1. 2 Agenda a) Industry Outlook Global Steel Scenario Domestic Steel Outlook b) Significant Developments at JSW c) Key Performance Highlights & Results

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Agenda

a) Industry Outlook Global Steel Scenario Domestic Steel Outlook

b) Significant Developments at JSW

c) Key Performance Highlights & Results JVSL JISCO

d) Merger - Impact & Status

e) Way Forward

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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

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Raw Material Prices

Raw Material Units 2003 CurrentIron Ore FOB - USD/mt 21 53 Coal FOB - USD/mt 42 125 Coke FOB - USD/mt 110 250 Scrap FOB - USD/mt 103 330 FeMn-MC Rs/PMT 39,000 65,000

Source: Company

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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 hindranceDomestic steel sector to remain stable

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Agenda





e) Way Forward

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Significant Developments at JSW

a) Expansion of Pellet capacity from 3.0 mtpa to 4.2 mtpa (May 2004)

b) 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

c) Commissioning of 2nd Reheating Furnace (September 25, 2004) Rolling capacity enhanced to 2 mtpa

d) 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

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Significant Developments at JSW (contd..)

e) Settlement of ‘Right of Recompense’ with CDR lenders All future right of recompense waived

f) 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%)

g) JVSL conferred with the “BEST INFORMATION TECHNOLOGY USER AWARD IN MANUFACTURING CATEGORY” by NASSCOM.

h) SISCOL takeover by JSW group Facilitates entry into long steel products

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Agenda





e) Way Forward

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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

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Financial Results – Q2 FY 2005(Rs.Crore)

Quarter Quarter Q on Q PARTICULARS Ended Ended Change %

30-09-2004 30-09-2003Production (MMT) 0.380 0.399 -4.86%Sales (MMT) 0.379 0.431 -11.99%Gross Sales 1,213.34 908.61 33.54%Excise 77.78 82.63 -5.87%Net Sales / Income from operations 1,135.56 825.98 37.48%Other Income 1.76 3.79 -53.56%Cost Of Operations 787.44 576.20 36.66%EBIDTA 349.88 253.57 37.98%EBIDTA as % of Net sales 30.81% 30.70%Interest & Financial Charges 106.50 123.22 -13.57%Cash Profit/(Loss) 243.38 130.35 86.71%Depreciation 76.86 78.64 -2.26%Misc.Exp.Written Off 15.12 16.00 -5.50%Profit before Exceptional Items & Tax 151.40 35.71 323.97%

Exceptional/Extraordinary Item (3.21) - NAProfit before tax 148.19 35.71 314.98%Current Tax 11.62 - NADeferred Tax 55.46 12.30 350.89%Net Profit 81.11 23.41 246.48%

Ratio

- Debt Equity Ratio 2.42 4.91

- Total Debt / NCA (annualised) 5.15 10.73

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Financial Performance

1,736

2,505

3279

1,007 1,136

278

715

1086

291 350

16%

29%

33%

29%31%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2001-02 2002-03 2003-04 Q1 04-05 Q2 04-05

Rs.

cro

res

0%

5%

10%

15%

20%

25%

30%

35%

%

Net Revenue EBIDTA % of Revenue

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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

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Financial Results – Q2 FY 2005(Rs.Crore)

Quarter Quarter Q on Q PARTICULARS Ended Ended Change %

30-09-2004 30-09-2003Production (Lacs MT) 1.679 1.325 26.72%Sales (Lacs MT) 1.816 1.372 32.36%Gross Sales 758.95 522.55 45.24%Excise 20.07 22.28 -9.92%Net Sales / Income from operations 738.88 500.27 47.70%Other Income 1.57 1.45 8.28%Cost Of Operations 614.74 400.10 53.65%EBIDTA 125.71 101.62 23.71%EBIDTA as % of Net sales 17.01% 20.31%Interest & Financial Charges 14.62 22.83 -35.96%Cash Profit/(Loss) 111.09 78.79 41.00%Depreciation 13.07 11.68 11.90%Misc.Exp.Written Off 2.74 4.87 -43.74%Profit before tax 95.28 62.24 53.08%Current Tax 34.61 20.12 72.02%Deferred Tax 0.22 (3.34) -106.59%Net Profit 60.45 45.46 32.97%

Ratio - Debt Equity Ratio 0.61 1.32 - Total Debt / NCA (annualised) 1.64 3.30

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Agenda





e) Way Forward

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Financial Results of Merged Entity – H1 FY 2005(Rs. Crores)

Q2 04-05 H1 04-05 FY 03-04Gross Sales 1,972.30 3,640.47 5,708.10 Excise Duty & Inter Company Sales 473.74 858.86 1,353.44 Net Sales / Income from operations 1,498.56 2,781.61 4,354.66 Other Income 2.16 4.89 31.78 Cost Of Operations 1,024.05 1,884.06 2,886.70 EBIDTA 476.67 902.44 1,499.74 EBIDTA as % of Net sales 31.81% 32.44% 34.44%Interest & Financial Charges 120.23 245.96 488.35 Cash Profit/(Loss) 356.44 656.48 1,011.39 Depreciation & Misc Exp 105.01 209.48 439.05 Profit before Exceptional Items & Tax 251.43 447.00 572.34

Exceptional/Extraordinary Item (3.21) (3.21) 390.76 Profit before tax 248.22 443.79 963.10 Current Tax 19.46 34.79 35.00 Deferred Tax 95.97 168.14 125.90 Net Profit 132.79 240.86 802.20

Debt : Equity 2.00 2.00 2.38

Total Debt / NCA (annualised) 3.70 3.70 4.94

Basic EPS 9.68 17.44 60.68

Book Value 156.58 156.58 135.56

Price / Book Value 1.60 1.60 1.84

Note: a) The merged figures to be read with cautionary statementb) Unaudited Combined Financial Results of JVSL & JISCO (giving impact of the Scheme of Merger)

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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.

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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

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Agenda





e) Way Forward

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Way forwardSr. No. Initiatives Status Impact

a)

i) Increase in Pellet Plant capacity from 4.2 mtpa to 5 mtpa at Rs. 36 crores

Scheduled for completion by Sept 2005; to be financed out of internal accruals

Additional pellets for sale improving EBIDTA

ii) Increase in rolling mill capacity from 2.0 mtpa to 2.5 mtpa with HSM modernisation at Rs. 200 crores

HSM modernisation scheduled for completion by March 2006

Increamental EBIDTA

iii) Increase in Finished steel capacity from 2.5 mtpa to 3.8 mtpa at a cost of Rs. 1275 crores

Scheduled for completion by March 2006; Financed by Internal Accruals - Rs. 425 crs & Debt - Rs. 850 crs.

Significant improvement in EBIDTA on commissioning of the additional capacity

Capacity Enhancement

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Way forward (contd..)Sr. No. Initiatives Status Impact

b)

i) Increase in CR capacity by 1,00,000tpa & GP capacity (Flux line) by 40,000 tpa

Scheduled for completion by March 2005

Increamental EBIDTA partly in Q4, FY 2005 and fully thereafter

ii) Setting up of new Colour coated line 1,00,000 tpa

Scheduled for completion by September 2005

Increamental EBIDTA from new value added segement

Value addition

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c)

i) Commissioning of dedicated Coke manufacturing facility to meet entire Coke requirement

Heating up commenced; due to be commissioned in phases - Nov' 04 to Feb' 05

Benefits of cost reduction is expected to reflect partly in Q3 & Q4 FY 2005 and fully thereafter

ii) Strategic tie-up for low cost Power from JSW power Ltd. - 200 MW using waste gases from the steel plant

Commissioning of first 100 MW by January 2005 & 2nd 100 MW by September 2005

Reduction in power tariff will improve EBIDTA

iii) Strategic tie-up for dedicated port facilities

Already in place Reduction in turnaround time thus reducing freight cost; ability to handle large size vessels

Increased Vertical Integration

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d)

i) Refinancing of high cost debt by Securitisation

Raised $ 75 million in Sept' 04 at low cost to prepay part of existing CDR debt

Reduced the weighted average cost of debt to 8.67% from 9.28%

ii) Reduce gearing ratio Debt reduction in H1 FY2005 by Rs. 371 crs; committed to repay additional Rs. 800 crs by March 2005 & over Rs. 1000 crs by March 2006

Debt equity ratio below 1:1 by March 2006 evenafter raising additional debt of Rs. 850 crores for financing expansion to 3.8 mpta

Improved financial profile

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Capital expenditure program – upto 31.03.06

Sr. No.

Projects Additiona Capacity

Cost

(mtpa) Internal Accruals

Debt

a) Expansion of finished steel capacity

1.30 1,275 425 850

b) Pellet Plant expansion 0.80 36 36 - c) HSM Modernisation 0.50 200 200 - d) New Lines :

CR / CC GP (flux line)

0.10 0.04

115 115 -

e) Normal Capex 220 220

Total 1,846 996 850

Financing Plan(Rs. Crores)

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Level of integration across value chain

Raw Materials

• 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.

Utilities

• 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

Logistics

• Well connected by road & rail

• Dedicated port at Goa

• Easy access to sea ports on both East & West coast

Manpower • Manned by skilled labour with high productivity

Focused to achieve control over entire supply chain

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Conclusion

a) Well equipped to reap benefits of prevailing steel scenario – domestically & internationally

b) Committed towards strengthening the company with focused approach to face future challenges

Aimed at creating Value for all stakeholders

Documents

1. 2 Agenda a) Industry Outlook Global Steel Scenario Domestic Steel Outlook b) Significant Developments at JSW c) Key Performance Highlights & Results