ANALYST MEET JVSL

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ANALYST MEETJVSL JISCO

• October 22, 2003

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Global Steel Outlook

• Capacity rationalisation at the backdrop of
  Merger Acquisitions mainly in Europe Japan
• Consensus amongst OECD to shut unviable
  capacities
• Developed countries shun from basic steel making
  due to higher manufacturing costs
• Thrust on infrastructure development in Russia
• Rising input costs is expected to keep the prices
  in the range of 300 per ton of HR Coils
• China continues to fuel steel demand
• Demand to grow by 4 4.5in FY 2003-04

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India Steel production
Finished Steel production has grown at a CAGR of
7.71 during the period 1990-91 till 2002-03
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Domestic HR Flats
Source CRIS INFAC
Domestic demand to grow at a rate of 7.8p.a.
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Domestic Steel Outlook

• Revival in Industrial activity
• Thrust on infrastructure development by
  government
• Pick up in Automobile and White goods sector
• Economy in Upbeat mode

Demand expected to grow by 6.5 7
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Highlights of Q2 FY 2003-04
JVSL

• Highest Pellet Production 8.53 Lac MT ( 113
  of installed capacity)
• All units achieve to 100 capacity during Q2
• Corex - 102 ( 0.408 Million MT)
• BOF - 103 ( 0.41 Million MT )
• CCP - 103 ( 0.403 Million MT)
• HSM - 103 ( 0.398 Million MT)
• Cash Profit Rs. 130 Crs
• Repayment/Prepayment Rs. 67.44 Crs
• Highest Sale of Pellet during a Quarter (Rs. 69
  Crs )
• EBIDTA 31 of Net sales
• Net Profit Rs. 23.41 crores . Net Profit
  before Tax and Extraordinary item higher by 185
  over Q1 ( Rs. 35.71 Crs against 12.53 Crs)

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JVSL
Agenda

• Highlights Performance of Q2 H1 03-04
• Management Initiatives

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Comparison Key Data
JVSL
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Key Financial Ratios
JVSL
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Production Growth HRC (Q v/s Q)
JVSL
12
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Sales Growth HRC (Q v/s Q)
JVSL
29
19
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Operational Highlights
JVSL

• All units consistently operate above rated
  capacity
• Labour Productivity 11 (from 857 TCS/Man
  Year to 947 TCS/Man Year) comparable with best
  international norms
• Refractory consumption in BOF at 6.98 (kg/t),
  Fuel consumption in HSM 142 (cum/mt), Energy
  consumption 6.28 (gcal/tcs) continues to be
  comparable with best in industry
• Benchmarking initiatives undertaken with JFE for
  improvements in HSM BOF_CCP
• Achieved 44 heats from one converter in a single
  day

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Operational Highlights contd.
JVSL
BEST PERFORMING COREX UNITS IN THE WORLD
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Operational Highlights contd.
JVSL
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2
5
11
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Total Revenue and EBIDTA
JVSL
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JVSL
Agenda

• Highlights Performance of Q2 H1 03-04
• Management Initiatives

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JVSL
Management Initiatives

• Improvement in Yield and productivity by
• - Following best operating
  maintenance practices
• - Benchmarking with the best in the
  Industry
• Aim to use all wastes/By products optimally
• Thrust on customer satisfaction with prompt
  responses
• Focus on interest reduction by continuously
  evaluating
• options of replacing expensive debt ,
  currency swaps and interst rate swaps
• Long term agreement with key suppliers for
  procurement
• of major inputs
• Thrust on skill improvement in employees through
  
• inhouse and external training programmes

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JISCO
JINDAL IRON STEEL CO. LTD.

FOCUS
Analyst Meet October 22, 2003
Mumbai
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Agenda
JISCO
A. Highlights Performance of Q2 H1 03-04
B. Management Strategy Initiative
C. Way forward
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JISCO
Major Highlights
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Key Financial Ratios
JISCO
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Production Growth GP/GC (Q v/s Q)
JISCO
8.5
11.5
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Sales Growth GP/GC (Q v/s Q)
JISCO
7.8
19.6
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Export Sales Growth GP/GC (Q v/s Q)
JISCO
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44
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JISCO
JISCO GI Exports
Presence in 40 Countries 5 Continents. Flexibili
ty to shift across markets.
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Interest to sales ratio
JISCO
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JISCO
DEBT PROFILE 30.09.2003
Rs. in Crs
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Agenda
JISCO
A. Highlights Performance of Q2 H1 03-04
B. Management Strategy Initiative
C. Way forward
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Management strategy Review
JISCO

• New Cold rolling mill commissioned , adding
  capacity of 2 lacs mt. p.a
• Additional 1.5 lacs mt Cold Rolling capacity
  added under conducting agreement
• The total cold rolling capacity is now
  7.5 lacs mt . p.a
• New galvanizing line with a capacity of 1.6 lacs
  mt. p.a expected to be commissioned by dec 03
• The total Galvanizing capacity will now be
  7.1 lacs mt. p.a

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JISCO
Management strategy review

• FOCUS cost saving of Rs. 30 Crs
• Benchmarking of Processes Practices with CORUS
  Consulting to achieve world class operating
  parameters strategic cost reduction.
• Assessment of new products and development of
  niche markets.

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Agenda
JISCO
A. Highlights Performance of Q2 H1 03-04
B. Management Strategy Initiative
C. Way forward
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Way forward
JISCO

• 6 HI CRM - Additional Cold Rolling capacity of 1
  lac tonnes by Dec 04.
• New Ultra Thin Gauge Line - Additional ultra
  thinner gauge galvanised capacity of 0.36 lac by
  Dec 04.
• Galvalume A new product with about 55 aluminum
  and provide high degree of weldability, heat
  resistance and corrosion resistance.

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JISCO
JISCO is the only steel company selected from
the Iron Steel sector
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Awards recognition
JISCO

• Engineering Export Promotion Council ( EEPC) has
  awarded JISCO for outstanding export performance
  during year 2002.

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Agenda

• Highlights Performance of Q2 H1 03-04
• Management Initiatives
• Way forward

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JISCO
Consolidation of Business JVSL JISCO

• Board approves appointment of consultants
  valuers for evaluating proposal for consolidation
  of steel business of JVSL JISCO
• Consultants Advisers
• RSM Co.
• ICICI Securities Ltd.
• Valuers
• Deloitte Haskins Sells
• ICICI Securities Ltd.

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Rationale for Consolidation of Businesses

• CREATES AN ENTITY MAKING IT ONE OF THE TOP 20
  COMPANIES IN INDIA
• In terms of
• Turnover
• Operating Profit
• Net Profit
• Market Capitalisation
• Gross Block of Assets

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Rationale for Consolidation of Businesses

• Facilitates bringing down debt gearing to less
  than 1 over 2-3 years and Cost of borrowing from
  8 to 6 through de-leveraging and replacement of
  expensive debt
• Replacement of expensive debt
• Accelerated repayment out of internal accruals

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Rationale for Consolidation of Businesses

• One of the lowest cost steel producer in the
  world
• Integrated steel making process from iron ore
  (Rs. 200/- tonne) to Galvanised products
  (Rs.30,000/- tonne)
• Rationalise cost through better utilisation of
  waste gases

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Rationale for Consolidation of Businesses

• Obtain Organic / Inorganic growth due to the
  improved financials
• Debottlenecking of operation
• Brownfield expansions
• Takeover, Mergers Acquisitions

CREATES SHAREHOLDER WEALTH ENHANCES ENTERPRISE
VALUE
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Cautionary statement
The figures provided in this presentation are
based on unaudited financial statements
pertaining to Jindal Iron steel co . Ltd
/Jindal Vijayanagar steel Ltd. However, industry
analysis Comparison statements of competitors
are taken from the published data .It has not
been possible for us to authenticate such data
hence we take no responsibility for the
authenticity for such figures. Statements in this
presentation describing the Companys objectives,
projections, expectations, estimates, or
prediction may be "forward looking statements"
within the meaning of applicable securities laws
and regulations. The actual results could
materially differ from those expressed or
implied. The important factors that could make a
difference to the Companys operations include
global and Indian demand supply conditions,
finished goods prices, cyclical demand, and
pricing in Companys principal markets, changes
in Government policies, regulations, tax regimes,
economic development within the country and
countries with which the company conducts
business.
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JVSL

• THANK YOU