Tata Steel published stand alone audited financial results for the nine months ended 31st December 2007 on 31st January 2008. The enclosed consolidated financial results of the Company for the nine months ended 31st December, 2007 were reviewed by the auditors and approved by the Board of Directors of the Company.

Highlights for the nine months ended 31st December 2007:

• Profit before interest, exceptional items and taxes for the nine months ended 31st December 2007 was Rs.10,889 crores against Rs.5,101 crores for the same period of the last financial year.

• Diluted EPS before exceptional items (not annualized) for the nine months ended 31st December 2007 was Rs.73.05 against Rs.58.44 for the same period in the last financial year.

The previous period figures do not include the financial results of Tata Steel UK (which includes Corus Group) and the current period includes financial results of Tata Steel UK, reviewed by the auditors.

• In terms of the leveraged buyout requirements of the lenders of Corus acquisition, the post acquisition corporate restructuring of Corus Group in United Kingdom and Netherlands was completed in December 2007.

Report on Financial performance

Quarter ended 31st December 2007

• Turnover

Excluding turnover of Tata Steel UK of Rs. 23,867 crores for the quarter, turnover registered an increase of Rs. 2,157 crores. The increase was mainly due to increases in Tata Steel Indian operations (Rs. 472 crores), Natsteel (Rs.1,135 crores) and Tata Steel Thailand (Rs.554 crores). The increase in Tata Steel Indian operations were primarily due to increase in prices, whereas the increase in Natsteel and Tata Steel Thailand was attributable to both price increases as well as increase in volume.

• Total Expenditure

Total expenditure for the quarter ended 31st December 2007 amounted to Rs.28,967 crores , (including total expenditure of Rs. 22,808 crores of Tata Steel UK), against Rs.4,325 crores during the previous year.

• Material cost

The material cost excluding of Tata Steel U.K of Rs. 11,253 crores increased from Rs. 1,919 crores in the previous year same period to Rs. 3,003 cr during the current year. While Increase in volume of operations as well as increase in prices of inputs (scrap) consumed by Natsteel resulted in an increase of Rs. 887 crores, Tata Steel Thailand contributed Rs. 226 crores to the increase on account of increase in volumes. Increase in Natsteel group is also due to increase in purchases of raw materials by TS Resources Australia for use by Tata Steel India.

• Other Expenditure

The Other expenditure excluding that of Tata Steel UK (Rs. 5,053 crores) was Rs.1,395 crores in Q3 FY08 against Rs. 1,133 crores in Q3 FY07. The increases were in Tata Steel Thailand, Natsteel and the Indian operations. While the increase in Indian operations by Rs. 58 crores was mainly due to increases in conversion charges for converting chrome ore and manganese ore to ferro chrome and ferro manganese / silico manganese, the increases in Natsteel and Tata Steel Thailand were mainly on account of increased volume of operations. . Major company wise breakup of the other expenditure is shown below:

Figs in Rs.crores
Other Expenditure	Q3 Fy08	Q3 Fy07	Inc/(dec)
Tata Steel	1,008	950	58
Corus	5,053	-	5,053
Natsteel	161	112	49
TSTH	159	93	65
TSAH	13	16	(3)
Others	201	92	109
Eliminations & Adjustments	(146)	(129)	(17)
Total	6,448	1,133	5,314

• Interest

The interest charges (net) were Rs. 1,081 crores in Q3 FY08 (Rs. 96 crores in Q3 FY07). Other than interest charge of Rs. 606 crores of Tata Steel UK, remaining increase is mainly due to increase in borrowings, to fund acquisition cost of Corus, by various entities including TSAH and Tata Steel India.

• Exceptional items

The employee separation compensation was Rs. 65 crores in Q3 FY08 (Q3 FY07: Rs. 50 crores). The discounting rate changed from 7.50% to 8.00 % in Q3 FY07 reducing the charge for employee separation in the last financial year while the discounting rate remained at 8.00% in the Q3 FY08 increasing the charge for employee separation compensation in Q3 FY08 against Q3 FY07.

Due to rupee appreciation against major foreign currencies in Q3 FY08, the company had a net exchange gain of Rs. 45 crores.

The actuarial gain on funds for employee benefits amounted to Rs.145 crores for the quarter ended 31st December 2007. The gain represents reduction in pension liability arising out of higher discount rate, reflecting improved yields on bonds. The gains or losses for employee benefits is required to be accounted for, through the P&L Account under Indian GAAP while this is adjusted through reserves under IFRS.

The Profit after tax inclusive of share of profits of associates and net of minority interest, amounted to Rs.1,416 crores for the quarter ending 31st December 2007 compared to Rs.1,055 crores for the corresponding period of the previous year.

Earnings per share for relevant periods are given below:

Nine months ended 31st December 2007

• Turnover

Excluding turnover of Tata Steel UK of Rs. 73,676 crores for the nine months, turnover registered an increase of Rs. 4,200 crores. The increase was mainly due to increases in Tata Steel Indian operations (Rs. 1,339 crores), Natsteel (Rs.2,372 crores) and Tata Steel Thailand (Rs.1,066 crores). The increase in Tata Steel Indian operations were primarily due to increase in prices, whereas the increase in Natsteel and Tata Steel Thailand was attributable to both price increases as well as increase in volume.

• Total Expenditure

Total expenditure for the nine months ended 31st December 2007 amounted to Rs.85,079crores, (including total expenditure of Rs. 68,576 Cr of Tata Steel UK), against Rs.12,990 crores during the previous year.

• Material cost

The material cost excluding of Tata Steel UK of Rs. 35,409 crores increased from Rs. 6,227 crores in the previous year same period to Rs. 8,062 crores during the current year. While Increase in volume of operations as well as increase in prices of inputs (scrap) consumed by Natsteel resulted in an increase of Rs. 2,014 crores, Tata Steel Thailand contributed Rs. 663 crores to the increase on account of increase in volumes. Increase in Natsteel group is also due to increase in purchases of raw materials by TS Resources Australia for use by Tata Steel India.

• Other Expenditure

The Other expenditures excluding that of Tata Steel UK (Rs.15,199 crores) were Rs.3,789 crores in 9m FY 08 against Rs. 3,059 crores in 9m FY07. The increases were primarily in Tata Steel India (Rs.348 crores), Natsteel (Rs.102 crores) and Tata Steel Thailand (Rs.180 crores). While the increases in Natsteel and Tata Steel Thailand were attributable mainly to increase in volume of operations, the increases in Indian operations were mainly due to increases in conversion charges for converting chrome ore and manganese ore to ferro chrome and ferro manganese / silico manganese Major company wise breakup of the other expenditure is shown below:

Figs in Rs.crores
Other Expenditure	9m Fy08	9m Fy07	Inc/(dec)
Tata Steel	2,871	2,523	348
Corus	15,199	-	15,199
Natsteel	394	292	102
TSTH	451	270	180
TSAH	45	16	29
Others	396	258	138
Eliminations & Adjustments	(368)	(301)	(68)
Total	18,988	3,059	15,929

• Interest

The interest charges (net) were Rs. 3,358 crores in 9mFY08 (Rs. 224 crores in 9mFY07). Other than interest charge of Rs. 2,236 crores of Tata Steel UK, remaining increase is mainly due to increase in borrowings, to fund acquisition cost of Corus, by various entities including TSAH and Tata Steel India.

Exceptional items

The employee separation compensation was Rs. 177 crores in 9mFY08 (9mFY07: Rs. 113 crores). The discounting rate changed from 7.50% to 8.00 % in nine months ended 31st December 2006 reducing the charge for employee separation in the last financial year while the discounting rate decreased from 8.25% to 8.00% in the current financial year increasing the charge for employee separation compensation in the current financial year.

A contribution of Rs. 150 crores towards development of sports infrastructure has been recognized as an exceptional expenditure during the current fiscal year.

Due to rupee appreciation against major foreign currencies in the current financial year, the company had a net exchange gain of Rs. 689 crores mainly due to revaluation the forex loans and deposits. This has been recognized as an exceptional income during the nine months ended 31st December 2007.

The actuarial gain on funds for employee benefits amounted to Rs. 6,117 crores for the nine months ended 31st December 2007. The gain is on account of recovery on bond yields used to discount scheme liabilities, and recovery in asset values of the scheme funds. The gains or losses for employee benefits is required to be accounted for, through the P&L Account under Indian GAAP while this is adjusted through reserves under IFRS.

The Profit after tax inclusive of share of profits of associates and net of minority interest, amounted to Rs.11,118 crores for the nine months ending 31st December 2007 compared to Rs.3,213 crores for the corresponding period of the previous year.

Earnings per share for relevant periods are given below:

	9mFY08	9mFY07
Basic earnings (before exceptional items)	76.48	58.44
Diluted earnings (before exceptional items)	73.05	58.44
Basic earnings (after exceptional items)	183.28	56.46
Diluted earnings (after exceptional items)	172.74	56.46
(Not annualized)