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Agenda

Agenda. Industry Outlook Global Steel Scenario Domestic Steel Outlook Significant Developments at JSW Key Performance Highlights & Results JVSL JISCO Merger - Impact & Status Way Forward. Global Steel Scenario. Global steel prices expected to remain stable

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Agenda

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  1. Agenda • Industry Outlook • Global Steel Scenario • Domestic Steel Outlook • Significant Developments at JSW • Key Performance Highlights & Results • JVSL • JISCO • Merger - Impact & Status • Way Forward

  2. Global Steel Scenario • Global steel prices expected to remain stable • Lower growth in production due to shortage in availability of key raw materials • High cost of production due to increase in input costs • Impact of measures to avoid hard landing by China drops Chinese steel consumption • Cushioned by increased consumption in US, Europe, Russia, Brazil & India • Raw materials scenario expected to ease by 2006 • Oil prices continue to be a concern (even after an upward revision in the projected Industrial production figures) • Expanding scale & global presence through consolidation • Merger of ISG with LNM group - entity with 70 mtpa capacity over 14 countries Steel prices expected to remain stable over medium term

  3. Raw Material Prices Source: Company

  4. Domestic Steel Outlook • Steel consumption remains strong across all sectors • High international prices neutralise impact of reduction in duty to 5% and consequent reduction in DEPB rates • Standalone downstream facilities to be affected • India sought after steel investment destination due to the natural advantages (alongwith Brazil) • Poor infrastructure development remains a major hindrance Domestic steel sector to remain stable

  5. Agenda • Industry Outlook • Global Steel Scenario • Domestic Steel Outlook • Significant Developments at JSW • Key Performance Highlights & Results • JVSL • JISCO • Merger - Impact & Status • Way Forward

  6. Significant Developments at JSW • Expansion of Pellet capacity from 3.0 mtpa to 4.2 mtpa (May 2004) • Commissioning of dedicated 0.9 mtpa Blast Furnace (August 20, 2004) • Finished steel capacity enhanced to 2.5 mtpa • Good quality of hot metal ensures full utilisation of hot metal for steel making • Achieved rated capacity within 45 days of commissioning • Commissioning of 2nd Reheating Furnace (September 25, 2004) • Rolling capacity enhanced to 2 mtpa • Expansion strongly backed by lenders: Capacity Cost(Rs. Crs) Completion date • Finished Steel Capacity 3.8mtpa 1275 31.03.2006 • Pellet plant capacity 5.0mtpa 36 30.09.2005

  7. Significant Developments at JSW (contd..) • Settlement of ‘Right of Recompense’ with CDR lenders • All future right of recompense waived • Refinancing part of existing CDR debt by securitisation of future export receivables of US $ 75 million • Reduction in interest cost by approx. Rs.14 crores p.a. • Weighted avg. cost of debt at 8.67% (from 9.28%) • JVSL conferred with the “BEST INFORMATION TECHNOLOGY USER AWARD IN MANUFACTURING CATEGORY” by NASSCOM. • SISCOL takeover by JSW group • Facilitates entry into long steel products

  8. Agenda • Industry Outlook • Global Steel Scenario • Domestic Steel Outlook • Significant Developments at JSW • Key Performance Highlights & Results • JVSL • JISCO • Merger - Impact & Status • Way Forward

  9. Key Performance highlight Q2’ 05 - JVSL • Overall performance • Net Sales 37% - Highest ever Turnover of Rs. 1213 crs • EBIDTA 38% - Highest ever Rs. 349.88 crs • Cash Profit 87% - Rs. 243.38 crs • Net Profit 246% - Rs. 81.11 crs • Highest monthly production of Pellets in July – 336,184 t • Highest ever caster yield @ 98.49% in September, 2004 • Converter life 4,309 heats – Indian record • Accumulated losses wiped out • Debt Reduction (Rs. Crs) Q2’05 H1’05 • Repayment of loans – 99.73 209.18 • Prepayment of Loans – 69.67 91.67 Total 169.40 300.85

  10. Financial Results – Q2 FY 2005

  11. Financial Performance

  12. Key Performance highlight Q2’ 05 - JISCO • Overall exemplary performance • GP/GC Production 27% - 1.68 lac tons • GP/GC sales volume 32% - 1.82 lac tons • Net Sales 48% - Rs. 738.88 crs • EBIDTA 24% - Rs. 125.71 crs • Cash Profit 41% - Rs. 111.09 crs • Net Profit 33% - Rs. 60.45 crs • EBIDTA margins continues to be the best in Industry • Earning Per share – Rs. 13.74 per share as compared to Rs. 10.51 for corresponding quarter • Debt Reduction (Rs. Crores) Q2’05 H1’05 • Repayment of loans – 28.73 55.69 • Prepayment of Loans – 14.06 Total – 28.73 69.75

  13. Financial Results – Q2 FY 2005

  14. Agenda • Industry Outlook • Global Steel Scenario • Domestic Steel Outlook • Significant Developments at JSW • Key Performance Highlights & Results • JVSL • JISCO • Merger - Impact & Status • Way Forward

  15. Financial Results of Merged Entity – H1 FY 2005

  16. Cautionary Statement • The figures mentioned above are provisional and not conclusive. Actual results can differ from those expressed based on the disposal of the "Scheme". Readers of the statement are cautioned that the "Scheme" is under implementation and the Company assumes no responsibility for any action taken based on the above information or to update the same as circumstances change. • From the effective date of the “Scheme”, name of the Company shall be changed to “Jindal Iron & Steel Company Limited". • The aforesaid provisional unaudited combined financial results (provisional) were considered by the Board at the meeting of the Board of Directors held on 26th August, 2004 and subjected to Limited Review by the Statutory Auditors.

  17. Status of Merger • Scheme approved by Hon. High Court of Bombay on 03.09.04 • Hearing fixed on Oct. 28, 2004 at Hon. High Court of Karnataka and approval expected soon

  18. Agenda • Industry Outlook • Global Steel Scenario • Domestic Steel Outlook • Significant Developments at JSW • Key Performance Highlights & Results • JVSL • JISCO • Merger - Impact & Status • Way Forward

  19. Way forward

  20. Way forward (contd..)

  21. Way forward (contd..)

  22. Way forward (contd..)

  23. Capital expenditure program – upto 31.03.06

  24. Level of integration across value chain • Proximity to source of iron ore; 40% from own mines, to be augmented to meet entire requirements gradually. • Use of abundantly available low cost Corex coal • Captive coke from a dedicated facility • Strategic investment in coal mines • Dedicated mines for fluxes – Limestone, Dolomite, Quarzite etc. Raw Materials • Fully self sufficient in power generation using waste gases from steel plant • Oxygen & other industrial gases from JPOCL under a long term supply agreement • Adequate availability of water Utilities • Well connected by road & rail • Dedicated port at Goa • Easy access to sea ports on both East & West coast Logistics Manpower • Manned by skilled labour with high productivity Focused to achieve control over entire supply chain

  25. Conclusion • Well equipped to reap benefits of prevailing steel scenario – domestically & internationally • Committed towards strengthening the company with focused approach to face future challenges Aimed at creating Value for all stakeholders

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