted underthe Aluminium (Control) Order, 1970 which ought to have been deposited to the credit of the Central Governmentas envisaged under the provisions of Section 11D of the Central Excise Act, 1944. The Company has filed WritPetition No. 1175/1994 in the Delhi High Court on March 8, 1994. The Court, allowed the petition on July 9, 1993and vide order dated August 5, 1994 found that the Respondent in the writ petition did not file a reply despitebeing given two opportunities to do so and therefore stayed the demand notice dated February 16, 1994 till finalorders were passed in the writ petition.

6. The Commissioner, Central Excise & Customs, Vadodara – II has issued a SCN No. V.Ch.74(4)43/R-IV/D-BRH/Commr./2004 dated April 13, 2004 to the Company in respect of the amount of Rs. 16.34 million that is sought tobe recovered from the Company under Rule 12 of the Cenvat Credit Rules, 2002 read with Section 11A of theCentral Excise Act, 1944. The Commissioner has also sought to impose penalty under Rule 13 of the Rules andcharge interest at the rate as fixed by the Board under Section 11AB of the Central Excise Act, 1944. The Companyhad allegedly not reversed the credit amounting to Rs. 16.34 million which they had originally availed, and whichwas in excess of the correctly admissible credit of duty. Hearing was held on February 21, 2005. The CommissionerCentral Excise and Customs dropped the proceedings against the Company vide order dated February 22, 2005.This SCN was confirmed by Additional Commissioner, vide order-in-original No.48/Demand/ADC/D-BRH/03 datedAugust 26, 2003 which was reversed by the Commissioner (Appeal), vide Order-in-Appeal No. Commr (A)/31/VDR-II/04 dated January 30, 2004. The Commissioner of Central Excise & Customs, Vadodara-II has now filed aMemorandum of Appeal in CESTAT, Mumbai against this Order-in-Appeal. Cross objections against the appealhave been filed by the Company on May 17, 2004 in CESTAT, Mumbai. The matter is currently pending inCESTAT, Mumbai.

7. The Commissioner, Central Excise has issued a SCN dated March 7, 2003 to the Company in respect of anamount aggregating Rs. 4.23 million on account of the reversal of the Cenvat credit availed of on a conveyer beltinstalled at the jetty. The Company has submitted its response on June 2, 2003. The matter is pending before theCommissioner, Central Excise, Vadodara.

8. The Commissioner, Central Excise, Vadodara has issued a SCN dated July 13, 2001 demanding an aggregateamount of Rs. 5.16 million along with a penalty of equal amount and interest in relation to Modvat credit onreduced CVD on import of copper cathodes at Mumbai. The Company filed its reply on September 25, 2001.Personal hearings have been held on October 24, 2001 and September 25, 2003. The matter is pending beforethe Commissioner, Central Excise, Vadodara.

9. The Commissioner, Central Excise, has issued a SCN dated October 5, 1996 to the Company demanding anamount aggregating Rs. 1.38 million in respect of the alleged irregular Modvat credit taken on furnace oil by the

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Company. The Company filed an appeal before the CESTAT, New Delhi, which passed an order No. 848/04-NB-A dated August 3, 2004 remanding the matter back to the adjudicating authority.

10. The Assistant Commissioner, Central Excise, issued an order dated March 27, 2002 confirming the demand foran aggregate sum of Rs. 2.21 million and imposed a penalty of Rs. 2.2 million in respect of Modvat credit oncapital goods taken by the Company. The Company filed an appeal before the Commissioner (Appeals), whopassed an order dated October 31, 2003 disallowing Modvat credit of Rs. 0.2 million and imposed penalty ofRs. 2 million. The Company filed an appeal before the CESTAT, New Delhi, which passed an order No. 286/04-NB(A) and SO 252/04-NB(A) dated March 29, 2004 remanding back the matter to the Assistant Commissioner forfresh adjudication.

11. The Joint Commissioner, Central Excise, issued a SCN to the Company for an aggregate amount of Rs. 1.88million in respect of the alleged Modvat credit taken on short received quantity of inputs and raw materials bythe Company. The Company filed an appeal before the Commissioner who passed an order dated March 29,2004 and the order was upheld by the Joint Commissioner (Appeals) on August 17, 2004. The Company filed anappeal before the CESTAT, New Delhi, which passed an order dated December 16, 2004 granting a stay on theorder of the Commissioner (Appeals). The CESTAT has passed an order No. 235/05 dated August 10, 2005granting an extension of the stay order dated December 16, 2004.

12. The Joint Commissioner, Central Excise, issued a SCN to the Company for an aggregate amount of Rs. 1.29million in respect of the alleged short payment of duty on re-packing and financial charges charged by theconsignment agent. The Company filed an appeal before the Commissioner (Appeals) who passed and orderdated September 6, 2004 upholding the order of the Joint Commissioner. The Company filed an appeal beforethe CESTAT, New Delhi, which passed an order dated January 27, 2005 admitted this appeal and granted stay ofthe order of the said Joint Commissioner. The Company made a further application for renewal of the stay order,which was granted by the CESTAT vide Misc. Order No. 226/05 dated August 8, 2005.

13. The Commissioner, Central Excise, Allahabad, issued a demand-cum-SCN No. 13/Commr.Alld./2004 for theassessment period 2001-2002 dated February 16, 2004 to the Company demanding an aggregate sum ofRs. 16.71 million in respect of the alleged non-inclusion of interest element while arriving at the cost of productionof rolled product for captive consumption as per valuation rules. The reply to the SCN has been submitted anda hearing held on July 13, 2004. The matter is pending with the Commissioner, Central Excise, Allahabad.

14. The Commissioner, Central Excise, Allahabad, issued a SCN No. 17\Commr\all\2004 dated March 18, 2004 to theCompany demanding an aggregate sum of Rs. 8.16 million for the assessment period 2002-2003 in respect ofthe notional interest alleged to have been earned on the credit balance of the buyers shown in the annual report.The matter is pending with the Commissioner, Central Excise, Allahabad.

15. The Commissioner, Central Excise, Allahabad, issued a SCN bearing No. 21\Commr\all\2004 dated April 6, 2004to the Company demanding an aggregate sum of Rs. 10.59 million for the assessment period 2000-2001 inrespect of the alleged non-inclusion of interest element while arriving at the cost of production of rolled productfor captive consumption as per valuation rules. The matter is pending with the Commissioner, Central Excise,Allahabad.

16. The Commissioner, Central Excise, Allahabad, issued a SCN bearing No. 18\Commr\all\2004 dated March 18,2004 to the Company demanding an aggregate sum of Rs. 8.08 million for the assessment period 1998-1999 inrespect of the alleged non-inclusion of interest element while arriving at the cost of production of rolled productfor captive consumption as per valuation rules. The matter is pending with the Commissioner, Central Excise,Allahabad.

17. The Commissioner (Appeals), Central Excise, Bangalore, issued an Order-in-Appeal No. 579/2002 CE datedSeptember 30, 2002 to the Company demanding an aggregate amount of Rs. 3.1 million as excise duty andpenatly in respect of the valuation of aluminium rolling ingots cleared by the Company between February, 1998and December, 1998. The Company filed an appeal No. E/29/2003 before the CESTAT, Bangalore, which passedan order dated December 30, 2003 granting a stay to the Order-in-Appeal No. 579/2002. The stay was extendedfor a period of six months vide an order dated February 2, 2002. The matter is pending.

18. The Joint Commissioner, Central Excise & Customs, Bhuvaneshwar II issued a SCN dated August 19, 2002demanding an aggregate amount of Rs. 1.24 million as excise duty on the sale of different types of M.S. Scrap,

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A1 Scrap and other miscellaneous scrap between July 2001 and March 2002. Personal hearing was held onOctober 12, 2004 and the Company submitted a grouping statement on December 6, 2004. The matter is pendingbefore the Joint Commissioner.

19. The Commissioner, Central Excise, Bhuvaneshwar-II issued a Demand-cum-SCN No. V(76)15/SCNMC/SBP-II/35/2003/9433A dated June 17, 2005 to the Company demanding an aggregate amount of Rs. 110.96 million, penaltyunder Section 11AC of the Central Excise Act, 1944 and interest under Section 11AB of the Central Excise Act,1994 in respect of the alleged under-valuation of ingots and cast coils transferred to other units between July 1,2000 to March 31, 2002, invoking the extended period of limitation. Pursuant to an application made by theCompany to extend time for submission of the reply to the SCN, the Superintendent (Adjudication) has grantedan extension of time allowing the Company to submit a reply on or before September 5, 2005 before theCommissioner, Central Excise, Bhuvaneshwar-II. The matter is pending.

20. The Commissioner, Central Excise, Belapur passed an Order-in-Original dated February 23, 2005 against theCompany demanding an aggregate amount of Rs. 7.6 million (duty of Rs 3.8 million with penalty of Rs. 3.8million) in respect of the alleged non-inclusion of loading charges and freight upto the premises of the buyer forthe ex-factory sale of scrap on “as is where is basis”. The Company filed an appeal before the CESTAT, Mumbai,which has granted an unconditional stay on the recovery of the amount by an order dated June 23, 2005. A copyof this order is awaited. In addition to the abovementioned demand, on the same issue, there are two unconfirmeddemands by the Joint Commissioner of Central Excise against the Company that are pending adjudication: SCNNo.F.No.V/Adj/(SCN) 15-294/JC/03/Bel/749 and SCN No.F.No V/Adj/(SCN)15-146/JC/04/BEL/491 dated March 4,2005 aggregating Rs. 1.28 million. These demands are pending adjudication.

21. The Director General of Anti-Evasion issued SCN dated April 11, 1997 to the Company demanding an aggregateamount of Rs. 20.2 million in respect of the alleged clandestine manufacture and removal of excisable goods.The Company filed a reply dated September 28, 1998 before the Commissioner of Central Excise (Adjudication),Mumbai, who passed an order dated March 23, 2005, dropping a major portion of the demand and charges ofclandestine removal but confirmed the demand in respect of some differences between the physical stock ofscrap and stock as reflected in the excise records. The Commissioner passed an order for payment of duty,penalty and redemption fine aggregating Rs. 8.75 million. The Company has filed an appeal dated June 23, 2005along with an application for stay before the CESTAT. Stay order dated September 13, 2005 has been receivedand the final hearing is awaited.

22. SCNs dated September 4, 1998 and January 14, 1999 were issued to the Company demanding an aggregateamount of Rs. 3.1 million in respect of the assessable value of rolling ingots which the department contendedcould not be calculated by comparison with aluminium slabs. The Company filed an objection to this demandbefore the Assistant Commissioner, who passed an order-in-original dated August 19, 2000 upholding the demand.The Company filed an appeal against this order before the Commissioner (Appeals), who passed an order datedOctober 11, 2002 rejecting the appeal. The Company has filed an appeal dated January 10, 2003 before theCESTAT, Bangalore against the order of the Commissioner (Appeals) which is pending disposal. A pre-hearingdeposit of Rs. 0.5 million has been made.

23. The Joint Commissioner, Central Excise passed an order dated March 29, 2004 against the Company and imposeda penalty of Rs. 1.9 million in respect of the alleged short receipt of inputs and raw materials during the periodfrom April 1996 to March 2000. The Company filed an appeal before the Commissioner (Appeals), Central Excise,Allahabad who passed an order dated August 17, 2004 upheld the order of the Joint Commissioner. The Companyfiled an appeal dated November 17, 2004 before the CESTAT which granted a stay on December 12, 2004.

24. A SCN has been issued to the Company dated February 28, 2005 to the Company demanding an aggregate sumof Rs. 12.8 million in respect of the notional interest alleged to have been earned for the period 2003-04 on thecredit balances of the buyers. The reply to this notice is yet to be filed.

25. The Central Excise department issued SCNs Nos. 1211/91 dated August 6, 1991, 2303/91 dated November 20,2001, 868/92 dated April 20, 1992, 1277/92 dated July 10, 1992, 1768/92 dated October 22, 1992, 103/93 datedJanuary 12, 1993,1/93-94 dated June 16, 1993 and 7/93-94 dated November 15, 1993 against the Companydemanding a sum of Rs. 2.158 million after disallowing Modvat credit claimed by the Company on inputs usedin the manufacture of aluminium by electrolysis during the assessment years 1991-92, 1992-93 and 1993-94. The

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Assistant Commissioner confirmed the demand by order Nos: 36/92 dated April 27, 1992, 100/92 dated. September17, 1992, 45/93 dated April 13, 1993 & 14/94 dated April 18, 1994. The Appeals preferred before the Commissioner(Appeals) and the Tribunal have also been rejected vide orders Nos. 154/92 dated July 20, 1992, 198/92 datedOctober 30, 1992,242,243 dated December 29, 1992, 114/93 dated August 16, 1993 & 110/94 dated July 15,1994, 825/94 dated November 10, 1994 and 594/96 dated April 15, 1996. Since the dispute involves a questionof law and involves interpretation of Rule 57 A, a Reference Application was filed and the matter was heard bythe Tribunal. The case has been referred to the Kerala High Court. The Company has submitted their paper bookbefore the High Court and the matter is pending.

26. The Central Excise Department, Bangalore issued two SCNs demanding a payment of duty of Rs. 1.197 millionon Aluminum scrap to LME and Indal, Bangalore. The department alleged that the Company was the manufacturerof the extrusions and therefore was bound to pay the differential duty over and above what was paid by LME.The Commissioner, Bangalore, confirmed the demand. Further a penalty was also imposed. The Company tookthe defence that it was the supplier of raw material and LME, by virtue of use of labour and machinery etc., wasthe manufacturer. The Company filed a stay application and an appeal before CEGAT, Madras on July, 1994. Theprayer for a stay was refused and the Company was asked to pre-deposit Rs. 1.19 million which was paid by theAlupuram division. The said order of the CEGAT has been challenged by filing a Reference Application inaccordance with Section 35G of the Central Excise Act, 1994, which has been admitted on the grounds thatquestions of law arise out of the said order. The matter has been referred to the Karnataka High Court by theCEGAT, Madras. The matter is pending.

27. The Central Excise Department and the Commissioner vide SCN No. 6/INDAL/155/EKM I/2005 dated June 17,2002, O-I-O No. 97/2002 dated July 24, 2002 and O-I-A No. 595/2002 dated December 12, 2002 denied Cenvatcredit in respect of returned goods on the grounds that after remelting, the same type of goods were not givento the same customer, as per the Rule 16(2) of the Cenvat Credit Rules 2001 and demanded a sum of Rs. 1.39million as duty. Based on the insertion of the term “removal” with effect from March 1, 2002 in Rule 16 (2), theCompany states they need not give fresh goods to the same customer during the period from July 1, 2001 toFebruary 28, 2002. The Company filed an appeal in the CESTAT in this regard, which was rejected vide an orderNo 482/ 2005 dated March 27, 2005. The Company has decided to file an appeal in the High Court under S. 35Gof the Central Excise Act against the said order as it involves a substantial question of law. Payment of thedemanded amount had been made as pre-deposit before the hearing at CESTAT. Consequent to the merger ofthe Company units in March 2005, the Department issued a demand dated March 16, 2005 to pay the balanceamount, with interest before issuing a fresh registration in favour of the Company. The balance amount alongwith Rs. 0.77 million as interest has been paid under protest.

28. Disputes with respect to classification of closure sheets amounting to Rs. 39.85 million are pending before theCommissioner, Central Excise, Kolkata-II. The cases have not proceeded after show cause proceedings in July1996. The Company has attended a personal hearing for cases amounting to Rs.15.86 million beforeCommissioner, Central Excise, Kolkata-II on March 15, 2005 and an order with respect to the same is awaited.

29. The Assistant Commissioner, Central Excise (Adj), has issued SCNs to the Company demanding a sum ofRs. 11.4 million in respect of input credit against dross clearance. The matter is pending before the Commissionerof Central Excise (Adj).

30. The Assistant Commissioner/Commissioner, Central Excise (Adj), has issued SCNs to the Company demandinga sum of Rs. 27.1 million in respect of dross removed without payment of excise duty and education cess. Out ofRs. 27.1 million, CESTAT had issued an order of Rs. 10.2 million in favour of the Company. Excise Authoritieshave challenged this order in the Calcutta High Court. No hearings have taken place before the High Court. Withregard to the balance Rs. 16.9 million, the matter is pending before the Commissioner of Central Excise (Adj).

31. The Department of Central Excise has issued two SCNs dated December 1, 1995 and February 29, 1996 demandinga sum of Rs. 1.19 million in respect of disallowance of Modvat credit on material returned/ defective invoicesraised by stock point. The matter is pending before the Assistant Commissioner, Central Excise.

32. The Assistant Commissioner, Central Excise issued SCNs demanding an aggregate amount of Rs. 1.41 millionon the ground that the Company executed job work on behalf of IFL on 1:1 basis and should therefore reversethe Modvat credit taken on excess materials dispatched. The matter is pending with the Assistant Commissioner,Central Excise.

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33. The Assistant Commissioner, Central Excise issued a SCN No. V-76(15) 164-CE/CAL-II/ADJN/99/1930 dated July4, 2001 to the Company demanding an aggregate amount of Rs. 1.29 million in respect of Modvat taken on oil,grease, rubber hose etc. for the period July 23, 1996 to February 28, 1998 as capital goods on the ground thatModvat is inadmissible as these are revenue expenditure. The matter is pending before the Joint Commissioner,Central Excise.

34. The Commissioner, Central Excise, issued a SCN No.V-Ch76(15)154-CE/Kol-II/Adjn/2002/1828 D dated April 4,2003 demanding an aggregate amount of Rs. 2.2 million on the ground that freight and insurance charged by theCompany should be part of assessment value for calculation of excise duty. The matter is pending before theCommissioner, Central Excise.

35. The Commissioner, Central Excise, issued a SCN No. V-CH-76(15)198-CE/KOL-II/ADJN/2002/3142-45-A datedNovember 10, 2003 to the Company demanding an aggregate amount of Rs. 1.03 billion on the ground that theCompany had already availed of Cenvat credit on the inputs received on stock transfer basis from its other unitduring the period April 1, 2000 to September 30, 2002. The matter is pending before the Commissioner, CentralExcise. Similarly the Commissioner, Central Excise has issued a SCN No.V-Ch.76(15)198-CE/KOL-II /Adjn/2002/4971 dated July 16, 2004 to the Company demanding an aggregate amount of Rs. 249.22 million on the groundthat the Company availed of Cenvat credit on the inputs received on stock transfer basis from its other units forthe period January 1, 2002 to March 31, 2003. The matter is pending before the Commissioner, Central Excise.

36. The Commissioner, Central Excise issued a SCN No. V-CH.76(15)146/CE/KOL-II/ADJN/2003/3229-32-A datedNovember 24, 2003 to the Company demanding an aggregate amount of Rs. 3.51 million on the ground that theCompany had collected freight charges from its customers for the period April 2001 to February 2003 through itsinvoice but not on an actual basis. The matter is pending before the Commissioner, Central Excise.

37. The Commissioner, Central Excise issued a SCN No.C-Ch.76(15)19/CE/KOL-II /Adjn/2004/975-78-A dated July21, 2004 to the Company demanding an aggregate amount of Rs. 1.08 million on the ground that the Companyhad collected freight charges from their customers for the period July 2003 to May 2004 through their invoicebut not on actual basis. The matter is pending before the Commissioner, Central Excise.

38. The Excise Department issued a SCN No.7/93-94 dated July 20, 1993 to the Company demanding an aggregateamount of Rs. 1.11 million on the ground that the Modvat credit was taken on Al. Sheet exceeding 0.20 mm atthe rate of 35% in March 1993 while the Finance Bill 1993 prescribed uniform rate of duty at the rate of 25%. TheCompany attended a personal hearing before Joint Commissioner of Central Excise on February 7, 2005. Theorder of the Joint Commissioner is awaited.

39. The Assistant Commissioner, Central Excise issued a SCN No.4337-A dated June 6, 2005 to the Companydemanding an aggregate amount of Rs. 1.05 million on the ground that the Company had collected freightcharges from its customers for the period June 2004 to November 2004 through their invoice but not on actualbasis. The matter is pending before the Assistant Commissioner.

40. The Joint Commissioner, Central Excise issued a SCN No.755-F dated September 9, 2005 to the Companydemanding an aggregate amount of Rs. 1.3 million on the ground that the Company had collected freight chargesfrom its customers for the period December 2004 to May 2005 through their invoice but not on actual basis. TheCompany is yet to file a reply to the SCN.

41. The Commissioner, Central Excise issued a SCN No. 294 dated August 5, 2005 to the Company demanding anaggregate amount of Rs. 20.7 million on the ground that the Company considered lower cost of input materialsfor valuation of products despatched to other units of the Company during the period July 2002 to December2004. The Company is in the process of replying to this SCN.

42. The Assistant Commissioner, SPB-II Divn issued a letter no. C/NO.IV(4) MODVAT/ SBP/94/15958 dated December13, 1995 to the Company demanding an aggregate amount of Rs. 14.2 million on the grounds of disallowance ofModvat credit on Al. rod, htgs steel wire and steel/wooden drum used for production and packing of ACSRmoose conductor for the years 1995-96 and 1996-97. The Assistant Commissioner alleged that the Companywas not carrying out any manufacturing activity inside the factory and hence they are not entitled to the benefitof Rule 57F (3) of the Central Excise Rules, 1944. The Company filed a writ petition before the Orissa High CourtDecember 22, 1995. The said Court allowed the Company to avail MODVAT credit on the aforesaid Inputs and

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benefit of Rule 57F (3) and also allowed to clear the goods on furnishing 50 per cent of duty by cash by passingInterim Order O.J.C. No.9506/1995 dated December 28, 1995. The balance accumulated Modvat credit of Rs.7.41 million remained unutilised from December, 1998 onwards in RG23A Part-II maintained for ACSR MooseConductor. The case came up for hearing on March 16, 2005 before the Orissa High Court and the matter waspart heard. The next date is yet to be fixed.

43. The Additional Commissioner of Central Excise and Customs, BBSR-II, Commissionerate issued a SCN No. V(76)15/SCNMC/ SBP-II/ 31/2001/ 7724A dated June 4, 2001 to the Company demanding excise duty amounting to anaggregate of Rs. 1.13 million as duty payable on removal/ sale of different types of M.S. Scrap and aluminiumscrap during the period between May, 1996 and May, 1999. The Additional Commissioner of Central Excise andCustoms, BBSR-II passed order no. CCE/ BBSR-II/ NO.11-ADDL. COMMR/ 2001 dated September 28, 2001 rulingin favour of the Department. The Commissioner (Appeals), Central Excise, Kolkata upheld the said order videorder dated December 18, 2002. The CESTAT, Kolkata remanded the matter to the Adjudicating Authority videorder No. S-714/A-855/KOL/2003 dated November 14, 2003. A personal hearing was held on July 12, 2004before the Joint Commissioner of Central Excise and Customs, BBSR-II who vide OIO No CCE/BBSR-II/NO.61-JOINT COMMR./2004 dated August 30, 2004. An appeal against the said order along with stay petition was filedbefore the Commissioner (Appeals) on November 19, 2004. The Commissioner (Appeals) vide OIA No. 01/STAY/ BBSR-I/ 04 dated December 15, 2004 directed the Company to pre-deposit the duty amount and waivedthe pre-deposit of penalty. The final hearing of the matter was held on March 15, 2005 and vide final OIA No.27/B-II/2005 dated March 28, 2005, the Commissioner (Appeals) set aside the impugned order and allowed theappeal. The Department filed an Appeal against the said order along with stay petition before the CESTAT,Kolkata on July 11, 2005 (SP-508/05 & EDM-354/05). The matter is pending before the said CESTAT, Kolkata.

44. The Additional Commissioner of Central Excise and Customs, Bhuvaneshwar-II issued SCN No. V(76) 15/ SCNMC/SBP-II/ 75/ 2001/ 15577A dated September 16, 2002 and SCN no. V(76) 15/ SCNMC/ SBP-II/ 74/ 2002/ 12303Adated August 19, 2002 demanding duty aggregating to an amount of Rs. 2.01 million in addition to interest andpenalty in relation to removal/ sale of different types of M.S. scrap, Al Scrap and other miscellaneous scrapduring the periods June, 1998 to June, 2001 and July 2001 to March 2002 respectively. The Company submitteda reply against both the SCNS on November 30, 2002 before the said Additional Commissioner. The JointCommissioner, Central Excise and Customs Bhuvaneshwar-II passed an order-in-original No. CCE/ BBSR-II/ NO.81-82-JOINT COMMR./2004 dated December 31, 2004. The Company filed an Appeal and stay petition beforethe Commissioner of Central Excise (Appeals), Bhuvaneshwar on March 3, 2005 who heard the matter on May31, 2005. The matter is pending before the Commissioner of Central Excise (Appeals), Bhuvaneshwar.

45. The Additional Commissioner of Central Excise and Customs, Bhuvaneshwar-II issued a SCN C.No. V (26) 15/SCNMC/ SBP-II/ 67/ 2001/ 16749A dated November 12, 2001 demanding payment of duty and penalty of anamount aggregating to Rs. 2.5 million in addition to interest in relation to sale of aluminium dross and skimmingsfrom October, 2000 to June, 2001 on the ground that the same is classifiable under chapter and sub-heading No.2620.00. The Company submitted a reply on January 12, 2002. The Additional Commissioner heard the Companyand passed order No. CCE/ BBSR-II/NO. 13-ADDL. COMMR/ 2002 dated March 28, 2002. The Company filed anappeal and stay petition before the Commissioner of Central Excise (Appeals), Kolkata on June 3, 2002, whoissued OIA No. 01/ BBSR-II/ 2003 dated January 6, 2003 in favour of the Department. An Appeal and stay petitionhas been filed before CESTAT, Kolkata on April 25, 2003. The file is transferred to CESTAT, New Delhi on April 21,2004. The matter was heard on June 25, 2004 and Final Order No. 645/04-NB (A) dated June 25, 2004 waspassed by the CESTAT, New Delhi in favour of the Company. The Department has filed petition of appeal (CivilAppeal No. 240 of 2005) before the Hon’ble Supreme Court and listed for hearing before the said Court onJanuary 3, 2005. The counter affidavit has been filed by the Company before the said Court and thereafter thematter is pending.

46. The Additional Commissioner of Central Excise and Customs, Bhuvaneshwar -II issued SCN C.NO+B19. V(26)15/ SCNMC/ SBP-II/ 12/ 2002/ 11265A dated July 31, 2002 to the Company demanding duty of an amountaggregating Rs. 1.91 million in relation to sale of aluminium dross and skimmings during the period from July2001 to May 2002. The Company submitted a reply to the SCN on November 19, 2002 before the AdditionalCommissioner, Central Excise and Customs and the matter was heard on December 19, 2002. The hearing wasthen rescheduled for November 27, 2003 before the Joint Commissioner of Customs and Central Excise,Bhuvaneshwar -II, before whom the matter is now pending.

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47. The Joint Commissioner, Central Excise and Customs, Bhuvaneshwar-II issued a SCN C. No. V(76) 15/ SCNMC/SBP-II/53/2004/ 20738A December 3, 2004 to the Company demanding an amount aggregating to Rs. 1.77 millionin relation to Cenvat credit on capital goods, which was taken in November 2003, December 2003, January 2004,March 2004 and April 2004. The Company has submitted a reply on June 27, 2005 before the Joint Commissioner,Central Excise and Customs, Bhuvaneshwar -II. The matter is pending.

48. The Joint Commissioner, Central Excise and Customs, Bhuvaneshwar -II issued a SCN C. No. V(76) 15/SCNMC/SBP-II/ 57/ 2004/ 22095A dated December 30, 2004 to the Company demanding an amount aggregating to Rs.1.11 million in relation to Cenvat credit on capital goods taken during December 2003, January 2004, and March2004 to June 2004. The Company has submitted a reply on June 29, 2005 before the Joint Commissioner,Central Excise and Customs, Bhuvaneshwar -II. The matter is pending.

49. The Commissioner of Central Excise and Customs, Bhubaneswar –II issued a SCN C.No. V (76) 15/SCNMC/SBP-II/35/2003/9433A dated June 17, 2005, demanding Rs.110.96 million for alleged undervaluation of rolling ingotsand sheets cleared to another unit of the same company during the period July 1, 2000 to March 31, 2002,invoking the provisions of extended period of limitation alleging wilful suppression of fact with the intent ofevading duty.

50. The Commissioner of Central Excise, Kolkata –II Commissionerate issued a SCN C.No. V-Ch.76(15) 39-CE/Kol-II/Adjn./2005/294 dated August 5, 2005 demanding Rs.20.74 million for alleged undervaluation of stock transfer toother factories of the same company during the period July 1, 2000 to December 31, 2004, invoking the provisionsof extended period of limitation alleging wilful suppression of fact with the intent of evading duty.

51. The Directorate of Central Excise Intelligence, Mumbai issued a SCN-cum-demand notice dated June 1, 2001 tothe Company demanding duty amounting to an aggregate of Rs. 472.2 million on the ground of wrongly availingthe benefit of the exemption contained in Notification no. 6/2000-CE dated March 1, 2000, thereby manufacturingand clearing precious metal, gold without payment of duty.

Excise Cases under Rs. 1 million

Apart from the cases described hereinabove there are approximately 70 other excise related cases filed against theCompany. The approximate amounts in these cases aggregate to Rs. 18.64 million.

(d) Customs

1. The Collector of Customs, Calcutta issued a SCN No. S2-9/92-SIB dated April 23, 1992 to the Company invokinga bank guarantee for recovery of refund aggregating Rs. 62.1 million on the ground that coal tar pitch is beingmanufactured by the process “straight run method” attracting duty at 15 per cent, whereas the Company contendedthat the coal tar pitch was manufactured by the “cut-back method” and attracted duty at Rs. 100 per ton. TheCompany filed Writ Petition No. 3498 of 1993 in the Calcutta High Court. The Court, vide order dated September7, 1994 allowed the appeal, thereby quashing the SCN. The Collector of Customs, Calcutta filed Appeal No. 620of 1994 before the Division Bench of the Calcutta High Court. The matter is yet to be listed.

2. The Deputy Commissioner, Customs, Kandla vide Order-in-Original No. KDL/DC-GP-I/9/2000 dated December22, 2000 confirmed the differential duty demand for 6 Bills of Entry amounting to Rs. 40.45 million consideringthe CIF value as FOB value and adding the cost of freight and insurance for assessment. The Company filed anappeal with the Commissioner (Appeals) who, vide order dated April 28, 2003, set aside the Order-in-Originaldated December 22, 2000 remanded the case back to the Deputy Commissioner for reconsideration of theissues following the principles of natural justice. The Company has received a fresh Demand cum SCN F No. S/5-20/1867 Gr-I dated August 16, 2004 from the Deputy Commissioner, Customs, Kandla. The Company hassubmitted its reply to the SCN and personal hearing has been held on November 24, 2004. The matter has beendecided in favour of the Company. The Department is yet to file an appeal against the order of the DeputyCommissioner, Customs.

3. The Assistant Commissioner, Customs, Calcutta has issued a SCN dated June 1, 2000 to the Company seekingto include the CIF value of Rs. 40.90 million in the price of equipment imported from KHD Humboldt Wedag AG,Germany for the production of green anode used in the process of electrolysis for production of aluminiummetal, to confiscate technical manuals valued at Rs. 40 million imported from VAW Aluminium TechnologiesGmbH, Germany (“VAW”) and to impose a penalty under Section 112 of the Customs Act, 1962. VAW sent the

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manuals to the Company vide airway bill dated June 15, 2000. The Company filed a Bill of Exchange for clearanceof the manuals on June 21, 1999. The Company filed a writ petition before the Delhi High Court seeking releaseof material on April 6, 2000 the Court ordered the release of the manuals on the Company furnishing a bankguarantee for Rs. 5 million and a Provisional Duty Assessment bond (“P.D. Bond”) for Rs. 7 million. The Companyfurnished the bank guarantee and P.D. bond as ordered by the Court and the manuals have been released. Thebank guarantee has been extended upto March 31, 2006. The Company replied to the SCN on January 31, 2001.The date of personal hearing is yet to be fixed.

4. The Assistant Commissioner, Customs, Mumbai, has issued an order dated June 14, 1996 finalising the assessmentin respect of 400 metric tonnes of Synthetic Cryolite and requiring the Company to pay a duty of Rs. 18 million byenforcing the P.D. bond given by the Company at the time of the provisional assessment. A duty of Rs. 4.55million as provisionally assessed was paid to get the goods cleared in May 1994. The Company filed an appealagainst the order of the Assistant Commissioner before the Commissioner of Customs (Appeals) who allowedthe appeal on January 5, 1998 and remanded the matter to the Assistant Commissioner. The AssistantCommissioner heard the matter on April 16, 1998 and reserved orders. The order has not so far been released.

5. The Assistant Commissioner, Customs, Calcutta, issued an order dated July 26, 1988 rejecting the Company’scontention that the conform extrusion press imported by the Company was a “Hydraulic Extrusion Press” anddenied the benefit of the provisional duty paid aggregating Rs. 8 million. The Company filed an appeal againstthis order before the Commissioner of Customs (Appeals) who passed an order dated December 20, 1989setting aside the order-in-original and remanding the matter for de-novo examination. The Assistant Commissioner,after de-novo examination by an order dated February 1, 1999 once again rejected the Company’s contention.The Company filed an appeal against this order before the Commissioner of Customs (Appeals) who allowed theappeal on March 10, 2000 and remanded the matter back to the Assistant Commissioner for passing a speakingorder after providing personal hearing. The matter was heard on January 11, 2001 and written submission filedon February 3, 2001. The orders of the Assistant Commissioner are awaited.

6. The Assistant Commissioner, Customs, Calcutta, issued an order dated December 16, 1988 rejecting theCompany’s contention that the Cut-to-Length Extrusion Machine imported by the Company was a “HydraulicExtrusion Press” and denied the benefit of the provisional duty paid aggregating Rs. 5.70 million. The Companyfiled an appeal against this order before the Collector of Customs (Appeals) who rejected the appeal on June 9,1989. The Company filed an appeal against the order of the Collector of Customs (Appeals) with the CEGAT. TheCEGAT allowed the appeal on October 23, 1997 and remanded the matter back to the Collectorate of Customs,Calcutta. This matter is linked with the matter at case no. 5 above and will be decided along with the same.

Custom Cases under Rs.1 million

Apart from the cases described hereinabove there are 3 cases filed against the Company. The approximate amountsin these cases aggregate to Rs. 1.33 million.

(e) Sales Tax

1. The Commercial Taxes Department has issued SCNs No. NBZ/07/02/01-02, NBZ/07/02/02-03 and NBZ/07/02/03-04 dated August 11, 2004 to the Company for an amount aggregating Rs. 14.22 million in respect of the denial ofset-off of taxes paid on inter-state purchases of various inputs used in the manufacturing of aluminium foilswhich are subject to the interstate sales tax and set off as provided GO 667 dated October 11, 2001 for theassessment years 2001-02, 02-03 and 03-04 respectively. The department also issued subsequent notices datedNovember 2, 2004 and November 10, 2004 The Company has filed Writ Petition no. 21775/2004 before the HighCourt of Andhra Pradesh against the notices. The petition has been admitted by the Court. Vide an order datedFebruary 17, 2005, the High Court admitted the petition and directed the Department not to take any action withrespect to the assessment years 2001-02 and 02-03 pending disposal of the petition, with a specific direction tothe Company to file its objections to the SCN in relation to the assessment year 2003-04. The writ petition ispending disposal. With respect to the assessment year 2004-05, the Company has written to the departmentdisputed that the matter is sub-judice and will be addressed after the decision in the writ petition.

2. The Flying Squad Unit, Ahmedabad has issued a demand notice in provisional assessment dated September 11,2001 for an aggregate amount of Rs. 218.9 million for non-payment of sales tax on leased assets. The Companyhas filed a writ petition before the Gujarat High Court at Ahmedabad against this provisional assessment. The

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Court admitted the writ petition and granted a stay against recovery proceeding in 2001. The next hearing isawaited.

3. The Flying Squad Unit, Ahmedabad has issued a demand notice in provisional assessment dated June 11, 2001for an aggregate amount of Rs. 212.3 million for non-payment of sales tax on leased assets. The Company hasfiled a writ petition before the Gujarat High Court at Ahmedabad against this provisional assessment. The Courtadmitted the writ petition and granted a stay against recovery proceeding on November 18, 2001. The next dateof hearing is yet to be fixed by the High Court. Meanwhile, regular sales tax assessment for the relevant year1997-98 has been passed. In the interim, the Deputy Commissioner, Sales Tax, Bharuch has passed an order forfinal assessment and regularized the revised demand of Rs. 260.5 million.

4. An order of assessment under Section 15B of the Gujarat Sales Tax Act was made for assessment years 1998-1999 demanding sales tax of an amount of Rs. 10.8 million together with interest, etc. The Company filed anappeal dated May 5, 2003 before the Assistant Commissioner Sales Tax (Appeal), Vadodara against the demand,but the appeal was rejected. The Company has appealed to the Tribunal which has granted a stay on September17, 2003 till the hearing of the appeal. The hearing was fixed for April 11, 2005 but was adjourned.

5. An order of assessment under Section 15B of the Gujarat Sales Tax Act was made for assessment years 1999-2000 demanding sales tax of an amount of Rs. 5.5 million together with interest and penalty. The Company hasfiled an appeal dated November 5, 2003 with the Assistant Commissioner (Appeals), against the demand. TheAssistant Commissioner (Appeals) rejected the appeal on November 24, 2003. The Company filed a secondappeal dated December 11, 2003 before the Sales Tax Tribunal, Ahmedabad on December 16, 2003, which hasgranted a stay till the hearing of the appeal. The hearing was fixed for April 11, 2005 but was adjourned. The casehas not been listed as yet.

6. An order of assessment was made against the Company under Section 15B of the Gujarat Sales Tax Act forassessment years 2000–2001 demanding sales tax of an amount of Rs. 2 million together with interest andpenalty. The Company has filed an appeal dated April 28, 2005 with the Assistant/Joint Commissioner Sales Tax(Appeals), Vadodara, against the demand. The Assistant Commissioner, Appeals, rejected the appeal on May 18,2005. The Company is submitting a further application with the Sales Tax Tribunal at Ahmedabad. A secondappeal is filed in the Sales Tax Tribunal, Ahmedabad on May 27, 2005. The matter is pending.

7. The Assistant Commissioner, Commercial Taxes, Ranchi, issued an assessment order dated February 1, 2005 tothe Company for an aggregate amount of Rs. 30.8 million for the assessment year 2000-01 in respect of non-submission of Form F for alumina sent to the Company for conversion and in respect of TOT & Surcharge. TheCompany filed an appeal on March 14, 2005 with the Joint Commissioner (Appeals), Ranchi. The hearing of theappeal was completed on June 10, 2005 and the Commissioner (Appeals) passed an order dated July 26, 2005remanding the matter to the Deputy Commissioner, Ranchi with directions.

8. The Assistant Commissioner, Sales Tax, Sambalpur on receipt of the report from the intelligence wing of thecommercial tax department started the re-opening proceedings under Section 12(8) of the Orissa Sales Tax Actfor the year 1999-2000 and served a demand notice on April 26, 2005 in respect of an aggregate sum of Rs. 3.20million on account of the alleged 70 metric tonnes of aluminium ingots supplied to Orissa Extrusion Ltd. by theCompany during the year 1999-2000 and not accounted in the books of the Company. An appeal along with stayapplication has been filed with the Additional Commissioner, Sales Tax on August 1, 2005. The Company hasbeen asked to make a pre-deposit Rs. 2 million within October 2005 and the balance demand has been stayed tilldisposal of the appeal by the order dated September 20, 2005.

9. The Department of Sales Tax, Thane, Maharashtra passed an Assessment Order dated March 30, 2005 for thefinancial year 1999-2000 for an aggregate demand of Rs. 1.56 million under the Bombay Sales Tax Act, 1959 inrelation to defining entry under the said Act for the Company’s laminated, coated aluminium foil products. TheDepartment was of the view that the said products would attract 8 per cent Sales tax while the Company valuedthe tax at 4 per cent. The Assessing Authority raised an additional demand of Rs. 26.49 million in respect of non-submission of C forms and interest. The Company has filed an appeal dated April 21, 2005 before the DeputyCommissioner, (Appeals), Thane for classification of entry and rate of tax, as well as for reassessment on accountof non-submission of C Forms and interest. The Appeal has been allowed on August 29, 2005 both under theBombay Sales Tax Act, 1859 and the Central Sales Tax Act (“CST Act”). By virtue of the Appeal, under theBombay Sales Tax Act, 1859, a refund of Rs. 1.67 million has been granted to the Company as against the

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demand of Rs. 1.56 million. Under the CST Act, the demand has been reduced from Rs. 26.49 million to Rs. 8.48million. The aforesaid refund has been adjusted against the CST demand. The said demand of central sales taxis in respect of the non-submission of Form C and interest. As per the provisions of the CST Act (TC No. 4T datedJanuary 7, 2003), the Company has already filed the administrative relief with the sales tax authorities on April25, 2004 for granting administrative relief as per the provisions of the CST Act. With the consideration ofadministrative relief, the final order will turn into a refund of around Rs. 2 million for sales tax both under theBombay Sales Tax Act, 1859 and the Central Sales Tax Act.

10. The Directorate of Commercial Taxes has - passed an assessment order dated June 24, 2004 demanding anaggregate amount of Rs. 6.5 million as sales tax along with interest on the ground that Central Sales Tax on saleof flat circular sheets for the year 2001-02 is to be paid at a rate of 4 per cent per annum and not at the rate of 2per cent per annum. The Company has filed an appeal which has been heard by Dy. Commissioner of CommercialTaxes. The order is awaited.

11. The Directorate of Commercial Taxes passed an assessment order dated July 10, 2001 demanding an aggregateamount of 17.1 million as sales tax along with interest for the assessment year 1998-99 under the West BengalSales Tax Act, 1994. The amount demanded includes disallowance of credit notes, higher demand for sales taxwith respect to sale of import licences and sale of assets, extra demand against stock transfer and non-productionof forms. The Company went on appeal against the said order of the Department to the Deputy Commissioner.The matter is being heard.

12. Assessment order No. STA 298/99 dated October 20, 2002 was issued to the Company demanding an aggregateamount of Rs. 7.4 million as sales tax and Rs. 0.5 million as interest for the assessment year 1998-99 under theCentral Sales Tax Act, 1944. The amount demanded includes disallowance of credit notes, issues relating toFreight Charges and non-production of C Forms.

13. The Assistant Commissioner issued an assessment order No. STA 217/98 dated March 16, 1998 to the Companydemanding an aggregate amount of Rs. 1.34 million as central sales tax during the assessment year 1991-92 inrelation to the consignment transfer and non-submission of C & H forms. The Company filed an appeal againstthis order of the Assistant Commissioner before the Deputy Commissioner (Appeals), which was dismissed videorder dated January 17, 2000. However, the Company has received no further demand in this regard from thesales tax authorities.

14. The Assistant Commissioner of Commercial Taxes filed a claim of Rs. 2 million as outstanding dues for theassessment year 1999-2000. The state sales tax claimed was Rs. 1.6 million and Rs. 0.4 million was claimed ascentral sales tax. Initially a demand was made for the above amount of Rs. 2 million by making ex parte orderagainst the Company. The Company appealed against this order before the Dy. Commissioner where the claimwas reversed, and a refund of Rs. 0.8 million was awarded to the Company. The case has been remanded for re-assessment before the Revisional Board on Company’s petition for further refunds. Hearings are yet to takeplace.

15. The Deputy Commissioner, Trade Tax has issued notices bearing Nos. 1084 to 1087 dated September 15, 2005alleging that the transfer of goods on stock transfer basis is not a consignment sale but a direct sale. As per thenotices, the stock transfer is Rs. 2.3 billion in April 2005, Rs. 2.55 billion in May 2005, Rs. 2.4 billion in June 2005and Rs. 2.5 billion in July 2005. The matter is pending.

Sales Tax Cases under Rs.1 million

Apart from the cases described hereinabove there are 18 other sales tax related cases filed against the Company. Theapproximate amounts in these cases aggregate to Rs. 7.52 million.

(f) Service Tax

1. Liability to pay service tax was initially imposed on the persons availing the services of ‘Goods Transport Operator’and ‘Clearing and Forwarding Agents’. As the Company was availing the services, it got itself registered and paidservice tax till 1999. The Supreme Court of India, vide its judgment dated August 27, 1999 in the Laghu UdyogBharti case, directed that any tax which had been paid by the customer or client of a ‘Goods Transport Operator’or ‘Clearing and Forwarding Agents’ was to be refunded within 12 weeks of them making a demand. TheCompany also sought the refund of Rs. 4.92 million in September and October 1999 which was rejected by the

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Assistant Commissioner on June 19, 2000 and Rs. 10.21 million in December 1999 and January 2000 which wasrejected by the Assistant Commissioner on February 6, 2001. However, the provisions were amended to nullifythe effect of the judgment and the authorities rejected the claim on the basis of those amendments. The Companyfiled an appeal before the Commissioner (Appeals) who passed an order dated December 24, 2001 rejecting theappeal. The Company filed an appeal before the CEGAT, New Delhi against this order, which was rejected by anorder dated June 4, 2003. The Company has filed an SLP in the Supreme Court against this order of the CEGAT.Two writ petitions bearing Nos 328 and 329 of 2004 were filed in the Supreme Court challenging the amendmentsmade vide Sections 116 and 117 of the Finance Act 2000 to the provisions of the Service Tax Act, 1994. The writpetitions further challenged the validity of Section 158 of the Finance Act, 2003 by which the provisions ofChapter V of the Finance Act, 1994 as modified by Section 116 of Finance Act, 2000 have been retrospectivelyamended and validated in respect of services rendered by the goods transport operators and clearing andforwarding agents. Both the aforesaid writ petitions were dismissed vide order dated March 17, 2005. The SLPis pending disposal.

2. The Assistant Commissioner has issued a SCN dated July 4, 2004 to the Company demanding an amount ofRs. 18.7 million as service tax leviable in respect of the consulting engineering / technical know how receivedfrom a firm which does not have an office in India.

3. The Assistant Commissioner, Central Excise Division, Mirzapur has issued a SCN dated December 29, 2004 tothe Company demanding an amount of Rs. 19.4 million as service tax leviable in respect of the consultingengineering / technical know how received from a firm which does not have an office in India. The reply to thesame is yet to be filed.

4. An SCN dated October 11, 2002 was issued to the Company demanding an amount of 5.6 million as service taxleviable in respect of the commission paid to consignment agents. The Company has submitted its reply to theSCN.

5. The Assistant Commissioner, Central Excise, Mirzapur, issued a SCN dated June 4, 2004 to the Companydemanding an aggregate sum of Rs. 18.7 million in respect of the alleged non-payment of service tax on consultingengineering services/know-how from non-resident firms. The sum demanded has been subsequently revised.The Company has filed its reply and the matter is pending with the Assistant Commissioner, Central Excise,Mirzapur.

(a) Other taxes, fees and cesses

1. The State of Madhya Pradesh has imposed a transit fee at the rate of Rs. 7 per ton on coal (including 4 per centsales tax thereon) under the Madhya Pradesh (Forest Produce) Rules, 2000. The General Manager, NorthernCoalfields Ltd. issued demand notices no. NCL:SGR:Sales:SR:02: 260 and 261 both dated March 1, 2002 andnotice no. JRD/AFM/Supply.bill/Transp.fee/2001-02/962 dated March 23/27, 2002, notice No. JRD/AFM/Supply.bill/Transp.fee/2002-03/218 dated June 19/22, 2002, notice No. JRD/AFM/Supply.bill/Transp.fee/2001-02/219 datedJune 19, 2002, notice no. coal/credit/transit fee/RSTPP/2002-2003/148 dated June 10, 2002, notice No. coal/credit/transit fee/RSTPP/2002-2003/148 dated June 10, 2002 and notice no. coal/credit/transit fee/RPD/2002-2003 dated July 10, 2002 demanding the said duty of a sum amounting to an aggregate of Rs. 30.31 million tothe Company. The Company has filed Writ Petition No. 4115/2002 before the High Court of Madhya Pradesh atJabalpur challenging the aforesaid demand notices as well as the constitutional validity of order No. F-5/9/10-3/2001 dated May 28, 2001 issued by the State of Madhya Pradesh to the Chief Conservator of Forests and notificationdated May 28, 2001 fixing the transit fee and letter No. 327/sidhi dated February 2, 2002, as illegal, arbitrary andwithout jurisdiction. The petition further challenged the constitutional validity of the relevant provisions of theMadhya Pradesh Transit (Forest Produce) Rules, 2000 and Sections 2(4)(b)(iv) and 41 of the Indian Forest Act,1927. The Company has paid Rs. 114.9 million (upto June, 2005) (recurring) under protest and subject to thejudgment in the writ petition. The hearing was concluded on February 24, 2004 and written arguments havebeen submitted. Orders have been reserved.

2. The State of Madhya Pradesh has imposed a transit fee at the rate of Rs. 7 per metric ton (including 4 per centsale tax) on bauxite under the Madhya Pradesh (Forest Produce) Rules, 2000. Katni Bauxite Pvt. Ltd. and C.R.Mittal & Co. have issued demand notices dated December 17, 2002 and December 16, 2002 demanding the saidfee of amounts aggregating Rs. 0.58 million from the Company for the bauxite supplied to the Company. TheCompany has filed a writ petition No. 612/2003 before the High Court of Madhya Pradesh at Jabalpur challenging

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the aforesaid demand notices in addition to challenging the constitutional validity of the order no. F-5/9/10-3/2001 dated May 28, 2001 issued by the State of Madhya Pradesh to the Chief Conservator of Forests, notificationdated May 28, 2001 issued by the State government fixing the transit fee as well as the relevant provisions of theMadhya Pradesh Transit (Forest Produce) Rules, 2000 and Sections 2(4)(b)(iv) and 41 of the Indian Forest Act,1927. The Company has paid Rs. 2.1 million (upto May, 2005) under protest and subject to the judgment in thewrit petition. The hearing was concluded on February 24, 2004 and written arguments have been submitted.Orders have been reserved.

3. The Janpad Panchayat, Kusmi, district Surguja has, vide resolution dated February 11, 1999 under Section 77 ofthe Madhya Pradesh Panchayat Raj Adhiniyam, 1993, levied tax at the rate of Rs. 5 per tonne on the transportationof bauxite from bauxite mines situated from Tehsil Kusmi, with effect from January 1, 1999. The Panchayatissued order No. J.P/99 dated February 12, 2002 confirming the said resolution and imposed the said levy on theCompany. A demand was made to the Company to pay the said tax for an amount aggregating Rs. 0.38 million.The Company had filed Writ Petition No. 32/2000 challenging the aforesaid levy before the High Court of MadhyaPradesh at Jabalpur which has since been transferred to the High Court of Chattisgarh at Bilaspur. The challengewas on the ground that the levy of the said tax was not within the legislative competence of the State Governmentor the Janpad Panchayat. The Company is liable to pay tax of an amount aggregating Rs. 5.87 million as calculatedupto January 2005. The petition was listed in the last week of February, 2004 but could not be taken up forhearing. The next date of hearing is yet to be fixed.

4. The Divisional Forest Officer, Renukoot has, in exercise of power under Section 41 of the Indian Forest Act, 1927and Rule 5 of the Uttar Pradesh Transit of Timber and other Forest Produce Rules, 1978, imposed a transit fee atthe rate of Rs. 5 per tonne on bauxite being brought by trucks from Madhya Pradesh to Renukoot and on coalmoved by the Company by trucks from Madhya Pradesh to Renusagar and also within district Sonebhadra at therate of Rs. 38 per tonne with effect from June, 2004. The Company has paid a transit fee on coal amounting toRs. 2.56 million from July 20, 1999 to January 17, 2000 and a transit fee on bauxite amounting to Rs. 0.28 millionfrom July 19, 1999 to January 24, 2000. A transit fee of Rs. 1.12 million has been imposed on bauxite fromJanuary, 2000 to May, 2005 and Rs. 145.7 million on coal upto June 2005. The Company has filed Writ PetitionNo. 40 of 2000 challenging the said imposition before the Allahabad High Court on the ground that the D.F.O,Renukoot does not have the legislative competence to impose the said levy and has further challenged theconstitutional validity of Sections 2(4)(b)(iv) and 41 of the Indian Forest Act, 1927. In response to stay applicationno. 2000 in WP No. 40 of 2000, the Court, vide order dated January 18, 2000, issued a stay on the levy on thecondition that if the writ petition fails, the amount will be payable with interest at 18 per cent per annum.

5. The Zilla Panchayat, Sonebhadra has, under the provisions of the Uttar Pradesh Kshetra Panchayat and ZillaParishad Adhiniyam, 1961, levied a transport/toll tax on the transportation of coal by the Company from thecollieries to its factories at Renukoot and Renusagar at the rate of Rs. 30 per truck. The Company has filed WritPetition No. 587/2003 before the Allahabad High Court challenging the levy. The Petition also challenged theconstitutional validity of the said Zilla Parishad Adhiniyam, 1961 on grounds that Zilla Panchayat does not havethe legislative competence to frame the impugned bye laws. The realization of the levy has been stayed by theHigh Court vide order dated April 10, 2003. Vide order dated May 22, 2003, the petition has been clubbed withanother writ petition no. 18035 and referred to a Full Bench of the High Court. The order dated April 10, 2003 alsodirects Petitioner to make necessary changes in their petition and the Respondents to file counter within onemonth. The Respondents have not filed counters. The petition has been fixed for day to day hearing on November16, 17 and 18, 2005.

6. Shaktinagar Special Area Development Authority imposed a cess at the rate of Rs. 5 per ton on coal purchasedby the Company from Northern Coalfields Ltd. Northern Coalfields Ltd. has demanded the said levy aggregatingRs. 33.2 million (as on June 2005) from the Company. The Company has paid an amount of Rs. 2.4 million. TheCompany has filed a writ petition No. 791 of 1997 dated April 4, 1997 against the State of Uttar Pradesh andothers before the Allahabad High Court challenging the demand. The Company has further challenged theconstitutionality of the said levy on several grounds including legislative competence and arbitrariness. Theimposition was stayed by the Court on December 19, 1997 with directions not to press the demand for theimpugned cess in pursuance of bills raised and also not to raise any further demand for the cess pending furtherorders. The Respondent Government has filed its counter. The petition was listed on August 11, 2004 and wasadjourned. The next date of listing is yet to be announced.

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7. As the monitoring agency for the collection of Research and Development Cess, IDBI demanded the payment ofRs 12.8 million in connection with the import by the Company of TG Sets from ABB Germany. The Company filedan application dated March 14, 2002 with Technology Development Board, the subsequent monitoring agency.The agency refused the refund of the cess paid. The Company has challenged this order through a Writ Petitionfiled before the Delhi High Court.

8. The Commercial Taxes Department has issued demand notices in Form II dated November 22, 2004, December23, 2004, January 22, 2005, March 1, 2005, March 22, 2005 and May 10, 2005 to the Company demanding anaggregate sum of Rs. 8155.1 million as the Special Entry Tax in respect of the furnace oil procured by theCompany by way of import and indigenously from the State of Karnataka imposed under the provisions of theKarnataka Special Tax on Entry of Certain Goods Act, 2004. The Company filed a writ petition No. 45866/2004dated November 19, 2004 before the High Court of Karnataka against this notice. The High Court passed anorder granting a stay on the proceedings of collection of the Special Entry Tax for the periods April and May2005. However, the Company is yet to receive the orders certifying the same. The demand notices for April 2005to July 2005 have been received vide notices dated May 31, 2005, June 23, 2005 and September 2, 2005 and areawaiting a stay in relation to the same. No provision was made for the month of August 2005 as the entirefurnace oil was purchased within the State. The date of hearing is yet to be announced.

9. The Directorate of Revenue Intelligence, Gandhidham Regional Unit, has issued a SCN dated July 27, 2004 toM/s. Trisun Chemical Industry, Gandhidham, for alleged irregularity in export along with all importers who haveused the duty entitlement pass books (“DEPB”) issued for these exports. The Company has received a demandof Rs. 3.43 million for utilization of 4 DEPBs at Dahej. The Company has filed its reply on September 14, 2004.There has been no further progress in this matter and it is still pending before the Commissioner of Customs,Kandla.

10. The Director General of Foreign Trade has issued a SCN to the Company in respect of non-submission of exportobligation against EPCG License. The reply is under preparation. A personal hearing was held on February 15,2005.

11. The Dy. Commissioner, Trade, Tax, Sonbhadra has issued SCN dated July 20, 2005 to the Company levying EntryTax amounting to Rs. 2.5 million for the months of April, May and June 2005 on coal, cement and petroleumproducts on the ground that Industrial Township is included in the definition of Local Area by virtue of theamendment dated March 24, 2005 made to Section 2 of the Uttar Pradesh Trade Tax Act, 1948. The Companyhas filed its reply. The Company has deposited an amount of Rs. 5.6 million under protest on August 31, 2005.The Company has sought a legal opinion on the matter, which is pending.

D. Civil cases

(a) Cases filed against the Company

1. Bombay Environmental Action Group and Shyam Chainani have filed Writ Petition No. 959 of 1998 on March 16,1998 before the High Court of Judicature at Bombay seeking to restrain Indal from carrying any mining activity orany other activity of any nature whatsoever in the Iderganj area of Radhanagari Taluka, Kolhapur District on thealleged ground that the mine is within the Radhanagari Sanctuary and the mining activity is carried out by Indalwithout obtaining the necessary permissions for the same from the relevant authorities and that grave andirreparable harm, loss and injury would be caused to the environment and topography of the RadhanagariReserve Sanctuary. The High Court has granted a stay order dated April 1, 1998 restraining Indal from carryingon any mining activity in the Iderganj area of Radhanagari, Kolhapur, till further orders. The stay order is still inforce.

2. Bombay Environmental Action Group and Shyam Chainani have filed Writ Petition No. 2244 of 98 before theHigh Court of Judicature at Bombay seeking cancellation of the renewal of mining lease granted to Indal in theIderganj area allegedly within the Radhanagari Sanctuary in Kolhapur. Stay on the renewal of the lease is in force.The total value of the mining rights which have been affected through these cases was Rs. 22.05 million.

3. The Estate Officer, Air India Limited issued an Eviction Notice dated April 19, 1999 to the Company purporting toact under Section 4 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 claiming that theCompany was in unauthorized occupation of an area of 10496.80 sq. ft. on the 15th floor of the Air India Building,

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situated at Nariman Point, Mumbai, and seeking to evict the Company therefrom. The Company filed its replydated October 4, 1999 before the Estate Officer who passed an order dated October 3, 2001 holding that theCompany was in unauthorized occupation of the premises and ordered it to vacate the same. The same officerpassed an order on the same day staying the eviction for a period of four weeks in the interests of justice. TheCompany filed an appeal dated October 11, 2005 before the Principal Judge, Bombay City Civil Court, againstthis order dated October 3, 2001. The appeal is pending disposal.

4. The Estate Officer, Air India Limited issued a SCN dated November 21, 2003 to the Company purporting to actunder Section 7 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 demanding an aggregateof amount of Rs. 320 million as damages in respect of the alleged unauthorized occupation of the Company of anarea of 10496.80 sq. ft. on the 15th floor of the Air India Building, situated at Nariman Point, Mumbai, and interestthereon. The Company filed its reply dated December 29, 2003 before the Estate Officer. The Estate Officerpassed an order dated March 4, 2004 adjourning the hearing of the matter till further notice. The matter ispending disposal.

5. The Centre for Public Interest Litigation has filed Interim Application No. 152 of 2003 dated May 13, 2003 in CivilWrit Petition No. 202 of 1995 before Central Empowered Committee (“CEC”) constituted by the Supreme Courtin the case of T.N. Godavarman Thirumalpad v. Union of India inter alia alleging that the Company encroachedon forest land in Renukoot resulting in loss of flora and fauna of the area which is in violation of the Forest Act,the Forest (Conservation) Act and the Wildlife Act. The Interim Application also alleged that the Company hastransferred some of the land allotted to it without requisite sanction, which is also violative of the aforesaid Acts.The complaint has been filed on the basis of internal reports of the Forest Department. The Company filed acounter in reply where it, inter alia took the preliminary objection that the Supreme Court, had earlier, vide orderdated August 26, 2002, rejected writ petition No. 238 of 2002, which was filed on identical issues by one Mr. N.KJain and another, and hence the interim application must be dismissed. The Complainant has filed a rejoinderon December 3, 2003, which refuted the reply by the Company, inter alia on the grounds that the dismissal of thesaid writ petition was on grounds of the same being misconceived, motivated and belated and therefore did notaffect the admissibility of the interim application. The first effective hearing was held on January 5, 2004 wherethe CEC took note of the preliminary objection filed by the Company as well as the rejoinder and directed thecomplainant to file an affidavit on two points- namely that the present matter is not covered by the Writ Petitiondecided by the Supreme Court and that the CEC can entertain the matter despite the dismissal of the earlier writpetition. The date of disposal of the preliminary objection will be fixed after the filing of the said affidavit by theComplainant.

6. Centre for Public Interest Litigation has filed Writ Petition No. 2145 of 99 before the Delhi High Court against theUnion of India and Ministry of Environment and Forest seeking issuance of directions by the High Court to theUnion of India and its agencies to ensure that the fly ash generated as industrial waste by thermal power plantsis utilized for the purpose of making cement or bricks and other building materials. The Petitioner also soughtsuitable directions from the Court to give effect to the objectives of the draft Notification dated May 22, 1998under the Environment (Protection) Rules, which aims to prevent the dumping and disposal of fly ash in landfills.The notification was brought into force on September 14, 1999, in pursuance of, inter alia, the order of the DelhiHigh court dated August 25, 1999 in the aforesaid writ petition directing the Central Government to publish thefinal notification. Subsequently, the Court has issued directions vide several orders to ensure the compliance ofthe aforesaid notification. The Company has filed an affidavit on August 22, 2003 certifying that it has reportedcompliance with the notification vide letter no. P&IR/HRD/5308/10827 dated August 12, 2000 to the Uttar PradeshPollution Control Board, letter no. HR/Env/1714/29049 dated March 12, 2002 to the Central Pollution ControlBoard, New Delhi and letter no. P&IR/Env/6020/11383 to the Ministry of Environment and Forest, Lucknow. TheHigh Court had asked the Union of India to file an affidavit on the implementation of the objectives of the notificationby concerned thermal power stations as well as by the State Pollution Control Boards. The Ministry of Environmentand Forest in turn asked various thermal power stations including the Company (Renusagar) to file report on thestatus of the implementation of the aforesaid notification to it. The Company vide letter no. P&IR/Env/1323 datedFebruary 26, 2004, furnished the requisite details to the Ministry of Environments and Forests. The Union of Indiafiled the requisite affidavit on July 14, 2004 before on the Delhi High Court. The next date is fixed on October 26,2005.

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7. Surendra Nath Dubey has filed Civil Miscellaneous Writ Petition No. 4926 of 2002 dated November 20, 2001before the Allahabad High Court against the Company seeking to restrain the Company from constructing an ashdam in district Sonebhadra on the ground that such construction would allegedly cause air and water pollution.Notices have been issued by the Court but have not been served on the Company. The Company has completedthe construction of the ash dam. The next date for hearing is yet to be fixed.

8. Prakriti Seva Sansthan has filed Civil Miscellaneous Writ Petition No.14403 of 2002 dated April 8, 2002 against,inter alia, the State of Uttar Pradesh and the Company alleging that enquiry by the Sub-divisional Magistrate,Sonbhadra into an accident that took place at the ash dam in 1996 was strongly influenced by the managementof the Hindalco Group and therefore was not properly conducted. The Writ Petition also alleges that the ash dambeing built by the Company is in breach of applicable environmental norms and therefore has prayed that theCourt direct the Respondents to construct a permanent ash dam with professional expertise and advise and takeall preventive and ecologically friendly measures to safeguard the environment of the area. In addition, thepetitioner also sought an ad interim order directing the Respondent to conduct a fresh enquiry into the accident.The Allahabad High Court admitted the Writ Petition vide order dated April 12, 2002. The Court further directedthe District Magistrate, Sonbhadra to personally make a local spot inspection in relation to the incident that tookplace in 1996 and submit his report. The District Magistrate submitted a report of his findings to the Court onMay 22, 2002. Notice has to be issued in this case, which has not been listed thereafter.

9. M/s Trimax Industries Ltd. filed Writ Petitions No.4290 and 4312/02 of 2002 against the Union of India, the Companyand others before Orissa High Court challenging an order dated September 18, 2002 in Revision Application No.22/(II)/2001-R-C-I passed by the Central Government under Section 30 of the Mines and Minerals (Developmentand Regulation) Act, 1957 and Rule 55 of the Minerals Concession Rules, 1960 in favour of the Company. Theimpugned order had allowed the revision preferred by the Company against the order of the State Governmentdated February 14, 2001 rejecting application of the Company and Trimax for bauxite mining lease in Orissa. Asimilar application for revision by Trimax had been rejected by Central Government vide order dated September18, 2002. The Court, vide interim order dated October 24, 2002 issued a stay on the revision passed by theCentral Government. The High Court vide its order dated May 8, 2003 vacated the stay order. The Court directedthe Union of India to file a counter to the Writ Petition. On August 23, 2005 M/s Trimax got its second WP No.4312/02 dismissed as withdrawn and on August 24, 2005 filed a new WP No. 10756 of 2005 challenging therecommendation and approval of Central Govt. to grant mining lease in favour of Hindalco. The matter waslisted on October 4, 2005 and is listed next on November 9, 2005. Similarly, M/s Gimpex Industries Ltd. haschallenged an order dated September 9, 2004 issued by the State of Orissa recommending granting mininglease in favour of the Company by filing revision petition no. 22 (8) 2004/RC-I dated November 16, 2004 beforethe Mines Tribunal, New Delhi. Gimpex Industries has asked for a stay to be imposed on the mining activity. Thereply to this application has been filed on January 13, 2005. The matter was finally heard on June 28, 2005 andorders are reserved.

10. Ram Shankar Singh, Shital Shiv Nandan and Abhay Lal have filed Civil Miscellaneous Writ Petition No. 5241 of2002 dated January 25, 2002 before the Allahabad High Court inter alia against the Government of India and theCompany seeking to restrain them from interfering with the possession of the petitioners over certain plots ofland in District Sonebhadra. The petitioners have alleged that compensation has not been paid to them in respectof the acquisition of these plots of land by the Government of India under the provisions of the Coal BearingAreas (Acquisition & Development) Act, 1957. After acquisition, the Government handed over the land to NorthernCoalfields Ltd. The Company has taken permission and possession from Northern Coalfields Ltd. for laying of apipeline. The petitioners have challenged the acquisition of the land as well as the subsequent grant of permissionto the Company from Northern Coalfields Ltd. On an interim application filed in March, 2005 the Court orderedthat in case the possession of the land is still with the petitioners, they should not be dispossessed. The matteris yet to be listed for hearing.

11. Agnorpeth Shri Sarveshwari Samooh filed Civil Misc. Writ Petition No. 3800 of 2001 dated November 21, 2001against the State of UP, the Company and others before Allahabad High Court alleging that peaceful possessionof the land occupied by the Ashram managed by the Petitioner society, is being disturbed by officials of theCompany, who dispute the Petitioner’s ownership and possession of the Ashram premises. The petitioner alsofiled a stay application No. 3800 of 2001 asking the Court to direct the Respondents not to interfere in thepeaceful possession and functioning of the Petitioner society and further direct them to permit the free flow of

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goods in the Ashram premises and further to direct the Respondents to allow the Petitioner to construct a tubewell on its premises. The Company has filed its counter affidavit before the High Court. The next date for hearingis yet to be fixed.

12. Indian Bank has filed O.A. No. 66 of 1994 against the erstwhile Renusagar Power Company, its directors and theCompany before Debt Recovery Tribunal, Calcutta claiming differential interest amounting to Rs.6.5 million inrelation to a term loan of Rs. 34.5 million with an interest of 4.5 per cent per annum over the official rate of theReserve Bank of India with a minimum of 13.5 per cent per annum from the date of execution of documents tillthe date of payment in full, availed by the erstwhile Renusagar Power Company under a term loan agreementdated June 23, 1981. The Indian Bank has alleged that the Company, as guarantor of the said loan has failed tomake the payment of interest in accordance with the terms of the disbursement. Subsequently, the name of theCompany was substituted as Respondent no. 1 vide order of the Debt Recovery Tribunal dated July 5, 2002. Thematter was fixed for judgment on February 2, 2004. However, the Presiding Officer could not deliver the judgmentand retired. The matter was adjourned for arguments on August 22, 2005 after which it has been further adjournedfor arguments till November 16, 2005.

13. Md. Hussain and others, who are residents of the Nagar Panchayat, Renukoot have filed Writ Petition No. 39739of 2000 dated August 20, 2000 against the State of Uttar Pradesh, the Company and others before the AllahabadHigh Court challenging the Notification dated April 7, 2000 which declared the property held by the Company inRenukoot, Uttar Pradesh as an Industrial Township by virtue of the power given to the Governor of Uttar Pradeshunder Article 243-Q of the Constitution. The petition was filed on the grounds that the notification is based oninformation including information that no service within the area has been rendered by the Nagar PanchayatRenukoot, the population of the area and the area and size of the Hindalco establishment, all of which is incorrectand unsubstantiated. Further, the petition alleges that a hearing has not been provided to the general public ofRenukoot or the elected Nagar Panchayat Committee before the making of such notification. The petition allegesthat the objective satisfaction of the Governor in declaring the area as an Industrial Township is not supported byany evidence or material and that the Governor has not applied his mind in issuing such notification. Noticeshave been issued to the Respondents. The Company is yet to file its counter.

14. Yogendra Knitting Mills has filed Civil Suit No. 812 of 2000 against the Company for possession of the godownpremises situated at Najafgarh Road, New Delhi, which was leased to the Company vide lease deed dated May23, 1972 and recovery of damages/mesne profit of Rs 0.16 million per month with effect from April 1, 2000 till thedate the possession of the suit property is handed over to the Plaintiffs on the ground that the lease had expiredand tenancy was accordingly terminated, vide legal notice dated December 1, 1999. The Plaintiff in the presentcase alleged that despite repeated notices, the Company failed to vacate the said godown premises, and is inillegal and unauthorized possession and use of the said property. The Company has filed counter claims stating,inter alia, that there is a valid and subsisting lease agreement between the parties. The Plaintiff had filed InterimApplication No. 3880 of 2000 in the aforesaid suit under Section 151 of the Code of Civil Procedure, 1908 askingthe Court to direct the Company to pay damages and mesne profits pending disposal of the suit. The Companyhas filed counter to the same. The next date fixed in the matter is to be fixed.

15. Six cases have been filed wherein parties have made representation to have small plots of land held by theCompany, recorded as their ownership in the revenue records in Mirzapur District. The tehsildar and subsequentlythe Assistant Record Officer passed orders in favour of the Plaintiffs. The Company filed revision petitions beforethe Commissioner, Mirzapur and the Board of Revenue which are still pending.

16. In Appeal No. 3501 of 1994, similar to those mentioned hereinabove, filed by Nokhai, the Assistant RecordOfficer vide order dated April 22, 1994 ordered mutation of the revenue records in the name of Nokhi, deletingthe name of the Company, in respect of certain plots, recorded in the name of the Company. These lands hadbeen purchased by the Company through a sale deed registered under the Government Grants Act, 1895. TheCompany has filed an appeal before the Record Officer, Sonebhadra against this order. The date of hearing is yetto be fixed.

17. Five cases have been filed against the Company seeking an order of permanent injunction against the constructionof an ash pipeline by the Company. The cases have been filed on the premise that the construction is interferingwith their enjoyment of their property. The Company is in the process of erecting an ash dam, pipeline and roadson these properties. In some of the cases temporary injunction against the demolition of contested property has

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been passed. These cases are still being heard at the court of the Civil Judge.

18. Ashok Kumar and others have filed Civil Miscellaneous Writ Petition No. 18683 of 2005 before the AllahabadHigh Court against the Company. The Company had filed Civil Suit No. 33 of 1987 before the Court of the CivilJudge (Junior Division), Dudhi for permanent injunction and demolition of unauthorized construction made bythe petitioners on the Company’s land in District Sonebhadra. To comply with the condition imposed in theEnvironment Management Plan (EMP) to upgrade the existing Effluent Treatment Plant (“ETP”)/Sewage TreatmentPlant (“STP”) to ensure “zero discharge”, a pipeline from STP to Alumina Plant was laid by the Company. Aportion of the pipeline also passed beneath the land on which the Petitioners’ unauthorized construction exists.The Petitioners moved an application before the Court of the Civil Judge on September 14, 2004 seeking torestrain the Company from passing the pipeline from underneath the construction of the petitioners and fromutilizing the pipeline for drainage. The trial court allowed the application on December 24, 2004 and restrainedthe Company from using the pipeline. Aggrieved by this order of the trial court, the Company filed a miscellaneousappeal before the District Judge, who allowed the appeal on February 8, 2005 and vacated the injunction orderpassed by the trial court. Aggrieved by the aforesaid order, the Petitioners filed the instant writ petition. Thepetition was taken up by the High Court on March 3, 2005. No interim order was made by the Court against theCompany. The matter is to be listed in the next cause list.

19. Twelve shopkeepers of Birla Market filed O.S. No. 13 of 90 on May 22, 1990 before Civil Judge (S.D), Robertsganjagainst the Company for permanent injunction against demolition of their property and for declaring them astenant of their respective shops on the basis of rent receipts issued to them by the Company. The Company hascontended that the Plaintiffs are mere licensees of the shops. Another similar suit was filed by Gulab Chand Baidin OS. No. 138 of 2004 of October 5, 2004 against the Company asking for the same relief with respect to thesame property. The matters are pending before the Civil Judge (S.D.), Robertsganj.

20. In respect of the same property, the Company has filed cases Nos. O.S. 57 - 64 of 2001 dated July 6, 2001 andO.S. No. 27 of 1991 dated April 27, 1991 before Civil Judge (S.D.) Robertsganj for eviction of the shop keepers ofthe Birla Market. In a related matter, the Company filed Civil Contempt No. 46 of 2003 before Civil Judge (S.D.),Dudhi against the attempt of the Plaintiff to violate the stay order of court in Case No. 13 of 1990 dated September18, 1990 by making construction over the shop in question. The matters are pending disposal.

21. Three cases have been filed on January 21, 1993, January 22, 1993 and May 28, 1996 before Civil Judge (S.D)Robertsganj for permanent injunction against encroachment by Company by construction of hutment over landnear Junior Type quarters. Company has filed an eviction suit against defendant. An application for consolidatingthese cases has been filed.

22. Shivachal filed O.S. No. 99 of 1999 on August 11, 1999 before Civil Judge (S.D.), Robertsganj for permanentinjunction against the Company claiming himself to be owner of land lying on the north side of the cinema hall inRoberstganj. The Company has asserted that land in question is part of land comprised in a sale-deed datedJanuary 29, 1985 executed by Government of Uttar Pradesh in favour of Company. The matter is pending disposal.

23. Dharmu filed O.S. No. 90 of 1997 on October 1, 1997 before Civil Judge (J.D.), Dudhi for permanent injunction.Plaintiff claims that the Company has illegally constructed a road in his land. The matter is pending disposal.

24. Jaimati Devi filed suit O.S. No 60 of 1998 on July 6, 1998 before Civil Judge (S.D.), Robertsganj for declarationand permanent injunction against Company, claiming her right and title over the impugned land lying oppositeto a cinema hall in Roberstganj. The Company has moved for declaration and permanent injunction againstencroachment by Jaimati Devi on the Company’s landed property which has been constructed by the Companyfor its labourers. Both parties have given evidence. The matter is pending disposal.

25. Mahendra Singh filed O.S. No. 61 of 1998 dated September 13, 1999 claiming to be in charge of RenukootPrivate Bus Stand before Civil Judge (J.D.),Dudhi and has sought permanent injunction order against Satyanarain,for restraining him from making any unauthorised construction over the structure of bus stand. On October 23,2003 the Court found that as per revenue record on the land in question, the name of the Company is recordedas owner of the land and ordered plaintiff to make the Company a party to the suit. Hence the Company wasmade party to the suit as defendant and summons were issued to the Company for appearance before the Courton May 31, 2004. The Company has appeared in the case by filing its vakalatnama. The matter is pendingdisposal.

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26. Ram Yash filed O.S. No. 36 of 2004 on April 16, 2004 before Civil Judge (J.D.), Dudhi for permanent injunctionagainst his eviction from Company’s quarters. Ram Yash, an assistant teacher in the school had withoutauthorization occupied Company’s quarter No. L-217. Court has granted an injunction order against defendantsvide order dated April 16, 2004. The matter is pending disposal.

27. Two cases have been filed before Civil Judge (S.D.), Robertsganj for permanent injunction by ex-employees ofthe Company alleging wrongful dismissal and seeking permanent injunction against the Company, restraining itfrom eviction from the Company’s quarter HH-86. Court has dismissed Interim Injunction on May 28, 2005earlier granted in Plaintiff’s favour. The Company has filed its written statement. The matter is pending disposal.

28. A civil suit bearing No. 17 of 2002 has been filed by Pragat Krishi Sadhan Kendra on October 5, 2002 at ShahadaCourt, Nandurbar on the ground of loss of profit amounting to an aggregate of Rs. 1.15 million. A hearing washeld on October 21, 2002 and the Company has filed its reply on November 22, 2002. The Civil Judge, Shahadacourt has decided the case against the Company. A Writ Petition has been filed by the Company on August 9,2004 before the Aurangabad bench of the Bombay High Court. The High Court has stayed the proceedings in thecivil suit. The Writ Petition has not come on Board.

29. Gopal Pushkaran filed O.S. No. 77 of 1994 on October 21, 1994 before Civil Judge (S.D.), Robertsganj praying torestrain the Company from transferring his shares in the Company to another person and for directions to theCompany to issue him duplicate shares. The Company has filed an affidavit stating that M/s Parley Product,Mumbai has lodged these shares for transfer. The plaintiff died in the course of proceedings and an applicationfor substitution of his legal representatives has been filed. The Company has filed its objection to this application.The matter is pending disposal.

30. Adi Nath Pandey, Ramnaval Singh and Jagdish Prasad jointly filed O.S. No. 69 of 1994 dated September 1, 1994against the Company before Civil Judge (S.D.), Robertsganj for permanent injunction restraining the Companyfrom transferring their shares, which they allege have been lost. The above suit was dismissed in default of thePlaintiffs’ appearance. A restoration application has been moved by Adi Nath Pandey by means of Misc Case.No. 8 of 2004 dated April 16, 2004. The Company has filed its objection against the restoration on August 4,2004. The matter is pending disposal.

31. Adwait Gyan Mandal has filed O.S. No.54 /1986 against the Uttar Pradesh Chalchitra Nigam and the Company.The case was filed on May 30, 1985 before Additional District Judge. Some property belonging to the Companywas given to the Uttar Pradesh Chalchitra Nigam with sanction from Uttar Pradesh Government to construct apicture hall. When construction was started, the above suit was filed by Adwait Gyan Mandal for injunction torestrain Uttar Pradesh Chalchitra Nigam. The Company has become party to the suit because the land belongedto it. Originally, suit was filed on October 17, 1979. Due to mistake in pecuniary jurisdiction, it was returned andre-numbered as 54 of 1986. The proceeding is stayed vide order of High Court dated May 7, 1992. In the samematter, Civil Misc. Contempt Petition No. 887 of 1992 was filed by Mr. R.D. Singh. The matter is pending disposal.

32. The Company and Grasim had purchased 50% of the undivided share of immovable property at plot No. 216AAnnie Beasant Road, Worli, Mumbai in a sale auction by the recovery officer, Debt Recovery Tribunal – I, Mumbai.The sale was confirmed on March 10, 2005. M/s Worli Enterprises Limited claims to be a tenant in possession inpremises situated in the above property and had filed RA Declaration Suit Nos. 940, 941 and 942 of 1996 in theCourt of Small Causes, Mumbai and has impleaded the Company and Grasim as parties to the case vide InterimNotice No. 1143 of 2005. The company and Grasim have orally undertaken to the Court that they will not demolishany structures on the property till the next date of hearing. The matter is pending before the Small Cause Court.

33. Pursuant to resolution dated June 17, 2005 passed by Mines & Geology Department, Government of Jharkhand,the District Mining Officer, Lohardaga has issued six demand notices dated August 18, 2005 (three notices) andSeptember 2, 2005 (three notices) amounting to Rs. 32.1 million towards payment of increased surface rent witheffect from January 1, 2005 on the mining leases for bauxite situated in Lohardaga and Gumla. The Companyhas replied to the same vide reply dated September 9, 2005 for Lohardaga and September 21, 2005 for Gumla.

Civil cases filed against the Company for claims under Rs. 1 million

Apart from the cases described hereinabove there are 2 civil cases filed against the Company for amounts aggregating

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to Rs. 1.7 million.

(b) Cases filed By the Company

1. A claim for anode slime insurance at Noranda has been filed and admitted by National Consumer Forum for Rs.28.4 million on August 3, 2004. A hearing was held on November 10, 2004. M/s. New India Assurance Co havesubmitted their replies. National Consumer Forum is yet to determine the next hearing date.

2. Company filed O.S. No. 50 of 1981 on December 18, 1981 before Civil Judge (J.D.), Dudhi against unauthorisedconstruction by Jai Singh over the Company’s land lying on western side of the metal road. The Companymoved an application for exhibiting certified copy of the sale deed of 1962 filed by it which was executed 30years ago. Trial court rejected this application on November 30, 2000. Company filed a Revision Petition againstthis order, and the same was allowed on December 2, 2002 with direction to trial court to decide the applicationagain. However, the trial court rejected the application on February 17, 2003. Hence the Company filed RevisionPetition No. 3 of 2003 before the court of Civil Judge against the order. In a similar case against Shankar (O.S. No.18/1985 on January 28, 1985) before the Civil Judge (J.D.), Mirzapur, proceedings have been stayed since 1993pursuant to an order issued by the High Court dated October 14, 1993 passed in Writ Petition No. 25/ 1993 filedby the Defendant in the O.S. No. 18/ 1985. The matter is due to be listed before the High Court.

3. The Company has filed four cases against encroachment over the Company’s land lying adjacent to the metaland other roads in Robertsganj belonging to the Company before the Civil Judge, Dudhi. In these cases, the trialcourt has passed orders against the Company. The Company has subsequently preferred appeal in the AllahabadHigh Court.

4. The Company filed O.S. No. 25 of 1983 on July 17, 1983 against Jahangir on August 18, 1988 before Civil Judge(J.D.), Dudhi for eviction from and demolition of unauthorised construction over the Company’s land near Atithigirhbehind the Zila Parishad Shops. The Defendant filed his written statement on February 24, 1993. Evidence of theCompany has been concluded. Evidence of the Defendant is yet to be adduced. The matter is pending disposal.

5. The Company filed O.S. No. 4 of 1984 on March 13, 1984 for eviction from and demolition of unauthorisedconstruction by an ex-employee over the Company’s land lying to the north of the petrol pump owned by theCompany. Judgment was pronounced against the Company on September 24, 2001. The Company filed anappeal against this order on November 8, 2001. In a similar case, the Company has also filed O.S. No. 35 of 1999on March 24, 1999 against Shakantha which is pending trial.

6. The Company filed O.S. No. 30 of 1984 against Dwarika on October 31, 1984 before Civil Judge (J.D.), Dudhi forpermanent injunction on and demolition of unauthorized construction of two rooms by Dwarika Singh and LallanRai on Company land adjacent to Janta School, pleading that the Company is the owner of the land and theschool building in question. Two school managing committees appeared before the court for impleadment.Owing to this technical issue, steps were taken by the Company to withdraw the suit with liberty to file fresh suitand an application was moved on September 12, 2000 for conditional withdrawal. This application was dismissedon November 7, 2000 for non-appearance of the party. A restoration application has been moved. The matter ispending disposal.

7. The Company has filed two cases against Barkat (OS. No. 82 of 1994) and Ramdei (C.A. No. 36 of 1996) beforeCivil Judge (J.D.), Dudhi and Addl. District Judge, Robertsganj against unauthorized construction on Companyland. Ramdei filed suit OS. No. 7 of 1971 for permanent injunction against Company on January 1, 1971 and inresponse the Company filed suit for eviction & demolition on November 26, 1984. Both the cases were consolidatedand disposed off on September 12, 1996 by common judgment in favour of the Company. Ramdei filed anappeal against the judgment. Court dismissed the appeal on August 18, 2004 in default of appearance of theAppellant in favour of the Company. The Company has filed Execution Application No. 2 of 2004 on December22, 2004. The final order is pending.

8. The Company has filed four cases for permanent injunction against encroachment on Company’s land lying onsouth of Kali Mandir and Cinema Hall before the District Judge, Sonbhadra at Robertsganj. These cases are allpending at various stages of hearing.

9. The Company has filed two cases before the Second Addl. District Judge, Robertsganj for eviction & demolitionof encroachment by appellant over the Company’s land lying on east of Public Works Department road. One of

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the cases, Bhola vs. the Company (C.A. No. 23 of 1999 filed on September 21, 1999), was decreed on August 12,1999 in favour of the Company. An appeal dated September 21, 1999 against this order has been filed before theCourt of the District Judge, Sonbhadra, which is pending disposal.

10. The Company has filed two suits, O.S. No. 143 of 1999 dated September 30, 1999 and O.S. No. 144 of 1999 datedNovember 11, 1999 before Civil Judge (S.D.), Robertsganj for permanent injunction against encroachment bydefendant over Company’s land lying on southern side of the Uttar Pradesh Roadways bus stand. These casesare in various stages of trial.

11. Two cases for permanent injunction in O.S. No. 8 of 2000 filed on February 2, 2000 against Mohd. Naeem andO.S. No. 14 of 2000 of February 9, 2000, against Ranglal have been filed by the Company before Civil Judge(S.D.), Robertsganj against encroachment by Defendants over the Company’s land lying near the Company’spetrol pump towards western side of metal road. In O.S. No. 8 of 2000, an amendment to the Company plaintmap has been allowed. In O.S. No. 14 of 2000, the Company has moved an application for issue of processagainst the Defendant through publication.

12. Four cases have been filed by the Company for eviction and demolition orders against encroachment over theCompany land near the Company’s Petrol pump on western side of metalled road before Civil Judge (S.D.),Robertsganj. In O.S. No. 143 of 2002 of November 14, 2002 against Satyanarain, an application for substitutionhas been moved. In O.S. No. 144 of 2002 of November 14, 2002 against Lallan Rai, an amendment applicationwas moved by Company which was allowed. In O.S. No. 9 of 2003 of January 14, 2003 against Lalman, the Courthas ordered for issuing process through the Gazette against the Defendant. In O.S. No. 10 of 2003 of January 14,2003 against Hublal, publication against the defendant has been carried out.

13. Three cases have been filed by the Company against encroachment by the Defendant over Company land nearjunior type quarters before Civil Judge (S.D.) Robertsganj on August 6, 2001. These cases are pending disposal.

14. Two cases have been filed by the Company against Shiv Pratap for permanent injunction against unauthorisedconstruction over Company’s land lying on western side of Aditya Birla Public School before Civil Judge (S.D.),Robertsganj being O.S. No 10 of 2004 of January 23, 2004 and O.S. No. 113 of 2004 of August 11, 2004. Thesecases are pending disposal.

15. Two cases have been filed by the Company before Civil Judge (J.D.) against the encroachment of land held bythe Company by Triveni Bai. In one of these cases, the Company has sought injunction against the establishmentof a deity on the disputed land. The case was filed on January 7, 1986 and the next hearing on evidence is fixedfor October 10, 2005.

16. Eight ejectment suits have been filed by the Company against encroachment over the Company’s land towardsthe east side of the metal road, Pipri-Shaktinagar Marg before the Civil Judge, (S.D). In two of these cases, theCompany has received favourable orders and in the other orders the suit has been decreed ex parte and the exparte argument is pending.

17. Eighteen ejectment suits filed against encroachment over the Company’s land towards the eastern side of themetal road Pipri-Shaktinagar Marg before Additional Civil Judge (S.D.) on January 1, 1988 bearing O.S. Nos. 1/1988 to O.S. No.18/1988. In all these cases the suit has been decreed ex parte and the ex parte argument ispending. With regard to the same property, an injunction suit has been filed before Civil Judge, (S.D.). This suitwas dismissed for default and thereafter, Restoration Petition is pending. For the same property, four suits fordemolition and possession have been filed before Civil Judge, (S.D.) which are pending at various stages of trial.Two cases have been filed with regard to removal of illegal possession on this property before Civil Judge (Jr.Div.). The matters are pending.

18. The Company has filed O.S. No. 97 of 1983, before Civil Judge, Dudhi on July 5, 1983 against PragatisheelMazdoor Sabha claiming ownership over the building housing the office of the Trade Union of the Company. Thecivil suit was decided against the Company and an appeal was preferred before District Judge, Mirzapur. TheDistrict Judge vide order dated December 3, 2003 rejected the appeal holding that unless the union wasderecognized by the Labour Court in accordance with the provisions Indian Trade Unions Act, 1926 it could notbe evicted from the building as per agreement dated December 10, 1973 arrived at between the Company andthe Union. Aggrieved by the order the Company filed a second appeal bearing No. 19 of 2002 before the Allahabad

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High Court. The matter is pending disposal.

19. The Company had filed Writ Petition CWJC No. 2945 of 96 (R) before the Ranchi High Court for refund of excesscess on royalty paid at 500 per cent instead of 133.33 per cent between June, 1985 and April, 1988. The amountinvolved is Rs. 24.7 million. On December 23, 2003 the Writ Petition was dismissed by the Ranchi High Court.The Company filed SLP No. 10367 of 2004 dated April 5, 2004 against this judgment in the Supreme Court. OnJuly 8, 2004, the SLP was admitted and notice was issued to the State. The matter is pending disposal.

20. The Company filed a case of libel against Dr. S.R. Jindal and others (Civil Suit No. 1202 of 2002) dated July 24,2002 before the Delhi High Court for recovery of Rs. 14.5 million as damages for the loss of reputation of theAditya Birla Group. Written statement has been filed by the Defendants. The case was posted on August 8, 2005for admission and denial of the documents. The next date of hearing is fixed on October 28, 2005 for filing of thedocuments.

21. The Company has filed a Writ Petition No. 33744 of 2004 dated August 10, 2004 before the Allahabad High Courtagainst the orders of Additional District Judge, Obra dated February 2, 2003, November 18, 1992 and January30, 1993 whereby the learned judge upheld the possessory rights of Awadhot Bhagwan Ram Ashram over landplot No. 169 (old) in village Jokahi in favour of the Ashram. The Company contends that this land rightfullybelongs to the Company and had been transferred to it by way of sale in 1971 and in 1976 this ownership andpossession had been reconfirmed by declaration of the Revenue Officer under the Uttar Pradesh ZamindariAbolition and Land Reforms Act. On August 10, 2004, a stay application against the impugned order has beenfiled. By order dated August 20, 2004 the High Court had issued notice to the Respondents to file counteraffidavit which has yet not been filed.

22. The Company has filed Writ Petition No. 4630 of 2000 dated July 31, 2000 in the Jabalpur High Court against thedecision of South Eastern Railway to retrospectively revise plot rents such that a claim of Rs 5.1 million is duefrom the Company. On August 9, 2000, the Jabalpur High Court granted stay in favour of the Company. The casehas since been transferred to Bilaspur High Court and is to be listed for arguments.

23. The Company has filed two cases against the Syndicate Bank for non-payment against letters of credit issued inrespect of a sum of Rs.2.52 million owed to the Company by M/s.Ramakrishna Metals Pvt. Ltd. and M/s. IshwarMetals. The required documents were lodged with the Syndicate Bank against the letters of credit, but wererejected by the Bank. The matters are pending disposal.

24. The Company has filed a civil suit against Ramesh Chand Industries for an amount aggregating to Rs. 5.3 million.The next hearing of the case is on December 5, 2005.

25. The Company filed Complaint Case No. 71/SC/1997 against the Managing Director of UP Airways and othersbefore the State Consumer Disputes Redressal Commission, Uttar Pradesh claiming refund on purchase oftickets, interest and compensation amounting to an aggregate of Rs. 1.35 million on grounds that the flightsoperated by the Respondent on the Delhi-Allahabad-Muirpur-Lucknow route were irregular and flights on theaforesaid route were completely stopped by the Respondent on May 7, 1996, thereby leaving the Company with172 valid unused tickets, which according to the terms of issue of the tickets, were to be used by June 30, 1996and 39 tickets for flights which were cancelled. The complaint alleged that the Respondent failed to revalidatethe tickets or refund the amount of money spent on the cancelled tickets. The Commission, vide an order datedMay 13, 2004 decided the matter in favour of the Company and awarded them a sum of Rs. 0.66 million asrefund due to the discontinuance of service along with an interest of 6 per cent from the date of deposit of theamount by the Complainant to the date of refund. The Managing Director, UP Airways and UP Airways filed FirstAppeal No. 6 of 2005 against the aforesaid order of the State Commission, before the National Consumer DisputesRedressal Forum, inter alia on the grounds that the State Commission, Lucknow had no jurisdiction to try thecase, the dispute is not a consumer dispute and the Company is not a consumer within the meaning of theConsumer Protection Act, 1986 and that the Company breached its obligations under the contract of purchase oftickets and cannot claim benefit from its own default. The National Commission admitted the appeal vide orderdated February 11, 2004 and also directed that notice be issued. Notice has been issued to the Company onFebruary 25, 2005. According to the notice, the matter was due to be listed on April 23, 2005. However, thematter is yet to be listed.

26. The Company has filed a series of Writ Petitions against the orders passed by the Uttar Pradesh Pollution Control

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Board under Section 13 of the Water Cess (Prevention and Control of Pollution) Act, 1977 which had allegedwrongful use of water from the Rihand lake. The total amount that has been paid by the Company under protestis Rs. 8.17 million. The Writ Petitions have been admitted but no further date of hearing has been given by theCourt.

27. The Company has filed cases against Somaru and Atma Ram before the Civil Judge, Dudhi against the act ofencroachment on the Company land and obstruction of use of the same. In the case against Somaru (CA No 15/2000) an adverse order was passed on July 17, 2000 against the Company which has been appealed at the levelof the District Judge. In the other case, temporary injunction has been passed in favour of the Company on April20, 2000. An execution application has been filed by the Company which is scheduled for ex parte hearing.

28. The Company has also filed summary suits bearing numbers 4879 of 2002 against Swastik Corporation, 4880 of2001 against Adarsh Metal Industries, Bombay and 623 of 2003 against Ruby Coach Industries, Ltd., Mumbai inthe Bombay High Court inter alia on grounds of default in payment against supply of sheets. The values of thecases are Rs. 25 million, Rs. 15 million and Rs. 5.4 million respectively. In the first two matters, the trial is inprogress and the matter is pending listing in 623 of 2003. The said Adarsh Industries is a sister concern ofSwastik metal Corporation and is owned by the same owner. Both these parties have closed their business, areinsolvent and have no property. In respect of Ruby Coach Industries, an out of Court settlement process is goingon with the said party. The matters are pending disposal.

Civil cases filed by the Company for claims under Rs. 1 million

Apart from the cases described hereinabove there are 95 cases filed by the Company. The approximate amounts inthese cases are an aggregate of Rs. 31.59 million.

E. Miscellaneous Cases

(a) Cases filed against the Company

1. Three cases have been filed under Section 5 and 26 of the Indian Forest Act, 1927 (“Forest Act”) before theMagistrate’s Court by the Divisional Forest Officer, Renukoot alleging encroachment upon forest land by theCompany through incorrect construction of boundary wall. In each of these cases, the Investigating Officer hasrecommended that an application for invocation of Section 63 of Forest Act be made.

2. Eight cases have been filed before the Judicial Magistrate at Lohardaga for breach of Sections 25, 26 and 33 ofthe Forest Act by the Company. It is alleged in these cases that the Company has engaged in activities notpermitted in the forest area such as mining, construction of road and transportation of bauxite. In three of thesecases, the High Court has admitted a petition for quashing the proceedings and has stayed the proceeding in thelower court. In three other cases, the lower court is hearing the case. In two of the cases, the sanction of theDeputy Forest Officer for continuing the proceedings is awaited.

3. Two cases have been filed against the Company under Section 52 of the Forest Act before the Divisional ForestOfficer for the confiscation of materials illegally collected from the forest. One of these cases is pending hearingbefore the Divisional Forest Officer. In the other case, an adverse order was passed by the Officer on March 3,2005. Against this order, Writ Petition (Cr) No.146 of 2005 was filed at Jharkhand High Court, Ranchi on April 19,2005 and the order of the lower court was stayed vide order dated May 12, 2005.

4. Two certificate cases 01 (RL) 2001-2002 & 11 (RL) 2001-2002 were filed before the Ranchi Certificate Office by theDistrict Mining Officer, Lohardaga claiming royalty on Vanadium Sludge. The first case involves royalty amountingto Rs. 6 million for the period 1990 – 2000 and second case involves royalty amounting to Rs. 2.9 million includinginterest for substantially the same period. In the first case, the Certificate Office has ruled against the Company.The Company has preferred an Appeal No. 18 of 2001 on August 25, 2001 before the District Court, Lohardagaand has deposited 40 per cent of the amount. In the second case, the Company has filed an objection before theCertificate Officer stating that the manner of calculation of royalty is wrong. No date for hearing has yet beenfixed.

5. The Assistant Mining Officer, Gumla filed certificate case No. 07/GR/2003-04 dated August 19, 2003 in the courtof Certificate Officer, South Chhotanagpur Anchal, Ranchi for realization of Rs. 6.01 million against cost ofmineral bauxite allegedly illegally mined and despatched from out of the lease area of Jalim and Sanai Mines bythe Company. The Company has filed denial petition under Section 9 of Bihar and Orissa Public Demands Recovery

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Act, 1914 on September 19, 2003 before the Certificate Officer Court, Ranchi. The case is pending for finalhearing in the court of Certificate Officer, Ranchi.

6. The Assistant Mining Officer, Lohardaga, issued a demand notice dated January 5, 2002 directing the Companyto pay an amount aggregating Rs, 19.55 million (together with Mines & Minerals Ltd.) in respect of the allegedarrears of royalty on vanadium sludge payable by the Company and interest thereon till December 31, 2001. TheCompany disputed its liability and the matter was referred to the Certificate Officer (Mines), Ranchi, whocommenced certificate proceedings under a notice dated January 15, 2002. The Company filed Writ Petition No.6839 of 2002 before the Allahabad High Court challenging the notice dated January 5, 2002 and January 15,2002. The High Court passed orders dated February 14, 2002 and March 22, 2002 holding that in case theCompany deposited 50 per cent of the aggregate amount and furnished a bank guarantee for the remainingamount, any further action including the certification proceedings pursuant to the demand notice would remainstayed. The Company has complied with the aforesaid conditions.

7. The Assistant Mining Officer, Gumla vide Notice dated June 13, 2005 demanded royalty on Vanadium amountingto Rs. 13.8 million for the period 1991-92 to 2000-01 with interest of Rs 26.7 million calculated upto March 31,2005. The Company has furnished a reply to this notice denying the liability. The Certificate Officer has issuednotice to the Company on July 25, 2005 for realization of the dues. The Company has denied its liability to payvide August 25, 2005. The reply from the Assistant Mining Officer has also been filed before the CertificateOfficer on September 6, 2005. The matter is pending disposal.

8. The Company has filed Revision Application dated January 21, 2002 under Section 54 of the Mineral ConcessionRules, 1960 before the Revisional Tribunal, Mines, Delhi against the order of the Government of Maharashtradated February 16, 2002, granting mining lease rights to Mr. RM Mohite in Kolhapur copper mines of area1312.41 hectares. Revision hearing was held on June 13, 2004 and was concluded on June 20, 2004. The orderof the tribunal is awaited.

9. The Company has filed Title Suit No. 174 of 1999 in the court of the Civil Judge Sambalpur against theencroachment of land held by the Company at Hirakud against Mrs. B. Kanta and others. The case is posted forhearing.

Miscellaneous cases under Rs. 1 million

Apart from the cases described hereinabove there are 6 other cases filed against the Company. The approximateamounts in these cases are an aggregate of Rs. 1.87 million.

(b) Cases filed by the Company

1. The Company has filed a Writ Petition No 2530 (MB) of 1994 on May 18, 1994 in the Allahabad High Court againstthe order of the Uttar Pradesh State Electricity Board (“UPSEB”) dated July 8, 1993 claiming an additionalRs. 35.7 million as water rates for the withdrawal of water from the Rihand Reservoir on account of retrospectiverevision of water charges for the period from 1989-90 to 1992-93. An order staying recovery has been passed onMay 18, 1994. This case has been tagged with writ petition no. 2219 of 2001 below and has not been listed forhearing after July 2001.

2. The Company has filed a Writ Petition No 2219 of 2001 in Allahabad High Court on May 9, 2001 against the claimof Rs. 5.1 million in arrears by the Uttar Pradesh Jal Vidyut Nigam Ltd. due to retrospective revision of watercharges for water drawn from upstream and down stream of Rihand Reservoir from January 14, 2000 to January31, 2001. Stay was granted for arrears on May 11, 2001.The case has been tagged with Writ Petition No. 2530(MB)of 1994 and has not been listed after July 2001.

3. The Deputy Officer, Mines Department, Sonbhadra, vide ‘citation to appear’ dated February 12, 2000 has demandeda royalty of Rs. 9.1 million on minor mineral illegally mined and utilized by the Company on its factory premises.The Company has challenged the said levy vide Suit No 19/2000 dated before Civil Judge (Sr. Div.), Sonbhadra.The demand has been stayed vide conditional stay order dated May 9, 2000 which required deposit of thedemand amount by way of fixed deposit in a nationalized bank for period specified in the order. The Companyhas paid the said amount. The case is fixed for disposal of preliminary issues on maintainability of the suit. Thedate of hearing is yet to be fixed.

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4. The Company filed Writ Petition O.P. No.10472 of 1998 dated June 6, 1998 before the Kerala High Court againstthe demand/disconnection notice of May 27, 1998 which followed the decision of the Kerala State ElectricityBoard of February, 1998 to withdraw the facility of clubbing of electricity availed by the Company. Amountinvolved is Rs.66.3 million for the period between February 1998 to June 1998.The Kerala High Court has stayedproceedings on September 24, 1998 for recovery of the disputed amount and directed the Board not to disconnectpower supply till disposal of the matter. Hearing is awaited.

5. The Company has filed a Review Application (Case No 3 of 2002) before the Deputy Commissioner, Lohardagaagainst the order dated September 3, 2001 citing encroachment by the Company on a public road passingthrough the leasehold area in Lohardaga Mine. A criminal complaint had also been filed which the Company hasprayed be rescinded in this application. Review petition was filed with Deputy Commissioner in October 2001.The said matter is pending before the Deputy Commissioner.

6. The Company filed a Writ Petition No. 5633 of 2004 dated October 8, 2004 before the Jharkhand High Courtagainst the order of the District Commissioner, Latehar dated July 24, 2004 directing the Company to pay fivetimes penalty of the deficit amount paid towards stamp duty on certain deeds executed in the year 1999. Thecase was heard on October 15, 2004 and the High Court directed the District Commissioner, Latehar not to takecoercive steps against the Company. This case was last heard on October 15, 2004 and is pending for finalhearing.

7. The Company imported six consignments of copper concentrate and since they were unable to produce a finalinvoice after filing the bills of exchange, they sought the provisional clearance of the imported goods on PDBonds. Subsequently, they filed the final invoice. The DC (Grade I) and the Company sought to value the goodsfor the purpose of customs duty at different rates. The Commissioner of Customs has issued an order-in-originalno. KDL/DC/Gr-I/NK/02/2005 dated March 18, 2004 dropping the proceedings in favour of the Company. TheDepartment is yet to file an appeal in this regard.

8. The Company had filed Writ Petition No. 1032 of 2004 before the Jharkhand High Court, Ranchi challenging twoorders of the Deputy Forest Officer vide letters dated November 21, 2003 and January 17, 2004 prescribingconfiscation and stoppage of transportation work of bauxite from mines at Latehar, Lohardaga, Palamau andGumla pending approval of the Central Government. By order dated June 21, 2004 a Single Judge Bench dismissedthis Writ Petition. Thereafter the Company has filed a Letters Patent Appeal against this order of dismissal andvide order dated May 12, 2005, the High Court has allowed Interim Application No. 787 of 2005 permitting thecontinuation of transportation activities till further orders are passed.

F. Arbitration Proceedings

1. The Company initiated arbitration proceedings for failure of Uttar Pradesh State Electricity Board (“UPSEB”) tosupply electrical energy in terms of Agreement dated October 29, 1959. For the period 1971 to 1973, the amountclaimed was Rs. 20.5 million and for 1973 to 1975, the amount claimed was Rs. 69.1 million. UPSEB moved thelower Court challenging the reference to Arbitration, which was rejected. Hence UPSEB has filed Revision Nos.6 &7 of 1980 dated January 1, 1980. Stay was granted on January 18, 1980 The Company has filed an applicationfor vacation of stay. The matter was last listed on May 20, 2005 when the court directed the cases to be listedbefore the appropriate regular court.

2. The Company has been involved in arbitration proceedings with IFFCO. The Presiding Arbitrator endorsed theawards of IFFCO’s Arbitrator against the Company. An amount of Rs. 71.9 million along with interest at 10.25 percent from January 15, 2001 was awarded to IFFCO. The Company has filed an appeal in the Delhi High Court onOctober 10, 2004 against this arbitration award. A hearing was held on December 1, 2004 and notices wereissued. The next date for hearing is on September 10, 2005. Court directed both parties to file synopses andlisted the matter for hearing on November 22, 2005.

3. The Company initiated arbitration proceedings for Rs. 15.3 million and Rs. 11.7 million on the grounds of failureof UPSEB to supply electrical energy in terms of agreement dated November 30, 1976. UPSEB filed miscellaneouscases before the Civil Judge, Lucknow, which were dismissed for default. The application for restoration andcondonation of delay were also dismissed by order dated February 5, 1993, UPSEB filed FAFO Nos. 105 of 1993and 107 of 1993 was filed by UPSEB. Arbitration proceedings were stayed by High Court vide order dated May20, 1993. The next date of hearing is yet to be fixed.

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4. The Company initiated three arbitration proceedings for failure of UPSEB to supply electrical energy in terms ofAgreements dated October 29, 1959 and September 30, 1976. The amounts claimed were Rs. 26.4 million forthe period September 1973 to November 30, 1977, Rs. 61.62 million for the period April 7, 1977 to September18, 1977 and Rs. 62.21 million for the period December 1, 1977 to May 7, 1978. UPSEB moved the lower Courtchallenging the references to Arbitration. The lower court partly allowed the applications holding that the arbitrationclauses were valid and the dispute were covered by the arbitration clauses but the references to arbitration wereunilateral and hence invalid. Against these orders the Company filed Revision Nos. 339, 340 and 341 of 1979while UPSEB filed Revision Nos. 10, 11 and 40 of 1980. Restraint orders have been granted against the arbitratorfrom proceeding in these arbitrations. Revisions are being listed for final hearing. The matters were listed onMay 20, 2005 and the Court directed these to be listed before the appropriate Court.

5. The Company initiated arbitration proceedings for failure of UPSEB to supply electrical energy in terms of theagreements dated October 29, 1959 and November 30, 1976. The amount claimed was Rs. 41.93 million for theperiod March 8, 1978 to September 30, 1978. UPSEB filed suit No. 58 of 1979 before Civil Judge (S.D.) Lucknowfor permanent injunction against the arbitration proceedings and for declaration that the dispute did not comewithin the purview of the arbitration clause. The said suit was allowed vide order dated September 28, 1998.Against this order of the Civil Judge Civil Revision No. 122 of 1998 has been preferred by the Company. In thisproceeding, the High Court vide its order dated January 18, 1999 stayed the operation of the impugned order ofthe Civil Judge. The matter came up for hearing on July 25, 2003 and was dismissed due to non-appearance ofcounsels. Restoration application has been filed on July 31, 2003. The High Court ordered restoration of the caseto its original number and continuation of the existing stay order on March 4, 2004. The case was listed last inJuly 9, 2004 and adjourned. A further date of hearing is yet to be fixed.

6. The Company had initiated arbitration proceedings against UPSEB in respect of the refund of Rs. 3.64 millionpaid under protest on account of wrongful demand based on minimum consumption guarantee. The UPSEBdeclined to appoint an arbitrator and challenged the appointment of sole arbitrator before the District Court inthe Unnao District of Uttar Pradesh. The Court vide its order dated April 10, 1992 rejected the challenge andUPSEB filed a Writ Petition No. 1232 of 1992 against the said Order. The writ petition was dismissed for defaulton December 4, 2000. The sole arbitrator passed an award on December 15, 2000 which was made Rule ofCourt in the year 2001. UPSEB filed an application No. 6179 of 2000 for recall of the order dated December 4,2000 and for restoration of the Writ Petition No. 1232 of 1992. The application is pending disposal.

7. UPSEB had revised its general rates from July 1, 1978 and had worked out an increase of 4.1647 paisa /unit overand above the average rate of 11 paisa/unit by ignoring the effect of fuel cost valuation adjustment charges incalculating the proportionate increase in terms of power agreement. The Company had paid a sum of Rs. 11.7million under protest and had initiated arbitration proceedings on April 17, 1981. The arbitrator made an awardfor Rs. 3.59 million, which was made Rule of Court on August 27, 1990. Against the order of making the awardthe Rule of Court, FAFO No. 47 of 1991 dated March 26, 1991 has been filed by the UPSEB in respect of anamount of Rs. 1.73 million. The appeal was admitted on August 16, 1994. Proceedings are pending and nofurther date has been fixed.

G. Notice

1. The Company was allotted 64 acres, 30 guntas extent of land in Kangrali Industrial Area by the Karnataka IndustrialAreas Development Board (“KIADB”) vide an allotment letter dated April 4, 1973. The Assistant Secretary, KIADB,Belgaum passed an order dated January 18, 2000 terminating the allotment letter and resuming the land onaccount of the alleged non-compliance with the conditions contained in the allotment letter. The Company, by aletter dated January 18, 2000, requested the KIADB to withdraw its letter dated January 18, 2000 and consider itsproposals submitted in an earlier letter dated August 6, 2000. The KIADB, by its letters dated January 28, 2000and January 31, 2000 revoked the order dated January 18, 2000 and kept the same in abeyance. By its letterdated February 1, 2000, the KIADB withdrew the order. The Company made an exchange proposal to the KIADB.The exchange proposal was accepted by KIADB. However, the same would not be implemented due to variouspractical problems such as stamp duty and surrender of our own land. Matter is pending with KIADB.

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II. Group Companies

Material litigation involving our top five Group Companies is as provided below:

(a) Grasim Industries Limited

1. A show cause notice for an amount of Rs.104.0 million was issued stating that the spinning and weaving units ofBhiwani Unit is not a composite mill. The matter is pending in CEGAT. A notice was issued disallowing Modvatcredit of Rs.70.6 million. There are 107 other minor cases aggregating Rs.663.1 million of excise duty which arepending at different levels of appeals.

2. Demand of Rs.108.1 million has been raised towards custom duty on import technical know-how and otherservices against which a bank guarantee of Rs.56.8 million has been furnished. The matter is pending in appealwith the Bombay High Court. Penalty of Rs.75.0 million has been imposed by the customs authorities for non-submission of bill of entry, against which an appeal is being filed in the Delhi High Court.

3. Demand of Rs.86.8 million has been raised towards stamp duty and lease transfer charges on the transfer ofGwalior property. There are 3 other minor cases aggregating Rs.45.2 million at different levels of appeals.

4. Madhya Pradesh State Electricity Board (“MPSEB”) has raised a demand of Rs.392.8 million on the basis of anorder of the Madhya Pradesh Electricity Regulatory Commission imposing a condition to use board’s minimumpower to the extent of 50% of requirement and surcharge thereon, against which a stay has been obtained fromMadhya Pradesh High Court. A demand of Rs.75.3 million has been raised by MPSEB towards minimum tariffcharges. The matter is pending before the Madhya Pradesh High Court. An appeal against a demand of electricitytax of Rs.72.3 million made by CEIG is pending with Energy Secretary for disposal. There are two other minorcases amounting to a sum of Rs.56.4 million pending before different levels of appeals.

5. Two cases aggregating to Rs.35.4 million with regard to Mineral Area Development Cess & Royalty, 61 casesaggregating to Rs.234.3 million with regard to sales tax and entry tax, six cases aggregating to Rs.61.5 millionwith regard to land compensation, 69 cases aggregating to Rs.29.9 million with regard to labour disputes, eightcases aggregating to Rs.35.5 million with regard to freight disputes, one case for Rs.5.7 million with regard tobetterment fees, two cases aggregating to Rs. 2.1 million with regard to service tax matters, four cases aggregatingto Rs.9.0 million with regard to property & road tax matters, four cases aggregating to Rs.9.3 million with regardto water cess, four cases aggregating to Rs.24.3 million with regard to price difference due to weight loss, 35cases of claims from parties aggregating to Rs.23.3 million and 17 miscellaneous cases aggregating to Rs.80.3million are pending before the appropriate authorities.

(b) Ultra Tech Cement Limited

1. There is one case pending in civil court against the company for recovery of an amount of Rs.38.0 million foralleged breach of contract for supply of clay.

2. There is one arbitration matter pending in the Bombay High Court, claiming demurrage amount of Rs. 12.0million arising out of contract for supply of coal.

3. There are eight cases pending against the Company in consumer courts. These are mainly against allegedquality of cement supplied. The amount of contingent liability in these cases is around Rs. 7.55 million.

4. Commissioner of Sales Tax, Orissa has challenged the Assessment Order passed by the first Appellate Authority.The aggregate amount involved is Rs. 89.3 million. The matter is pending appeal.

(c) Indo Gulf Fertilisers Limited

1. The state has filed a complaint under Section 7 of the Essential Commodities Act, 1955 read with the Fertilizer(Control) Order, 1985 against the company and Mr. B.N. Puranmalka, a former managing director and otherofficers, in the court of special judge, Moga. The complaint was filed on the ground that a sample of fertilizerdrawn by the compost inspector on analysis was found to be substandard fertilizer in violation of Clause 19 ofthe Fertilizer (Control ) Order, 1985.

2. Taxes and other dues aggregating to an amount of Rs. 6.8 million have been claimed on sale of urea, tradingmaterials and on secondary freight under the West Bengal Sales Tax Act, 1994.

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3. Hindustan Petroleum Corporation Limited (HPCL) has made a claim for amount aggregating Rs. 20.8 milliondeducted by the company for certain disputes relating to poor quality of products and shortages. The companyfiled a counter claim amounting to Rs.25.38 million against HPCL. The case is pending in the District Court,Sultanpur.

4. Demand by the Assistant Director, Electric Safety towards interest aggregating Rs. 0.3 million in connection withcaptive power generation. The matter is pending before the Lucknow High Court.

5. Claims aggregating Rs. 5.9 million have been made by ex-employees of the Company pending in various courts.

6. Claims aggregating Rs. 1.7 million have been made against the company for recovery towards staff cost, sidinginspection charges, etc. of personnel deployed by the Indian Railways at the Company’s private siding.

(d) Aditya Birla Nuvo Limited (formerly Indian Rayon And Industries Limited)

1. The Excise department has made a demand of Rs.55.1 million in respect of imported readymade garmentspurchased in bulk and repacked in small quantity for sale, considering this activity as manufacturing. The companyhas submitted that this activity does not amount to manufacture and no excise duty is payable.

2. The Excise Department has made a demand of Rs.97.6 million in respect of excise duty levy on MRP basisinstead of Nil rate of duty. There are also other excise demands made by the department against the companyaggregating Rs. 210.6 million.

3. There are various customs related cases against the company for claims aggregating Rs. 15.3 million.

4. The Income Tax Department has filed an appeal before the Income Tax Appellate Tribunal against the Companyin connection with favourable order received by the Company from CIT(A) for the Assessment Year 1995-96 foramount aggregating Rs. 55.7 million. The Income Tax Department has also filed appeal before Appellate Tribunalagainst the Company in connection with favourable order received by the Company from CIT(A) for the AssessmentYear 1997-98 for amount aggregating Rs. 175.9 million. There are other income tax related cases pending forclaims aggregating Rs. 116.3 million.

5. There are various labour related cases against the company for claims aggregating Rs. 59.2 million.

6. There are various sales tax related cases against the company for claims aggregating Rs. 56.2 million.

7. There are various service tax related cases against the company for claims aggregating Rs. 5.0 million.

8. The company entered into a contract with a party for supply of hardware accessories to UPSEB. The party failedto supply the hardware accessories and so the company procured the accessories from an alternative supplier.In response, the party has filed a suit against the company and UPSEB for compensation amounting to Rs.58.2million. The Company has also filed a suit against the party for Rs.16.2 million additional costs incurred.

9. Other than the above there are various civil cases pending against the company for claims aggregating Rs. 88.8million.

(e) Birla Global Finance Limited

1. A criminal case of cheating has been filed against Dr. K.M. Birla, Mr. S.K. Mitra and Mr. Ashish Goel (Lucknowbranch employee) in the Kanpur Court by one hirer Mr. Charanjeet Singh. The Allahabad High Court has issueda stay on the proceedings at the Kanpur Court. The stay is still in force and there are no further developments inthe case.

2. A case under Section 138 of the Negotiable Instruments Act, 1881 against the company and its managing directorhas been filed at the Delhi Court by one fixed depositor, Mr. B N Sharma. The Company has filed a revisionpetition in the Delhi High Court.

3. SEBI has issued a letter to the company alleging violation of Regulation 6(2) of the Takeover Code in the year1997 and the company has agreed to settle the same by settlement by consent order.

4. Penalty of Rs. 75,000 was imposed by SEBI on Birla Mutual Fund for non-compliance of disclosure requirementsunder Regulation 7(1) and 7(2) of the Takeover Code pursuant to acquisition of 161,200 shares representing5.01% of the paid up capital of Subex Systems Ltd. on October 18, 1999.

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III. Subsidiaries

A. Bihar Caustic and Chemicals Limited

1. Mr. Dilip Kumar Sharma filed criminal complaint against a contractor of the company and the managingdirector of the company. Mr. Kumar had rented a machine to the contractor for carrying out work in thecompany’s premises. The full amount of rent was not paid by the contractor and Mr. Kumar filed thecriminal complaint. The court took cognizance of the complaint and issued a bailable warrant against thecontractor and the managing director of the company. The company filed a criminal miscellaneous applicationto quash the order before the Jharkhand High Court at Ranchi, and the High Court has issued a stay againstthe proceedings of the trial court. The criminal miscellaneous application is pending for final disposal.

2. The Jharkhand State Electricity Board (JSEB) raised an annual minimum guarantee bill of Rs. 21.4 million,which was challenged by the company before the High Court. The High Court directed the JSEB to issue arevised bill, which was issued for an amount aggregating Rs. 158.9 million. The revised bill included fuelsurcharge and other charges. The matter is sub-judice before the High Court. The amount in disputeaggregates approximately Rs. 615 million.

3. A fuel surcharge bill of Rs. 378.2 million was raised by the JSEB and challenged by the company on theground of wrong calculation. The disputed amount involved is approximately Rs. 12.82 million and ispending before the Supreme Court of India.

4. The company filed a writ petition in the High Court in respect of the company’s entitlement to an interestfree sales tax loan of Rs. 100 million under the industrial policy of the Bihar Government. The company washowever only reimbursed Rs. 10 million and aggrieved by the same has filed the instant writ petition.

5. The company has made an insurance claim for Rs. 2.2 million, which has been allowed by the single judgeof the Calcutta High Court. The insurance company has filed an appeal challenging the order of the singlejudge.

6. The company filed an appeal before CEGAT, Kolkata against adjudication order No. 122-178/Ran/C.E/Appeal/2004 dated August 31, 2004 relating to levy of excise on excess charges realised from transporters amountingto Rs. 7 million. The case was heard on July 21, 2005 and the CESTAT has granted full stay. The case is fixedfor final hearing on September 27, 2005.

7. The State Bank of India has filed a suit before the debt recovery tribunal for recovery of Rs. 39.5 million. Thecase is pending before the tribunal.

B. Indian Aluminium Company, Limited

1. Sales tax related claims in respect of set off on purchases under G.O 667 are pending before the High Courtof Andhra Pradesh writ petition no 21775 of 2005, for amounts aggregating Rs. 14.22 million.

2. The Income Tax Department has raised a demand for Rs. 4.57 million in respect of assessment year 2002-03 on account of disallowance of depreciation and minimum alternate tax. The company is in appeal beforeCIT(A) against the order of the department.

C. Minerals and Minerals Limited

1. District Forest Officer, Ranchi West Division, Lohardaga filed complaint case against the former generalmanager of the Company and other officers in the court of CJM, Lohardaga for illegal mining and loading ofillegally mined bauxite from expired lease in Manduapat mine. The CJM, Lohardaga by an order dated July16, 1999 had been taken cognizance for the offence under Sections 26 and 63 of the Indian Forest Act, 1927and Section 2, 3(a), 3(b) of the Forest Conservation Act, 1980. An application under Section 482 of theCode of Criminal Procedure was heard and allowed by the High Court at Ranchi and the proceedings havebeen stayed against the officers of the company. The case is pending final hearing at the High Court ofRanchi.

2. Mr. Arbind Bhai Patel, Director of the Mahuamilan Karanpura Coal Mines Ltd. (“Mahuamilan”) filed a title suitNo. 28/92 in the Civil Court, Gumla on August 10, 1992 for a declaration that Mahuamilan is the statutorylessee under Bihar State and the lease of Mahuamilan granted in the year 1948 by the maharaja ofChhotanagpur was subsisting at the time of vesting of estate and that State Government be restrained from

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making settlement of the leased area to any one else. The company is impleaded as a defendant to the suitas it had filed an application on December 23, 1968 for grant of mining lease for bauxite over an area of1475 acres land in villages – Bimarla, which is claimed to be a part of area earlier held by Mahuamilan. Thecase is pending before Sub-Judge-1 Court, Gumla for filing documents and production of witnesses.

3. An application for compensation under Section 140 of the Motor Vehicles Act, 1988 has been filed onAugust 10, 2004 by mother of deceased who died in a motor accident by a dumper belonging to thecompany. An amount of Rs. 50,000 has been claimed as compensation. The case is pending in the court ofDistrict and Sessions Judge, Lohardaga.

4. General Secretary, CBW Union has raised a dispute before the CGIT, Dhanbad on December 14, 1999regarding refusal of the company to accept the 33 point charter of demand presented by the union.

5. Assistant Mining Officer, Lohardaga filed certificate case No. 10/RL/01-02 on January 15, 2002 in the Courtof Certificate Officer, South Chhotanagpur Anchal, Ranchi for realization of Rs. 3.69 million against royaltyand interest due on vanadium mineral for the period 1991-92 to 2000-01. The company has filed a denialpetition on January 28, 2002 before the Certificate Officer at Ranchi. The case is pending for final hearing/order in the Court of Certificate Officer, Ranchi.

6. The Company has filed SLP No. 10860 of 2004 on April 5, 2004 in the Supreme Court of India against thedismissal order dated December 23, 2003 passed in CWJC No. 2943 of 1996 by the Jharkhand High Courtand praying for a refund of Rs. 2.14 million against mineral cess which was collected as excess amountbetween the period of June 21, 1985 and April 30, 1988 at the rate of 500 per cent after adjusting the cesspayable at 133 1/3rd per cent for the relevant period until April 4, 1991. The case is pending final hearing.

7. The company filed civil appeal No. 328 of 03 in the Calcutta High Court, against the order passed by theCESTAT, Kolkata dismissing the appeal No. E-516/02. The company filed the aforesaid appeal against theorder in appeal No. 0/A No. 173/JSR/CEX/Appeal/02 passed by the commissioner of Central Excise andCustoms, Patna whereby refund claim of about Rs. 219,780 filed by the company was rejected. The appellantfiled the aforesaid refund claim as service tax deposited during the period November 1997 to June, 1998 inregard to service provided by goods transport operators.

D. Lucknow Finance Company Limited

1. The Income Tax Department has imposed a penalty of Rs. 5.1 million and Rs. 4.6 million under Section.271(1)(c) of the IT Act, 1961 on March 31, 2005 and March 30, 2005 in respect of assessment years 2000-01and 2002-03. The Company is in appeal before CIT(A) against the impositions of this penalty

E. Renuka Investments & Finance Limited

1. The State of Uttar Pradesh filed case against the Company in respect of land purchased from M/s GwaliorProperties and Estates Limited in village Kharpatar, Dudhi, on the ground that the land had been purchasedfor commercial purposes and as no commercial rates have been notified for the area therefore the dutyshould have been paid at the price reserved for residential plots. The Collector after inspecting the plot onNovember 28, 2002 imposed stamp duty of Rs. 0.18 million and a penalty of equal amount. The Companyhas filed appeal No. 33600/2003 before the Commissioner, Mirzapur and has deposited one third of thetotal amount demanded.

2. Mr. S. K. Mitra has filed O.S. No 21 of 2001-02 in the Court of SDM Dudhi, against the Company alleging thatan area of 0.1265 hectares in plot no. 392 (405 old) situated in village Murdhawa Pargana & Tehsil Dudhi,belonging to him has wrongly been recorded in the name of the company and requested the Court todeclare him the Bhumidhar of the plot and that records be accordingly rectified by deleting the name of theCompany. The matter is fixed for disposal of objections on the report of the lekhpal with respect to thelocation and area of the plot.

3. Declaratory suit O.S. No. 16 of 2002 in the Court of SDM, Dudhi has been initiated by State of Uttar Pradeshthrough Collector Sonebhadra against the company, alleging that the transfer of certain plots in favour ofthe Company has taken place beyond the provisions of U.P.Z.A. Act, and therefore have prayed that thecourt declare the State as owner of the plots in question. Matter is pending before the court for framing ofissues.

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F. Birla Mt. Gordon Pty Limited

1. There are two labour related claims raised against the company. The first is in respect of an employee of thecompany who has been off work for approximately two years is claiming AUD 400,000 in terms ofcompensation for future income due to loss caused by injury sustained at work. The other dispute has beenraised by an employee of a caterer to the company, who is claiming compensation against the company forpersonal injuries sustained in the course of work.

G. Indal Exports Limited

1. The Commercial Taxes Officer has raised demands under the West Bengal (Sales Tax) Act, 1994 for theassessment year 1995-1996 for tax, interest and penalty amounting to Rs. 0.22 million. The demand hasbeen set aside by the Assistant Commissioner of Commercial Taxes, in his order dated August 30, 1998.

2. The Commercial Taxes Officer has raised demands under the Central Sales Tax Act, 1956 for the assessmentyear 1995-1996 for tax and penalty amounting to Rs. 0.17 million. The demand has been set aside by theAssistant Commissioner of Commercial Taxes, in his order dated August 30, 1998.

3. The Commercial Taxes Officer has raised demands under the West Bengal (Sales Tax) Act, 1994 for theassessment year 1996-1997 for tax, interest and penalty amounting to Rs. 0.22 million. The demand hasbeen set aside by the Assistant Commissioner of Commercial Taxes, in his order dated August 30, 1998.

H. Utkal Alumina International Limited

1. Ms. Badli Naik has filed MJC 2/2005 before the Civil Judge (Senior Division), Rayagada, claimingcompensation as granddaughter of original khatadar in respect of land acquired for the Company. She hasfiled the case for her share of compensation and subsequent payment of ex gratia which is being paid bythe company as per the award under the Land Acquisition Act.

2. Ghenu Halwa has filed TS 6 of 2005 before the Civil Judge (Senior Division), Rayagada disputing the ownershipof certain land acquired for the company. The petitioner is claiming a potion of ex gratia which is being paidby the company as per the award under the Land Acquisition Act.

3. Ghasiram Dambo has filed OJC 4482 of 2000 in the Orissa High Court challenging the acquisition of landunder Khata No. 368 in village Koral for the company. Mr. Dambo claims a share in the land acquired andhas challenged the validity of the land acquisition proceedings and has prayed for reversal of the land in hisfavour.

4. The President of the Village Development Committee, Koral representing the residents of Upper Sahi ofKoral, has filed WP (2)-5971 of 2005 in the Orissa High Court. The writ has been filed on the grounds thatthough the Lower Sahi has been acquired for the Company, the upper sahi has not been acquired, thusdiscriminating between lower sahi and upper sahi. The petitioner claims that since the factory will beinstalled close to upper sahi, it poses a potential health hazard and further that the acquisition of agriculturalland leaves the residents with no alternate means of livelihood. The petitioners have prayed for acquisitionof homestead lands in upper sahi and provision of alternate housing. The High Court has ordered that thevillagers of upper sahi shall not be obstructed from access to their land.

5. A labourer of the contractors constructing the Company’s factory, met with a fatal accident. The mother ofthe deceased labourer filed has made a claim in WCC 17 of 2005 before the Deputy Commissioner Workmen’scompensation cum Deputy Commissioner, Jeypore against the contractor and the Company.

6. Mr. B. Naik has filed suit bearing No. T.S. 16/2005 before the Civil Judge (Senior Division), Rayagada claimingex-gratia amount payable in respect of land bearing plot No. 616, under khata No. 76 of Dwimundi mouazaacquired for the Company.

7. Ms. Goudo has filed suit bearing No. T.S. 9/2005 before the Civil Judge (Senior Division), Rayagada claimingex-gratia amount payable in respect of land bearing plot Nos. 3, 15, 4, 84, 120 and 121 under khata No. 16of Dwimundi mouza acquired for the Company.

Except as stated above there are no outstanding litigations, defaults, etc., in relation to our subsidiaries pertaining tomatters likely to affect operations and finances of the Company, including disputed tax liabilities, prosecution underany enactment in respect of Schedule XIII to the Companies Act, 1956 (1 of 1956).

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IV. Directors

1. The State of Uttar Pradesh has filed Criminal Case No. 1834/91 before the Munsif Magistrate, Dudhi against Mr.S.S. Kothari as Occupier of the Renusagar Power Division and others for non-compliance of rules relating tomethods of work as prescribed and causing fatal accident of one Prabhat Chander Sharma, Rigger on April 10,1990. Mr. Kothari and the factory manager of the Company have filed Cri. Misc. App. No. 14721/92 in the AllahabadHigh Court, which has issued a stay order staying the proceedings in 1834/91 vide order dated November 18,1992. The matter has not been listed for further hearing.

2. The State of Uttar Pradesh has further filed Criminal Case No. 1866/91 against Mr. S.S. Kothari and others fornon-compliance of Sections 7 (A) and 36 of Factories Act and U.P. Rules, 1950 leading to the fatal accident ofLate Shankar Dayal Sharma on December 13, 1990. Mr. Kothari and the factory manager of the Company havefiled, Cri. Misc. App. No. 14736/92 in the Allahabad High Court, which has issued a stay order staying theproceedings in 1866/91 vide order dated November 18, 1992 . The matter has not been listed for further hearing.

3. A criminal case of cheating has been filed against Dr. K.M. Birla, Mr. S.K. Mitra and Mr. Ashish Goel (Lucknowbranch employee) in the Kanpur Court in relation to Birla Global Finance Limited, by one hirer Mr. CharanjeetSingh. The Allahabad High Court has issued a stay on the proceedings at the Kanpur Court. The stay is still inforce and there are no further developments in the case.

4. A proceeding under Section 138 of the Negotiable Instruments Act has been pending against Baroda RayonCorporation Limited and its directors which included Mr. E.B. Desai. Mr. E.B. Desai is no longer serving on theboard of Baroda Rayon Corporation.

5. Certain proceedings under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheques, havebeen pending against REPL Engineering Limited (“REPL”) and its directors which included Mr. C..M. Maniar. Mr.C..M. Maniar was a non-executive director of REPL and resigned from the Board of REPL on August 28, 1997.Some of these proceedings filed under Section 138 against Mr. C.M. Maniar in his capacity as a director of REPLhave been quashed by the Bombay High Court and the Madhya Pradesh High Court, Indore Bench on reviewunder Section 482 of the Criminal Procedure Code. However, certain proceedings under Section 138 against Mr.C.M. Maniar in his capacity as a director of REPL are still pending before various other lower courts.

6. Some proceedings under Section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheques, havebeen pending against Pharmaceutical Products of India Limited (“PPIL”) and its directors which included Mr. C.M. Maniar. Mr. C.M. Maniar was a non-executive director of PPIL and resigned from the Board of PPIL on April 24,2001. These proceedings against Mr. C.M. Maniar in his capacity as a director of PPIL are still pending beforevarious lower courts.

Except for the criminal and civil cases stated above, where the Directors and Officers of the Company have beennamed as parties or respondents, there are no, outstanding litigation, disputes, overdues to banks/financial institutions,defaults against banks/financial institutions, proceedings initiated for any economic/civil/ any other offences, involvingthe Directors or Officers of our Company.

V. Promoters

BGHPL has filed an appeal before ITAT on April 21, 2004 against the order passed by CIT(A) in relation to disallowanceunder Section 14A of the IT Act, in respect of net interest paid by the company and administrative and other expenses.

Apart from what is stated above, there are no outstanding litigation, disputes, overdues to banks/financial institutions,defaults against banks/financial institutions, proceedings initiated for any economic/civil/ any other offences, involvingour Promoter.

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VI. Joint Ventures

Except as stated below, there are no contingent liabilities not provided for, outstanding litigation, disputes, non paymentof statutory dues, overdues to banks/financial institutions, defaults against banks/financial institutions, defaults indues towards instrument holders like debenture holders, fixed deposits and arrears on cumulative preference sharesissued by the company, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiatedfor any economic/civil/ any other offences, involving our joint ventures:

(a) Tanfac Industries Limited

1. There are various sales tax related cases pending against the company for claims aggregating Rs. 6.49million.

2. There is a customs case pending against the company for a claim of an approximate value of Rs. 1.08million in relation to duty on fluorspar shipment in the assessment year 1998-99.

3. There are several central excise cases pending against the company for claims aggregating Rs. 0.46 million.

4. There is an Income tax case pending against the company for a claim of an approximate value of Rs. 24.37million in relation to deduction under Section 80 HHC & 80I of the IT Act during the assessment year1996-97.

5. The company has filed Writ Petition No. 619/2000 against the Regional Provident Fund Commissioner in theMadras High Court in relation to coverage of trainees. The amount involved is approximately Rs. 30,000.The matter is scheduled to come up for the first hearing in the second week of September 2005.

6. An industrial dispute is pending against the Company on the ground of dismissal of service. The matter ispending and is scheduled to come up for hearing in October 2005.

(b) Idea Cellular Limited

1. There are six Income Tax cases pending against the Company across circles for amounts aggregating toRs. 6.77 million on various grounds of assessment during various assessment years.

2. There are ten SCNs and cases pending against the Company across circles on various grounds for claimsaggregating to an amount of Rs. 360.93 million. These matters are pending before the relevant authorities.

3. There is one excise case pending against the Company for a claim aggregating to an amount of Rs. 3.86million.

4. There are eighty consumer cases filed against the Company in various fora for claims amounting to anaggregate of Rs. 4.33 million.

5. There are forty six civil cases pending against the Company on various grounds in various fora for amountsaggregating Rs. 2.96 million.

6. There are six labour cases which have been filed against the Company and are pending in various fora forclaims amounting to an aggregate of Rs. 13.98 million.

7. The Department of Telecommunications has raised claims aggregating to an amount of Rs. 259.63 millionagainst the Company on grounds including penalty and interest charged on short payment of licence fees,royalty etc.

8. There is one criminal case filed against the Company in the High Court against the order of the lower Court,dismissing applications to drop proceedings. The aggregate value of the claim is Rs. 0.067 million.

9. Ten other miscellaneous cases have been filed against the Company on various grounds including recoveryof dues and stamp duty. These claims amount to an aggregate of Rs. 21.54 million.

10. There are approximately seven thousand one hundred and twenty one cases (7121) filed by the Companyagainst subscriber defaulters under Section 138 of the Negotiable Instruments Act for sums amounting toan aggregate of Rs. 24.6 million.

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GOVERNMENT APPROVALS

In view of the approvals listed below, we can undertake this Issue and our current business activities and no furthermaterial approvals are required from any Government authority or the RBI to continue such activities. We have receivedthe following Government approvals that are material to our business:

General

PAN Number – AAACH1201R

RBI

1. Approval No. EC.CO.FID (I) 1467/252 (Euro-Equity) Hindalco-II 93/94 dated November 11, 1992 from RBI to theCompany granting permission under Section 19 (1) (d) of the Foreign Exchange Regulation Act, 1973; i ) make aninternational offering of rupee denominated equity shares of the Company to be subscribed in US dollars uptoUSD 110 million through Global Depositary Receipts (“GDRs”); ii) list the GDRs on one or more stock exchangesincluding the stock exchange at Luxemburg. This permission was to be valid for three months from the date ofissue.

2. Approval No. FID(I)/4/48/252 (Euro-Equity) Hindaco-II 93/94 dated June 10, 1994 from RBI to the Company grantingpermission under Section 19 (1) (d) of the Foreign Exchange Regulation Act, 1973 i) for making an internationaloffering of rupee denominated equity shares to be subscribed in US dollars upto USD 100 million throughGlobal Depositary Receipts mechanism. ii) to list the GDRs on one or more stock exchanges including the stockexchange at Luxemburg. This permission was to be valid for three months from the date of issue.

3. Approval No. BYWAZ200300054 (Ref No. EC. CO. OID/19.08.114/2002-03) dated February 20, 2003 from RBI tothe Company approving: i) acquisition of a wholly owned foreign subsidiary in Australia, Straits Nifty Pty Ltd.which was a subsidiary of Straits Resources Pty Ltd. for a gross consideration of AUD 148.82 million; ii)incorporation of a wholly owned subsidiary in Australia of the Company named Birla Maroochydore Pty Ltd. andiii) the acquisition of 50% of stake in Straits Exploration Pty Ltd. through a remittance of AUD 89,820,000 andissue of a guarantee of AUD 69 million. Permission for these cash remittances was valid upto February 19, 2004.

4. Approval (Ref. No. Mumbai. FID-II/04.02.10/2002-2003) dated March 21, 2003 from RBI to the Company grantinggeneral permission for allotment of shares pursuant to the scheme of arrangement between the Company andIndo Gulf Fertilisers Limited and Indo Gulf Corporation Limited.

Factory Approvals

(A) Belgaum Factory

Approvals relating to manufacture

1. Factory license number MYS/BGM/404 issued by the Labour Department, Karnataka and amended in the nameof the Company following the demerger of Indal. This application has been renewed till December 31, 2006.

2. Central Excise Registration Certificate dated March 23, 2005 issued by the Office of the Assistant Commissionerof Central Excise, Belgaum under Rule 9 of the Central Excise Rules, 2002, registering the Belgaum factory forthe manufacture of Alumina Hydrate, Calcined Alumina, Carbon Electrode Paste and Cathode Carbon Blocks;the factory was allotted the Excise Registration No. – AAACH1201RXM007.

3. VAT allotment letter dated March 30, 2005 from the Office of the Deputy Commissioner of Commercial Taxes,Belgaum allotting the VAT No. 29950323033 to the Company which would be valid and subsisting from April 1,2005. This VAT No. is subject to the formal permission given by the Commissioner of Commercial Taxes, Bangalore.

4. Letter dated April 5, 2005 has been filed with the Asst. Labour Commissioner, Belgaum for a further update of thelist in the Schedule to Certificate carrying Registration Number CLA/18/75-76 under Contract Labour (Regulationand Abolition) Act, 1970, issued on July 26, 1975 permitting contact labour to be employed in tasks of loadingand unloading raw materials and finished products, cleaning of ducts and tanks, sweeping and cleaning ofcolony and plant. The Schedule specifying the contractor and the number of workers and nature of work has lastbeen updated on August 4, 2003. The license has been updated and granted in the name of the Company onMarch 15, 2005.

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5. Applications dated April 22, 2005 to the Deputy Chief Controller of Explosives for the amendment in the licensecertificates due to change in the company name to “Hindalco Industries Limited Belgaum Works, Belgaum”following the demerger of Indal. The change has been made in respect of licenses comprising:

(a) License No. P-12(22)-322/MYS 1770 to store petroleum issued under the Petroleum Act, 1934 by the ChiefController of Explosives to Indal issued on April 4, 1970, with an approved usage plan upto December 12,2004.

(b) License No. P-12(22)-332/MYS 1802 to store petroleum issued under the Petroleum Act, 1934 by the ChiefController of Explosives to Indal issued on December 10, 1970, with an approved usage plan upto December12, 2005.

(c) License No. P-12(22)-332/MYS 1761 to store petroleum issued under the Petroleum Act, 1934 by the ChiefController of Explosives to Indal issued on January 1, 1970, with an approved usage plan upto December12, 2005.

(d) License No. P/SC/KA/15/232(P38716) dated August 8, 2001 to store petroleum issued under the PetroleumAct, 1934 by the Chief Controller of Explosives to Indal, which shall remain in force till December 31, 2007.

(e) License No. P/SC/KA/14/32(P29716) dated August 8, 2001 to store petroleum issued under the PetroleumAct, 1934 by the Chief Controller of Explosives to Indal, which shall remain valid till December 31, 2007after being updated on October 21, 2004.

6. Certificates for Use of a Boiler issued by the Deputy Director of Boilers, Belgaum Division of the Karnataka StateBoiler Inspection Department permitting Indal to use the following WT boilers:

(a) Boiler Registry No. MYS 1149 for a period extending from December 20, 2004 to December 19, 2005 by acertificate dated December 20, 2004.

(b) Boiler Registry No. MYS 1296 valid from December 10, 2004 to December 9, 2005 by a certificate datedDecember 10, 2004.

(c) Boiler Registry No. MYS 1875 valid from January 18, 2005 to January 17, 2006 by a certificate dated January18, 2005.

7. Certificate dated April 16, 2005 for use of a Boiler issued by the Deputy Director of Boilers, Belgaum Division ofthe Karnataka State Boiler Inspection Department permitting the Company to use WT Boiler Registry No. MYS1150 valid from April 16, 2005 to April 7, 2006.

8. Certificate dated May 10, 2005 for use of a Boiler issued by the Deputy Director of Boilers, Belgaum Division ofthe Karnataka State Boiler Inspection Department permitting the Company to use WT Boiler Registry No. MYS1151 valid from May 10, 2005 to May 4, 2006.

9. Certificates for Use of an Economiser issued by the Deputy Director of Boilers, Belgaum Division of the KarnatakaState Boiler Inspection Department permitting Indal to use the following Economisers:

(a) Economiser Registry No. KTK-E-75 by a certificate dated June 4, 2004 valid from June 4, 2004 to March 6,2006.

(b) Economiser Registry No. KTK-E-80 by a certificate dated July 7, 2004 valid till July 6, 2007.

(c) Economiser Registry No. KTK-E-82 by a certificate dated July 11, 2005 valid till February 28, 2007.

10. Letter dated December 3, 2004 from the Additional Director, Ministry of Environment and Forests issuingenvironmental clearance to the proposed expansion of Belgaum factory to 587 KTPA alumina plant, underEnvironmental Impact Assessment Notification dated January 27, 1994.

11. Authorisation No. KSPCB/HWMC/AEO-2/DEO-3/SEO1/2000-01/513 issued under Rule 5 of the Hazardous Wastes(Management and Handling) Rules 1989 and Amendment Rules, 2003 issued on July 18, 2001 with regard to thedisposal of cathode residues and system oil. The authorization was renewed till June 30, 2008 vide letter datedAugust 19, 2005.

12. Consent granted under the Air (Prevention and Control of Pollution) Act, 1981, and Water (Prevention and Controlof Pollution) Act, 1974, before the Environmental Officer of the Karnataka State Pollution Control Board bearing

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No. CFE – CELL/IACL-256/NEIA/2005-2006/115 dated October 1, 2005 for expansion of the existing 270 KTPAplant to capacity of 587 KTPA alumina plant and for establishing and operating new facilities of specialty gradealumina/hydrate This consent is valid for 3 years from the date of issue.

Certification

1. Certificate of ISO 14001: 1996 (No. 157270) awarded by Bureau Veritas Quality International for quality inenvironmental management system to the Company, Belgaum for the manufacture of Alumina Hydrate, CalcinedAlumina, Carbon Electrode Paste and Cathode Carbon Blocks on July 24, 2004 which is valid till May 15, 2006.

2. Certificate No. 139597 awarded by Bureau Veritas Quality International to Hindalco Industries Limited, Belgaumon November 5, 2003 on being found to comply with the Occupational Health and Safety management systemstandard OHSAS 18001:1999 in the manufacture and supply of Alumina Hydrate, Calcined Alumina, CarbonElectrode Paste and Cathode Carbon Blocks and research and development of all ores, intermediate productsand final products of Alumina Hydrate, Calcined Alumina, Carbon Electrode Paste and Cathode Carbon Blocks.This certificate is valid till November 4, 2006.

3. Certificate No. 129897 awarded by Bureau Veritas Quality International on December 19, 1996 for qualitymanagement system to Hindalco Industries Limited, Belgaum of ISO 9001:2000 in manufacture and supply ofalumina hydrate, calcined alumina, special alumina hydrates and special calcined aluminas, carbon blocks andpaste which is renewed till May 10, 2006.

Applications Pending

1. Application for renewal of consent order No. KSPCB/17-CAT/APC/INDAL/2003-04/172 dated September 22, 2003,for operation of the industrial plant in the air pollution control areas under Section 21 of the Air (Prevention andControl of Pollution) Act, 1981, issued by Deputy Environmental Officer, Karnataka State Pollution Control Boardfiled on February 7, 2005. This consent was to be valid till June 30, 2004.

2. Application for renewal of consent Order No. KSPCB/WPC/INDAL/17-CAT/2003-04/276 granted on December15, 2003 by the Environmental Officer, Karnataka State Pollution Control Board under Section 25 of the Water(Prevention & Control of Pollution) Act, 1974, authorising the industrial plant to discharge effluents and sewagefiled on February 7, 2005. Consent was to be valid till June 30, 2004.

3. Application for renewal of consent Order No. KSPCB/WPC/INDAL/17-CAT/2003-04/97 granted on August 3, 2004by the Environmental Officer, Karnataka State Pollution Control Board under Section 25 of the Water (Prevention& Control of Pollution) Act, 1974 authorising the industrial plant to discharge effluents and sewage filed onFebruary 7, 2005. Consent was valid till June 30, 2005.

4. Application for renewal of consent order No. KSPCB/17-CAT/APC/INDAL/2004-05/89 dated August 3, 2004 foroperation of the industrial plant in the air pollution control areas under Section 21 of the Air (Prevention andControl of Pollution) Act, 1981, issued by the Environmental Officer, Karnataka State Pollution Control Board filedon February 7, 2005. This consent was valid till June 30, 2005.

(B) Kalwa Factory

Approvals to carry out manufacture

1. Letter dated October 14, 2004 to the Deputy Director, Industrial Safety and Health at Thane requesting renewal ofthe factory license No. 64459 for 2005. Under the Maharashtra Factories Rules, 1963, renewal is deemed to havebeen effected.

2. Central Excise Registration Certificate issued under Rule 2 of the Central Excise Rules, 2002, by the Office of theAssistant Commissioner of Central Excise, Belapur registering the Kalwa factory for the manufacture of excisablegoods on March 24, 2005. The factory was allotted the Excise Registration No. AAACH1201RXM008.

3. Certificate of Registration issued under Section 22/22A of the Bombay Sales Tax Act, 1959 and Rule 8 of theBombay Sales Tax Rules, 1959 by the Sales Tax Officer, Thane Division issued on March 28, 2005 bearing No.400605/S/1798 and coming into effect since March 7, 2005 and recognizing the sale of aluminium, aluminiumproducts and by-products and foil products.

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4. License No. P/HQ/MH/15/254(P5611) issued on February 21, 1978, to store petroleum renewed on December31, 2004 under the Petroleum Act, 1934 by the Chief Controller of Explosives to Indal to remain in force tillDecember 31, 2007.

5. License No. P/HQ/MH/15/48(P783) to store petroleum under the Petroleum Act, 1934 by the Chief Controller ofExplosives to Indal issued on February 21, 1978, and renewed on May 16, 2005 to remain in force till December31, 2007.

6. Certificate dated June 1, 2005 allowing renewal of license till September 30, 2010, bearing No. MR/TH/GCS - 133to store compressed gas in cylinders under Rules 57 and 58 of the Indian Explosives Act, 1884 and allotted it thenew license No G/W/MH/06/1668 (G18027). This certificate was initially issued by the Chief Controller of Explosivesat Bombay permitting upto 130 units of Carbon Dioxide cylinders to be stored in a storage shed on the factorypremises on October 25, 1993.

7. Certificate dated June 2, 2005 allowing renewal of license bearing No. MR/TH/LPG_S.115 till September 30,2009 and allotted it the new license No. G/WC/MH/06/94. This certificate was issued on October 25, 1993 to storecompressed gas in cylinders under Rules 57 and 58 of the Indian Explosives Act, 1884 by the Chief Controller ofExplosives at Bombay permitting upto 600 kgs of gas cylinders to be stored in a storage shed on the factorypremises.

8. Consent No. BO-RO/Thane/R/CC-950 dated December 12, 2002 issued by the Maharashtra Pollution ControlBoard to operate under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and under Section21 of the Air (Prevention and Control of Pollution) Act, 1981 and Hazardous Wastes (Management and Handling)Rules, 1989 and Amendment Rules, 2003 to Kalwa Factory. Consent is valid till December 31, 2006. The Companyhas applied for changes in the consent order incorporating the changes pursuant to the merger with Indal.

9. Consent No. BO-RONM/Raigad-156-183/04/0/CC-186 dated October 7, 2004 issued by the Maharashtra PollutionControl Board granting consent to operate under Section 25 of the Water (Prevention and Control of Pollution)Act, 1974 and under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and Hazardous Wastes(Management and Handling) Rules, 1989 and Amendment Rules, 2003 to Kalwa Factory. Consent is valid till June30, 2007.

Applications Pending

Letter dated March 30, 2005 to the Joint Director, Industrial Safety and Health at Thane requesting the transfer of thefactory license in the name of the Company following the demerger of Indal.

(C) Alupuram Factory

Approvals relating to manufacture

1. Registration and license to work a factory issued by the Joint Inspector of Factories, Ernakulum to the Company,Alupuram Smelter Metal and Carbon Divisions bearing Registration No. AWY/03/18/88 (NIC Code Number 27203)in the district of Ernakulum employing not more than 900 persons on any day of the year and using power notexceeding 32558.47 K.W for operating this factory. This license is valid till December 31, 2005.

2. Registration and license to work a factory issued by the Joint Inspector of Factories, Ernakulum to the Company,Aluminium Extruded Section bearing License No. AWY/03/462/97 (NIC Code No. 27203) in the district of Ernakulumin favour of Hindalco Industries Limited. This license is valid till December 31, 2005.

3. Central Excise Registration Certificate issued by the Office of the Deputy Commissioner of Central Excise,Ernakulum division under Rule 9 of the Central Excise Rules, 2002, registering the Kalamassery factory for themanufacture of excisable goods on March 17, 2005; the factory was allotted the Excise Registration No.AAACH1201RXM006.

4. Central Excise Registration Certificate (form ST 2) issued by the Superintendent of Central Excise, Aluva WestRange under Section 69 of the Finance Act, 1994 and Section 32 of the Finance Act, 1944, registering theKalamassery factory for payment of service tax on “services availed from goods transport agencies” on April 12,2005; the factory was allotted the Registration No. GTA/ALY-W/23/2005.

5. Certificate of Registration issued under Rule 5 of the Kerala General Sales Tax Rules, 1963 by the Asst.

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Commissioner of Commercial Taxes at Ernakulum, on March 15, 2005 bearing No. 23050981/15-03-2005recognizing the storage of goods at Alupuram and Kalamassery and manufacture of aluminium ingots andextrusions. This certificate is valid from March 15, 2005 till cancelled. Consequent to implementation of valueadded tax (“VAT”), certificate of registration was issued under Rule 17(7) of the Kerala Value Added Tax Rules,2005 by the Asst. Commissioner, KVAT, Special Circle-III, Ernakulam, on April 1, 2005, issuing the local sales taxregistration No. TIN 3207 0404 575005 recognizing the storage of goods at Alupuram and Kalamassery andmanufacture of aluminium ingots and extrusions. This certificate is valid from April 1, 2005 till cancelled.Certificateof Registration issued under Rule 5 of the Central Sales Tax (Registration and Turnover) Rules, 1957 by the Asst.Commissioner of Commercial Taxes at Ernakulum, on March 22, 2005 bearing No. 23055981 permitting themanufacture, wholesale and retail distribution of aluminium and its alloys and the resale of aluminium andcarbon electrode. This certificate is valid from March 15, 2005 till cancelled. Consequent to the VAT implementationin Kerala, Central Sales Tax registration number has been changed to CST 0704 C 000 457 effective April 1, 2005.

6. Consent Renewal order No. PCB/A/R6/8/2003 dated August 27, 2000, to produce 1190 tonne/month of Aluminiummetal under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, issued by the Kerala StatePollution Control Board on December 3, 2003. This consent is to be valid till December 31, 2005. The applicationfor the renewal of consent has been submitted on September 3, 2005.

7. Consent Renewal order No. PCB/A/R2/832/2002 to make chimney of height of 21 m above ground level underSection 21 of the Air (Prevention and Control of Pollution) Act, 1981, issued by the Kerala State Pollution ControlBoard on November 15, 2002. This consent is to be valid till December 31, 2005. A renewal application has beensubmitted to Kerala State Pollution Control Board on September 27, 2005.

8. Authorisation of the Kerala State Pollution Control Board bearing number PCB/HWMAR2/44 /2001 under Rule 5of the Hazardous Wastes (Management and Handling) Rules 1989 issued on May 23, 2001 with regard to thedisposal of cathode residues and system oil. The authorization is valid till May 23, 2006.

9. Authorisation of the Kerala State Pollution Control Board bearing No. PCB/HWMA/R1/41/2001 under Rule 5 ofthe Hazardous Wastes (Management and Handling) Rules, 1989 issued on May 14, 2001 with regard to thecollection, storage, treatment and disposal of lubricants and system oil. The authorization is valid till May 14,2006.

10. Consent Order No. W/07/93 granted on September 6, 1993 by the Environmental Officer, Kerala State PollutionControl Board under Section 25 of the Water (Prevention & Control of Pollution) Act, 1974 authorising the industrialplant to discharge effluents and sewage. Consent is to be valid till December 31, 2007.

11. Consent Order No. W/07/354/99 granted on August 7, 1999 by the Environmental Officer, Kerala State PollutionControl Board under the Water (Prevention & Control of Pollution) Act, 1974. Consent is to be valid till December31, 1995. This consent was extended to December 31, 2004. Consent is to be valid till December 31, 2007.

12. Permission for manufacturing activity given to the aluminium extruded section of the Alupuram unit by Secretary,Eloor Grama Panchayath bearing license No. H-43/2005-06. This license is valid up to March 31, 2006.

13. Certificate for Use of a Boiler issued by the the Inspector of Factories & Boilers Grade – I, Aluva, ErnakulumDistrict permitting Hindalco Industries Limited to use WT Boiler Registry No. K-608, FTB.

14. Licence for operating Radio Remote Control of EOT Cranes in the plant bearing No. EOT 48/1-4 issued underThe Indian Telegraph Act 1885 by Ministry of Communications & IT on July 16, 2003 and renewed till March 31,2006.

15. Exemption order granted by Government of Kerala under sub-section (3)(a) of Section 81 of Kerala Land ReformsAct, 1961 (1 of 1964) vide Noification No. 76751/N2/2000/RD dated May 15, 2002 exempting 37 acres of landfrom ceiling provisions of the Kerala Land Reforms Act. This exemption notification is valid till May 29, 2006.

Certifications

1. Certificate awarded by Bureau Veritas Quality International No. 81299 to the Company (Alupuram Extrusion) onMay 31, 2001 on being found to comply with the environmental management system standard ISO 14001:1996for the manufacture and supply of aluminium extrusions. This certificate is valid till June 3, 2007.

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2. Certificate awarded by Bureau Veritas Quality International No. 153001 to the Company (Alupuram Extrusion) onNovember 22, 1997 on being found to comply with the quality management system standard ISO 9001:2000 inthe manufacture and supply of aluminium extrusions. This certificate is valid till April 28, 2007.

3. Certificate awarded by Bureau Veritas Quality International of No. 145279 to the Company (Alupuram Extrusion)on January 13, 2004 on being found to comply with the Occupational Health and Safety management systemstandard OHSAS 18001:1999 for the manufacture and supply of aluminium extrusion. This certificate was validtill January 13, 2007.

4. Certificate awarded by Bureau Veritas Quality International No. 152902 to the Company (Alupuram Smelter) onMay 28, 2005 on being found to comply with the environmental management system standard ISO 14001:1996for the development, manufacture and supply of Aluminium billets, Aluminium rods, Aluminium Alloy ingots.This certificate is valid till May 15, 2006.

5. Certificate awarded by Bureau Veritas Quality International No. 142266 to the Company (Alupuram Smelter ) onMay 28, 2005 on being found to comply with the Quality management system standard ISO 9001:2000 for themanufacture and supply of Aluminium alloy billets, electrical conductor grade Aluminium wire rods, AluminiumAlloy wire rods, Aluminium ingots and Aluminium Alloy ingots. This certificate is valid till December 4, 2006.

(D) Taloja

Approvals relating to manufacture

1. Certificate of Registration under Section 7(2) of the Contract Labour (Regulation and Abolition) Act, 1970, issuedby the office of the Registering and Licensing Officer, Thane on October 17, 1973 permitting the use of certainnumber of contract labour updated till December 31, 2005. An application for renewal has been submitted.

2. Certificate of Registration issued under Rule 5 of the Central Sales Tax (Registration and Turnover) Rules, 1957 bythe Asst. Commissioner of Commercial Taxes at Ernakulum, on March 22, 2005 bearing No. 400025 C-112permitting the manufacture, reselling and distribution of non-ferrous metal, aluminium, stainless sheets andhardware products. This certificate is valid from December 15, 1995 till cancelled.

3. Certificate of Registration issued under Section 22/22A of the Bombay Sales Tax Act, 1959 and Rule 8 of theBombay Sales Tax Rules, 1959 by the Sales Tax Officer, Thane Division on March 28, 2005 to the Companybearing No. 410208/S/1 and coming into effect since March 7, 2005 and recognizing dealing in aluminium sheetsand foils.

4. Central Excise Registration Certificate issued by the Office of the Assistant Commissioner of Central Excise,Belapur under Rule 9 of the Central Excise Rules, 2002, registering the Company’s Taloja factory for the manufactureof excisable goods; the factory was allotted the Excise Registration No. AAACH1201RXM005.

5. Certificate of Registration issued by the Superintendent of Service Tax Division of Service Tax Commissionerateof Mumbai under Section 69 of the Finance Act, 1994, registering the Kalamassery factory for collecting servicetax on goods transport agency, technical testing, analysis and inspection for the Company’s factory at Taloja onMarch 23, 2005; the factory was allotted the Registration No. ST/GTA-TIC/BEL/3062/2004-05. The certificate isvalid for as long as the holder carries on the specified activity on the mentioned premises.

6. Letter of allotment of Tax Deduction Account Number (TAN) to the Company’s unit at Taloja under the IncomeTax Act, 1961 by the Income Tax Department dated March 28, 2005. The number allotted is PNEH04840D.

7. Certificate of Registration dated April 1, 2005, under Section 5(2) of the Maharashtra State Tax on Professions,Trades, Callings and Employments Act, 1975 by the Profession Tax Officer of Navi Mumbai registering the PrincipalOfficer of the Company as an employer under the abovementioned Act.

8. License No. P-12(7)-4284/MR. Kol.52 to store petroleum in a Class C Storage tank issued under the PetroleumAct, 1934 by the Chief Controller of Explosives to Indal issued on April 29, 1997, renewed till December 11, 2007.

9. License No. P-12(7)-1876/MR/Kol/133 for bulk storage of 45 Kilolitres of petroleum issued under the PetroleumAct, 1934 by the Chief Controller of Explosives to Indal issued on January 2, 1978, renewed till December 31,2007.

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10. License for bulk storage of 20 kilolitres of petroleum issued under the Petroleum Act, 1934 by the Jt. ChiefController of Explosives to Indal with License No. P/WC/MH/15/79(P56433) issued on July 8, 1994, renewed tillDecember 31, 2007.

11. Agreement for Power Supply, between Indal and the Government of Maharashtra under Section 6A(1)(a) of theBombay Electricity Special Powers Act, 1946, dated September 7, 1971, wherein the government undertook tosupply a 8500 KV of electricity to the plant with effect from April 15, 1972.

12. Supplementary Agreement for Additional Power, between Indal and the Maharashtra State Electricity Board,dated February 11, 1985, wherein MSEB undertook to supply 27,192 KWA to the Taloja unit.

13. Letter dated November 27, 2004 extending membership and registration in the Mumbai Waste ManagementLtd. till March 31, 2006 bearing registration No. MWML-HzW-TAL-175. This license is valid till March, 2006.

14. Consent Order No. BO/MPCB/PCI-II/EIC-182-05/CC-09 granted on June 14, 2005 by the Maharashtra State PollutionControl Board to operate under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 andunder Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and Authorisation under Rule 5 of theHazardous Wastes (Management and Handling) Rules, 2003 to the Aluminium Recycling Project in Taloja. Theconsent is valid upto June 30, 2007.

15. License to import petroleum in an installation issued under the Petroleum Act, 1934 by the Chief Controller ofExplosives to Indal with License No. P-12(7)-1315/MR.Kol.102 issued on September 30, 1977, renewed tillDecember 31, 2007.

16. Certificate for Use of a Boiler issued by the Director of Boilers of the Bombay State Boiler Inspection Departmentpermitting Indal to use WT Boiler Registry No. MR 13585 valid till May 5, 2006 vide letter dated May 2, 2005.

Certification

1. Certificate awarded by Bureau Veritas Quality International for quality management system to the Company’sunit at Taloja of ISO 9001:2000 (No. 161500) in design, manufacture and supply of unalloyed and alloyed aluminiumplates, coils sheets and foil on July 8, 1995 which is valid till September 30, 2007.

2. Certificate awarded by Det Norske Veritas No. 00026-2004-S-NDE to Indal (Taloja Works) on March 18, 2004 onbeing found to comply with the Occupational Health and Safety management system standard ISO 18001:1999in the development, manufacture and dispatch of aluminium ingot, plates, coils, sheets and foil forms. Thiscertificate was valid till March 18, 2007.

3. Certificate awarded by Det Norske Veritas No. RIN350-AE-1150 to Indal (Taloja Works) on March 26, 2002 onbeing found to comply with the environmental management system standard ISO 14001:1996 in the development,manufacture and dispatch of aluminium in plates, coils, sheets and foil forms. This certificate is valid till May 15,2006.

(E) Belur Factory

Approvals relating to manufacture

1. Registration and license to work a factory issued by the Chief Inspector of Factories (Govt of West Bengal) infavour of Hindalco Industries Limited with effect from March 7, 2005, bearing factory license No. 165, registrationNo. 229-HW/X which had been given in favour of Indal on July 18, 1941 under the Factories Act, 1948.

2. Central Excise Registration Certificate issued by the Office of the Assistant Commissioner of Central Exciseunder Rule 9 of the Central Excise Rules, 2002, registering the Company’s Belur factory for the manufacture ofexcisable goods; the factory was allotted the Excise Registration No. AAACH1201RXM010.

3. Registration Certificate issued by the Superintendent, Central Excise under Section 69 of the Finance Act, 1994,registering the Belur factory for collecting service tax on goods transport agency (consignee/consignor) for theCompany on April 8, 2005; the factory was allotted the Registration No. 59/GTA/SB02/KEL/2005-06. The certificateis valid for as long as the holder carries on the specified activity on the mentioned premises.

4. Letter dated March 11, 2005 from the Office of the Deputy Commissioner of Commercial Taxes, CommercialDivision at Kolkata allotting to the Company, the VAT number – 19200127039, the State Sales Tax Act No.19200127136 and CST Act No. 19200127233, incorporating the name “Hindalco Industries Limited” which would

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be valid and subsisting from March 11, 2005.

5. Letter dated March 28, 2005 from the Dy. Controller of Explosives, East Circle Office of Kolkata transferringlicense No. P/EC/WB/14/1685(P27401) for Petroleum Class B retail outlet/service station/consumer pump at Belurto the Company and extending the validity of this license till December 31, 2007.

6. Letter dated June 5, 2003 from the Dy. Controller of Explosives transferring license number P/EC/WB/14/1685(P27401) dated March 8, 2005 to the Company. for the storage of 13.6 kilolitre of Petroleum Class B in tankson the licensed premises under Petroleum Act, 1934. This license is valid till December 31, 2007.

7. Letter dated March 28, 2005 from the Dy. Controller of Explosives transferring license No. P/HQ/WB/15/2400(P932) dated April 24, 2003 to the Company. for the installation of Petroleum Class B & C Units under PetroleumAct, 1934. This license is valid till December 31, 2007.

8. Renewal of Consent order No. CO19/10-PCB/HOW/65-97 dated October 31, 2002, vide certificate dated December22, 2004 for operation of the industrial plant of Indal and for the release of gaseous and liquid effluents underSection 21 of the Air (Prevention and Control of Pollution) Act, 1981 and under Section 25 and 26 of the Water(Prevention & Control of Pollution) Act, 1974, issued by the West Bengal State Pollution Control Board. Thisconsent is valid till December 31, 2005.

9. Certificate of Enlistment from the Bally Municipality in Howrah to the Company for the business of aluminiumrolling mill for the year 2005-06 issued on April 20, 2005.

10. Food License for the Indal (Canteen) from the Bally Municipality (Health Department) under the West Bengal PFARules, 1957 vide receipt dated June 23, 2004.

11. License dated September 6, 2005 issued by the Deputy Secretary and Collector, Fire Service License Section tothe Company to store hazardous materials under the West Bengal Fire Services Act, 1950 which is valid till April17, 2006.

Certifications

1. Certificate awarded by Bureau Veritas Quality International No. 169168 to the Company’s unit at Belur on April18, 2002 on being found to comply with the environmental management system standard ISO 14001:1996 forthe development, manufacture and supply of alloyed and unalloyed aluminium coils and sheets. This certificateis valid till May 15, 2006.

2. Certificate of compliance with ISO 9001:2000 quality standards by Bureau Veritas Quality International to theCompany’s unit at Belur on December 16, 1995 for the manufacture and supply of aluminium foil, foil and non-foil based plain, printed, coated, laminated and extruded substrates for packaging purposes. The certificatenumber is 169169 and is valid till March 11, 2006.

Pending Applications

1. Letter dated March 15, 2005 to the West Bengal State Pollution Control Board requesting the transfer of name onConsent order No. CO19/10-PCB/HOW/65-97 dated October 31, 2002 from Indal to the Company following themerger of these companies.

2. Certificate of compliance with ISO 9001:2000 quality standards by Bureau Veritas Quality International to theCompany’s unit at Belur on November 20, 2001 for the manufacture of I-20K aluminium ingots, rolling ingots,cast coils and carbon paste. The certificate number is 169169 and is valid till November 21, 2004. Application forrenewal is pending.

(F) Hirakud Complex

Approvals relating to manufacture

1. Certificate of Registration under Section 7(2) of the Contract Labour (Regulation and Abolition) Act, 1970, issuedby the office of the Registering and Licensing Officer, Government of Orissa on February 18, 2004 specifying themaximum number of contract labour that may be employed from each contractor for specified services.

2. Central Excise Registration Certificate issued by the Office of the Assistant Commissioner of Central Excise,Belgaum under Rule 9 of the Central Excise Rules, 2002, registering the Hirakud complex for the manufacture ofexcisable goods on April 1,2005; the factory was allotted the Excise Registration No. AAACH1201RXM011.

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3. Certificate of registration issued to Indal under Section 9/9A and 9/C of the Orissa Sales Tax Act, 1947 by theSales Tax Officer conferring registration No. SA I-2587 with effect from November 1, 1957 permitting themanufacture of all aluminium related products and resale of chemicals, scrap and carbon blocks. This certificatewas amended in favour of the Company on March 7, 2005 and was renewed on March 29, 2005 for 2005-06.

4. Certificate of Registration issued under Rule 5 of the Central Sales Tax (Registration and Turnover) Rules, 1957 bythe Asst. Commissioner of Commercial Taxes at Ernakulum, on September 9, 2004 bearing number SA I (Central)345. The certificate was amended upto March 7, 2005 issuing the certificate in favour of the Company instead ofIndal. This certificate is valid from March 15, 2005 till cancelled. This certificate lists the material and equipmentthat may be utilized in the mine as well as the factory and enlists the items that can be put up by the complex forsale, leasing and resale.

5. Certificate of assignment of Taxpayer Identification No. 2160170134 for Indal at Hirakud in lieu of the existingOrissa Sales Tax No. 2587 by the Commercial Tax Officer, Sambalpur.

6. License to store 159 KL of Class C Petroleum bulk petroleum in an installation issued under Form XV of thePetroleum Act, 1934 by the Chief Controller of Explosives to Indal, Hirakud with License No. P-12(14)59/OR-480initially issued on February 26, 1990, which shall remain in force till December 31, 2006.

7. License to store petroleum in tank or tanks in connection with pump outfit for fuelling motor conveyances underForm XIV under the Petroleum Rules, 2002 by the Dy. Chief Controller of Explosives, Rourkela to Indal, Hirakudwith License number OR-991 initially issued on November 11, 2005, which shall remain in force till December 31,2006.

8. Authorisation for collection, treatment, storage, transport and disposal of hazardous waste bearing No. IND/IV/HW –050(23) 21395 issued by the Orissa State Pollution Control Board under Rule 5 of the Hazardous Wastes(Management and Handling) Rules, 1989 and Amendments thereof issued on November 13, 2000. Theauthorization was expiring on November 13, 2005.

9. The Director of Factories and Boilers, Orissa vide letter No. 16244 dated October 1, 2005 has issued certificatesfor use of boilers having registration Nos. OR/484 and OR/489 respectively. The certificates were issued witheffect from August 20, 2005 and are valid till August 19, 2006.

Certifications

1. Certificate awarded by Det Norske Veritas No. RIN350-AE-1042 to Indal (Hirakud Smelter) on December 27, 2000on being found to comply with the environmental management system standard ISO 14001:1999 for aluminiumsmelting, production of aluminium pigs, rolling ingots, cast coils and carbon paste. This certificate was valid tillDecember 27, 2003.

2. Certificate awarded by Bureau Veritas Quality International of No. 149968 to the Company’s unit at Belur onMarch 16, 2004 on being found to comply with the Occupational Health and Safety management system standardOHSAS 18001:1999 for the manufacture and supply of unalloyed and alloyed aluminium coils and sheets. Thiscertificate was valid till March 16, 2007.

Approvals Pending

1. Registration issued on May 31, 2002 to Indal to work a factory by the Chief Inspector of Factories, Orissa in thedistrict of Hirakud employing not more than 2500 persons on any day of the year and using power not exceeding1,20,000 K.W. The certificate was to expire on December 31, 2004. Application for change in the name of Companyin whose favour the factory is registered is pending with the Directorate of Factories, Orissa.

2. Consent Order No. 10920 SPCB/BBSR-I-IND(C0N)/32 dated March 31, 2005, under Section 25 and 26 of theWater (Prevention & Control of Pollution) Act, 1974 to Indal, Hirakud Smelter for the release of trade effluents,issued by the Orissa State Pollution Control Board. This consent was to be valid till March 31, 2005. Applicationfor renewal is pending.

3. Consent Order No. 10922 SPCB/BBSR-I-IND(C0N)/32 dated March 31, 2005, under Section 21 of the Air (Prevention& Control of Pollution) Act, 1981 to Indal for the release of trade effluents, issued by the Orissa State PollutionControl Board. This consent was to be valid till March 31, 2005. Application for renewal is pending.

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4. Letter dated December 6, 1992 from the Regional Provident Fund Commissioner, Orissa allowing Indal, HirakudPower to extend the application of Employees Provident Funds and Miscellaneous Provisions Act, 1952 to theestablishment. The code number allotted was OR/4630.

5. Letter dated April 27, 1994 from the Regional Director, Employees State Insurance Corporation, Bhuvaneshwar,extending the operation of the Employees State Insurance Act, 1948 to the Hirakud Power Co. vide NotificationNo. IVS-4-43/82-20069/LE with effect from September 4, 1993. The code number allotted to the factory is 44-3308-95.

(G) Hirakud Power

Approvals relating to manufacture

1. Registration and license to work a factory by the Chief Inspector of Factories, Orissa to Indal bearing registrationNo. SB-230 in the district of Hirakud employing not more than 2000 persons on any day of the year and usingpower not exceeding 18,000 K.W. for a factory for generating electrical power. This license is valid till December31, 2005

2. License to store upto 6 Chlorine Tonners and 2 Chlorine cylinders under Rules 57 and 58 of the Indian ExplosivesAct, 1884, bearing No. GC(OG)3-130/OR/A issued by the Chief Controller of Explosives at Bombay permittingIndal, Hirakud Power issued on June 26, 1998 and renewed till March 31, 2007.

3. License to store petroleum in two above ground Petroleum Class C Storage tanks issued under the PetroleumAct, 1934 by the Chief Controller of Explosives to Indal, Hirakud Power with License No. P-12(14)397/OR-1524initially issued on March 2, 1993, to remain in force till December 31, 2005.

4. License No. OR-1596 to store petroleum in a tank issued under the Petroleum Rules, 2002 by the Dy ChiefController of Explosives, Rourkela to Indal, Hirakud issued on March 29, 1995, duly renewed till December 31,2005 vide letter dated March 13, 2003.

5. Authorisation for collection, treatment, storage, transport and disposal of hazardous waste bearing number IND/IV/HW –050(23) 21386 issued by the Orissa State Pollution Control Board to Indal, Hirakud Power under Rule 5 ofthe Hazardous Wastes (Management and Handling) Rules, 1989 and amendments thereof issued on November13, 2000 with regard to the disposal of oily sludge, spent resin, used oil and batteries. The authorization isexpiring on November 13, 2005.

Approvals Pending

1. Consent Order No. 20740/SPCB/BBSR-I-IND(CON)/1411 granted on June 25, 2004 by the Environmental Officer,Orissa State Pollution Control Board under Section 25 of the Water (Prevention & Control of Pollution) Act, 1974authorising to Indal, Hirakud Power to discharge domestic effluents. Consent is to be valid till March 31, 2005.Application for renewal is pending.

2. Consent order No. 20742/SPCB/BBSR-I-IND(CON)/1411 dated June 25, 2004 to Indal, Hirakud Power for operationin air pollution control area and specifying the nature of gaseous release permitted and the nature of chimneysthat have to be utilised under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, issued byDeputy Environmental Officer, Orissa State Pollution Control Board. This consent was to be valid till March 31,2005. Application for renewal is pending.

(H) Renusagar

Approvals relating to manufacture

1. License No. SBR -132 issued under Section 6 of Factories Act, 1948 by the Director of Factories, Uttar Pradesh.The license has been renewed for year ending December 31, 2005.

2. Registration under Contract Labour (Regulation and Abolition) Act, 1970, issued on January 19, 1978.

3. License bearing No. PV(NC)S- 88/UP69/PVS to store compressed gas in cylinders under the Indian ExplosivesAct, 1884, issued by the Deputy Chief Controller of Explosives at Agra permitting upto 16 Te units of Ammonia tobe stored on the premises. This license was renewed till March 31, 2007.

4. License bearing No. UP- 302(L) to store compressed gas in cylinders under the Indian Explosives Act, 1884,

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issued by the Deputy Chief Controller of Explosives at Agra permitting upto 2000 kilograms of liquefied petroleumgas to be stored on the premises. This license was renewed till March 31, 2006.

5. License bearing No. 18- 297/ CGS to store compressed gas in cylinders under the Indian Explosives Act, 1884,issued by the Deputy Chief Controller of Explosives at Agra permitting liquefied petroleum gas to be stored onthe premises. This license was renewed till March 31, 2006.

6. License bearing No. UP- 1200/CGS to store compressed gas in cylinders under the Indian Explosives Act, 1884,issued by the Deputy Chief Controller of Explosives at Agra permitting upto 1200 kilograms of liquefied petroleumgas to be stored on the premises. This license was renewed till March 31, 2007.

7. License to import and store petroleum class A and class B under Form XIII of the Petroleum Act, 1934 by theChief Controller of Explosives, Agra with License No. UP-1726. This approval is valid till December 31, 2005.

8. License to import and store HSD oil pertaining to petroleum class B under Form XIII of the Petroleum Act, 1934by the Chief Controller of Explosives, Agra with License No. P-12(17)665. This approval is valid till December 31,2005.

9. Certificates for use of a Boiler issued by the Deputy Director of Boilers, Kanpur Division permitting the Companyto use boilers for the following:

(a) Certificate dated January 28, 2005 permitting the working of boiler registry No. UP 4870 for a period extendingfrom January 28, 2005 to January 27, 2006.

(b) Certificate dated May 20, 2004 permitting the working of boiler registry No. UP 5445 for a period extendingfrom May 20, 2004 to May 19, 2006.

(c) Certificate dated April 6, 2005 permitting the working of boiler registry No. UP 5869 for a period extendingfrom April 6, 2005 to April 5, 2006.

(d) Certificate dated December 9, 2004 permitting the working of boiler registry No. UP 5902 for a periodextending from August 29, 2005 to August 28, 2006.

(e) Certificate dated June 20, 2005 permitting the working of boiler registry No. UP 5537 for a period extendingfrom June 20, 2005 to June 19, 2006.

10. Consent Order No. F34506 dated July 16, 2004 from the Uttar Pradesh Pollution Control Board for obtainingconsent to operate under the Water (Prevention and Control of Pollution) Act, 1974. The consent is valid tillDecember 31, 2005.

11. Consent Order No. F34505 dated July 16, 2004 from the Uttar Pradesh Pollution Control Board to operate underthe Air (Prevention and Control of Pollution) Act, 1981. The consent is valid till December 31, 2005.

12. Authorisation letter bearing No. 703/Auth/AB-16-1-2002 dated January 9, 2002 issued by the Uttar PradeshPollution Control Board under Rule 5 of the Hazardous Wastes (Management and Handling) Rules, 1989 andAmendment Rules, 2003 with regard to the collection and storage of waste oil and used batteries. The authorizationis valid till January 7, 2007.

13. Mobile Station License No. P-472/1-17 issued by the Ministry of Communications and IT dated December 22,2004. The license is valid upto December 31, 2006.

14. Wireless Station License No. P-1173/1-39 issued by the Ministry of Communications and IT. The license is validupto September 30, 2005.

15. Mobile Station License No. RP-52/1-124 issued by the Ministry of Communications and IT dated December 20,2004. The license is valid upto December 31, 2005.

16. Mobile Station License No. P-4077/1-17 issued by the Ministry of Communications and IT. The license is validupto September 30, 2005.

17. Registration Certificate No. CTV/MZP-124/03 issued by the Head Post Master, Mirzapur for running a cable televisionnetwork.

18. Registration No. UP 38/5 issued under Rule 5 of the Uttar Pradesh Motor Transport Workers Rules, 1962. Theregistration is valid till December 31, 2007.

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19. One time bulk consumer license No. 43 issued under UP Scheduled Commodities Dealer (License and Controlon Hoardings) Order, 1989 by the licensing authority, Uttar Pradesh on December 2, 1994.

20. Mandi Samiti license bearing No.M-442 issued on June 16, 2001 licensing authority Uttar Pradesh.

Approvals Pending

1. Letter dated October 9, 2005 applying for renewal of factory license No. I/1167/SDH/2m(I) for the year endingDecember 31, 2005 made to Director, Industrial Health and Safety, Madhya Pradesh.

2. Letter dated October 30, 2005 applying for renewal of factory license No. MPR-67 for the year ending December31, 2005 made to Assistant Director of Factories, Uttar Pradesh.

3. Application to renew license No. E-25(17)-460/UP-355/E to possess explosives for use, for the period endingMarch 31, 2006 made to the Joint Chief Controller of Explosives, Agra vide letter dated January 20, 2004.

(I) Renukoot

Approvals relating to manufacture

1. Plant I factory license bearing No. SBR-86 issued under the Factories Act, 1948 by the Deputy Chief Inspector ofFactories, Uttar Pradesh vide certificate dated November 29, 1997. The license has been renewed upto December31, 2005.

2. Plant II factory license bearing No. MPR-92 issued under the Factories Act, 1948 by the Deputy Chief Inspector ofFactories, Uttar Pradesh vide certificate dated March 5, 2002. The license has been renewed upto December 31,2005.

3. Plant I registration certificate No. 4 under Contract Labour (Regulation and Abolition) Act, 1970, issued on January19, 1978, being a one time registration.

4. Plant II registration certificate No. 5 under Contract Labour (Regulation and Abolition) Act, 1970, issued on January19, 1978 being a one time registration.

5. Sales tax registration No. MI-10 issued under the Uttar Pradesh Trade Tax Act, 1948.

6. Sales tax registration No. RG-5006130 issued under the Central Sales Tax Act, 1956.

7. License No. UP-5799 to store upto 15 kiloliters of petroleum class A and class B under the Petroleum Act, 1934,issued by the Controller of Explosives, Agra This approval is valid till December 31, 2005.

8. Central Excise registration No. AAACH1201RXM002 issued by the Central Excise Division, Mirzapur on December18, 2001 under Rule 9 of the Central Excise Rules, 2002, registering the Renukoot factory for the manufacture ofexcisable goods.

9. Service tax registration No. AAACH1201RST005 for service of cable operators. The Company has also appliedto register itself for the services of Mandap Keeper, health and fitness, goods transport agency and consultingengineer services.

10. License No. P-12(17)2589/UP-3598 dated May 4, 1994 to store upto 1135.05 kilo liters of petroleum class C underthe Petroleum Act, 1934, issued by the Chief Controller of Explosives, Agra. The license has been renewed tillDecember 31, 2005.

11. License No. UP 702/ CGS to store compressed gas in cylinders under the Indian Explosives Act, 1884, issued bythe Deputy Chief Controller of Explosives at Agra permitting compressed gas to be stored on the premises. Thislicense was renewed till March 31, 2006.

12. License No. UP 1357/ CGS to store compressed gas in cylinders under the Indian Explosives Act, 1884, issuedby the Deputy Chief Controller of Explosives at Agra permitting carbon dioxide gas to be stored on the premises.This license was renewed till March 31, 2006.

13. License No. P/HQ/UP/15/1364(P8765) dated October 23, 2000 to store upto 92 kilo liters of petroleum class Cunder the Petroleum Act, 1934, issued by the Chief Controller of Explosives. The license has been renewed tillDecember 31, 2006.

14. License No. P/HQ/UP/15/4259(P53699) dated September 8, 2003 to store upto 50 kilo liters of petroleum class C

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under the Petroleum Act, 1934, issued by the Chief Controller of Explosives. The license has been renewed tillDecember 31, 2006.

15. License No. PV(CC)S- 314/UP205/PVS to store compressed gas in cylinders under the Indian Explosives Act,1884, issued by the Deputy Chief Controller of Explosives at Agra permitting upto 8.4 MT of Propane to bestored on the premises. This license was renewed till March 31, 2007.

16. License No. PV(CC)S- 314/UP205/PVS to store compressed gas in cylinders under the Indian Explosives Act,1884, issued by the Deputy Chief Controller of Explosives at Agra permitting upto 8.4 MT of Propane to bestored on the premises. This license was renewed till March 31, 2007.

17. License No. PV(CC)S- 315/UP206/PVS to store compressed gas in cylinders under the Indian Explosives Act,1884, issued by the Deputy Chief Controller of Explosives at Agra permitting upto 8.4 MT of Propane to bestored on the premises. This license was renewed till March 31, 2007.

18. License No. S/HO/UP/03/267(S20867) to store compressed nitrogen gas in three pressure vessels, issued underthe Indian Explosives Act, 1884, by the Deputy Chief Controller of Explosives on September 21, 2004. Thislicense is valid till March 31, 2007.

19. Consent No. F27422/C2/A-259/2004 dated February 10, 2004 from the Uttar Pradesh Pollution Control Board forobtaining consent to operate under the Air (Prevention and Control of Pollution) Act, 1981. The consent is validtill December 31, 2005.

20. Consent No. F27421/C2/480/2004 dated February 10, 2004 from the Uttar Pradesh Pollution Control Board forobtaining consent to operate under the Water (Prevention and Control of Pollution) Act, 1974. The consent isvalid till December 31, 2005.

21. Authorisation letter bearing No. 604/AUTH/HINDALCO 2002 dated January 9, 2002 issued by the Uttar PradeshPollution Control Board under Rule 5 of the Hazardous Wastes (Management and Handling) Rules 1989 andAmendment Rules, 2003 with regard to collection, reception, treatment, storage, transport and disposal ofhazardous wastes. The authorization is valid till January 7, 2007.

22. Authorisation granted by the regional officer, Uttar Pradesh Pollution Control Board under the Bio-Medical Waste(Management & Handling) Rules, 1998 for the period January 11, 2005 to December 31, 2007 vide letter datedJune 23, 2005.

23. Environmental clearance granted by the Ministry of Environment and Forests, Government of India for the 40MW co-generation power project at Renukoot, Uttar Pradesh.

24. Consent No. F 50284C-2/Vayu Pradushan/567/05 dated September 5, 2005 read with Consent Order letter No.03/C2/Sahmati(Vayu) Adesh/05 dated 5.9.2005 valid from January 1, 2005 to December 31, 2005 under Air(Prevention & Control of Pollution) Act, 1981 from U.P. Pollution Control Board, Lucknow.

25. Consent No. 50283C-2/Sahmati Jal/934/05 dated September 5, 2005 read with Consent Order letter No. 103/C2/Sahmati Jal Adesh/05 dated September 5, 2005 valid from January 1, 2005 to December 31, 2005 under Water(Prevention & Control of Pollution) Act, 1974 from U.P. Pollution Control Board, Lucknow.

26. No Objection Certificate and approval from UP Pollution Control Board for Red Mud/ Ash disposal on 69 hectareland in the Company’s existing premises and located on South of Water Treatment Plant, Renukoot vide letterNo. F50102/NOC/3310/2005 dated August 30, 2005.

27. Registration Certificate No. CTV/MZP-116/2002 issued by the Head Post Master, Mirzapur for running a cabletelevision network. The certificate is valid upto December 16, 2005.

Certification

1. Certificate of registration No. 1479 issued by Moody International Certification on January 1, 2004 certifying thatthe environmental management systems of the Company have been assessed and registered against the ISO14001 standard.

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Applications Pending

1. License No. P/HQ/UP/15/4352(P53693) dated June 8, 2004 to store upto 183 kiloliters of petroleum class C underthe Petroleum Act, 1934, issued by the Joint Chief Controller of Explosives. The Company has vide its applicationdated November 17, 2004 applied to renew the license for the period January 1, 2005 to December 31, 2007.

2. License No. P/HQ/UP/15/435(P105554) dated June 8, 2004 to store upto 156 kiloliters of petroleum class C underthe Petroleum Act, 1934, issued by the Joint Chief Controller of Explosives. The Company has vide its applicationdated November 17, 2004 applied to renew the license for the period January 1, 2005 to December 31, 2007.

3. License No. P-12(17)383/UP-1775 dated December 19, 1984 to store upto 4950 kiloliters of petroleum class Cunder the Petroleum Act, 1934, issued by the Chief Controller of Explosives, Agra. The Company has vide itsapplication dated November 17, 2004 applied to renew the license for the period January 1, 2005 to December31, 2007.

4. License No. P-12(17)615/UP-1777 dated January 31, 1978 to store upto 46 kiloliters of petroleum class B underthe Petroleum Act, 1934, issued by the Chief Controller of Explosives, Agra. The Company has vide its applicationdated November 17, 2004 applied to renew the license for the period January 1, 2005 to December 31, 2007.

5. License No. P-12(17)1854/UP-1792 dated July 15, 1986 to store upto 62-83 kiloliters of petroleum class C underthe Petroleum Act, 1934, issued by the Chief Controller of Explosives, Agra. The Company has vide its applicationdated November 17, 2004 applied to renew the license for the period January 1, 2005 to December 31, 2007.

6. License No. P/HQ/UP/15/693(P8085)/UP-1793 dated July 15, 1986 to store upto 226.57 kiloliters of petroleumclass B under the Petroleum Act, 1934, issued by the Deputy Chief Controller of Explosives, Agra. The Companyhas vide its application dated November 17, 2004 applied to renew the license for the period January 1, 2005 toDecember 31, 2007.

7. License No. P-12(17)2596/UP-4112 dated September 25, 1995 to store upto 92 kiloliters of petroleum class Cunder the Petroleum Act, 1934, issued by the Deputy Chief Controller of Explosives, Agra. The Company hasvide its application dated November 17, 2004 applied to renew the license for the period January 1, 2005 toDecember 31, 2007.

(J) Dahej

Approvals relating to manufacture

1. Factory license issued under the Factories Act, 1948 by the Chief Inspector of Factories. The license has beenrenewed upto December 31, 2005.

2. Certificates for use of a Boiler issued by the Gujarat Boiler Inspection Department, permitting the Company touse the following boilers:

a. Certificate dated August 28, 2005 permitting the working of boiler registry No. GT 3962 for a period extendingfrom May 17, 2005 to May 16, 2006.

b. Certificate dated August 28, 2005 permitting the working of boiler registry No. GT 4063 for a period extendingfrom June 7, 2005 to June 6, 2006.

c. Certificate dated August 28, 2005 permitting the working of boiler registry No. GT 3879 for a period extendingfrom May 10, 2005 to May 9, 2007.

d. Certificate dated August 28, 2005 permitting the working of boiler registry No. GT 3880 for a period extendingfrom May 10, 2005 to May 9, 2007.

e. Certificate dated May 4, 2005 permitting the working of boiler registry No. MP 4059 for a period extendingfrom February 26, 2005 to February 25, 2006.

f. Certificate dated August 28, 2005 permitting the working of boiler registry No. GT 4429 for a period extendingfrom May 10, 2005 to May 9, 2007.

3. Letter from the Employee’s Provident Fund Organisation, dated October 22, 2002 allotting separate code DL/7233 to Indo-Gulf Corporation Limited, Unit Birla Copper at Dahej. Letter requesting a change of name has beensubmitted.

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4. Central Excise registration No. AAACH1201RXM003 issued by the Central Excise Division, Bharuch on March 30,2004 under Rule 9 of the Central Excise Rules, 2002, registering the Dahej factory for the manufacture of excisablegoods.

5. Sales tax registration No. 2107000691 issued under the Gujarat Sales Tax Act, 1969.

6. Sales tax registration No. GJ-15G-74 issued under the Central Sales Tax Act, 1956.

7. Service tax registration No. GTO/VAD-II(BRH)19/HIL/2005 issued by the Central Excise and CustomsCommissionerate, Vadodara - II on January 19, 2005 under Section 69 of the Finance Act, 1994 for goods transportoperator services.

8. License No. GJ/BRO-407 to store upto 20 kilo liters of petroleum class A and class B in tanks on the premises,issued under the Petroleum Act, 1934, by the Joint Controller of Explosives, Navi Mumbai. This approval is validtill December 31, 2006.

9. Certificates for use of a Boiler issued by the Gujarat Boiler Inspection Department, permitting the Company touse Boiler registry number GT 4676 for a period extending from January 4, 2005 to January 3, 2006 vide certificatedated January 4, 2005.

10. License No. P/HQ/GJ/15/1813(P12167) dated October 21, 1997 to store upto 659 kiloliters of petroleum class Aand 452 kilo liters of petroleum class C under the Petroleum Act, 1934, issued by the Chief Controller of Explosives.The license has been renewed till December 31, 2007.

11. License No. P-12(25)3272 dated October 21, 1997 to store upto 25 kilo liters of petroleum class B under thePetroleum Act, 1934, issued by the Deputy Chief Controller of Explosives, Baroda. The license has been renewedtill December 31, 2007.

12. Licence No. S/HO/GJ/03/356(s1682) to store compressed gas in cylinders under the Indian Explosives Act, 1884,issued by the Joint Chief Controller of Explosives, Navi Mumbai permitting upto 350 cubic meters of liquefiedpetroleum gas to be stored on the premises. This license was renewed till March 31, 2008.

13. Consent Order No. 3565 dated August 9, 2004 from the Gujarat Pollution Control Board to operate under theWater (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and theHazardous Wastes (Management and Handling) Rules, 1989. The consent is valid till February 19, 2009.

14. Mobile Station License No. P-4404/1-17 and 4405/1-17 issued by the Ministry of Communications and IT datedMarch 23, 2005. The licenses are valid till March 31, 2006.

15. Permission from the Gujarat Maritime Board vide its letter dated March 30, 2005 permitting Dahej Harbour andInfrastructure Limited to use its captive jetty for handling commercial cargo. The permission has been renewedtill December 31, 2005.

(K) Silvassa

Approvals to carry out manufacturing

1. Factory license bearing No. 631 issued under the Factories Act, 1948 by the Chief Inspector of Factories, Silvassavide certificate dated January 28, 1998. The license has been renewed upto December 31, 2005.

2. Factory license bearing No. 1151 issued under the Factories Act, 1948 by the Chief Inspector of Factories, Silvassavide certificate dated September 16, 1999. The license has been renewed upto December 31, 2005.

3. Central Excise registration No. AAACH1201RXM001 issued by the Central Excise Division, Silvassa on January19, 2003 under Rule 9 of the Central Excise Rules, 2002, registering the Silvassa factory for the manufacture ofexcisable goods.

4. Service Tax Code No. AAACH1201RST006 for goods transport operators and business auxiliary services, issuedby the Assistant Commissioner of Central Excise, Silvassa on February 9, 2005.

5. Allotment of Tax Deduction Account No. SRTH0059F issued under Section 203A of the I.T. Act, by the IncomeTax Officer - TDS, Surat on June 17, 2003.

6. Sales Tax registration No. DNH/ST/2045 issued under the Dadra and Nagar Haveli Sales Tax Regulation, 1978.

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7. Sales tax exemption certificate No. ADM/DNH/EXEMPT/ST/98/424 dated June 29, 1999 and amendments datedMarch 15, 2003 and July 5, 2003 issued by the Assistant Commissioner of Sales Tax, Silvassa. The Company isexempt from payment of sales tax under the Dadra and Nagar Haveli Sales Tax Regulation, 1978 in respect ofpaper poly laminated, paper coated aluminium sheet and strips of thickness exceeding 0.2 mm alloyed and non-alloyed for the period December 31, 1999 to March 5, 2013; and in respect of road wheels and parts andaccessories thereof for the period September 28, 1999 to September 27, 2014.

8. License No. P-12(9)213 SIL-71 to store upto 20 kiloliters of petroleum class B and 40 kiloliters of petroleum classC on the premises, issued under the Petroleum Act, 1934, by the Chief Controller of Explosives. This approval isvalid till December 31, 2005.

9. Authorisation letter No. PCC/DDD/O-607/HW/KU/96-97/526 dated December 16, 2004 issued by the PollutionControl Committee, Daman & Diu & Dadra and Nagar Haveli under the Hazardous Wastes (Management andHandling) Rules, 1989 and Amendment Rules, 2003 with regard to collection, storage, transport and disposal ofhazardous wastes. The authorization is valid till February 28, 2006.

10. Consent No. PCC/DDD/O-607/HW/KU/96-97/525 dated December 16, 2004 issued by the Pollution ControlCommittee, Daman & Diu & Dadra and Nagar Haveli to operate under the Water (Prevention and Control ofPollution) Act, 1974. The consent is valid till February 28, 2006.

11. Consent No. PCC/DDD/O-607/HW/KU/96-97/524 dated December 16, 2004 issued by the Pollution ControlCommittee, Daman & Diu & Dadra and Nagar Haveli for consent to operate under the Air (Prevention and Controlof Pollution) Act, 1981. The consent is valid till February 28, 2006.

Certifications

1. Certificate Registration No. 04111 20053 issued by the Certification Body for QM-Systems of RWTUV SystemsGmbH, certifying that the Wheel Division at Silvassa has established and applies a quality system for design,manufacture and supply of aluminium alloy wheel rims, that is compliant with ISO/TS 16949:2002. This certificateis valid till May 14, 2006.

2. Membership No. WR/MH/05/588 of the Automotive Component Manufacturers Association of India, for theperiod 2004-2005.

3. Certificate Registration No. 04104 2002 522-E3 dated January 14, 2002 issued by the Certification Body for QM-Systems of RWTUV Systems GmbH, certifying that the environmental management systems of the unit areassessed and registered as meeting ISO 14001 standard.

4. Certificate Registration No. 04100 2002 0053-E3 dated January 14, 2002 issued by the Certification Body for QM-Systems of RWTUV Systems GmbH, certifying that the manufacturing systems of the unit are assessed andregistered as meeting ISO 9001 standard.

(L) Muri

Approvals to carry our manufacturing

1. Certificate of registration No. 9 issued under Section 7(2) of the Contract Labour (Regulation and Abolition) Act,1970 to Indal, Chotamuri on December 19, 1973 for the employment of 1001 persons as contract labour.

2. Central Excise registration No. AAACH1201RXM009 issued to the Company by the Central Excise Division,Ranchi on March 24, 2005 under Rule 9 of the Central Excise Rules, 2002, registering the Dahej factory for themanufacture of excisable goods.

3. State sales tax registration No. RN(S) 2437(R) issued to the Company, under Section 14 of the Bihar Finance Act,1981. The certificate is renewed up till May 31, 2008.

4. Registration No. Jharkhand (S) 2173 (C) issued to the Company, under the Central Sales (Registration and Turnover)Rules, 1957.

5. License No. P-12(6)891/Bi-3048 dated February 18, 2004 issued under the Petroleum Act, 1934, issued by theChief Controller of Explosives, Hazariba. The license is valid till December 31, 2005.

6. Provisional orders under Section 9 of the Indian Boilers Act, 1923 issued by the Inspectorate of Boilers, Ranchi

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Division permitting the Company to use the following boilers:

(a) Certificate dated July 8, 2004 permitting the working of water tube boiler registry number BR/6940.

(b) Certificate dated July 25, 2004 permitting the working of water tube boiler registry number BR/8314.

(c) Certificate dated May 21, 2004 permitting the working of water tube boiler registry number BR/8403.

7. Discharge Consent Order No. RA/0139/W/C-1190 dated October 16, 2004 from the Jharkhand State PollutionControl Board issued to Indal, to operate under the Water (Prevention and Control of Pollution) Act, 1974. Theconsent is deemed as renewed till December 31, 2005.

8. Emission Consent Order No. RA/0027/A/C-1191 dated October 16, 2004 from the Jharkhand State PollutionControl Board issued to Indal, to operate under the Air (Prevention and Control of Pollution) Act, 1981. Theconsent is deemed as renewed till December 31, 2005.

Certifications

1. Certificate awarded by Det Norske Veritas no. 00002-2003-AS-DNV to Indal (Chota Muri unit) on August 8, 2003on being found to comply with the Occupational Health and Safety management system standard OHSAS18001:1999 for the manufacture of Alumina Hydrate, Calcined Alumina, Carbon Electrode Paste and CathodeCarbon Blocks. This certificate was valid till August 8, 2006.

2. Certificate awarded by Bureau Veritas Quality International for quality management system to the Company’sunit at Chota Muri of ISO 9001:2000 (No 145393) for the manufacture of Alumina Hydrate, Calcined Alumina,Carbon Electrode Paste and Cathode Carbon Blocks on May 29, 1997 which is valid till January 27, 2007.

3. Certificate awarded by Det Norske Veritas No. 00162-2004-AE-BOM-RaV to Indal (Chota Muri unit) on April 5,2001 on being found to comply with the environmental management system standard ISO 14001:1999 for themanufacture of Alumina Hydrate, Calcined Alumina, special alumina hydrates and special calcined aluminas.This certificate was valid till April 5, 2007.

Applications Pending

1. Factory license registration No. 1612/RCH issued to Indal under the Factories Act, 1948 by the Inspector ofFactories, Ranchi vide certificate dated August 24, 2004. The license was valid till December 31, 2004. Anapplication for renewal of factory licence was made on December 30, and is 2004, still pending with the authorities.

2. License for storing explosive substances bearing No. BI-3534 dated September 16, 1993 issued under thePetroleum Act, 1934, issued by the Chief Controller of Explosives, Hazaribag. Payment for renewal of this licensetill December 31, 2005 has been made. The confirmation of the extension is awaited.

(M) Aditya Aluminium

1. Memorandum of Manufacturer has been acknowledged by Ministry of Industry on August 8, 1997 for manufactureof 500,000 MT of calcined alumina at Kansariguda, Rayagada, Orissa.

2. Memorandum of manufacturer has been acknowledged by Ministry of Industry on August 8, 1997 for themanufacture at the facility of aluminium with captive base power plant for capacity of 250,000 MT which includes60,000 MT aluminium wire.

3. Registration certificate has been issued by the Assistant Labour Officer for the Aditya Aluminium Project underShops and Establishments Act on December 31, 1997 and this registration is valid up to December 31, 2005.

4. No Objection Certificate has been accorded by the State Pollution Control Board Orissa for establishment of 1.0Mln.T capacity Alumina Refinery at Kansariguda Rayagada, 260,000 T capacity Aluminium Smelter Plant at Lapangaand 5 X 130 MW Captive Power Plant at Lapanga, Sambalpur and have been revalidated vide order No.17817dt.27.05.2004.

5. State Govt. in Water Resources Department has accorded permission to draw 52.73 cusec water in favour ofAditya Aluminium Project provisionally and advised to sign the agreement for the same.

6. Approval for drawal of construction power from SOUTHCO has been obtained for Bauxite Mines & AluminaRefinery site (Kansariguda) and approval for drawal of construction power from WESCO has been obtained forAluminium Smelter and Power Plant Project site (Lapanga).

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7. In principle approval granted to Aditya Aluminium Project to draw 11.25 Cusec from Patagarha River by theOrissa Government through the Additional Secretary vide letter dated May 15, 1998 for the alumina refinery.

8. A recommendation has been made and sent by Industrial Promotion and Investment Corporation of OrissaLimited to Industrial Development Corporation of Orissa for acquisition of 3324.09 acres for aluminium smelter& captive power plant and 2095.29 acres for alumina plant and accordingly land is being acquired.

Applications Pending

1. Applications for environment clearance has been made to the Ministry of Environment and Forest for aluminarefinery and aluminium smelter dated July 28, 2004 and for captive power plant dated March 3, 2005 and theExpert Committee Meetings already held. The final clearance is awaited from the Ministry of Environment andForest.

(N) Utkal Alumina International Limited

Utkal Alumina was incorporated on September 29, 1993 and subsequently became a subsidiary of Indal. Pursuant tothe Scheme of Arrangement inter alia the entire shareholding interest of Indal in Utkal Alumina was transferred to theCompany. Approvals in respect of this project of Utkal Alumina in Orissa, were initially applied for in the name of Indalor through its subsidiary, Utkal Alumina.

Approvals in respect of the project

1. Permission granted to Utkal Alumina under Section 44(1) of the Indian Electricity Supply Act, 1948 for installationof a coal based co-generation power plant of 80 MW capacity by the Orissa Electricity Regulatory Commissionon June 11, 1997.

2. Permission to widen road to Utkal Alumina from Tikri Junction to Koral Junction from the Works Department,Government of Orissa, dated May 22, 2001.

3. In –principle approval granted to Indal by the Department of Irrigation, Government of Orissa for drawing waterfrom the Indravati Reservoir vide letter dated May 1, 1993.

4. Administrative clearance granted to Utkal Alumina by the Department of Water Resources, Government of Orissafor the drawing of water from the Indravati Reservoir vide letter dated November 18, 2002.

5. The Collectors of Rayagada and Kalahandi district have granted surface rights over land in Kashipur and Rampurvide letters dated May 25, 2004 and October 5, 2004. These surface rights are valid till December 17, 2028.

6. In-principle approval granted for the proposed mining site for Utkal Alumina at Baphlimali, District Rayagada,subject to certain conditions, by the Ministry of Environment and Forest on July 4, 1994.

7. In-principle approval granted for the establishment of an aluminium plant producing I million tonne of aluminiumat Rayagada by the Orissa State Pollution Control Board vide letter dated June 19, 1995 subject to certainconditions.

8. Environmental clearance was granted for the Baphalimali bauxite mine of Utkal Alumina subject to certainconditions by the Ministry of Environment and Forest on September 25, 1995.

9. Environmental clearance was granted to the proposed alumina plant and the captive power plant of Utkal Aluminasubject to certain conditions by the Ministry of Environment and Forest on September 27, 1995.

Approvals Pending

1. The approval for the project was granted by the Ministry of Industry – Department of Industrial Development,SIA under SIA registration No. E.O. 294(91)-IL, (MRTP) vide letter dated July 18 1991 to Indal. The approval wasrenewed from time to time initially by Indal and subsequently by Utkal Alumina. The last renewal sought for theestablishment of the new undertaking in Kashipur for the manufacture of alumina (annual capacity of 1 milliontonnes) which was obtained vide letter dated September 30, 1992 with a validity of a period of 3 years from itsdate of issue.Subject to certain conditions, the permission had been granted with all the facilities and privilegesadmissible under the 100% Export Oriented Scheme. The validity of this letter of intent had been extended tillSeptember 30, 2002, in favour of Utkal Alumina, by the Ministry of Commerce & Industry, Department of IndustrialPolicy and Promotion, vide letter dated September 26, 2000. In the year 2002, renewal application was againmade by Utkal Alumina. The application for renewal is being processed.

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2. There are certain approvals and consents in relation to Utkal Alumina to be obtained after the renewal of theletter of intent is granted:

(a) Permission to survey land to Indal for the development of infrastructure facilities for export of aluminiumand import of caustic soda granted by the Vishakapatnam Port Trust vide letter dated February 11, 1993.Application for allotment of land requires to be made.

(b) In-principle commitment for the allotment of 1000 hectares of land by the Joint Secretary to the Government,Revenue and Excise Department for the purpose of setting up a 100% EOU at Rayagada dated January 27,1994.

(c) Rail transport clearance from Ministry of Railways for the outward transport of alumina and inward transportof coal, fuel oil and caustic soda. This clearance was valid till January 15, 1994. This clearance from theMinistry of Railways for the carriage of 3 million tpa to the alumina plant has been extended till December17, 2002 vide letter dated December 7, 2001.

(d) Linkage accorded to the Utkal Alumina’s captive power plant by the Ministry of coal for the supply of 0 .8million tpa vide letter dated November 16, 1998. The ministry required an agreement for the supply of fuelto be concluded by May 17, 1999. The Ministry of Coal and Mines has given consent vide letter datedDecember 17, 2004 to extend time for signing the fuel supply agreement till March 31, 2005

(e) In principal approval given by the Department of Energy, Government of Orissa on February 5, 1993 forsupply of 5 MW power in 1994 for setting up the project and 15 MW operational power between 1997 and1998 to Utkal Alumina.

Approvals for Offices

(A) Bangalore

1. Registration certificate dated July 12, 1966 issued under the Karnataka Shops and Establishments Act, 1961 infavour of Indian Aluminium Company Limited for an office located at Indal House, 140, Field Marshal House, KMCariappa Road, Bangalore – 560025, bearing registration No. 61/CE/0309.

2. Branch Certificate issued to the Company for its office located at Industry House, Race Course Road, Bangalore– 560001 bearing No. 72834304, on October 10, 2002, permitting the operation of branches at Peenya, KMCariappa Road and Godown at survey no. 45/18.

(B) Mumbai

1. Certificate of Registration issued under the Bombay Shops and Establishments Act, 1948 bearing No. KE II/011019dated February 14, 2000 for an office located at Ahura Complex, 1st Floor, MIDC, Mahakali Caves Road, AndheriEast, Mumbai 400093. The registration has been renewed till 2005.

2. Certificate of Registration issued under the Bombay Shops and Establishments Act, 1948 bearing No. A-II/005707dated for an office located at 15th Floor, Air India Building, Nariman Point, Mumbai 400021. The registration hasbeen renewed for the year, 2006 on January 7, 2004.

3. Certificate of Registration issued under the Bombay Shops and Establishments Act, 1948 bearing No. G18-II-361dated March 23, 2000 for an office located at Century Bhavan, 3rd Floor, Dr. Annie Besant Road, Worli, Mumbai400025. The registration has been renewed till 2005.

(C) Bhubaneshwar

1. Registration Certificate Number II-478 issued under the Orissa Shops and Establishments Act, 1956 in favour ofIndian Aluminium Company Limited dated January 24, 2005 for an office located at J-6 Jaydev Vihar, Bhubaneshwar- 751013. By letter dated May 2, 2005 to the District Labour Officer, the Company has requested a transfer in theregistration certificate in favour of Hindalco Industries Limited.

2. Registration certificate dated December 31, 1997 from the Assistant Labour Officer, Bhubaneshwar in favour ofAditya Aluminium Project bearing number II-733 permitting the use of contract labour on the premises.

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(D) Chennai

1. Statement issued under Section 3 of the Tamil Nadu Industrial Establishments (National and Festival Holidays)Act, 1958 to the Company by Asst. Inspector of Labour on February 13, 1998 for the office located at 40 CalveChateau, 808 PH Road, Kilpauk, Chennai – 600010 updated on December 31, 2004.

2. Statement issued under Section 3 of the Tamil Nadu Industrial Establishments (National and Festival Holidays)Act, 1958 by Asst. Inspector of Labour bearing No.56/74 dated February 12, 1974 to Indian Aluminium CompanyLimited, Second Floor, Golden Enclave, 184 Poonamallee High Road, Kilpauk, Chennai – 600010 updated onDecember 31, 2004.

(E) Delhi

1. Notice issued under Section 33 of the Delhi Shops and Establishments Act, 1954 mentioning the time of operationof the office of the Company located at Vandana, 5th Floor, 11, Tolstoy Marg, New Delhi - 110001 by the ChiefInspector of Shops and Establishments, Delhi.

2. Registration certificate issued under Delhi Shops and Establishments Act, 1954 bearing registration number 6/3200/II by the Chief Inspector, Shops and Establishments, Delhi on March 3, 1992 in favour of the office of theCompany located at UCO Bank Building, 2nd Floor, Parliament Street, New Delhi -110001.

(F) Hyderabad

1. Certificate of Registration No C22/1969/2000 dated March 14, 2000 issued under the Andhra Pradesh Shops andEstablishments Act, 1988 to the Company for an office located at Emerald House, SP Road for carrying on salesand Marketing by the Department of Labour; this certificate is valid till December 31, 2005.

2. Certificate of Registration No. AL032/HYD/196/1991 to the Company for an office located at 312 Minerva House,94 Sarojini Devi Road, Secunderabad renewed till December 31, 2005 vide letter dated December 27, 2004under the Andhra Pradesh Shops and Establishments Act, 1988 by the Department of Labour.

(G) Kolkata

1. Certificate of registration bearing registration No. Cal/Park/P-II/439 issued under the West Bengal Shops andEstablishments Act, 1963 to the office of I Middleton Street, Kolkata –700071, to operate as a commercialestablishment. The registration was granted on May 31, 1994 and was last updated on January 25, 2005.

2. Certificate of registration bearing registration No. CAL/Hare/P-II/37387/01 issued under the West Bengal Shopsand Establishments Act, 1963 to the office of Hindalco Industries Limited at 9/1 R.N. Mukherjee Road, Kolkata700001. The certificate of enlistment with the Kolkata Municipal Corporation has been renewed for 2005-2006.

(H) Lucknow

1. Registration certificate issued for the office of the Company located at 23 Vidhan Sabha Marg, Lucknow. Anapplication has been made to renew the registration for a period of 5 years starting from 2005-2066.

Permits and Approvals in relation to Mining

(I) Maharashtra

A. Durgamwadi

1. Consent No. TB/NOC/Kri/B-3993 issued by the Maharashtra Pollution Control Board on October 28, 1991 grantinga no objection certificate (NOC) to Indal for mining 72000 MT/Month of bauxite by open cast mining method atRadhanagari, District Kolhapur, subject to certain conditions.

2. Consent No. BO/Kri/2529/C-2136 issued by the Maharashtra Pollution Control Board on November 19, 1993granting clearance under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”) toIndal to establish a factory in the Water Pollution Prevention Area of Krishna River basin for manufacture of 72000MT/Month of bauxite in Village Durgamadwadi S.P. No. 120(P), 123(P) and Padsoli 13(P), 14, 15(P), 16(P), 18(P),36(P), 38(P), 39(P), 40(P), 41(P), 42, 36(P), 43(P), 45(P), 188(P), Taluka Radhanagari, District Kolhapur. The consentalso imposed certain air pollution control measures.

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3. Consent No. BO/Kri/2529/R/C-683 by the Maharashtra Pollution Control Board on April 29, 1995 granted to operatethe factory in the Water Pollution Prevention Area of Krishna River Basin under Section 26 of the Water Act for themanufacture of 72000 MT/Month of bauxite and 10,000 MT/Month of aluminum laterite. This consent is validupto December 31, 1995 and also imposed certain air pollution control measures.

4. Environmental Clearance issued by the Government of Maharashtra on December 8, 1996, stating that theDepartment had no-objection to the Company’s expansion to manufacture 72000 MT/Month of bauxite at villageDurgamanwadi, Radhanagari, Dist. Kolhapur.

5. Consent No. BO/KO/22/R/CC/24 issued by the Maharashtra Pollution Control Board on March 17, 2004 under theAir and Water Acts until December 31, 2006. The validity of the authorisation granted under Hazardous Wastes(Management and Handling) Rules, 1989 is valid for a period of three years.

B. Kasarsada

1. Certificate of Approval no. No.8-83/99-FC/3562-F issued by the Central Government on October 3, 2001 underSection 2 of the Forest (Conservation) Act, 1980 for diversion of 106.76 hectare forest land for renewal of Kasarsadamining lease and construction of feeder road in favour of Indalco in District Kolhapur, Maharashtra.

2. Consent No. BO/RO/Kolhapur- 113/ R/CC-815 issued by the Maharashtra Pollution Control Board on January 3,2004 in respect of mining 150000 MT/yr of bauxite and 300000 MT/yr of aluminum laterite under the Water andAir Pollution Acts and also the Hazardous Wastes (Management & Handling) Rules 1989. This consent is validuntil December 31, 2006.

C. Ngartaswadi

No consents are required for this mine as it is non-operational.

D. Mogalgad

1. Clearance No. J-11016/17/95-IA.II(M) issued by the Government of India on August 1, 1996 granting environmentalclearance for diversion of 16 hectares of forest land.

2. Since the mine is non-operational, no environmental consents are present.

E. Idergunj

1. Approval no. F. No. 11-84/ 2003-FC given by the Ministry of Environment and Forests on June 29, 2004 grantingapproval of the Central Government to entrust the work for carrying on Environmental Impact Assessmentstudies in the Inderganj area to the Indian Institute of Science, Bangalore.

2. No other consents seen as mines are not operational.

Consents and Approvals Pending

A. Dhangarwadi

1. The Company has applied for forest clearance from the Ministry of Environment and Forests (“MoEF”) Thisapplication is pending before the concerned authority.

2. In relation to obtaining an NOC from the Maharashtra Pollution Control Board (“MPCB”), a public hearing wasconducted on August 18, 2005 and the report of the same has been forwarded to the MPCB.

3. The Udyog, Energy and Labour Department, has written a letter to the Company on October 16, 2003 stating thatthe Company would be granted permission to work in the forest land upon receipt of NOC from the ForestDepartment for 74.91 hectares of forest land.

B. Mogalgad

1. The forest clearance in relation to diversion of forest land for which the Government had earlier granted approval,has since been withheld on the basis of recommendation of Dy.Conservator of Forests (Wildlife) (“DCF”), PrincipalChief Conservator of Forests (Wildlife) and the Nodal Officer. The new Conservator and the DCF visited theaforesaid site on September 16, 2005 and have taken the opinion of the surrounding villagers. The report isexpected to be forwarded by September 24, 2005

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C. Durgmanwadi

1. The Company has applied for environmental clearance on July 4, 2005 and for temporary working permission15 July 2005 to the MoEF. The said clearances are awaited.

D. Kasarsada

1. The Company has applied for environmental clearance on July 11, 2005 and for temporary working permission15 July 2005 to the MoEF. The said clearances are awaited.

(II) Jharkhand

A. Bagru

1. Emission Consent Order No. RA/0171/A/C-694 issued by the Jharkhand Pollution Control Board (“JSPCB”) to theCompany under Section 21 of the Air Act on May 6, 2004 to the Company granting consent to operate itsIndustrial Plant at Bagru Hill Bauxite Mines, Lohardaga. The consent is valid from July 1, 2003 till June 30, 2004.

2. Discharge Consent Order No. RA/0170/W/C-693 issued by the JSPCB on May 6, 2004 to the Company grantingconsent to operate under Section 25/ 26 of the Water Act for discharge of trade effluent at Bagru Hill BauxiteMines, Indal for the period from July 1, 2003 till June 30, 2004.

3. Renewal of consent order for Emission and Discharge for Bagru Hill Bauxite Mines submitted to the JSPCB onMay 28, 2004.

B. Bhusar

1. Emission Consent Order No. RA/0170/W/C-694 issued by the JSPCB on May 6, 2004 to the Company grantingconsent under Section 21 of the Air Act to operate their Industrial Plant at Bagru Hill Bauxite Mines, Lohardaga.The consent is valid from July 1, 2003 till June 30, 2004.

2. Discharge Consent Order No. RA/0170/W/C-693 issued by the JSPCB to the Company on May 6, 2004 grantingconsent to operate under Section 25/ 26 of the Water Act for discharge of trade effluent at Bagru Hill BauxiteMines, Indal. The said consent is valid from July 1, 2003 till June 30, 2004.

3. Renewal of consent order for Emission and Discharge for Bagru Hill Bauxite Mines submitted to the JSPCB onMay 28, 2004.

C. Hisri (Old)

1. Emission Consent Order no. RA/0170/W/C-694] issued by the JSPCB to the Company on May 6, 2004 grantingconsent under Section 21 of the Air Act to operate an Industrial Plant at Bagru Hill Bauxite Mines, Lohardaga. Thesaid consent is valid from May 6, 2004 July 1, 2003 till June 30, 2004.

2. Discharge Consent Order No. RA/0170/W/C-693 issued by the JSPCB to the Company on May 6, 2004 grantingconsent to operate under Section 25/ 26 of the Water Act for discharge of trade effluent at Bagru Hill BauxiteMines, Indal. The consent is valid from July 1, 2003 till June 30, 2004.

3. Renewal of consent orders for Emission and Discharge for Bagru Hill Bauxite Mines submitted to the JSPCB onMay 28, 2004.

D. Hisri (New)

1. Emission Consent Order No. RA/0170/W/C-694 issued by the JSPCB to the Company on May 6, 2004 grantingconsent under Section 21 of the Air Act to operate an Industrial Plant at Bagru Hill Bauxite Mines, Lohardaga Thesaid consent is valid from July 1, 2003 till June 30, 2004.

2. Discharge Consent Order No. RA/0170/W/C-693 issued by the JSPCB on May 6, 2004 granting consent to operateunder Section 25/ 26 of the Water Act for discharge of trade effluent at Bagru Hill Bauxite Mines, Indal. The saidconsent is valid from July 1, 2003 till June 30, 2004.

3. Renewal of consent orders for Emission and Discharge for Bagru Hill Bauxite Mines submitted to the JSPCB onMay 28, 2004.

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E. Serengdag

1. NOC no. No. N-403 issued by JSPCB to the Company on August 31, 2004 under Section 25 & 26 of the Water Actand under Section 21 of the Air Act.

2. Letter no. 453 issued by the State Government on April 4, 2005 allowing Serangdag lease bifurcation and givingconsent for mining in non-forest land.

F. Pakhar

1. The MoEF has issued Environmental Clearance to the Company.

2. Emission Consent Order No. RA/0301/A/C-780 issued by the JSPCB under Section 21 of the Air Act on May 24,2004 to the Company granting consent to operate the Pakhar Bauxite Mines, Lohardaga. The consent is validfrom September 30, 2003 till September 30, 2004.

3. Discharge Consent Order No. RA/0300/W/C-695 issued by the JSPCB on May 6, 2004 granting consent to operateunder Section 25/ 26 of the Water Act for discharge of trade effluent at Pakhar Bauxite Mines, Indal for the periodfrom September 30, 2003 till September 30, 2004.

G. Shrengdag, Jalim and Sanai

1. Renewal of Emission Consent Order no. Ref No. 160A/ 1100 issued by Jharkhand State Pollution Control Board(JSPCB) on November 30, 2004 to the Company under the Air Act with respect to the Shrengdag Bauxite Mines.The renewal is valid from January 1, 2005 till December 31, 2005.

2. Application for consent of the Ministry of Environment and Forest has been initiated on May 28, 2005. The Noobjection certificate from the State pollution board is awaited.

H. Gurdari

1. Renewal Application for Emission Consent Order No. 160A/1101 issued by the JSPCB on November 30, 2004 toNovember 2005 for Gurdari Bauxite Mines under the Air Act. The renewal is valid from January 1, 2005 tillDecember 31, 2005.

2. Renewal of Discharge Consent Order No. 160A/ 1485 issued by JSPCB on February 22, 2005 to February 2006for the Gurdari Bauxite Mines under the Water Act, 1974. The renewal is valid from April 1, 2005 till March 31,2006.

3. Application for consent of the Ministry of Environment and Forest has been made. The No objection certificatefrom the State pollution board is awaited,

I. Chiro-Kukud

No consents are required for this mine as it is non-operational.

J. Orsapat

No consents are required for this mine as it is non-operational.

K. Kujam-I

1. NOC No. N-402 issued by the JSPCB on August 31, 2004 to the Company granting permission under Sections25 and 26 of the Water Act and Section 21 of the Air Act for Kujam-I, Kujam-II and Amtipani Project for productionof Bauxite- 500 MT/ day. The EIA submitted after the public hearing on June 21, 2004. The NOC is subject tocertain conditions including that the unit shall obtain consent to operate from State Pollution Control Boardunder Section 25 and 26 of the Water Act and Section 21 of the Air Act prior to commissioning of the plant. TheUnit is also required to obtain Environmental clearance from the Ministry of Environment and Forest beforestarting any activity at the site. This NOC is valid for a period of two years. The Company has already made anapplication to the MoEF in this regard.

2. Mining lease grant order vide letter No. 3B.M.-II-3/97 1385/M, Ranchi issued by the State Government on October30, 2004.

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L. Kujam-II

1. NOC no.N-402 issued by the JSPCB on August 31, 2004 to the Company under Sections 25 and 26 of the WaterAct and Section 21 of the Air Act for Kujam-I, Kujam-II and Amtipani Project for production of Bauxite- 500 MT/day. The EIA was submitted after the public hearing held on June 21, 2004. The NOC is subject to certainconditions including that the unit shall obtain consent to operate from State Pollution Control Board underSections 25 and 26 of the Water and Section 21 of the Air Act prior to commissioning of the plant and that theUnit is to obtain Environmental clearance from the MoEF before starting any activity at the site. The NOC is validfor a period of two years. The Company has already made an application to the MoEF in this regard.

2. Mining lease grant order vide letter No. 3B.M.-II-2/97 1386/M, Ranchi issued by the State Government on October30, 2004.

M. Amtipani

1. NOC No. N-402 issued by the JSPCB on August 31, 2004 under Sections 25 and 26 of the Water Act and Section21 of the Air Act for Kujam-I, Kujam-II and Amtipani Project for production of Bauxite- 500 MT/ day. The EIA wassubmitted after the public hearing held on June 21, 2004. The NOC is subject to certain conditions including thatthe unit shall obtain consent to operate from State Pollution Control Board under Sections 25 and 26 of the Waterand Section 21 of the Air Act prior to commissioning of the plant and that the Unit is to obtain Environmentalclearance from the MoEF before starting any activity at the site. The NOC is valid for a period of two years. TheCompany has already made an application to the MoEF in this regard.

2. Mining lease grant order vide letter No. 3B.M.-II-4/97 1384/M, Ranchi issued by the State Government on October30, 2004.

Pending Approvals

A. Bagru, Bhusar, Hisri New and Hisri Old

1. The Company has made an application for renewal of Consent Orders for Emission and Discharge (combined forBagru, Bhusar, Hisri New and Hisri Old) to the JSPCB on May 25, 2005. The JSPCB has carried out a site inspectionon August 3, 2005 and found everything in order. The renewal is awaited.

B. Bagru

1. The Company has submitted a deforestation proposal for the forest land in Bagru on 2, 2005 and has applied fortemporary working permission on June 27, 2005). It must be noted that the proposal and application have beensubmitted in relation to land on which permanent structures have been constructed before the Forest ConservationAct, 1980 came into force.

2. The Company has submitted an EIA/EMP along with an application for NOC to the JSPCB on July 9, 2005 inorder to comply with the MoEF notification dated October 28, 2004.

3. The Company has applied for temporary working permission for environment related clearances to the MoEF onJuly 25, 2005 as per MoEF notification dated July 7, 2005.

C. Bhusar

1. The Company has submitted an EIA/EMP and an application for NOC on July 9, 2005 to the JSPCB in order tocomply with the the MoEF notification dated October 28, 2004,

2. The Company has applied for temporary working permission in relation to the environment to the MoEF on July25, 2005 as per MoEF notification dated July 4, 2005.

D. Hisri (Old)

1. The Company has submitted an application for the renewal of Consent Orders for emission and discharge forBagru Hill Bauxite Mines (combined for Bagru, Bhusar, Hisri New and Hisri Old) submitted to JSPCB on May 25,2005. The JSPCB officials have carried out an inspection of the site on August 3, 2005 and found everything inorder.

2. The Company has made an application for second renewal on August 11, 2005 and has further made an applicationrelating to the deforestation proposal over 10.29 Ha. of forest land on August 12, 2005.

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3. The Company has submitted an EIA/EMP and an application for NOC on July 9, 2005 to the JSPCB in order tocomply with the the MoEF notification dated October 28, 2004. The site inspection for 4.47 Hectares of forestland diversion has been carried out by Conservator of Forest, Ranchi and DFO, Ranchi West Division on October22, 2005.

E. Hisri (New)

1. The Company has made an application for renewal of Consent Orders for Emission and Discharge for Bagru HillBauxite Mines (combined for Bagru, Bhusar, Hisri New and Hisri Old) to JSPCB on May 25, 2005. The JSPCBofficials have carried out a site inspection on August 3, 2005 and have found everything in order.

2. The Company has submitted an EIA/EMP and an application for NOC on July 9, 2005 to the JSPCB in order tocomply with the MoEF notification dated October 28, 2004,

F. Pakhar

1. The Company has submitted an application for renewal of Consent Orders for Emission and Discharge forPakhar Bauxite Mines to the JSPCB on August 27, 2004. The renewal is pending.

2. The Company is also seeking the permission of the Ministry of Environment and Forest.

G. Kujam-I, Kujam-II and Amtipani

1. Approvals for Kujam-I, Kujam-II and Amtipani Project from the MoEF.

H. Shrengdag

1. Approvals for Shrengdag from the MoEF.

I. Chiro-Kukud

1. Environmental Impact Assessment report submitted to JSPCB for no objection certificate on August 27, 2005.Approval for Ministry of Environment and Forest clearance will be sought after NOC from the State is received.

J. Orsapat

1. Environmental Impact Assessment report submitted to JSPCB for no objection certificate. Approval for Ministryof Environment and Forest clearance will be sought after NOC from the State is received.

(III) Chattisgarh

A. Tatijharia, Kudag and Samri

1. Letter no. J-11015/304/94-1A II (M) issued by the MoEF on January 1, 1996 granting clearance for Samri, Kudagand Tatijharia leases.

Pending Approvals and Consents

A. Tatijharia, Kudag and Samri

1. An application for clearance from the MoEF for enhanced capacity has been made. The said approval forenhancement is awaited.

(IV) Orissa

Consents and Approvals Pending

1. MoEF clearance with respect to mines at Talabira for which an application for a temporary work permit has beenfiled with the Ministry of Environment and Forest on July 4, 2005.

2. An application has been filed with the State Pollution Control, Orissa for public hearing and consent to establisha unit with higher capacity.

3. A revised mine plan has been submitted to the Ministry of Coal, New Delhi.

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STATUTORY AND OTHER INFORMATION

Authority for the Issue

Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on September 20,2005 and the resolutions passed by the Committee of Directors on November 12, 2005 it has been decided to makethe following offer to the Equity Shareholders of the Company with a right to renounce.

Consent of Lenders

The agreements in respect of some of the debt taken by us contain certain covenants inter-alia for altering our sharecapital and for our expansions and diversifications plans, including the expansion proposed to be funded out of theproceeds of this Issue. We have obtained these consents from our lenders, where required.

Prohibition by SEBI

Neither we, nor our Directors or the Promoter Group Companies, or companies with which our Directors are associatedwith as directors or promoters, have been prohibited from accessing or operating in the capital markets under anyorder or direction passed by SEBI. Further, none of the directors or person(s) in control of the Promoters (as applicable)have been prohibited from accessing the capital market under any order or direction passed by SEBI.

Eligibility for the Issue

Hindalco is an existing company registered under the Indian Act whose Equity Shares are listed on BSE and NSE. It iseligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines. The Company, its Promoter, itsDirectors or any of the Company’s associates or group companies are currently not prohibited from accessing thecapital market under any order or direction passed by SEBI. Further the Promoter, their relatives (as per Act), theCompany, group companies, associate companies are not detained as willful defaulters by RBI / Government authorities.

Disclaimer Clause

AS REQUIRED, A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGEBOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS LETTER OFOFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED ORAPPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OFANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESSOF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THIS LETTER OF OFFER. THE LEAD MANAGERS JMMORGAN STANLEY PRIVATE LIMITED AND DSP MERRILL LYNCH LIMITED HAVE CERTIFIED THAT THEDISCLOSURES MADE IN THIS LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITHSEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THISREQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT INTHE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY ISPRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANTINFORMATION IN THE LETTER OF OFFER, THE LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCETO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF ANDTOWARDS THIS PURPOSE THE LEAD MANAGERS JM MORGAN STANLEY PRIVATE LIMITED AND DSP MERRILLLYNCH LIMITED HAVE FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 22, 2005 WHICHREADS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKECOMMERCIAL DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIALS MOREPARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OFTHE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS ANDOTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNINGTHE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONEDIN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;

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WE CONFIRM THAT:

THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALSAND PAPERS RELEVANT TO THE ISSUE;

ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES,INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY INTHIS BEHALF HAVE BEEN DULY COMPLIED WITH;

THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLETHE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO INVESTMENT IN THE PROPOSED ISSUE;

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OFOFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID; AND

4. IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFILTHEIR UNDERWRITING COMMITMENTS – [NOT APPLICABLE]

5. WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR INCLUSION OFTHEIR SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIESPROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN, WILL NOT BE DISPOSED/SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILINGTHE DRAFT LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIODAS STATED IN THE DRAFT LETTER OF OFFER [– NOT APPLICABLE]

The filing of this Letter of Offer does not, however, absolve the Company from any liabilities under Section 63 orSection 68 of the Act or from the requirement of obtaining such statutory or other clearance as may be required forthe purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the LeadManagers any irregularities or lapses in this Letter of Offer.

Caution

The Company and the Lead Managers accept no responsibility for statements made otherwise than in this Letter ofOffer or in any advertisement or other material issued by the Company or by any other persons at the instance of theCompany and anyone placing reliance on any other source of information would be doing so at his own risk.

The Lead Managers and the Company shall make all information available to the Equity Shareholders and no selectiveor additional information would be available for a section of the Equity Shareholders in any manner whatsoeverincluding at presentations, in research or sales reports etc. after filing of this Letter of Offer with SEBI.

Disclaimer with respect to jurisdiction

This Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulationsthereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) inMumbai, India only.

This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulationsthereunder. The distribution of the Letter of Offer and the Issue of Equity Shares on a Rights basis to persons in certainjurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons in whosepossession this Letter of Offer may come are required to inform themselves about and observe such restrictions. Anydisputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only.

The Equity Shares Issued on a Rights basis in terms of this Letter of Offer have not been, and will not be, registeredunder the US Securities Act of 1933, as amended, or under any U.S. State securities laws and may not be offered,sold, resold or otherwise transferred within the United States or to, or for the account or benefit of, “U.S. Persons” (asdefined in Regulation S under the Securities Act), except in a transaction exempt from the registration requirementsof the Securities Act. The delivery of this Letter of Offer to any address in the United States by anyone other than theCompany or the Lead Managers is not authorized by the Company and the Lead Managers and the Rights Entitlementor the Equity Shares may not be offered, sold, exercised or delivered in the United States, unless specifically authorisedby the Company.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for thatpurpose, except that this Letter of Offer has been filed with SEBI for observations and SEBI has given its observations.

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Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Letter ofOffer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in suchjurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances createany implication that there has been no change in our affairs from the date hereof or that the information containedherein is correct as of any time subsequent to this date.The Draft Letter of Offer was filed with SEBI, Mittal Court, ‘A’ Wing, Nariman Point, Mumbai 400 021, for its observations.After SEBI gave its observations, the final Letter of Offer was filed with the Designated Stock Exchange as per theprovisions of the Act.NEITHER THE RIGHTS ENTITLEMENTS NOR THE EQUITY SHARES THAT MAY BE PURCHASED PURSUANT THERETOHAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ORANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED WITHINTHE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, “US PERSONS” (AS DEFINED IN REGULATIONS UNDER THE SECURITIES ACT), EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTSOF THE SECURITIES ACT. THE OFFERING TO WHICH THIS LETTER OF OFFER RELATES IS NOT, AND UNDER NOCIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FOR SALE IN THE U.S.A.OR THE TERRITORIES OR POSSESSIONS THEREOF, OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OFTHE SAID SHARES OR RIGHTS. ACCORDINGLY, THIS LETTER OF OFFER SHOULD NOT BE FORWARDED TO ORTRANSMITTED IN OR INTO THE U.S.A. AT ANY TIME EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT. THE COMPANY WILL NOT ACCEPT SUBSCRIPTIONS FROM ANY PERSON,OR HIS AGENT, WHO APPEARS TO BE, OR WHO THE COMPANY HAS REASON TO BELIEVE IS, A RESIDENT OF THEU.S.A. AND TO WHOM AN OFFER, IF MADE, WOULD RESULT IN REQUIRING REGISTRATION OF THIS LETTER OFOFFER WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. THE COMPANY IS INFORMED THATTHERE IS NO OBJECTION TO A US SHAREHOLDER SELLING ITS RIGHTS IN INDIA. RIGHTS MAY NOT BETRANSFERRED OR SOLD TO ANY US PERSON.

Designated Stock ExchangeThe Designated Stock Exchange for the purpose of the Issue will be the Bombay Stock Exchange Limited.

Disclaimer Clause of the BSEThe Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter dated October 6, 2005 permission tothe Company to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges on which this Company’ssecurities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purposeof deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in anymanner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer;or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) take anyresponsibility for the financial or other soundness of this Company, its Promoters, its management or any scheme orproject of this Company; and it should not for any reason be deemed or construed that this Letter of Offer has beencleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities ofthis Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claimagainst the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or inconnection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein orfor any other reason whatsoever.

Disclaimer Clause of the NSEAs required, a copy of this Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafterreferred to as NSE). NSE has given vide its letter Ref. No. NSE/LIST/17524-E dated October 11, 2005 permission to theIssuer to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges on which the Issuer’s securitiesare proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of decidingon the matter of granting the aforesaid permission to the Issuer. It is to be distinctly understood that the aforesaidpermission given by NSE should not in any way be deemed or construed that the Letter of Offer has been cleared orapproved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of thecontents of this Letter of Offer; nor does it warrant that the Issuer’s securities will be listed or will continue to be listedon the Exchange; nor does it take any responsibility for the financial or other soundness of the Issuer, its Promoters,its management or any scheme or project of the Issuer.Every person who desires to apply for or otherwise acquire any securities of the Issuer may do so pursuant toindependent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever byreason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

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Filing

This Letter of Offer was filed with SEBI, Mittal Court, Nariman Point, Mumbai 400 021. The Letter of Offer has beenfiled with the Designated Stock Exchange as per the requirements of the law. All the legal requirements applicable tillthe date of filing the Letter of Offer with the Stock Exchanges have been complied with.

Dematerialised Dealing

The Company has agreements with National Securities Depository Limited (NSDL) and Central Depository Services(India) Limited (CDSL) and its Equity Shares bear the ISIN No. INE038A01020.

Listing

The existing Equity Shares are listed on the BSE and NSE. The Company has made applications to the BSE and NSEfor permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of thisLetter of Offer. The Company has received in-principle approvals from BSE and NSE by letters dated October 6, 2005and October 11, 2005 respectively. The Company will apply to the BSE and NSE for listing of the Equity Shares to beissued pursuant to this Issue.

If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchangesmentioned above, within 42 days from the Issue Closing Date, the Company shall forthwith repay, without interest, allmonies received from applicants in pursuance of this Letter of Offer. If such money is not paid within 8 days after theCompany becomes liable to repay it, then the Company and every Director of the Company who is an officer indefault shall, on and from expiry of 8 days, be jointly and severally liable to repay the money with interest as prescribedunder the Section 73 of the Act.

Consents

Consents in writing of the Auditors, Lead Managers, Legal Advisors, Registrar to the Issue, Monitoring Agency andBanker to the Issue to act in their respective capacities have been obtained and filed with SEBI, along with a copy ofthe Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Letter of Offer forregistration with the stock exchanges.

The Auditors of the Company have given their written consent for the inclusion of their Report in the form and contentas appearing in this Letter of Offer and such consents and reports have not been withdrawn up to the time of deliveryof this Letter of Offer for registration with the stock exchanges.

Singhi & Co., auditors have given their written consent for inclusion of income tax benefits in the form and content asappearing in this Letter of Offer, accruing to the Company and its members.

To the best of our knowledge there are no other consents required for making this Issue. However, should the needarise, necessary consents shall be obtained by us.

Expert Opinion, if any

Save and except as indicated elsewhere in this Letter of Offer, no other expert opinion has been obtained by theCompany.

Fees Payable to the Lead Managers to the Issue

The fees payable to the Lead Managers to the Issue are set out in the Memorandum of Understanding entered into bythe Company with JMMS and DSPML, copies of which are available for inspection at the Registered Office of theCompany.

Fees Payable to the Registrars to the Issue

The fee payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept openfor inspection at the Registered Office of the Company.

Underwriting commission, brokerage and selling commission

No underwriting commission, brokerage and selling commission will be paid for this Issue.

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Other Expenses of the IssueThe other expenses of the Issue payable by the Company including, printing and distribution expenses, publicity,listing fees, stamp duty and other expenses are estimated at Rs. 400.0 million (around 1.80% of the total Issue size)and will be met out of the proceeds of the Issue. The following table provides a break up of estimated issue expenses:

Particulars In Rs. million

Advertisement Budget (including non-statutory) 3.0Postage, Printing and Stationery 30.0Domestic and International Legal Advisor’s fee 18.0Lead Managers 278.3Information Agent and Distribution to GDR holders 2.5Road Show Expenses 10.0Monitoring Agency Fees 18.0Others & Contingencies 40.2

Total 400.0

Promise versus Performance

1. The Company

(a) Initial public issue in 1960

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

February 8, 1960 February 18, 1960 (a) To raise capital for land, Integrated aluminium productionbuildings, cost of engineering facility at Renukoot was setand construction of plant and up in 1962.facilities;

(b) To meet working capital needs; Working capital needs and pre-(c) To meet pre-incorporation incorporation expenses partly met

expenses of the company. from the issue proceeds.

(b) Rights issue in 1967, of 2,037,943 equity shares of Rs. 10 each for cash at par.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

- December 26, 1967 To fund Company’s expansion The issue proceeds were used toprogramme as well as for setting fund the Company’s expansionup a fabrication plant. and for setting up a fabrication

plant at Renukoot.

(c) Rights issue in 1990 of 5,636,415 - 12.5% secured redeemable convertible debentures of Rs. 250 each.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

January 22, 1990 February 22, 1990 To finance in part:

(a) the capital expenditure The expansion had beenprogramme relating to completed well within the time.expansion of present installed There were no cost overruns.capacity for the manufacture ofaluminium from 124,000 to150,000 tonnes per annum;

(b) the cost of modernizationscheme; and

(c) to augment the long termresources for working capitalrequirement.

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2. Group Companies

(a) Grasim

Grasim Industries Limited made a rights issue of 10,416,666 – 12.5% secured redeemable partly convertibledebentures (II series) of face value Rs. 120 aggregating to a value of Rs. 125 crores to its equity shareholders in1989.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

September 27, October 26, 1989 To partly finance a gas based The Company ’s sponge iron1989 sponge iron project with a licensed facility at Salav District, Raigad

capacity of six lakh TPA and if in (Maharashtra) - Vikram Ispatline with Government’s licensing Division, having an annualpolicy, to expand capacity upto capacity of 750,000 tonnes wasseven and a half lakh TPA. The commissioned in March, 1993,project was to be located at Salav within the scheduled time period.District, Raigad (Maharashtra) and The current capacity is 900,000estimated to cost Rs. 400 crores. TPA.

(b) Aditya Birla Nuvo Limited (formerly Indian Rayon And Industries Limited)

Aditya Birla Nuvo Limited (formerly Indian Rayon And Industries Limited) made a rights issue in 1993 to itsshareholders of 5,447,400 zero interest secured fully convertible debentures of Rs. 170 each and 1,620,000 zerointerest secured fully convertible debentures of Rs. 200 each, both for cash at par, aggregating Rs. 125.01 croresand 7,227,400 number 16.5% fifteenth series secured redeemable non-convertible debentures of Rs. 300 eachwith detachable warrants for cash at par aggregating Rs. 216.82 crores.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

September 14, October 11, 1993 a. To set up a 50,000 tons per The sea water magnesia plant1993 annum sea water magnesia (known as “Birla Periclase”) with

project at an estimated cost an installed capacity of 50,000 tonof Rs. 240.40 crore; per annum, was commissioned

b. To expand the capacity of the and the commercial productcompany’s carbon black started towards the end ofdivision from 20,000 tons p.a. February 1998. Due to adverseto 40,000 tons p.a. at an market conditions, the plant wasestimated cost of written off in the year 2000.Rs. 72.0 crores;

c. Normal capital expenditure The expansion of the capacity offor modernization estimated the company ’s carbon blackat about Rs. 83 crore. division was completed well

within the promised time period.There were no cost overruns. Thecurrent capacity is 170,000 TPA.

(c) IGFL

Indo Gulf Fertilisers Limited (formerly known as Indo Gulf Fertilisers and Chemicals Corporation Limited) (erstwhileIndo Gulf Corporation Limited) made a public issue of 80,850,000 equity shares of Rs. 10 each at par in 1986.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

November 19, December 3, 1986 To set up a gas fertilizer complex The Urea manufacturing facility of1986 for the manufacture of 7.26 lac the company was completed in

tonnes per annum of urea October 1988 with no cost

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(nitrogenous fertliser) at Jagdishpur overruns. The facility consists ofIndustrial Area, District Sultanpur, a 1350 tpd ammonia plant, 2200a notified backward area in Uttar tpd Urea Plant in 2 equal streamsPradesh. The project was based of equal tonnage. The facility ison natural gas from South Bassein supported by a 19 MW natural gasarea and was to include a single turbine driven power generationstream of 1350 tonnes per day plant with cogeneration ofammonia plant (4.45 lac tpa) and medium pressure steam used fortwo parallel streams of 1100 tpd process.each of urea plant (7.26 tpa).The complex was to be supportedby a captive power plant. Theproject was expected to becompleted by July, 1988

(d) BGFL

Birla Global Finance Limited made a rights issue of 67,48,605, 18% optionally convertible secured debentures ofRs. 67.50 each for cash at par aggregating Rs. 45,55,30,837.50 on a rights basis to the existing shareholders ofthe company in 1996.

Issue Open date Issue Close date Objects of the Issue Actual Performance achieved

August, 27, 1996 September 23, To strengthen the capital base of The capital base was1996 the company; to redeem such strengthened and the preference

portion of the preference capital capital was redeemed asequivalent to issue of equity capital promised. The resources wereon conversion of Part A & Part B used for the business expansion.of the OCDs; and to augment suchlong term resources needed forbusiness expansion and meet theexpenses of the issue.

Previous Issues by the Company and other companies under same management

The Company has not undertaken any previous public or rights issue during the last five years. In 2003, our subsidiary,Bihar Caustic and Chemicals Limited made a rights issue of 15,600,000 equity shares of Rs. 10 each for cash at paraggregating Rs. 156,000,000 to its equity shareholders in the ratio of two equity shares for every equity share held onJanuary 29, 2003. The issue opened on February 18, 2003 and closed on April 18, 2003. The object of the issue wasto part finance a coal based captive power plant. The cost of the captive power plant has been met from proceeds ofthe issue and money raised through project finance. Further, no other listed company under the same managementwithin the meaning of Section 370 (1) (B) of the Act, has made any capital issue during the last three years.

Defaults in the payment/refunds of debentures, fixed deposits, interest on fixed deposits, debentureinterest and institutional dues

There are no defaults, non-payment/overdues of statutory dues, institutional/Company dues and dues towards holdersof debentures, bonds and fixed deposits and arrears of preference shares, etc, other than unclaimed liabilities of theCompany, its subsidiaries, its other ventures, promoters, Group companies and companies promoted by the promoter.

Status of complaints received from SEBI

As of the date of this Letter of Offer, no complaints were pending with SEBI.

Details of adverse events affecting the company since the last financial year

No circumstances have arisen since the date of the last financial statement that materially adversely affects / likely toaffect the trading or profitability of the Company or the value of its assets or its ability to pay its liabilities within thenext twelve months.

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Material developments

Save as stated elsewhere in the Letter of Offer, there are no material developments, after the date of the last financialstatements.

Issue Schedule

Issue Opening Date : Monday, December 19, 2005

Last date for receiving requests for split forms : Tuesday, January 3, 2006

Issue Closing Date : Wednesday, January 18, 2006

Allotment Letters / Refund Orders

The Company will issue and dispatch letters of allotment/ share certificates/ demat credit or letters of regret alongwith refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of 30days from the date of closure of the Issue. If such money is not repaid within 8 days from the day the Companybecomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act.

Letters of allotment/ share certificates/ demat credit/ refund orders above the value of Rs. 1,500 will be dispatched byregistered post/ speed post to the sole/ first applicant’s registered address. However, refund orders for value notexceeding Rs. 1,500 shall be sent to the applicants by way of under certificate of posting. Such cheques or pay orderswill be payable at par at all the centres where the applications were originally accepted and will be marked‘A/c payee’ and would be drawn in the name of the sole/ first applicant. Adequate funds would be made available tothe Registrar to the Issue for dispatch of the letters of allotment/ share certificates/ demat credit/ refund orders.

In case the Company issues letters of allotment, the corresponding share certificates will be kept ready within threemonths from the date of allotment thereof or such extended time as may be approved by the Companies Law Boardunder Section 113 of the Act or other applicable provisions, if any. Allottees are requested to preserve such Letters ofAllotment, which would be exchanged later for the share certificates.

Date of listing on the Stock Exchange

The Equity Shares of our Company of face value of Rs. 10 each were listed on the BSE and the listing agreement wassigned with BSE on January 28, 1960. Thereafter, the Equity Shares were listed on the NSE.

Issue at premium or discount

This Issue is at a premium of Rs. 95 per Equity Share of our Company.

Capital Structure

Issues for consideration other than cash

Except issuance of bonus shares or pursuant to merger, amalgamations, scheme of arrangements as stated in the“Capital Structure” on page 15 of this Letter of Offer, the Company has not issued Equity Shares for considerationother than cash or out of revaluation reserves within the two years preceding the date of this Letter of Offer.

Outstanding debentures or bonds and redeemable preference shares

Please see the section “Description of Certain Indebtedness” on page 206 for details on the outstanding debenturesissued by the Company.

Option to Subscribe

Other than the present rights Issue, the Company has not given any person any option to subscribe to the shares ofthe Company.

Stock market data for Equity Shares of the Company

Please refer to page 175 of the Letter of Offer for further information pertaining to stock market data for the EquityShares of the Company.

Investor Grievances and Redressal System

The Company has adequate arrangements for redressal of Investor complaints. Well-arranged correspondence system

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developed for letters of routine nature. The share transfer and dematerialization for the Company is being handled bythe Investor Services Department of the Company. Letters are filed category wise after having attended to. Redressalnorm for response time for all correspondence including shareholders complaints is 30 days. However, the Companyendeavours to redress all the complaints within 15 days of the receipt of complaint.

An Investors Grievances Committee was constituted on January 23, 2001. The Committee consists of directors Mr.E.B. Desai and Mr. C.M. Maniar. Mr. E.B. Desai is the Chairman of the Committee. The role of the Committee is to lookinto the grievances of investors like non-receipt of share certificates, non-receipt of dividend receipts etc. Mr. AnilMalik, Company Secretary, is the compliance officer of the Company. Meeting of Investors Grievances Committee isscheduled once every 12 months.

There was one complaint pending redressal as on November 18, 2005. During the period from April 1, 2005 toNovember 18, 2005, 16 complaints were received. 16 complaints were resolved to the satisfaction of the shareholders.

Status of Complaints

No. of shareholders complaints as of March 31, 2005: 1

Total number of complaints received during last financial year (2004-05): 31

Total number of complaints received during last financial year (2005-06): 16 (as of November 18, 2005)

Status of the complaints: All complaints received during this financial year have been resolved

Time normally taken by it for disposal of various types of Investor grievances:15 days

Investor Grievances arising out of this Issue

The Company’s investor grievances arising out of the Issue will be handled by Karvy Computershare Private Limited,Registrars to the Issue. The Registrars will have a separate team of personnel handling only our post Issuecorrespondence. Investor grievances are settled expeditiously and satisfactorily by us. The agreement between usand the Registrars will provide for retention of records with the Registrars for a period of at least one year from the lastdate of dispatch of Letter of Allotment/ share certificate / warrant/ refund order to enable the Registrars to redressgrievances of Investors.

All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio no.,name and address of the first applicant, number and type of shares applied for, Application Form serial number,amount paid on application and the name of the bank and the branch where the application was deposited, along witha photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should befurnished.

The average time taken by the Registrar for attending to routine grievances will be seven days from the date ofreceipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavourof the Registrars to attend to them as expeditiously as possible. We undertake to resolve the Investor grievances in atime bound manner.

Investors may contact the Compliance Officer in case of any pre-Issue/ post -Issue related problems such as non-receipt of letters of allotment/share certificates/demat credit/refund orders etc.

Changes in Auditors during the last three years

There have been no changes in our Statutory Auditors over the last three years.

Capitalisation of Reserves or Profits

Except as provided below, the Company has not capitalized any of its reserves or profits for the last five years:

Sl. No. Financial Year Capitalisation of Reason/Explanation for CapitalisationReserves or profits

(In Rs. million)

1. 2001-2002 4.15 Utilised for premium on buy back of 5,807 Shares.

2. 2002-2003 545.62 Utilised for premium on buy back of 752,723 Shares.

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Revaluation of Fixed Assets

There has been no revaluation of the Company’s fixed assets for the last five years. However, during fiscal 2003 theCompany had reinstated its fixed assets at original cost instead of revalued amount due to which the gross value offixed assets was reduced by Rs. 25,809.28 million. Revaluation amount included in the value of net fixed assetsamounting to Rs. 11,358.08 million had been reversed with the corresponding effect in Revaluation Reserves.

Government Approvals

Our Company was incorporated on December 15, 1958 under the Act. We have obtained all necessary approvals toundertake our activities and we do not propose to enter into any new activities through this Issue, for which furtherapprovals may be required to be obtained, except as may be required to be obtained in the normal course of ourbusiness and for intended use of Objects of the Issue. For further details, please refer to the section on “GovernmentApprovals” on page 258 of this Letter of Offer.

Important

� This Issue is pursuant to the resolution passed by the Board of Directors at its meetings held on September 20,2005 and the resolution passed by the Committee of Directors on November 12, 2005.

� This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners as per the list tobe furnished by the depositories in respect of the shares held in the electronic form and on the Register ofMembers of the Company at the close of business hours on the Record Date i.e. November 28, 2005. TheCompany will arrange to dispatch the Letter of Offer and Composite Application Form (“CAF”) by registered/speed post to such Equity Shareholders in India.

� Your attention is drawn to the section entitled “Risk Factors” appearing on Page vii of this Letter of Offer.

� Please ensure that you have received the Composite Application Form (“CAF”) with this Letter of Offer.

� Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before filling in theCAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefullyfollowed. An application is liable to be rejected for any non-compliance of the provisions contained in the Letterof Offer or the CAF.

� All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue,quoting the Registered Folio number/ DP and Client ID number and the CAF numbers as mentioned in the CAF.

� All information shall be made available to the Investors by the Lead Managers and the Issuer, and no selective oradditional information would be available by them for any section of the Investors in any manner whatsoeverincluding at road shows, presentations, in research or sales reports, etc.

� The Lead Managers and the Company shall update this Letter of Offer and keep the public informed of anymaterial changes till the listing and trading commences.

Terms of Appointment of our Directors

Our directors are liable to retire by rotation in accordance with the Act. The term of appointment of the ManagingDirector is five years.

Purchase of Property

The Company in the ordinary course of expansion may start marketing and sales at new centres for which it may leaseor buy properties at such places. The present Issue is not being made with the specific objective to buy such properties.None of the Directors are interested in any property acquired by the Company during the last three years.

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TERMS OF THE ISSUE

The Equity Shares, now being issued, are subject to the terms and conditions contained in this Letter of Offer, theenclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of the Company, theprovisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and forlisting of securities issued by Government of India and/or other statutory authorities and bodies from time to time,terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as maybe applicable and introduced from time to time.

Authority for the Issue

This Issue is being made pursuant to the resolution passed by the Board of Directors of the Company under Section81(1) of Act at its meeting held on September 20, 2005 and the meeting of the Committee of our Directors held onNovember 12, 2005.

Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose namesappear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in theelectronic form and on the Register of Members of the Company in respect of shares held in the physical form at theclose of business hours on the Record Date, i.e., November 28, 2005 fixed in consultation with BSE.

Principal Terms and Conditions of the Issue

Face value

Each Equity Share shall have the face value of Re. 1.

Issue Price

Each Equity Share is being offered at a price of Rs. 96 (including a premium of Rs. 95).

Terms of payment

On application, Rs. 24, which constitutes 25% of the full amount of the Issue Price of Rs. 96 shall be payable (“ApplicationMoney”). A further 25% of the full amount of the Issue Price shall become payable, at the option of the Company,anytime between 9 and 12 months after the Allotment Date. Rs 48, which constitutes the remaining 50% of the fullamount of the Issue Price shall become payable at the option of the Company, anytime between 18 and 24 monthsafter the Allotment Date. The payment on application and on calls would be applied as under

Towards Share Capital Towards Share Premium Account

On Application Re. 0.25 per Equity Share Rs. 23.75 per Equity Share

On first call Re. 0.25 per Equity Share Rs. 23.75 per Equity Share

On second and final call Re. 0.50 per Equity Share Rs. 47.50 per Equity Share

If there is a failure to pay any call or installment of a call on or before the day appointed for the payment of the same,in accordance with the provisions of the articles of association of the Company, the Board may, at any time duringwhich any part of the call or installment remains unpaid, serve a notice on such member of the Company requiringhim to pay the same together with any interest that may have accrued. The present Articles of Association of theCompany provide for a rate of interest at 9%. The notice shall fix a date and a place or places on and at which such callor installment and such interest as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place or places appointed, the shares in respect of which such call was madeor installment is payable and to which the notice relates will be liable to be forfeited. If the requisites of such notice arenot complied with, any shares in respect of which such notice has been given may, at any time thereafter beforepayment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of theBoard to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and notactually paid before the forfeiture. Neither the receipt by the Company of a portion of any money which shall fromtime to time be due from any Member to the Company in respect of his shares, either by way of principle or interest,nor any indulgence granted by the Company in respect of the payment of any such money, shall preclude the Companyfrom thereafter proceeding to enforce a forfeiture of such shares. Any share so forfeited shall be deemed to be the

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property of the Company, and the Board may sell, re-issue or otherwise dispose of the same in such manner as theythink fit.

Rights Entitlement Ratio

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio ofone Equity Share for every four Equity Shares held as on the Record Date.

Rights entitlement on shares held in the pool account of the clearing members on the Record Date shall be considered,and such claimants are requested to –

1. Approach the concerned depository through the clearing member of the Stock Exchange with requisite details;and

2. Depository in turn should furnish details of the transaction to the Registrar.

Only upon receipt of the aforesaid details, rights entitlement of the claimants shall be determined.

Fractional entitlements

If the shareholding of any of the Equity Shareholders is not in multiples of four, then the fractional entitlement of suchholders shall be ignored. Equity Shareholders whose fractional entitlements are being ignored would be givenpreferential allotment of ONE additional Equity Share each if they apply for additional shares.

Joint-holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold thesame as joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of theCompany

Ranking of the Equity Shares

The Equity Shares shall be subject to the memorandum and articles of association of the Company. The dividendpayable on Equity Shares allotted in this Issue, until fully paid up shall rank for dividend in proportion to the amountpaid up. The Equity Shares allotted in this Issue, once fully paid up shall be pari passu with the existing Equity Sharesin all respects including dividend. The voting rights in a call, whether present in person or by representative or byproxy shall be in proportion to the paid up value of the Equity Shares held, and no voting rights shall be exercisablein respect of moneys paid in advance until the moneys have become payable. For more details see “Main Provisionsof Our Articles of Association” on page 321 of this Letter of Offer.

The Global Depository Receipts with respect to the Equity Shares of the Company issued by JP Morgan Chase Bank(formerly Morgan Guaranty Trust Company of New York) as depositary (“GDRs”) were listed on the Bourse deLuxembourg- a market of the Luxembourg Stock Exchange appearing on the list of regulated markets issued by theEuropean Commission. With effect from November 25, 2005 the listing of the GDRs has been transferred to theEuroMTF market of the Luxembourg Stock Exchange, which is not a market appearing on the list of regulated marketsissued by the European Commission, but is regulated by the rules and regulations of the Luxembourg Stock Exchange.

GDR holders are expected to be able to participate indirectly in the Issue through the issue of GDRs in respect of EquityShares issued on a partly paid up basis, provided that they provide certification as to their status such as to satisfy theCompany and the Depositary that they may legally do so without taking of any further action by the Company or theDepositary, to making payment in respect of the amounts payable on the relevant shares and the completion of suchother formalities as the Company or the Depositary may determine. GDR holders who are unable to do so or fail to do soare expected to receive a proportionate share of any net value the Depositary may receive from selling the proportion ofRights Entitlements corresponding to the GDRs in respect of which no such certification is given.

A separate notice with respect to the Issue will be distributed by the Depository in respect of the GDRs detailing howpersons entitled to such GDRs may participate in the Issue. The Depositary may be contacted at 60 Wall Street, NewYork, NY 10260, USA.

Procedure For Calls

The schedule set out below for listing and trading of the partly paid and fully paid shares is based on the currentregulatory framework applicable thereto. Accordingly, any change in the regulatory regime would accordingly affectthe schedule.

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Calls

The Company would convene meetings of the Board from time to time to pass the required resolution(s) for makingthe Calls and suitable intimation would be given by the Company to the Stock Exchanges. Further, advertisements forthe same will be issued in one English national daily with wide circulation, one Hindi national daily with wide circulationand one Mumbai edition of a Marathi daily.

Record date for Calls and suspension of trading

The Company would fix a record date giving atleast 15 days prior notice to the Stock Exchanges for the purpose ofdetermining the list of shareholders to whom the notice for call money (“Call Money Notice”) would be sent. Once therecord date has been fixed, trading in the partly paid Equity Shares for which calls have been made would be suspended5 days prior to each record date that has been fixed for the call concerned.

Separate ISINs on application and call

In addition to the present ISIN for the existing fully paid up Equity Shares, the Company would obtain separate ISINNos. for its 25% paid up Equity Shares and 50% paid up Equity Shares, respectively.

The 25% paid up Equity Shares offered under the Issue will be traded under a separate ISIN No. for the period fromthe date of listing of these Equity Shares and up to five days prior to the record date for the first call. The ISIN No.representing 25% paid up Equity Shares will be terminated after the record date for the first call.

Shares paid up to the extent of 50%, would be listed and traded under a separate ISIN No. for the period from the datefixed for commencement of trading for these shares and until five days prior to the record date for second and finalcall. The ISIN No. representing 50% paid up shares will be terminated after the record date for the second and thefinal call.

On payment of the second and final call in respect of the 50% paid up Equity Shares, such shares on which final callhas been duly paid would be converted into fully paid up Equity Shares and merged with the existing ISIN for fullypaid Equity Shares of the Company.

Listing of partly paid shares

The 25% paid up shares and 50% paid up shares would be listed on the Stock Exchanges. Once, the Call MoneyNotice for respective calls has been sent, the listing of then existing partly paid up Equity Shares would be terminated.

The Company will make necessary application to BSE and NSE for listing of partly paid up shares. The 25% paid upand 50% paid up shares will be issued in accordance with the Letter of Offer and would be listed for the period as perthe following details.

� The allotment of 25% paid up shares will be made within 30 days from the closure of Issue and the same will belisted within 10 days thereafter.

� The listing of 50% paid-up shares will be done within approximately 15 days from the last date fixed for paymentof first call money.

� The fully paid up shares will be listed within approximately 15 days from the last date fixed for payment ofsecond call money.

The process of corporate action for crediting 50% paid up and fully paid up shares to the Demat Account may takeabout two weeks time from the last date of payment of the account under the call money notice. During this periodthe partly paid up shares would not be tradeable.

Payment Period for each call

As per the article 29 of Articles of Association of the Company, the shareholders would be given not less than 21 daystime for the payment of the call money for each call.

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Indicative Activities

Indicative Schedule of activities for making the partly paid up shares fully paid up:

Sr. Event Indicative time periodNo. (on or around)

1. Allotment is finalized with Stock Exchange Day X

2. Listing of Equity shares 25% paid up Day X+2 working days

3. Board to make first call of another 25% Day X + (9 to 12) months time(Day Y)

4. Record date for making first call Y

5. Suspension of ISIN No. representing 25% paid up shares Y

6. Suspension of trading of 25% paid up shares Y -5 trading days

7. Send the call notice to the shareholders holding shareson the record date Y+2 days

8. Last date for payment of call money Y+23 days

9. Corporate action for credit of 50% paid up shares(representing by new ISIN No.) to the demat account ofshareholders who have paid the call money Y + 35 days

10. Listing of shares 50% paid up within Y+ 40 days

11. Board to make second call for balance 50% X + (12 to 24) months time(Day Z)

12. Record date for making second call Z

13. Suspension of ISIN No. representing 25% paid up shares Z

14. Suspension of trading of 50% paid up shares Z- 5 trading days

15. Send the call notice to the shareholders holdingshares on the record date Z+2 days

16. Last date for payment of call money Z+ 23 days

17. Corporate action for credit of fully paid up shares to thedemat account of shareholders who have paid the call money Z + 35 days

18. Listing of shares fully paid up within Z+ 40 days

Printing Of Bank Particulars On Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, theparticulars of the applicant’s bank account are mandatorily required to be given for printing on the refund orders.Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in theaccount specified. The Company will in no way be responsible if any loss occurs through these instruments fallinginto improper hands either through forgery or fraud.

Notices

All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one Englishnational daily with wide circulation, one Hindi national daily with wide circulation and one regional language dailynewspaper in Mumbai with wide circulation and/or, will be sent by ordinary post/ to the registered holders of theEquity Share from time to time.

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Market lot

The Equity Shares of the Company are tradable only in dematerialized form. The market lot for Equity Shares indematerialised mode is one. In case of holding in physical form, the Company would issue to the allottees onecertificate for the Equity Shares allotted to one folio (“Consolidated Certificate”). In respect of the ConsolidatedCertificate, the Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificateinto smaller denomination within one week’s time from the request of the Equity Shareholder. No fee would becharged by the Company for splitting the Consolidated Certificate.

Nomination facility

In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant cannominate any person by filling the relevant details in the CAF in the space provided for this purpose.

A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s)may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case maybe, shall become entitled to the Equity Shares. A Person, being a nominee, becoming entitled to the Equity Shares byreason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he wouldbe entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s)may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the EquityShare(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall standrescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a freshnomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shallbecome entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only inthe prescribed form available on request at the registered office of the Company or such other person at such addressesas may be notified by the Company. The applicant can make the nomination by filling in the relevant portion of theCAF.

Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registeredthe nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in thisIssue under the same folio.

In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination forthe Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant wouldprevail. If the applicant requires to change the nomination, they are requested to inform their respective DP.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall berefunded to the applicants within forty-two days from the date of closure of the Issue. If there is a delay in the refundof subscription by more than eight days after the Company becomes liable to repay the subscription amount, i.e.forty-two days after closure of the Issue, the Company will pay interest for the delayed period, at the rates prescribedin sub-sections (2) and (2A) of Section 73 of the Act.

The Issue will become undersubscribed after considering the number of shares applied as per entitlement plus additionalshares. The Promoters or promoter group will subscribe to such undersubscribed portion as per the relevant provisionsof the law. The undersubscribed portion shall be applied for only after the close of the Issue. If any person presentlyin control of the Company desires to subscribe to such undersubscribed portion and if disclosure is made pursuant toTakeover Code, such allotment of the undersubscribed portion will be governed by the provisions of the TakeoverCode. Allotment to promoters of any unsubscribed portion, over and above their entitlement shall be done in compliancewith Clause 40A of the Listing Agreement.

The above is subject to the terms mentioned under the section entitled “Basis of Allotment” on page 305 of this Letterof Offer.

Offer to Non-Resident Equity Shareholders/Applicants

As per regulation 6 of notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general permission toIndian companies to issue rights shares to non-resident shareholders including additional shares. Applications receivedfrom NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from

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time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of applicationmoneys, allotment of Equity Shares, issue of letter of allotment / notification No. FEMA 20/200-RB dated May 3, 2000.The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBIwhile approving the allotment of Equity Shares, payment of dividend etc. to the non-resident shareholders. The rightsshares purchased by non-residents shall be subject to the same conditions including restrictions in regard to therepatriability as are applicable to the original shares against which rights shares are issued.

By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) havebeen derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign ExchangeManagement (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly,OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified in its circular, A.P. (DIRSeries) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adversenotice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities. Thus, OCBsdesiring to participate in this Issue must obtain prior approval from the RBI. On providing such approval to theCompany at its registered office, the OCB shall receive the Letter of Offer and the CAF.

Letter of offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered address in India.

No Offer in the United States

The rights and the shares of the Company have not been and will not be registered under the United States SecuritiesAct of 1933, as amended (the “Securities Act”) or any U.S. state securities laws and may not be offered, sold, resoldor otherwise transferred within the United States or to, or for the account or benefit of, “U.S. Persons” (as defined inRegulation S under the Securities Act), except in a transaction exempt from the registration requirements of theSecurities Act. The rights referred to in this Letter of Offer are being offered in India but not in the United States ofAmerica. The offering to which this Letter of Offer relates is not, and under no circumstances is to be construed as, anoffering of any shares or rights for sale in the United States of America, or the territories or possessions thereof, or asa solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Letter of Offer should not beforwarded to or transmitted in or into the United States of America at any time. The Company will not acceptsubscriptions from any person, or his agent, who appears to be, or who the Company has reason to believe is, aresident of the United States of America and to whom an offer, if made, would result in requiring registration of thisLetter of Offer with the United States Securities and Exchange Commission. The Company is informed that there isno objection to a United States shareholder selling its rights in India.

Procedure For Application

The CAF would be printed in blue ink for all shareholders. An additional separate advise for Non-resident shareholderswill be provided. In case the original CAF is not received by the applicant or is misplaced by the applicant, theapplicant may request the Registrars to the Issue, Karvy Computershare Private Limited, for issue of a duplicate CAF,by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders can obtain a copy of the CAF from the Registrars to the Issue, Karvy Computershare PrivateLimited from their office located Karvy House, 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034, India byfurnishing the registered folio number, DP ID number, Client ID number and their full name and address. Equity Sharesoffered to you either in full or in part in favour of any other person or persons. Such renouncees can only be IndianNationals/Limited Companies incorporated under and governed by the Act, statutory corporations/institutions, trusts(unless registered under the Indian Trust Act), minors (through their legal guardians), societies (unless registeredunder the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorisedunder its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, more than threepersons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to anyperson situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or requirecompliance with securities laws.

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Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling Part A of theenclosed CAF and submit the same along with the Application Money payable to the Bankers to the Issue or any ofthe branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the IssueClosing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers notcovered by the branches of collecting banks can send their CAF together with the cheque /demand draft, net ofbank and postal charges, payable at Hyderabad in case of resident shareholder and payable at Mumbai or NewDelhi in case of non-resident shareholders, to the Registrar to the Issue by registered post. Such applications sent toanyone other than the Registrar to the Issue are liable to be rejected.

Option available to the Equity ShareholdersThe Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitledto.

If the Equity Shareholder applies for an investment in Equity Shares, then he can:

� Apply for his entitlement in part;

� Apply for his entitlement in part and renounce the other part;

� Apply for his entitlement in full;

� Apply for his entitlement in full and apply for additional Equity Shares.

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional EquityShares.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to,provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favorof any other person(s). Only depository representing various individual GDR holders, may apply for additional sharesrepresenting intention of those GDR holders who wish to apply for additional shares over their entitlements and alsorenounce the entitlement of those GDR holders who have indicated their intention to the depository to renounce theirentitlement. Company would take due care that the GDR holders who have represented to the depository that theywould renounce their entitlement would not be eligible to apply for any additional shares. If you desire to apply foradditional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of theCAF. Applications for additional Equity Shares shall be considered and allotment shall be in the manner prescribedunder the section entitled “Basis of Allotment” on page 305 of this Letter of Offer. The renouncees applying for all theEquity Shares renounced in their favor may also apply for additional Equity Shares.

In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened forthe purpose.

Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotmentwould be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

Renunciation

This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part infavour of any other person or persons subject to the approval of the Board. Such renouncees can only be IndianNationals (including minor through their natural/legal guardian)/limited companies incorporated under and governedby the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registeredunder the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorisedunder its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationalsor nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or havingjurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securitieslaws of such jurisdiction or any other persons not approved by the Board.

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident IndianShareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) issubject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBI

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under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions shouldbe attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”)have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign ExchangeManagement (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly,the existing Equity Shareholders of the Company who do not wish to subscribe to the Equity Shares being offered butwish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise)in favour of OCB(s).

Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favor of:

� More than three persons including joint holders

� Partnership firm(s) or their nominee(s)

� Minors

� Hindu Undivided Family

� Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any otherapplicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company)

The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be entitledin its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. Ifused, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collectingbranches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall beconclusive evidence for the Company of the person(s) applying for Equity Shares in Part C to receive allotment ofsuch Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply foradditional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid.Renouncee(s) will also have no further right to renounce any shares in favour of any other person.

Procedure for renunciation

To renounce the whole offer in favour of one renouncee

If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of jointholding, all joint holders must sign Part B of the CAF. The person in whose favor renunciation has been made shouldcomplete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF.

To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two ormore renouncees, the CAF must be first split into requisite number of forms.

Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and returnthe entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last dateof receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedureas mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with thespecimen registered with the Company, the application is liable to be rejected.

Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Formand submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with theapplication money.

Change and/ or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already ajoint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to

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be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure,as stated above shall have to be followed.

Please note that:� Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been made.

If used, this will render the application invalid.

� Request by the applicant for the Split Application Form should reach the Company on or before January 3, 2006.

� Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitled torenounce and to apply for Split Application Forms. Forms once split cannot be split again.

� Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

How to Apply

Resident Equity ShareholdersApplications should be made on the enclosed CAF provided by the Company. The enclosed CAF should be completedin all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the LeadManagers or by the Registrar to the Issue or by the Company at any offices except in the case of postal applicationsas per instructions given elsewhere in the Letter of Offer.

The CAF consists of four parts:

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares

Part B: Form for renunciation

Part C: Form for application for renouncees

Part D: Form for request for split application forms

Non-resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia,be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of applicationmoneys, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of dividends etc.

Letter of offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered address in India.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the followingoptions with regard to the Equity Shares offered, using the enclosed CAF:

Option Option Available Action Required

A. Accept whole or part of your entitlement withoutrenouncing the balance.

Fill in and sign Part A (All joint holders must sign)

B. Accept your entitlement in full and apply for additionalEquity Shares.

Fill in and sign Part A including Block III relatingto the acceptance of entitlement and Block IVrelating to additional Equity Shares (All jointholders must sign).

C. Accept only a part of your entitlement of the EquityShares offered to you (without renouncing thebalance).

Fill and sign Part A of the CAFs.

D. Renounce your entitlement in full to one person (Jointrenouncees not exceeding three are considered asone renouncee).

Fill in and sign Part B (all joint holders must sign)indicating the number of Equity Sharesrenounced and hand over the entire CAF to therenouncee. The renouncees must fill in and signPart C of the CAF (All joint renouncees mustsign).

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Applications for Equity Share should be made only on the CAF, which are provided by the Company. The CAF shouldbe completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAFbefore submission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on orbefore the closure of the subscription list. Non Resident Shareholders/Renouncee should forward their applicationsto Banker to the Issue as mentioned in the CAF for Non-Resident Equity Shareholders. No part of the CAF should bedetached under any circumstances. Applicants must provide information in the CAF as to their savings / current / NRE/ NRO / FCNR bank account and the name of the bank with whom such account is held to enable the Registrar to printthe said details in the refund orders after the name of the payees.

For applicants residing at places other than designated Bank Collecting branches.

Applicants residing at places other than the cities where the Bank collection centres have been opened should sendtheir completed CAF by registered post/speed post to the Registrars to the Issue, Karvy Computershare PrivateLimited, alongwith demand drafts, net of bank and postal charges, payable in favour of “Hindalco Industries Limited- Rights Issue” in case of Resident shareholders and Non Resident shareholders applying on Non-repatriable basisand in favour of “Hindalco Industries Limited - Rights Issue - NR” in case of non-resident shareholders applying on arepatriable basis and crossed “A/c Payee only” so that the same are received on or before closure of the Issue (i.e.January 18, 2006). In such case the demand draft in case of Resident shareholders, should be payable at Hyderabadand in case of Non-resident shareholders, should be payable at Mumbai or New Delhi.

The Company will not be liable for any postal delays and applications received through mail after the closure of theIssue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any othermanner except as mentioned below:

All application forms duly completed together with cash/ cheque/demand draft for the application money must besubmitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branchesmentioned on the reverse of the CAF. The CAF alongwith application money must not be sent to the Company orthe Lead Managers to the Issue or the Registrars to the Issue except as mentioned above.

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the applicationbeing liable to be rejected with the Company, the Lead Managers and the Registrars not having any liabilities tosuch applicants.

E. 1. Accept a part of your entitlement and renouncethe balance to one or more renouncee(s).

OR

2. Renounce your entitlement to all the Equity Sharesoffered to you to more than one renouncee.

Fill in and sign Part D (all joint holders must sign)requesting for Split Application Forms. Send theCAF to the Registrar to the Issue so as to reachthem on or before the last date for receivingrequests for Split Forms. Splitting will bepermitted only once.

On receipt of the Split Form take action asindicated below.

(i) For the Equity Shares you wish to accept, ifany, fill in and sign Part A of one split CAF(only for option 1).

(ii) For the Equity Shares you wish to renounce,fill in and sign Part B indicating the numberof Equity Shares renounced and hand overthe split CAFs to the renouncees.

(iii)Each of the renouncees should fill in and signPart C for the Equity Shares accepted bythem.

F. Introduce a joint holder or change the sequence ofjoint holders.

This will be treated as a renunciation. Fill in andsign Part B and the renouncees must fill in andsign Part C.

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Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue aduplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID No.and his/ her full name and address to the Registrar to the Issue. Please note that those who are making the applicationin the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/found subsequently. Thus in case the orginal and duplicate CAFs are lodged for subscription, allotment will be madeon the basis of the duplicate CAF and the original CAF will be ignored.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF maymake an application to subscribe to the Issue on plain paper, along with a demand draft net of bank and postalcharges, drawn in favor of “Hindalco Industries Limited - Rights Issue” in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of “Hindalco Industries Limited - Rights Issue -NR” payable at Mumbai or New Delhi, in case of non-resident shareholders applying on repatriable basis and send thesame by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of the Issue.In such case the demand draft should be payable at Hyderabad in case of Resident shareholders and payable atMumbai or New Delhi in case of Non-resident shareholders. The envelope should be superscribed “Hindalco IndustriesLimited - Rights Issue” in case of resident shareholders and non-resident shareholders applying on non-repatriablebasis and in favour of “Hindalco Industries Limited - Rights Issue - NR” in case of non-resident shareholders applyingon repatriable basis.

The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimenrecorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date andshould contain the following particulars:

� Name of Issuer, being Hindalco Industries Limited.

� Name and address of the Equity Shareholder including joint holders.

� Registered Folio No./ DP ID No. and Client ID No.

� Number of shares held as on Record Date.

� Certificate numbers and distinctive Nos., if held in physical form.

� Number of Rights Equity Shares entitled.

� Number of Rights Equity Shares applied for.

� Number of additional Equity Shares applied for, if any.

� Total number of Equity Shares applied for.

� Total amount paid on application at the rate of Rs. 24 (application amount only) per Equity Share.

� Particulars of cheque/draft.

� Savings/Current Account Number and name and address of the bank where the Equity Shareholder will bedepositing the refund order.

� PAN/GIR number, Income Tax Circle/Ward/District, photocopy of the PAN card/ PAN communication / Form 60 /Form 61 declaration where the application is for Equity Shares of a total value of Rs.50,000 or more for theapplicant and for each applicant in case of joint names.

� Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of theCompany.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renouncetheir rights and should not utilize the original CAF for any purpose including renunciation even if it is receivedsubsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both theapplications. The Company shall refund such application amount to the applicant without any interest thereon.

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Last date of Application

The last date for submission of the duly filled in CAF is January 18, 2005. The Board or any committee thereof willhave the right to extend the said date for such period as it may determine from time to time but not exceeding 60(sixty) days from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on orbefore the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committeeof Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board/ Committeeof Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the section entitled”Basis of Allotment”.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCKEXCHANGES ONLY IN DEMATERIALIZED FORM.

Mode of payment for Resident Equity Shareholders/ Applicants

� All cheques / drafts accompanying the CAF should be drawn in favour of “Hindalco Industries Limited- RightsIssue” and marked ‘A/c Payee only’.

� Applicants residing at places other than places where the bank collection centres have been opened by theCompany for collecting applications, are requested to send their applications together with Demand Draft ofamount net of bank and postal charges, for the full application amount favouring “Hindalco Industries Limited -Rights Issue” and marked ‘A/c Payee only’ payable at Hyderabad directly to the Registrar to the Issue by registeredpost so as to reach them on or before the Issue Closing Date. The Company or the Registrar to the Issue will notbe responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident equity shareholders, the following further conditions shall apply:

Payment by non-residents must be made by demand draft / cheque payable at Mumbai or New Delhi or funds remittedfrom abroad in any of the following ways:

Application with repatriation benefits

Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Mumbai or New Delhi orfunds remitted from abroad in any of the following ways:

� By Indian Rupee drafts purchased from abroad and payable at Mumbai or New Delhi or funds remitted fromabroad (submitted along with Foreign Inward Remittance Certificate); or

� By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Mumbai or NewDelhi; or

� By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable in Mumbaior New Delhi; or

� FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

� All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of “HindalcoIndustries Limited - Rights Issue - NR” payable at Mumbai or New Delhi and crossed ‘A/c Payee only’ for theamount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment ismade by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit Certificate from the bankissuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account should be enclosed withthe CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected.

In the case of NR who remit their application money from funds held in FCNR/NRE Accounts, refunds and otherdisbursements, if any shall be credited to such account details of which should be furnished in the appropriatecolumns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad,refunds and other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such timesubject to the permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuationfor converting the Rupee amount into US Dollars or for collection charges charged by the applicant’s Bankers.

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Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specifiedabove, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained inMumbai or New Delhi or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable atMumbai or New Delhi. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of ‘HindalcoIndustries Limited - Rights Issue’ payable at Mumbai or New Delhi and must be crossed ‘A/c Payee only’ for theamount payable. The CAF duly completed together with the amount payable on application must be deposited withthe Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the IssueClosing Date. A separate cheque or bank draft must accompany each CAF.

If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuingthe draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. Inthe absence of the above, the application shall be considered incomplete and is liable to be rejected.

New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

Note:

� In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment inEquity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961.

� In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Sharescannot be remitted outside India.

� The CAF duly completed together with the amount payable on application must be deposited with the CollectingBank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date.A separate cheque or bank draft must accompany each CAF.

� In case of an application received from non-residents, allotment, refunds and other distribution, if any, will bemade in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making suchallotment, remittance and subject to necessary approvals.

Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Schemehas been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue

Basis of Allotment

Subject to the provisions contained in this Letter of Offer, the Articles of Association of the Company and the approvalof the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority:

(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in partand also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part.

(b) If the shareholding of any of the Equity Shareholders is less than four or is not in multiples of four, then thefractional entitlement of such holders for Equity Shares shall be ignored. Equity Shareholders whose fractionalentitlements are being ignored would be given preferential allotment of ONE additional Equity Share each if theyapply for additional shares. (For further details please see the section “Terms of the Issue – Fractional Entitlements”on page 294 of this Letter of Offer)

(c) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as part of theIssue and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will bemade as far as possible on an equitable basis having due regard to the number of Equity Shares held by them onthe Record Date, provided there is an under-subscribed portion after making full allotment in (a) above. Theallotment of such Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultationwith the Designated Stock Exchange, as a part of the Issue and not preferential allotment.

(d) Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have alsoapplied for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in

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(a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at thesole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, asa part of the Issue and not as a preferential allotment.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplusavailable after making full allotment under (a), (b), (c) and (d) above.

After taking into account allotment to be made under (a) and (b) above, if there is any unsubscribed portion, the sameshall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would beavailable for allocation under (c), (d) and (e) above. The Promoter and the promoter group will subscribe to unsubscribedportion if the Issue does not have subscription to the extent of 90% of the Issue size, after considering the aboveallotment, to ensure that the Issue is successful. This acquisition of additional Equity Shares, if allotted to the Promotershall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability ofregulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b) ofthe Takeover Code. Further this acquisition will not result in change of control of management of the Company.

After such allotments as above and to the Promoters and the promoter group, including the application for rights/renunciation and additional equity shares, any additional Equity Shares shall be disposed off by the Board or committeeof the Board authorised in this behalf by the Board of the Company, in such manner as they think most beneficial tothe Company and the decision of the Board or committee of the Board of the Company in this regard shall be final andbinding. In the event of oversubscription, allotment will be made within the overall size of the issue.

Allotment to Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliancewith Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time.

Underwriting

The present Issue is not underwritten.

Allotment / Refund

The Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of regretalong with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a periodof six weeks from the Issue Closing Date. If such money is not repaid within eight days from the day the Companybecomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act.

In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialised form byusing electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be givenseparately.

In case the Company issues letters of allotment, the corresponding share certificates will be kept ready within threemonths from the date of allotment thereof or such extended time as may be approved by the Company’s Law Boardunder Section 113 of the Act or other applicable provisions, if any. Allottees are requested to preserve such letters ofallotment, which would be exchanged later for the share certificates. For more information, please refer to the sectionentitled ‘Letters of Allotment / Share Certificates / Demat Credit’ on page no. 307 of this Letter of Offer.

Letters of allotment/ share certificates/ demat credit/ refund orders above the value of Rs. 1,500 will be dispatched byregistered post/ speed post to the sole/ first applicant’s registered address. However, refund orders for value notexceeding Rs. 1,500 shall be sent to the applicants by way of certificate of posting. Such cheques or pay orders will bepayable at par at all the centres where the applications were originally accepted and will be marked ‘A/c payee’ andwould be drawn in the name of the sole/ first applicant. Adequate funds would be made available to the Registrar tothe Issue for the dispatch of such letters of allotment/ share certificates/ demat credit and refund orders.

The Company shall ensure that at par facility is provided for encashment of refund orders/ pay orders at the placeswhere applications are accepted.

As regards allotment/ refund to non-residents, the following further conditions shall apply:

In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ orpayment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of whichshould be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their applicationmonies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any

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other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will bemade net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Companywill not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount intoUS Dollars. The share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant.

Letters of Allotment / Share Certificates / Demat Credit

Letter(s) of allotment/ share certificates/ demat credit or letters of regret will be dispatched to the registered addressof the first named applicant or respective beneficiary accounts will be credited within 6 (six) weeks, from the date ofclosure of the subscription list. In case the Company issues letters of allotment, the relative share certificates will bedispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment(if any) to be exchanged later for share certificates. Export of letters of allotment (if any)/ share certificates/ dematcredit to non-resident allottees will be subject to the approval of RBI.

Option to receive Equity Shares in Dematerialized Form

Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialised(electronic) form at the option of the applicant. The Company signed a tripartite agreement dated May 10, 1999 withCDSL and MCS Ltd. and a bipartite agreement dated December 26, 2003 with NSDL, which enables the Investors tohold and trade in securities in a dematerialised form, instead of holding the securities in the form of physical certificates.

In this Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their Equity Shares inthe form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain spacefor indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevantparticulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain thisinformation, will be given the securities in physical form. No separate applications for securities in physical and/ordematerialized form should be made. If such applications are made, the application for physical securities will betreated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done indemat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

The Equity Shares of the Company will be listed on the BSE and NSE.

Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under:

� Open a beneficiary account with any depository participant (care should be taken that the beneficiary accountshould carry the name of the holder in the same manner as is exhibited in the records of the Company. In thecase of joint holding, the beneficiary account should be opened carrying the names of the holders in the sameorder as with the Company). In case of Investors having various folios in the Company with different joint holders,the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who havealready opened such Beneficiary Account (s) need not adhere to this step.

� For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on the RecordDate, the beneficial account number shall be printed on the CAF. For those who open accounts later or those whochange their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to suchaccount, the necessary details of their beneficiary account should be filled in the space provided in the CAF. Itmay be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized formeven if the original Equity Shares of the Company are not dematerialized. Nonetheless, it should be ensured thatthe Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as inthe records of the Company.

Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vissuch information with the applicant’s depository participant, would rest with the applicant. Applicants should ensurethat the names of the applicants and the order in which they appear in CAF should be the same as registered with theapplicant’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF the applicant will get Equity Shares inphysical form.

The Equity Shares pursuant to this Issue allotted to investors opting for dematerialized form, would be directly creditedto the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sentdirectly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the

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confirmation of the credit of such Equity Shares to the applicant’s depository account.

Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securitiesin this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.

Utilisation of Proceeds

Subscription received against this Issue will be kept in a separate bank account(s) and the Company would not haveaccess to such funds unless it has received minimum subscription of 90%, of the Issue and the necessary approvalsof the Designated Stock Exchange, to use the amount of subscription.

General instructions for applicants

(a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by the Company except as mentioned under the headApplication on Plain Paper and should be completed in all respects. The CAF found incomplete with regard toany of the particulars required to be given therein, and/ or which are not completed in conformity with the termsof this Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refundedwithout interest and after deduction of bank commission and other charges, if any. The CAF must be filled inEnglish and the names of all the applicants, details of occupation, address, father’s / husband’s name must befilled in block letters.

(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or tothe Registrar to the Issue and not to the Company or Lead Managers to the Issue. Applicants residing at placesother than cities where the branches of the Bankers to the Issue have been authorised by the Company forcollecting applications, will have to make payment by Demand Draft payable at Hyderabad of amount net ofbank and postal charges, and send their application forms to the Registrar to the Issue by REGISTERED POST. Ifany portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d) PAN/ GIR Number: Applications for a total value of Rs. 50,000 or more, i.e. where the total number of securitiesapplied for multiplied by the Issue price, is Rs. 50,000 or more the applicant or in the case of application in jointnames, each of the applicants, should mention his/ her PAN number allotted under the Income-Tax Act, 1961 andalso submit a photocopy of the PAN card(s) or a communication from the Income Tax authority indicating allotmentof PAN (“PAN Communication”) along with the application for the purpose of verification of the number. Applicantswho do not have PAN are required to provide a declaration in Form 60 / Form 61 prescribed under the I.T.Actalong with the application. Application Forms without this photocopy/ PAN Communication/ declaration willbe considered incomplete and are liable to be rejected.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current accountnumber and the name of the Company with whom such account is held in the CAF to enable the Registrar to theIssue to print the said details in the refund orders, if any, after the names of the payees. Application not containingsuch details is liable to be rejected.

(f) Payment by cash: The payment against the application should not be effected in cash if the amount to be paid isRs. 20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalidand the application money will be refunded and no interest will be paid thereon. Payment against the applicationif made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(g) Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to theConstitution of India. Signatures other than in English or Hindi and thumb impression must be attested by aNotary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must signthe CAF as per the specimen signature recorded with the Company or depositories.

(h) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy ofthe relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investmentunder this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / orbye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of theserial number of the CAF. In case the above referred documents are already registered with the Company, thesame need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the

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Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should thesepapers be attached to the application submitted to the Bankers to the Issue.

(i) In case of joint holders, all joint-holders must sign the relevant part of the CAF in the same order and as per thespecimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, thenumber of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in thefirst applicant’s name and all communication will be addressed to the first applicant.

(j) Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment ofEquity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI underFEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotmentof Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or NRI Equity Shareholder hasspecific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approvalwith the CAF.

(k) All communication in connection with application for the Equity Shares, including any change in address of theEquity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issuequoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please notethat any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent tothe in house, Investor Service Department, Hindalco Industries Limited, Ahura Centre, First Floor, B Wing, MahakaliCaves Road, Andheri (East), Mumbai – 400 093 in the case of Equity Shares held in physical form and to therespective depository participant, in case of Equity Shares held in dematerialized form.

(l) Split forms cannot be re-split.

(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled toobtain split forms.

(n) Applicants must write their CAF number at the back of the cheque / demand draft.

(o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque /demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member ora sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where theapplication is to be submitted.

(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated chequesand postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts/ money orders or postal orders will be rejected. The Registrar will not accept payment against application ifmade in cash. (For payment against application in cash please refer point (f) above)

(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrarwill acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of theCAF.

Grounds For Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

� Amount paid does not tally with the amount payable for;

� Bank account details (for refund) are not given;

� Age of first applicant not given;

� PAN photocopy/ PAN Communication/ Form 60 / Form 61 declaration not given if Application is for Rs. 50,000 ormore;

� In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documentsare not submitted;

� If the signature of the existing shareholder does not match with the one given on the Application Form and forrenouncees if the signature does not match with the records available with their depositories;

� If the Applicant desires to have shares in electronic form, but the Application Form does not have the Applicant’s

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depository account details;

� Application Forms are not submitted by the Applicants within the time prescribed as per the Application Formand the Letter of Offer;

� Applications not duly signed by the sole/joint Applicants;

� Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest inthe Issue;

� Applications accompanied by Stockinvest;

� In case no corresponding record is available with the Depositories that matches three parameters, namely,names of the Applicants (including the order of names of joint holders), the Depositary Participant’s identity (DPID) and the beneficiary’s identity;

� Applications by US persons;

� Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable locallaws) and where last available address in India has not been provided.

Disposal of application and application money

No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to theIssue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning theacknowledgment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, andin either case without assigning any reason thereto.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever anapplication is rejected in part, the balance of application money, if any, after adjusting any money due on EquityShares allotted, will be refunded to the applicant within six weeks from the close of the Issue in accordance withsection 73 of the Act.

For further instruction, please read the Composite Application Form (CAF) carefully.

Utilisation of Issue Proceeds

The Board of Directors declares that:

(i) The funds received against this Issue will be transferred to a separate bank account other than the bank accountreferred to sub-section (3) of Section 73 of the Act.

(ii) Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in thebalance sheet of the Company indicating the purpose for which such moneys has been utilised.

(iii) Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate separatehead in the balance sheet of the Company indicating the form in which such unutilised moneys have beeninvested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have anyaccess to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that theminimum subscription of 90% of the Issue has been received by the Company.

Undertakings by the Company

1. The complaints received in respect of the Issue shall be attended to by the Company expeditiously andsatisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all StockExchanges where the securities are to be listed will be taken within seven working days of finalization of basis ofallotment.

3. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be madeavailable to the Registrar to the Issue.

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4. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the specifiedtime.

5. No further issue of securities affecting equity capital of the Company shall be made till the securities issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

6. The Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirmsthat to best of its knowledge and belief, there are no other facts the omission of which makes any statementmade in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertainsuch facts.

7. All information shall be made available by the Lead Managers and the Issuer to the investors at large and noselective or additional information would be available for a section of the investors in any manner whatsoeverincluding at road shows, presentations, in research or sales reports etc.

Important

� Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanyingComposite Application Form (CAF) are an integral part of the conditions of this Letter of Offer and must becarefully followed; otherwise the application is liable to be rejected.

� All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split ApplicationForms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number andthe name of the first Equity Shareholder as mentioned on the CAF and superscribed ‘Hindalco Industries Limited- Rights Issue’ on the envelope) to the Registrar to the Issue at the following address:

Karvy Computershare Private LimitedUnit: Hindalco Rights IssueKarvy House, 46 Avenue 4, Street No. 1, Banjara Hills, Hyderabad 500 034,Tel: (91 40) 2343 1546Fax: (91 40) 2343 1551

� It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled “Risk Factors”beginning on page vii of this Letter of Offer.

The Issue will not be kept open for more than 31 days unless extended, in which case it will be kept open for amaximum of 60 days.

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SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND US GAAP

The consolidated and unconsolidated financial statements included in this Prospectus have been prepared in accordancewith applicable Indian GAAP and the applicable provisions of the Companies Act, 1956 and the SEBI Guidelines.Indian GAAP differs in certain respects from US GAAP.

The following table summarizes the significant differences between Indian GAAP and US GAAP in so far as they arerelevant to the consolidated and unconsolidated financial statements of the Company. The following summary maynot include all the differences that exist between US GAAP and Indian GAAP. US GAAP is generally more prescriptiveand comprehensive than Indian GAAP regarding recognition and measurement of transactions, account classificationand disclosure requirements. No attempt has been made to identify all disclosure, presentation or classificationdifferences that would affect the manner in which transactions and events are presented in the financial statementsand the notes thereto. Various US GAAP and Indian GAAP pronouncements, including guidance provided by the USSecurities and Exchange Commission, have been issued for which the mandatory application date is later than March31, 2005. These together with standards that are in the process of being developed in both jurisdictions could have asignificant impact on future comparisons between Indian GAAP and US GAAP.

1 Contents of financialstatements

Companies are required to presentbalance sheets and profit and lossaccounts for two years along with therelevant accounting policies and notes.

Additionally all listed Companies(including companies in the process ofgetting listed), companies with turnoverexceeding Rs. 500 million and insurancecompanies are required to present cashflow statements.

(Applicable for financial years beginningon April 1, 2005 for other than listedcompanies).

There is no standard or requirement forcomprehensive income statement.

Companies are required to presentbalance sheets, statements ofoperations, statements of cash flowsand statements of changes inStockholders equity for two years alongwith the relevant accounting policies andnotes to accounts.

Public companies are required topresent statements of operations,statements of cash flows and statementsof changes in stockholders equity forthree years. They need not present thebalance sheet for the third year.

A statement of comprehensive income(comprising primarily of unrealized gainsand losses) is required and is generallypresented as part of stockholder’sequity.

2 Changes in accountingpolicies

The effect of a change in accountingpolicy must be recorded in the incomestatement of the period in which thechange is made except as specified incertain standards where the changeresulting from adoption of the standardhas to be adjusted against openingretained earnings.

The effect of a change in accountingpolicy is generally included (net of taxes)in the current year income statement,after extraordinary items.

Pro-forma comparatives reflecting theimpact of the change is generallydisclosed.

3 Correction of errors The effect of correction of errors mustbe included in the current year incomestatement with appropriate disclosureas a prior period item.

The correction of material errors usuallyresults in the restatement of relevantprior periods.

S r .No.

Particulars Indian GAAP US GAAP

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4

Sr.No.

Particulars Indian GAAP US GAAP

Consolidation and JointVentures

In accordance with AS 27, “Financialreporting of Interests in joint ventures”the venturer recognizes in its separateand consolidated financial statements itsshare of jointly controlled assets, anyliabilities it has incurred, its share of anyliabilities incurred jointly with otherventurers in relation to the joint venture,any income from sale or use of its shareof output of the joint venture, togetherwith its share of expenses incurred byjoint venture and any expenses which ithas incurred in respect of interest in jointventure.

There is no specific guidance withrespect to Variable Interest Entities

For financial statements, disclosure isrequired for the share of interest in theJoint Venture.

Investment in Joint Ventures is generallyaccounted for under the equity methodof accounting

Companies are required to evaluate ifthey have any interest in VariableInterest Entities, as defined by thestandard. Consolidation of such entitiesmay be required if certain conditions aremet.

5 Business Combinations Restricts the use of pooling of interestmethod to circumstances, which meetthe criteria listed for an amalgamationin the nature of a merger. In all othercases, the purchase method is used

Business combinations are accountedfor by the purchase method only (exceptas discussed below). Severaldifferences can arise in terms of date ofcombination, calculation of share valueto use for purchase price, especially ifthe Indian GAAP method is‘amalgamation’ or pooling In the eventof combinations of entities undercommon control, the accounting for thecombination is done on a historical costbasis in a manner similar to a poolingof interests for all periods presented.

6 Goodwill Goodwill is capitalized amortized overits useful life, except for

� Enterprises whose equity or debtsecurities are listed on a recognizedstock exchange in India, andenterprises that are in the process ofissuing equity or debt securities thatwill be listed on a recognized stockexchange in India as evidenced bythe board of directors’ resolution inthis regard, or All other commercial,industrial and business reportingenterprises, whose turnover for the

Goodwill is not amortized but, tested forimpairment annually.

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accounting period exceeds Rs. 500millions.

(Applicable for financial yearsbeginning on April 1, 2005 for other thanlisted companies).

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Negative of Goodwill (i.e.,the excess of the fair valueof net assets acquired overthe aggregate purchaseconsideration)

Negative goodwill is computed basedon the book value of assets (not the fairvalue) of assets taken over/acquired andis credited to the capital reserveaccount, which is a component ofshareholders funds.

Negative goodwill is allocated to reduceproportionately the fair value assignedto non-current assets. Any remainingexcess is considered to be anextraordinary gain.

8 Intangible assets Intangible assets are capitalized ifspecific criteria are met and areamortized over their useful life, generallynot exceeding 10 years. The recoverableamount of an intangible asset that is notavailable for use or is being amortizedover a period exceeding 10 years shouldbe reviewed at least at each financialyearend even if there is no indication thatthe asset is impaired.

When allocating purchase price of abusiness combination, companies needidentify and allocate such purchaseprice to intangible assets, based onspecific criteria. Intangibles that have anindefinite useful life are required to betested, at least annually, for impairment.

Intangible assets that have finite usefullife are required to be amortized overtheir estimated useful lives.

9 Segment Information Specific requirements govern the formatand content of a reportable segment andthe basis of identification of a reportablesegment.

The information for disclosure is to beprepared in conformity with theaccounting standards used for thecompany as a whole.

Public companies are required to reportinformation about operating segmentsin annual financial statements andselected information about operatingsegments in interim financial reportsissued to shareholders. There arerequirements for related disclosuresabout products and services,geographic areas, and major customers.Operating segments are components ofan enterprise about which separatefinancial information is available that isevaluated regularly by the ChiefOperating Decision Maker in decidinghow to allocate resources and inassessing performance. Generally,financial information is required to bereported on the basis that it is usedinternally for evaluating segmentperformance and deciding how toallocate resources to segments.

10 Dividends Dividends are reflected in the financialstatements of the year to which theyrelate even if proposed or approvedafter the year end.

Dividends are accounted for whenapproved by the board/shareholders.

If the approval is after year end, thedividend is not considered to be asubsequent event that needs to bereflected in the financial statements.

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11. Property, Plant andEquipment

Fixed assets are recorded at thehistorical costs or revalued amounts.

Foreign exchange gains or lossesrelating to the procurement of property,plant and equipment can be capitalizedas part of the asset.

Depreciation is recorded over theasset’s useful life. Schedule XIV of theCompanies Act prescribes minimumrates of depreciation and typicallycompanies use these as the basis foruseful life.

Interest cost on specified or identifiableborrowings is capitalized to qualifyingassets during its construction period.

Revaluation of fixed assets is notpermitted under US GAAP.

All foreign exchange gains or lossesrelating to the payables for theprocurement of property, plant andequipment are recorded in the incomestatement.

Depreciation is recorded over theasset’s useful life. Therefore the usefullife may be different from the useful lifebased on Schedule XIV.

The interest cost, if material, eligible forcapitalization shall be the interest costrecognized on borrowings and otherobligations. The amount capitalized is anallocation of the interest cost incurredduring the period required to completethe asset.

The interest rate for capitalizationpurposes is to be based on the rates onthe company’s outstanding borrowings.

12 Investment in MarketableSecurities

Unrealized appreciation on available forsale securities or trading securities is notrecognized. Unrealized depreciation onavailable for sale securities and tradingsecurities is recognized in the incomestatement.

Unrealized gains and losses on availablefor sale securities are recorded as othercomprehensive income, which is acomponent of stockholders’ equity.

Unrealized gains and losses on tradingsecurities are recognized in the incomestatement.

13 Impairment of assets,other than goodwill

Applicable for accounting periodsbeginning from April 1, 2004 onwardsfor:

� Enterprises whose equity or debtsecurities are listed on a recognizedstock exchange in India, andenterprises that are in the process ofissuing equity or debt securities thatwill be listed on a recognized stockexchange in India as evidenced bythe board of directors’ resolution inthis regard, or

� All other commercial, industrial andbusiness reporting enterprises,whose turnover for the accountingperiod exceeds Rs. 500 millions.

(Applicable for financial years beginningon April 1, 2005 for other than listedcompanies).

An impairment analysis is performed ifimpairment indicators exist. Animpairment loss shall be recognizedonly if the carrying amount of a long-lived asset (asset group) is notrecoverable and exceeds its fair value.The carrying amount of a long-livedasset (asset group) is not recoverable ifit exceeds the sum of the undiscountedcash flows expected to result from theuse and eventual disposition of theasset (asset group). An impairment lossshall be measured as the amount bywhich the carrying amount of a long-lived asset (asset group) exceeds its fairvalue (which is determined based ondiscounted cash flows).

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If impairment is indicated, the assetsmust be written down to higher of netselling price and the value in use basedon discounted cash flows.

14 Pension / Gratuity / PostRetirement Benefits

The liability for defined benefit plans likegratuity and pension is determined asper actuarial valuation. There is nodefined method of expensedetermination, the discount ratedetermination criteria, and guidance forvaluation of plan assets and the choiceis left to the discretion of actuary.

Actuarial gains or losses are recognizedimmediately in the statement of income.

The liability for defined benefit schemesis determined using the projected unitcredit actuarial method. The discountrate for obligations is based on marketyields of high quality corporate bonds.The plan assets are measured using fairvalue or using discounted cash flows ifmarket prices are unavailable.

If at the beginning of the year, theactuarial gains or losses exceeds 10%of the greater of the projected benefitobligation or the market-related valueof plan assets, then such amount is notrecognized immediately, but amortizedover the average remaining serviceperiod of active employees expected toreceive benefits under the plan.

15 Leases Leases are classified as finance oroperating in accordance with specificcriteria.

Judgement is required to determine ifthe criteria are met or not.

The criteria to classify leases as capitalor operating include specificquantitative thresholds.

16 Derivatives and otherfinancial instruments –measurement of derivativeinstruments and hedgingactivities

The accounting for derivativeinstruments has not clearly emerged inthe Indian context. Currently what isapplicable is the Guidance Note onAccounting for Equity Index and EquityStock Futures and Options are thepronouncements, which address theaccounting for derivatives.

However, the accounting treatmentrecommended in the guidance note isapplicable to all contracts entered intofor Equity Derivative Instrumentsirrespective of the motive.

The impact of derivative instruments arecorrelated with the movement of theunderlying assets and liabilities andaccounted pursuant to the principles ofhedge accounting. The related amountreceivable from and payable to the swapcounter parties is included in the other

There is specific accounting guidancerequired for derivative instruments,including certain derivative instrumentsembedded in other contracts,(collectively referred to as derivatives)and for hedging activities. It requiresthat an entity recognize all derivativesas either assets or liabilities in thestatement of financial position andmeasure those instruments at fair value.If certain conditions are met, aderivative may be specificallydesignated as:

(a) a hedge of the exposure to changesin the fair value of a recognized assetor liability or an unrecognized firmcommitment (fair value hedge),

(b) a hedge of the exposure to variablecash flows of a forecasted transaction(cash flow hedge), or

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assets or liabilities in the balance sheet.When there is no correlation ofmovements between derivatives andthe underlying asset or liability, or if theunderlying asset or liability specificallyrelated to the derivative instrument ismatured, sold or terminated, thederivative instrument is closed out ormarked to market as an element of noninterest income on an outgoing basis.

There is specific guidance with respectto the documentation that must bemaintained for hedge accounting.

(c) a hedge of the foreign currencyexposure of a net investment in aforeign operation, an unrecognized firmcommitment, an available-for-salesecurity, or a foreign-currency-denominated forecasted transaction(net investment hedge).

The accounting for changes in the fairvalue of a derivative (that is, gains andlosses) depends on the intended use ofthe derivative and the resultingdesignation.

� Fair value hedge: the gain or loss isrecognized in earnings in the periodof change together with theoffsetting loss or gain on the hedgeditem attributable to the risk beinghedged.

� Cash Flow hedge and Net investmenthedge: the effective portion of thederivative’s gain or loss is initiallyreported as a component of othercomprehensive income andsubsequently reclassified intoearnings when the forecastedtransaction affects earnings. Theineffective portion of the gain or lossis reported in earnings immediately.

� For a derivative not designated as ahedging instrument, the gain or lossis recognized in earnings in theperiod of change.

An entity that elects to apply hedgeaccounting is required to establish at theinception of the hedge the method it willuse for assessing the effectiveness ofthe hedging derivative and themeasurement approach for determiningthe ineffective aspect of the hedge.Those methods must be consistent withthe entity’s approach to managing risk.

17 Deferred taxes Deferred tax asset / liability is classifiedas long term.

Deferred tax asset/liability is classifiedas current and long-term dependingupon the timing difference and thenature of the underlying asset or liability.

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The tax rate applied on deferred taxitems is the substantially enacted taxrate.

The tax rate applied on deferred taxitems is the enacted tax rate.

18 Revenue recognition Revenues are recognized when allsignificant risks and rewards ofownership are transferred.

US GAAP has extensive literature onrevenue recognition topics andapplication of these guidelines couldresult in revenue recognition that isdifferent from Indian GAAP.

19 Stock basedcompensation

There is no specific guidance onaccounting for employee stockcompensation under Indian GAAP. SEBIhas issued the Employee Stock OptionScheme and Employee Stock PurchaseScheme Guidelines, 1999, which areeffective for listed companies for allstock-option schemes established after19 June 1999.

In accordance with these guidelines, theexcess of the market price/fair valuationof underlying equity shares as of the dateof grant of the options over the exerciseprice of the options, including up-frontpayments, if any, is to be recognized andamortized on a straight-line basis overthe vesting period.

Entities have a choice of accountingmethods for determining the costs ofbenefits arising from employees stockcompensation plans. They may eitherfollow an intrinsic value method or a fairvalue method.

Under the intrinsic value method, thecompensation cost is the differencebetween the market price of the stockat the measurement date and the priceto be contributed by the employee(Exercise price). The measurement dateis typically the date of the grant, onwhich date, both the number of sharesand the exercise price would be known.This method is widely used in practice.

The fair value method is based on thefair value of the option at the grant date.This is estimated using an option-pricingmodel. If an entity chooses to follow theintrinsic value method, it must makepro-forma disclosures of net income andearnings per share as if the fair valuemethod had been applied.

There is a new standard effective 2005,which requires a fair value method tobe used for all options (June 15, 2005for Public companies and December 15,2005 for Private companies).

20 Options to Non-employees

No specific guidance Complex guidance with respect tomeasurement date and timing ofrecognition of expense. All options tonon-employees are recognized at fairvalue.

21 Start up costs andorganization costs

No specific guidance. Companiesexpense start up costs.

Requires costs of start-up activities andorganization costs to be expensed asincurred.

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23 Mandatorily redeemablepreferred shares

Instruments characterized as preferredshares are recorded as equity, even ifthey are mandatorily redeemable.

Mandatorily redeemable preferredshares are classified as a liability andany payments related to them, even ifcharacterized as a dividend, arerecorded as interest expense.

24 Issuance and redemptioncosts for borrowings

Debt issuance costs are generallyrecognised as expense in the periodincurred. Redemption premiumspayable may be amortised in the Profitand Loss Account. Redemptionpremiums are permitted to berecognised in the Securities PremiumAccount in certain instances.

Debt issuance costs and redemptionpremiums are amortised using theeffective interest method over the lifeof the debt.

25 Guarantees These are required to be disclosed ascontingent liabilities.

A guarantor is required to recognize atinception a liability for the fair value ofthe obligation undertaken in issuing theguarantee, except for certain types ofguarantees that are accounted asderivatives or are reported as equity orguarantees between parents andsubsidiaries.

26 Onerous Contracts An onerous contract is a contract inwhich the unavoidable costs of meetingthe obligations under the contractexceed the economic benefits expectedto be received under it. Under IndianGAAP, the Company does not recognizeany provision on account of onerouscontracts.

A liability for costs to terminate acontract before the end of its termshould be recognised and measured atfair value when the entity terminates thecontract in accordance with the contractterms. A liability for costs that willcontinue to be incurred under a contractfor its remaining term without economicbenefit to the entity should berecognized and measured at its fairvalue when the entity ceases to use theright conveyed by the contract.

27 Provisions Discounting of liabilities is not permittedand all provisions are carried at their fullvalues.

Where the effect of the time value ofmoney is material, the amount of aprovision may be the present value ofthe expenditures expected to berequired to settle the obligation. Thediscount rate should be pre-tax rate thatreflects current market assessments ofthe time value of money and the risksspecific to the liability.

The discount rate should not reflect risksfor which future cash flow estimateshave been adjusted and, any change inpresent value of Provision is recognizedas Interest Cost.

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However, if a range of estimates ispresent and no amount in the range ismore likely than any other amount in therange, the ‘minimum’ (rather than themid-point) amount must be used tomeasure the liability. A provision mustonly be discounted when the timing ofthe cash flows is fixed.

28 Other comprehensiveincome

All items of income are included in netincome, unless specifically permitted tobe adjusted to equity.

Certain items of revenues, expenses,gains, and losses that under generallyaccepted accounting principles areincluded in comprehensive income butexcluded from net income are classifiedas other comprehensive income. Itemsincluded in other comprehensiveincome shall be classified based on theirnature. For example, under existing USaccounting standards, othercomprehensive income shall beclassified separately into;

� foreign currency items,

� minimum pension liabilityadjustments, and unrealized gainsand

� losses on certain investments in debtand equity securities

29 Related party disclosures Disclosures by public sector companiesof related party transactions with otherpublic sector companies do not need tobe provided.

Related parties would include all entitiesunder common control (includinggovernment departments), and there isno specific exemption for public sectoror government owned entities.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of Association.Pursuant to Schedule II of the Companies Act, 1956 and SEBI Guidelines, the main provisions of the Articles ofAssociation of the Company are set forth below.

Capital

Allotment of Shares

Article 6 provides that subject to the provisions of these Articles shares in the Capital of the Company for the timebeing shall be under the control of the Board of Directors who may allot or dispose of the same or anyof them on suchterms and conditions and at such times and either at a premium or at par or (subject to the provisions of Section 79 ofthe Act) at a discount as the Board may think fit. Provided that where at any time subsequent to the first allotment ofshares it is proposed to increase the subscribed capital of the Company by the issue of new shares then subject to anydirections to the contrary which may only validly be given by Special Resolution of the Company in General Meetingthe Board shall issue such shares in the manner set out in Section 81(1) of the Act.

Minimum Application Money

Article 7 provides that if the Company shall offer any of its shares to the public for subscription, the amount payableon application on each share shall not be less than 5 per cent of the nominal amount of the share.

Compliance for the purposes of Allotment

Article 8 provides that as regards all allotments from time to time made, the Directors shall duly comply with theprovisions of the Act.

Uniform Conditions as to Calls

Article 11 provides that where any calls for further share capital are made on shares such calls shall be made on auniform basis on all shares falling under the same class. For the purposes of this Article shares of the same nominalvalue on which different amounts have been paid up shall not be deemed to fall under the same class.

Installments on shares to be duly paid

Article 12 provides that if by the conditions of allotment of any shares, the whole or part of the amount or issue pricethereof be payable by installments, every such installment shall, when due, be paid to the Company by the personwho for the time being shall be registered holder of the share.

Restrictions on purchase by Company or loans by Company for purchase of its own shares

Article 13 provides that except as provided in these Articles, none of the funds of the Company shall be employed inthe purchase of, or lent on the security of shares of the Company and the Company shall not, except as permitted bySection 77 of the Act, give any financial assistance for the purpose of or in connection with any purchase of shares inthe Company.

Who may be members

Article 15 provides that shares may at the discretion of the Directors be registered in the name of any limited companyor other corporate body or in any other collective name.

Shares

Shares to be numbered progressively and no share to be sub-divided

Article 17 provides that the shares in the Capital shall be numbered progressively, according to their severaldenominations, and except in the manner herein mentioned no share shall be sub-divided.

Restriction on Allotment

Article 18 provides that the Board of Directors shall observe the restrictions as to allotment of shares to the Publiccontained in Section 69 of the Act, and shall cause to be made the returns as to allotment provided for in Section 75of the Act.

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Acceptance of Shares

Article 19 provides that any Application signed by an applicant for shares in the Company, followed by an allotment ofany share therein, shall be an acceptance of shares within the meaning of these Articles; and every person who thusor otherwise accepts any shares and whose name is on the Register shall, for the purposes of these Articles, be amember.

Article 19A provides that notwithstanding anything contained in these Articles, the Company shall be entitled todematerialise its shares, debentures and other marketable securities and to offer the same for subscription in adematerialised form and on the same being done, the Company shall be further entitled to maintain a Register ofMembers with the details of members holding shares both in the materialised and dematerialised form of any mediaas permitted by law including any form of electronic media, either in respect of the existing shares or any future issue.Provided that the provisions set forth in Articles 22 to 26 shall not apply to shares or other marketable securities whichhave been dematerialised.

Article 19B provides that in the case of transfer of shares or other marketable securities where the Company has notissued any certificates and where such shares or securities are being held in an electronic and fungible form, theprovisions of the Depositories Act, shall apply.

Deposit and Calls to be a debt payable immediately

Article 20 provides that the money (if any) which the Board of Directors shall, on the allotment of any shares beingmade by them, require or direct to be paid by way of deposit call or otherwise, in respect of any shares allotted bythem, shall immediately on the inscription of the name of the allottee in the Register of Members as the name of theholder of such shares, become a debt due to and recoverable by the Company from the allottee thereof, and shall bepayable by such allottee accordingly.

Liability of Members

Article 21 provides that every Member, or his heirs, executors or administrators, shall pay to the Company the proportionthe capital represented by his share or shares which may, for the time being remain unpaid thereon, in such amounts,at such time or times, and in such manner, as the Board of Directors shall from time to time, in accordance with theCompany’s regulations require or fix for the payment thereof.

Restrictions on purchase by Company or loans by Company for purchase of its own shares.

Article 24 provides that except as provided in these Articles, none of the funds of the Company shall be employed inthe purchase of, or lent on the security of shares of the Company and the Company shall not, except as permitted bySection 77 of the Act, give any financial assistance for the purpose of or in connection with any purchase of shares inthe Company.

Calls

Calls

Article 27 provides that the Directors may, from time to time, subject to Section 91 of the Act and the terms on whichany shares may have been issued, make such calls as they think fit upon the members in respect of all moneys unpaidon the shares held by them respectively (whether on account of nominal value of shares or by way of premium) andnot by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount ofevery call so made on him to the persons and at the times and places appointed by the Directors. A call may be madepayable by installments. A call may be revoked or postponed at the discretion of the Directors.

When call deemed to have been made.

Article 28 provides that a call shall be deemed to have been made at the time when the resolution of the Directorsauthorising such call was passed.

Article 29 provides that not less than 21 days’ notice of any call shall be given specifying the time and place ofpayment and to whom such call shall be paid. Provided that the Directors may by notice in writing to the membersrevoke the call or extend the time for payment thereof.

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Amount payable at fixed times or by installments payable as calls.

Article 30 provides that if by the terms of issue of any share or otherwise the whole or part of the amount or issueprice thereof is made payable at any fixed time or by installments at fixed times, every such amount or issue price orinstallment thereof shall be payable as if it were a call duly made by the Directors and of which due notice had beengiven and all the provisions herein contained in respect of calls shall apply to such amount or issue price or installmentaccordingly.

When interest on call or installment payable.

Article 31 provides that if the sum payable in respect of any call or installment be not paid on or before the dayappointed for the payment thereof, the holder for the time being of the share in respect of which the call shall havebeen made or the installment shall be due, shall pay interest for the same at the rate of 9 per cent per annum, or atsuch other rate as the Directors may determine from the day appointed for the payment thereof to the time of theactual payment but they shall have power to waive the payment.

Evidence in action by Company against members

Article 32 provides that on the trial or hearing of any action or suit brought by the Company against any member or hisrepresentative to recover any debt or money claimed to be due to the Company in respect of his shares, it shall besufficient to prove that the name of the members is, or was, when the claim arose, on the register of members of theCompany as a holder or one of the holders of shares in respect of which such claim is made.

Payment of calls in advance.

Article 33 provides that the Directors may if they think fit, receive from any member willing to advance the same, allor any part of the Capital due upon the shares held by him beyond the sums for which calls shall have been made andupon the money so paid in advance, or so much thereof as from time to time exceeds the amount of the calls thenmade upon the shares in respect of which such advance has been made, the Company may pay interest at such rateas the member paying such sum in advance and the Directors agree upon but not more than six per cent per annumunless the Company in General Meeting shall otherwise direct. No voting rights in respect of the moneys so paid inadvance shall be exercisable until the moneys shall have become payable. Money so paid in excess of the amount ofcalls shall not rank for dividend and until appropriated towards satisfaction of any call shall be treated as a loan to theCompany and not as a part of its capital and shall be repayable to the members at any time without notice if theDirectors so decide.

Forfeiture and Lien

Notice may be given for call not made

Article 34 provides that if any member fails to pay any call or installment of a call on or before the day appointed forthe payment of the same, the Directors may, at any time thereafter during such time as any part of the call or installmentremains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that mayhave accrued.

Form of Notice

Article 35 provides that the notice shall fix a date (not being earlier than the expiry of 14 days from the date of serviceof the notice) and a place or places on and at which such call or installment and such interest as aforesaid are to bepaid. The notice shall also state that in the event of non-payment at or before the time and at the place or placesappointed the shares in respect of which such call was made or installment is payable and to which the notice relateswill be liable to be forfeited.

If notice not complied with shares may be forfeited

Article 36 provides that if the requisites of any such notice as aforesaid be not complied with, any shares in respect ofwhich such notice has been given may, at any time thereafter before payment of all calls or installments, interest andexpenses due in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shallinclude all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. Neither thereceipt by the Company of a portion of any money which shall from time to time be due from any Member to the

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Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by the Companyin respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce aforfeiture of such shares as herein provided.

Notice after Forfeiture

Article 37 provides that when any share shall have been so forfeited, notice of the forfeiture shall be given to themember in whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture, with the datethereon shall forthwith be made in the Register, but no forfeiture shall be in any manner invalidated by any omissionor neglect to give such notice or to make such entry aforesaid.

Forfeited share to become property of the Company

Article 38 provides that any share so forfeited shall be deemed to be the property of the Company, and the Directorsmay sell, re-issue or otherwise dispose of the same in such manner as they think fit.

Power to annul forfeiture

Article 39 provides that the Directors may, at any time before any share so forfeited shall have been sold, reissued orotherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit.

Arrears to be paid notwithstanding forfeiture

Article 40 provides that a person whose shares have been forfeited shall cease to be a member in respect of theforfeited shares but shall notwithstanding forfeiture remain liable to pay to the Company all calls, installments, interestand expenses owing upon or in respect of such shares at the date of forfeiture with interest thereon from the date offorfeiture until payment at such rate not exceeding nine per cent per annum as the Directors may determine. Theliability of such person shall cease if and when the Company shall have received payment in full of all such moneys inrespect of the shares. The Company may receive the consideration, if any, given for the share on any sale or disposalthereof and execute a transfer of the share in favour of the person to whom the share is sold or disposed of. Thetransferee shall thereupon be registered as the holder of the share. The transferee shall not be bound to see toapplication of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity inthe proceedings in reference to the forfeiture, sale or disposal of the share. The provisions of these regulations as toforfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payableat a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had beenpayable by virtue of a call duly made and notified.

Effect of forfeiture.

Article 41 provides that the forfeiture of a share shall involve the extinction of all interest in and also of all claims anddemands against the Company in respect of the share, and all other rights incidental to the share, except only such ofthose rights as by these Articles are expressly saved.

Evidence of forfeiture.

Article 42 provides that a declaration in writing that the declarant is a Director of the Company, and that certain sharesin the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the factstherein stated as against all persons claiming to be entitled to the shares and such declaration and the receipt of theCompany for the consideration, if any, given for the shares on the sale or disposition thereof shall constitute a goodtitle to such share.

Company’s Lien on shares

Article 43 provides that the Company shall have a first and paramount lien upon all the shares (other than fully paid upshares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of salethereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such sharesand no equitable interest in any share shall be created except upon the footing and condition that Clause 14 hereof isto have full effect and such lien shall extend to all dividends and bonuses from time to time declared in respect of suchshares. Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company’slien, if any, on such shares. The Directors may at any time declare any shares to be wholly or in part to be exempt fromthe provisions of this Clause.

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Enforcing the lien by sale and applying the proceeds of sale.

Article 44 provides that for the purpose of enforcing such lien the Board of Directors may sell the shares subjectthereto in such manner as they think fit but no sale shall be made unless a sum in respect of which the lien exists ispresently payable and until notice in writing of the intention to sell shall have been served on such member, hisexecutors or administrators, or his committee, curator bonis or other legal representatives as the case may be anddefault shall have been made by him or them in the payment of the sum payable as aforesaid for fourteen days afterthe date of such receipt. To give effect to such sale the Directors may authorise some person to transfer the sharessold to the purchaser thereof. The net proceeds of the sale shall be received by the Company and applied in ortowards payment of such part of the amount in respect of which the lien exists as is presently payable and theresidue, if any, shall be paid to each member, his executors of or administrators or his committee, curator bonis, orother legal representative as the case may be.

Validity of shares

Article 45 provides that upon any sale for enforcing a lien in exercise of the powers by these presents given, theDirectors may cause the purchaser’s name to be entered in the Register in respect of the shares sold, and the purchasershall not be bound to see the regularity of the proceedings, nor to the application of the purchase money, and after hisname has been entered in the Register in respect of such shares his title to such shares shall not be affected by anyirregularity or invalidity in the proceedings in reference to such sale or disposition, nor impeached by any person, andthe remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

Transfer and Transmission of Shares

Article 46 provides that subject to the provisions of the Foreign Exchange Regulation Act, 1947 as in force the Companyshall not register a transfer of shares in, or debentures of, the Company, unless a proper instrument of transfer dulystamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name,address and occupation, if any, of the transferee, has been, delivered to the Company along with the certificaterelating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of theshares or debentures. Provided that where on an application in writing made to the Company by the transferee andbearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board of Directors thatthe instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost,the Company may register the transfer on such terms as to indemnity as the Board may think fit. The transferor shallbe deemed to remain holder of such share until the name of the transferee is entered in the Register in respectthereof.

Application for Transfer

Article 47 provides that an application for the Registration of the transfer of a share may be made either by thetransferor or the transferee provided that, where such application is made by the transferor, no registration shall in thecase of partly paid shares be effected unless the Company gives notice of the application to the transferee in themanner prescribed by the Act, and, subject to the provisions of Articles 14, 52 and 56 hereof, the Company shallunless objection is made by the transferee within two weeks from the date of receipt of the notice, enter in theRegister the name of the transferee in the same manner and subject to the same conditions as if the application forregistration was made by the transferee.

Notice of transfer to registered holder.

Article 48 provides that before registering any transfer tendered for registration, the Directors may, if they so think fit,give notice by letter posted in the ordinary course to the registered holder that such transfer deed has been lodgedand that, unless objection is taken, the transfer will be registered and if such registered holder fails to lodge anobjection in writing at the Office of the Company within seven days from the posting of such notice to him, he shall bedeemed to have admitted the validity of the said transfer. Where no notice is received by the registered holder, theDirectors shall be deemed to have decided not to give notice and in any event the non-receipt by the registeredholder of any notice shall not entitle him to make any claim of any kind against the Company in respect of such non-receipt.

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The Company not liable for disregard of a notice prohibiting registration of a transfer.

Article 49 provides that the Company shall incur no liability or responsibility whatever in consequence of its registeringor giving effect to any transfer of shares, made or purporting to be made by any apparent legal owner thereof (asshown or appearing in the Register of Members) to the prejudice of persons having or claiming any equitable right,title or interest to or in the same shares, notwithstanding that the Company may have had notice of such equitableright, title or interest or notice prohibiting registration of such transfer and may have entered such notice, or referredthereto, in any book of the Company, and the Company shall not be bound or required to regard to attend or giveeffect to any notice which may be given to it of any equitable right, title or interest, or be under any liability whatsoeverfor refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company; butthe Company shall nevertheless, be at liberty to regard and attend to any such notice, and give effect thereto if theDirectors shall so think fit.

In what case to register transfer is declined.

Article 51 provides that the Directors may, subject to the right of appeal conferred by Section 111 of the Act, declineto register any transfer of shares to a transferee of whom they do not approve.

No transfer to minor or person of unsound mind.

Article 52 provides that no transfer shall be made to a minor or person of unsound mind.

Rights of unregistered executors and trustees.

Article 60 provides that subject to Section 206 of the Act and other provisions of these Articles if the Directors in theirsole discretion are satisfied in regard thereto, a person becoming entitled to a registered share in consequence of thedeath or insolvency of a member may receive and give a discharge for any dividends or other moneys payable inrespect of the share.

Alteration of Capital

Power to alter capital

Article 65 provides that the Company in General Meeting may from time to time by Special Resolution alter thecondition of its Memorandum to increase the share capital by such amount, to be divided into shares of such amountas may be specified in the resolution.

Article 66 provides that the Company may by Special Resolution alter the conditions of its Memorandum to consolidateand divide all or any of its share capital into shares of larger amount than its existing shares; sub-divide its existingshares or any of them into shares of smaller amount than is fixed by the Memorandum, and/or Articles of Associationsubject, nevertheless, to the provisions of Clause (d) of sub-section (1) of Section 94. cancel any shares, which at thedate of the passing of the resolution, have not been taken or agreed to be taken by any person.

On what condition new shares to be Issued

Article 67 provides that subject to the provisions of any special rights or privileges for the time being attached to anyissued shares, the new shares shall be issued upon such terms and conditions and with such right and privilegesattached thereto, as the Company in General Meeting or the Board of Directors (as the case may be) resolving uponthe creation thereof shall direct and in particular such shares may be issued with a preferential or qualified right todividends and subject to the provisions of Section 85 of the Act in the distribution of the assets of the Company andsubject to the provisions of Section 87 of the Act with a special or without any right of voting.

New shares to be offered first to the existing members

Article 68 provides that subject to the other provisions of these Articles and subject to any directions to the contrarythat may be given by the meeting that resolves upon the increase of capital where the Directors decide to increase thecapital of the Company by the issue of further shares, such shares shall be offered to the persons who at the date ofthe offer, are holders of the equity shares of the Company, in proportion as nearly as circumstances admit to thecapital paid up on those shares at that date, and such offer shall be made by notice specifying the number of sharesoffered and limiting a time not being less than fifteen days from the date of the offer within which the offer, if notaccepted, will be deemed to have been declined; and after the expiration of such time, or on receipt of an earlierintimation from the members to whom such notice is given that he declines to accept the shares offered, the Directors

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may dispose of the same in such manner as they think most beneficial to the Company; and the offer aforesaid shallbe deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any ofthem in favour of any other person and the notice aforesaid shall contain a statement of this right, so that the personor persons in whose favour any such shares may be renounced shall be such as the Directors may in their absolutediscretion approve of, and in case the Directors may not so approve of any such person the renunciation of any suchshares in favour of such persons shall not take effect.

Article 69 provides that in addition to and without derogating from the powers for that purpose concerned on theDirectors under these presents, the Company in General Meeting may determine that any shares (whether formingpart of the original capital or of any increased capital of the Company) shall be offered in the first instance to existingmembers in such proportion to the amount of the capital held by them and on such terms and conditions and eitherat a premium or at par, or (subject to compliance with the provisions of the Act), at a discount, as such generalmeeting shall determine, or make any other provisions as to the issue and allotment of the new shares, and with fullpower to give to any person (whether a-member or holder of debentures of the Company or not) the option to call foror be allotted shares of any class of the Company either at a premium or at par, or (subject to existing memberscompliance with the provisions of the Act), at a discount, and such option being exercisable at such times and forsuch consideration as may be directed by such General Meeting.

New Capital to be same as Old Capital

Article 70 provides that except so far as otherwise provided by the conditions of issue or by these presents, anycapital raised by the creation of new shares shall be considered part of the original capital and shall be subject to theprovisions herein contained with reference to the payment of calls and installments, transfer and transmission, forfeiture,lien and otherwise.

Power to alter Capital

Article 71 provides that the Company may, by special resolution, reduce in any manner and with, and subject to anyincident authorised and consent required by law its share capital, any capital redemption reserve fund, or any sharepremium account.

Modification of Rights

Article 72 provides that whenever the capital, by reason of the issue of preference shares or otherwise, is divided intodifferent classes of shares all or any of the rights and privileges attached to any class may be modified, commuted,affected, abrogated or dealt with according to the procedure and with sanctions prescribed in Section 106 of the Actor any statutory modification or re-enactment thereof from time to time and for the time being in force; and in respectof any general meeting of members holding shares of that class to be held for the purpose all the provisions hereinaftercontained as to general meetings shall mutatis mutandis, apply but so that the quorum thereof shall be two persons,being members holding shares of that class. This clause is not to derogate from any power the Company would havehad if this clause were omitted.

Proceedings at General Meetings

Business of Ordinary General Meeting.

Article 93 provides that the Ordinary business of an Annual General Meeting shall be to receive and consider theprofit and loss account, the balance sheet and the reports of the Directors and of the Auditors, to appoint Directors inplace of those retiring, to appoint auditors and fix the remuneration and to declare dividends and subject to theprovisions of Sections 173 and 188 of the Act to transact any other business. All other business transacted at anAnnual General Meeting and all business transacted at an Extraordinary General Meeting shall be deemed to bespecial business. Where any items of business to be transacted at the meeting are deemed to be special business inaccordance with Section 173 of the Act, there shall be annexed to the notice of the meeting a statement setting out allmaterial facts concerning each such item of business including in particular the nature and extent of the interest, ifany, therein of every Director, Managing Director and Manager, if any, of the Company. And where any item of businessconsists of the according of approval to any document by the meeting, the time and place where the document canbe inspected shall be specified in the aforesaid statement.

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Quorum

Article 94 provides that the quorum for a General Meeting, of the Company shall be five members personally present.

Quorum necessary for business.

Article 95 provides that no business shall be transacted at any General Meeting unless a quorum shall be present atthe commencement of the business.

Chairman

Article 96 provides that the Chairman of the Directors shall be entitled to take the chair at every General Meeting, or ifsuch Chairman shall have notified to the Company that he will not be present at the meeting or if at any meeting heshall not have given notice of absence and shall not be present, within fifteen minutes after the time appointed forholding such meeting, or, is unwilling to act as chairman, the members present shall choose another Director asChairman and, if no Director be present, or if all the Directors present decline to take the chair, then the memberspresent shall choose one of their number being a member entitled to vote to be chairman.

How questions or resolutions to be decided at meetings

Article 98 provides that the in case of an equality of votes, whether on a show of hands or on a poll, the chairman ofthe meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second ora casting vote in addition to the vote or votes to which he may be entitled as a member.

What is to be evidence of the passing of a question or resolution where poll not demanded

Article 99 provides that the at any General Meeting a resolution shall first be put to the vote on a show of hands andunless a poll is (before or on the declaration of the result of a show of hands) demanded in the manner mentioned inSection 179 of the Act and unless a poll is so demanded, a declaration by the Chairman that a question or resolutionhas on a show of hands, been carried, or carried unanimously, or by a particular majority, or not carried by a particularmajority, or lost, and an entry to that effect in the Books containing the minute book of the proceedings of the Companyshall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour ofor against such question or resolution. Before or on the declaration of the result of voting on any resolution on a showof hands a poll may be ordered to be taken by the Chairman of the meeting of his own motion, and shall be orderedto be taken by him on a demand made in that behalf by the person or persons specified in Section 179 of the Act.

Poll

Article 100 provides that if a poll is demanded as aforesaid it shall, subject to the provisions of Article 101 be taken insuch manner and at such time and place as the Chairman of the Meeting directs and either at once or otherwise notbeing later than 48 hours from the time of such demand and the result of the poll shall be deemed to be the resolutionof the meeting at which the poll was demanded. The demand of a poll may be withdrawn.

Power to adjourn General Meeting

Article 102 provides that the Chairman of a General meeting may with the consent of the meeting and shall if sodirected by the meeting adjourn the same from time to time and. from place to place but no business shall betransacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournmenttook place. When a meeting is adjourned sine die or for 30 days or more, notice of the adjourned meeting shall begiven as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of anadjournment or the business to be transacted at an adjourned meeting.

Chairman’s decision conclusive.

Article 106 provides that the Chairman of any meeting shall be sole judge of the validity of every vote tendered atsuch meeting. The chairman of the meeting present at the taking of a poll shall be the sole judge of the validity ofevery vote tendered at such poll.

Article 107 provides that at every Annual General Meeting of the Company there shall be laid on the table the Reportof the Directors, the Profit and Loss Account, Balance Sheet and Report of the Auditors, such documents (if any)required by law to be annexed or attached thereto and the Register of Directors’ shareholding. The Auditors’ Reportshall be read before the Company in Annual General Meeting and shall be open to inspection by any member of theCompany.

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Votes of Members

Votes of Members

Article 112 provides that subject to any rights or restrictions for the time being attached to any class or classes ofshares on a show of hands, every member present in person or if a body corporate through a representative appointedunder the provisions of Section 187 of the Act and Article 113 hereof or by proxy shall have one vote and on a poll thevoting right of such member whether present in person or by representative or by proxy shall be in proportion to hisshare of the paid up equity share capital of the Company. Subject as aforesaid and save as provided in clause (c) ofthis Article, every member of the Company holding any preference share capital shall, in respect of such capital, havea right to vote only on Resolutions or questions placed before the Company which directly affect the rights attachedto his preference shares. Any Resolution for winding up the Company or for the repayment or reduction of its sharecapital shall be deemed directly to affect the rights attached to preference shares within the meaning of this clause.Subject as aforesaid every member of the Company of holding any preference share capital shall, in respect of suchcapital, be entitled to vote on every resolution or question placed before the Company at any meeting, if the dividenddue on such capital or any part of such dividend has remained unpaid. In the case of cumulative preference shares, inrespect of an aggregate period of not less than two years preceding the date of commencement of the meeting andin the case of non-cumulative preference shares, either in respect of a period of not less than two years ending withthe expiry of the financial year immediately preceding the commencement of the meeting or in respect of an aggregateperiod of not less than three years comprised in the six years ending with the expiry of the financial year aforesaid.

For the purposes of this clause, dividend shall be deemed to be due on preferences shares in respect of any period(whether a dividend has been declared by the Company on such shares for such period or not) on the last dayspecified for the payment of such dividend for such period in these Articles or other instrument executed by theCompany in that behalf or in case no day is so specified, on the day immediately following such period. Where theholder of any preference share has a right to vote on any Resolution or question in accordance with the aforesaidprovisions of this Article, ‘on a show of hands he shall, if present in person, have one vote and upon a poll he shall asthe holder of such share, whether present” in person or by proxy, have a voting right in the same proportion as thecapital paid up in respect of the preference share bears to the total paid up equity share capital of the Company. Incase the Company may accept from any member the whole or a part of the amount remaining unpaid on any shares(whether equity or preference shares) held by him, although no part of the amount has been called up the membershall not be entitled to any voting rights in respect of the monies so paid by him until the same would, but for suchpayment, become presently payable.

Representation of Corporations at meetings of Companies and of Creditors.

Article 113 provides that a body corporate (whether a Company within the meaning of the Act or not) may, if it is amember of the Company, by resolution of its board of directors or other governing body, authorise such person as itthinks fit, to act as its representative at any meeting of the Company or at any meeting of any class of members of theCompany. If such body corporate be a creditor (including a holder of debentures) of the Company, it may by resolutionof the Board of Directors or other governing body, authorise such person as it thinks fit, to act as its representative atany meeting of any creditor of the Company held in pursuance of the Act or any rules made thereunder, or in pursuanceof the provisions contained in any Debenture or Trust Deed, as the case may be. A person authorised by a resolutionas aforesaid, shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalfof the body corporate which he represents as that body could exercise if it were a member, creditor or holder ofdebentures of the Company. He shall be counted for the purpose of ascertaining whether a quorum of members ispresent. The production at the meeting of a copy of such resolution duly signed by one director of such body corporateCompany or by the Managing Director/Manager or other duly authorised officer thereof and certified by him or themas being a true copy of the resolution may on production at the meeting be accepted by the Company as sufficientevidence of the validity of his appointment.

Proxies Permitted

Article 116 provides that votes may be given either personally or by proxy or in case of a company or other bodycorporate by a representative duly authorised as aforesaid. A proxy or representative shall be entitled to vote on ashow of hands as well as on a poll.

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Instrument approving proxy to be in writing

Article 117 provides that the instrument appointing a proxy shall be in writing and shall be signed by the appointer orhis attorney duly authorised in writing or, if the appointer is a body corporate, be under its seal or be signed by anofficer or an attorney duly authorised by it. A proxy need not be a member of the Company. A proxy appointed asaforesaid shall not have any right to speak at any meeting.

Instrument appointing proxy to be deposited at the office

Article 119 provides that the instrument appointing a proxy and the Power of Attorney or other authority (if any) underwhich it is signed or a notarially certified copy of the power or authority, shall be deposited at the Office not less thanforty-eight hours before the time for holding the meeting at which the person named in the instrument proposes tovote, and in default the instrument of proxy shall not be valid.

A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding theprevious death or insanity of the principal or revocation of the instrument or transfer of the share in respect of whichthe vote is given: Provided no intimation in writing of the death, insanity or revocation of instrument of transfer of theshare shall have been received at the Office or by the Chairman of the Meeting before the vote is given: Providednevertheless that the Chairman of any meeting shall be entitled to require such evidence as he may in his discretionthink fit of the due execution of an instrument of proxy and that the same has not been revoked.

Restriction on Voting

Article 120 provides that no member shall be entitled to be present or to vote on any question either personally or byproxy at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum shall be due andpayable to the Company in respect of any of the shares of such member or in regard to any shares on which theCompany has and has exercised any right of lien.

Directors

Number of Directors

Article 125 provides that subject of the provisions of Sections 252, 255, 256 and 259 of the Act, until otherwisedetermined by the Company in General Meeting, the number of Directors, shall not be less than four or more thantwelve, excluding debenture Directors.

Qualification of Directors

Article 127 provides that the qualification of a Director shall be the holding of Ordinary and/or Preference shares orboth in the Capital of the Company of the aggregate nominal value of Rs.2,500 (Rupees two thousand five hundredonly). The first Directors named in the Articles, an Ex-officio Director or an alternate director appointed pursuant toArticles 76, 125, 126, 142 & 143 shall not be required to hold any qualification shares.

Directors not to hold office of profit

Article 132 provides that except with the previous consent of the Company accorded by a special resolution, nodirector of a company, no partner or relative of such a director, no firm in which such a director or relative is a partner,no private company of which such a director is a director or member, and no director or manager of such a privatecompany shall hold any office or place of profit except that of Managing Director, Manager, legal or Technical Adviser,Banker, or Trustee for the holders of Debentures of the Company under the Company, or under any subsidiary of theCompany, unless the remuneration received from such subsidiary in respect of such office or place is paid over to theCompany or its holding company.

Directors and Manager may contract with Company

Article 133 provides that subject to the provisions of Sections 297, 299, 300, 302 and 314 of the Act, the Directorsincluding a Managing Director and the Manager shall not be disqualified by reason of his or their office as such fromcontracting with the Company either as vendor, purchaser, lender, agent, broker, lessor or lessee or otherwise, norshall any such contract or any contract or arrangement entered into by or on behalf of the Company with any Directoror the Manager or with any company or partnership of or in which any Director or the Manager shall be a member orotherwise interested be avoided nor shall any Director, or the Manager so contracting or being such member or sointerested be liable to account to the Company for any profit realised by such contract or arrangement by reason only

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of such Director or the Manager holding that office or of the fiduciary relation thereby established, but the nature ofthe interest must be disclosed by him or them at the meeting of Directors at which the contract or arrangement isdetermined on, if the interest then exists or in any other case at the first meeting of Directors after the acquisition ofthe interest; Provided nevertheless that no Director shall vote as a Director in respect of any contract or arrangementin which he is so interested as aforesaid and if he does so, his vote shall not be counted but he shall be entitled to bepresent at the meeting during the transaction of the business in relation to which he is precluded from voting althoughhe shall not be counted for the purpose of ascertaining whether there is a quorum of Directors present. This provisoshall not apply to any contract by or on behalf of the Company to give the Directors or any of them any security byway of indemnity against any loss which they or any of them may suffer by becoming or being sureties for theCompany.

Appointment of Additional Director

Article 140 provides that the Directors shall have power at a meeting of the Board at any time and from time to timeto appoint any person other than a person who has been removed from office of a Director of the Company underArticle 139 to be a Director of the Company as an addition to the Board but so that the total number of Directors shallnot at any time exceed the maximum number fixed. Any Director so appointed shall hold office only upto the date ofthe next following Annual General Meeting of Company.

Casual Vacancy may be filled by Board

Article 141 provides that the Directors at a meeting of the Board shall have power to fill a vacancy in the Board if theoffice of any Director appointed by the Company in General Meeting is vacated before his term of office will expire inthe usual course.

Debenture Director

Article 140 provides that any Trust Deed for securing debentures or debenture-stock if so arranged provide for theappointment from time to time by the trustees thereof or by the holders of the debentures or debenture-stock ofsome person to be a Director of the Company and may empower such trustees or holders of debentures or debenture-stock from time to time to remove any Director so appointed. A Director appointed, under this Article is hereinreferred to as a “Debenture Director” and that the term ‘Debenture Director’ means a Director for the time being inoffice under this Article. A Debenture Director shall not be bound to hold any qualification shares and not be liable toretire by rotation or be removed by the Company. The Trust Deed may contain such ancillary provisions as may bearranged between the Company and the Trustees and all such provisions shall have effect notwithstanding any of theother provisions herein contained.

Alternate Director

Article 143 provides that the Board of Directors may appoint an alternate Director to act for a Director (hereinaftercalled the ‘Original Director’) during his absence for a period of not less than three months from the State in whichmeetings of the Board are ordinarily held. An alternate Director appointed under sub-clause (a) above shall vacateoffice if and when the Original Director returns to State. If the term of office of the Original Director is determinedbefore he so returns to State, any provision for the automatic re-appointment of the Retiring Director in default ofanother appointment, shall apply to the Original and not to the alternate Director. This Article shall not apply to an ex-officio Director or Debenture Director.

Managing Director

Article 162 provides that subject to the provisions of the Act, the Board of Directors may from time to time appointany one or more of their body to be the Managing Director or Managing Directors (in which expression shall beincluded Joint Managing Director/s) of the Company for such term not exceeding five years at a time and upon suchterms and conditions as they may deem fit and may from time to time (subject to the provisions of any contractbetween him or them and the Company) remove or dismiss him or them from office and appoint another or others inhis or their place or places.

Dividends

Division out of Profits

Article 183 provides that subject to the provisions of these Articles the net profits of the Company (after making

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provisions, if any, for sinking fund, depreciation and reserve funds and carrying forward balances) which it shall fromtime to time be determined to be divided in respect of any year or other period shall be applied first in paying thepreferential dividend on the capital paid-up on the Preference Shares to the close of such year or other period and thesurplus shall be divisible amongst the holders of Ordinary Shares in proportion to the amounts paid up on the OrdinaryShares held by them respectively.

Capital paid in advance of calls

Article 184 provides that when capital is paid-up on advance of calls upon the footing that the same shall carryinterest, such capital shall not, whilst carrying interest, confer a right to participate in profits.

Declaration and payment of Dividends

Article 185 provides that the Company in General Meeting may declare a dividend to be paid to the members accordingto their rights and interest in the profits and may, subject to Section 207 of the Act, fix the time for payment.

Dividend out of profits only and not to carry interest

Article 186 provides that no dividend shall be payable except out of the profits of the Company of the year or anyother undistributed profits, and no dividend shall carry interest as, against the Company.

What to be deemed net profits

Article 187 provides that the declaration of the Directors as to the amount of the net profits of the Company in anyyear shall be conclusive.

Interim dividend

Article 188 provides that the Directors may from time to time pay to the members such interim dividends as in theirjudgment the position of the Company justifies.

Company may retain dividends

Article 189 provides that The Directors may retain the dividend payable upon shares in respect of which any personis under “The Transmission Article” entitled to become a member or which any person under that Article is entitled totransfer until such person shall become a member in respect thereof or shall duly transfer the same.

Dividend and call together

Article 190 provides that any General Meeting declaring a dividend may make a call on the members of such amountas the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that thecall be made payable at the same time as the dividend and the dividend may, if so arranged, between the Companyand the members, be set off against the call.

Dividend in specie

Article 191 provides that any General Meeting declaring a dividend may upon the recommendation of the Directorsresolve that such dividend be paid wholly or in part of the distribution of specific assets, and in particular of paid-upshares, debentures or debenture-stock of the Company or paid-up shares, debentures or debenture-stock of anyother company, or in anyone or more of such ways.

Capitalisation of Reserves

Article 192 provides that any General Meeting may upon the recommendation of the Directors resolve that anymoneys, investment or other assets forming part of the undivided profits of the Company standing to the credit of anyreserve fund or special account or in the hands of the Company and available for dividend and including any profitsarising from the sale or revaluation of the assets of the Company or any part thereof or by reason of any otheraccretion to capital assets be capitalized and distributed amongst such of the members as would be entitled toreceive the same if distributed by way of dividend and in the same proportions on the footing that they becomeentitled thereto as capital and that all or any part of such capitalised fund be applied on behalf of such members inpaying up in full either at par or at such premium as the resolution may provide any unissued shares, debentures ordebenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalledliability on any issued shares, or debentures or debenture-stock, and that such distribution or payment shall beaccepted by such members in full satisfaction of their interest in the said capitalised sum.

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Fractional certificates

Article 193 provides that For the purpose of giving effect to any resolution under the two last preceding Articles theDirectors may settle any difficulty which may arise in regard to the distribution as they think expedient and in particularmay issue fractional certificates, and may fix the value for distribution of any specific assets and may determine thatcash payments shall be made to any members upon the footing of the value so fixed or fractions of less value thanrupee one may be disregarded in order to adjust the rights of all parties and may vest any such cash or specific assetsin trustees upon such trusts for the persons entitled to the dividends or capitalised fund as may seem expedient to theDirectors. Where requisite a proper contract shall be filed in accordance with the provisions of the Act and theDirectors may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalisedfund, and such appointment shall be effective.

To whom dividends payable

Article 194 provides that a transfer of shares shall not pass the rights to any dividend declared thereon before theregistration of the transfer, and, subject to the provisions of these Articles, no dividend shall be payable to any personwhose name does not appear on the register of members except with the authority, special or general, of the Directors.

Any one of joint-holder can give receipts

Article 195 provides that anyone of several persons who are registered as joint-holders of any share may give effectualreceipts for all dividends and payments on account of dividends in respect of such shares.

Payment by post

Article 196 provides that unless otherwise directed, any dividend may be paid by cheque, warrant or postal moneyorder sent through the post to the registered address of the member or person entitled thereto or in the case of joint-holders to the registered address of that one whose name stands first on the Register in respect or the joint -holdingor to such person and such address as the member or person entitled or such joint-holders as the case may be, maydirect; and every cheque or warrant so sent shall be made payable to the order of the person to whom it is sent.

What payment a good discharge

Article 197 provides that the payment of every cheque or warrant sent under the provisions of the last precedingArticle, shall if such cheque or warrant purports to be duly endorsed, be a good discharge to the Company in respectthereof: Provided nevertheless that the Company shall not be responsible for the loss of any cheque, dividend warrantor postal money order which shall be sent by post to any member or by his order to any other person in respect of anydividend.

Unclaimed Dividend

Article 198 provides that “Dividend remaining unclaimed - shall be dealt with in accordance with the relevant provisionsof the Act for the time being in force.”

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by us orentered into more than two years before the date of this Letter of Offer) which are or may be deemed material havebeen entered or are to be entered into by us. These contracts and also the documents for inspection referred tohereunder, may be inspected at the Registered Office of the Company situated at Century Bhavan, 3rd Floor, Dr. AnnieBesant Road, Worli, Mumbai 400 025 from 11.00 a.m. to 2.00 p.m. from the date of this Letter of Offer until the date ofclosure of the Subscription List.

A. Material Contracts

1. Memorandum of Understanding between the Company, JM Morgan Stanley Private Limited and DSP MerrillLynch Limited dated September 22, 2005.

2. Memorandum of Understanding between the Company and Karvy Computershare Private Limited datedNovember 1, 2005.

B. Documents

1. Memorandum and Articles of the Company.

2. Certificate of Incorporation of the Company dated December 15, 1958.

3. Fresh certificate of incorporation consequent on change of name from Hindustan Aluminium Corporation Limitedto Hindalco Industries Limited dated October 9, 1989.

4. Shareholders Resolution passed at the Annual General Meeting held on July 12, 2005 appointing Singhi and Co.,as statutory auditors for the financial year 2005-2006.

5. Copy of the Board Resolution dated September 20, 2005 approving this Issue.

6. Consents of the Directors, Auditors, Lead Managers to the Issue, Legal Counsel to the Company, Legal Counselto the Lead Managers, Bankers to the Issue and Registrars to the Issue, to include their names in the Letter ofOffer to act in their respective capacities.

7. Appointment of Company Secretary as Compliance Officer.

8. Letter dated September 22, 2005 from the Auditors of the Company confirming Tax Benefits as mentioned in thisLetter of Offer.

9. The Report of the Auditors, Singhi & Co., as set out herein dated September 22, 2005 in relation to the restatedfinancials of the Company for the last five financial years.

10. Annual Report of the Company for the last five Financial Years.

11. Application made for In-principle listing approval dated September 23, 2005, and September 23, 2005 to theBSE and NSE respectively.

12. In-principle listing approval dated October 6, 2005 and October 11, 2005 from BSE and NSE.

13. Letter No. CFD/DIL/SM/51685/2005 dated October 13, 2005 issued by SEBI for the Issue.

14. Due Diligence Certificate dated September 23, 2005 from JM Morgan Stanley Private Limited and DSP MerrillLynch Limited.

15. Tripartite Agreement dated May 10, 1999 between the Company, CDSL and MCS Ltd. to establish directconnectivity with Depository.

16. Bipartite Agreement dated December 26, 2003 between the Company and NSDL to establish direct connectivitywith Depository.

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DECLARATION

No statement made in this Letter of Offer contravenes any of the provisions of the Act and the rules made thereunder.All the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI,Government and any other competent authority in this behalf have been duly complied with.

Yours faithfully

On behalf of the Board of Directors of Hindalco Industries Limited

Dr. K.M. Birla Mrs. Rajashree Birla Mr. D. Bhattacharya

Chairman Non-executive Director Managing Director

Mr. A.K Agarwala Mr. C.M. Maniar Mr. E.B. Desai

Non-executive Director Independent Director Non-executive Director

Mr. S.S. Kothari Mr. M.M. Bhagat Mr. K.N. Bhandari

Non-executive Director Independent Director Independent Director

Mr. R.K. Kasliwal

Chief Financial Officer

Place: MumbaiDate: November 25, 2005

Enclosure: Composite Application Form