January 2011

Steel Authority of India Limited

Corporate Presentation
Strictly private and confidential

Safe Harbour
This document is for informational purposes only and the information contained in this document does not constitute or form any part of any offer, invitation, solicitation or recommendation to purchase or subscribe for any securities (including those described herein) in any jurisdiction, including India and the United States, and neither the issue of the information nor anything contained herein shall form the basis of, or be relied upon in connection with, any investment decision, contract or commitment on the part of any person to proceed with any transaction. Nothing in the document shall constitute and/or deem to constitute an offer or invitation to an offer, to be made to the Indian public or any section thereof, and this document and its contents should not be construed to be a prospectus in India or the United States. The Equity Shares have not been recommended by any U.S. federal or state securities commission or regulatory authority. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (U.S. Securities Act) or any state securities laws in the United States, and, may not be offered or sold within the United States, or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the U.S. Securities Act (Regulation S), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. There will be no public offering of the Equity Shares in the United States. This document has not been and will not be reviewed or approved by any statutory or regulatory authority or by any stock exchange in India or the United States or otherwise in any jurisdiction. Any representation to the contrary is a criminal offence in the United States and may be a criminal offence in other jurisdictions. This presentation does not comply with the disclosure requirements prescribed by any applicable authority in relation to a public issue of securities in India and/or the listing of such securities on the Indian py q p y y pp y p g stock exchanges. This document has been prepared by and is the sole responsibility of the Company. The information and opinions contained in this presentation are current, and if not stated otherwise, as of the date of this presentation. We undertake no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. Certain statements made in this presentation may not be based on historical information or facts and may be "forward looking statements", including those relating to the Companys general business and expansion plans, planned projects and strategy, future financial condition and growth prospects, future developments in industry and competitive and regulatory environment. Such forward-looking statements are not indicative or guarantees of future performance. A f f t f Any forward-looking statements i thi presentation are subject t risks and uncertainties th t could cause actual results t diff materially f d l ki t t t in this t ti bj t to i k d t i ti that ld t l lt to differ t i ll from th those th t that may be inferred to being expressed in, or implied by, such statements. Any forward-looking statements, projections and industry data made by third parties included in this presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. The Company expressly disclaims any obligation or undertaking to release any update or revisions to any forward-looking statements in this presentation as a result of any change in expectations or any change in events, conditions, assumptions or circumstances on which these forward-looking statements are based. None of the Company, its Directors, Promoter or affiliates, nor any of its or their respective employees, advisers or representatives or any other person guarantees that the assumptions underlying such forward-looking statements are free from errors nor does either accept any responsibility for the future accuracy of the forward-looking statements contained in this presentation or the actual occurrence of the forecasted developments. You should not place undue reliance on forward-looking statements, which speak only as of the date of this document. Any prospective investors in securities of the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and the nature of the securities. This document is strictly confidential and may not be copied or disseminated, in whole or in part, and in any manner or for any purpose. No person is authorized to give any information or to make any representation not contained in or inconsistent with this document, and if given or made, such information or representation must not be relied upon as having been authorized by any person. Failure to comply with this restriction may constitute a violation of the applicable securities laws. The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about and observe any such restrictions. The information contained in this document is not intended to be viewed by, or distributed or passed on (directly or indirectly) to, and should not be acted upon by any class of persons other than those who have professional experience in matters relating to investments or to those persons to whom it may otherwise be lawfully communicated (in each case referred to as "Relevant Persons"). It is a condition of your receiving this document that you represent and warrant to the Company and each of the BRLMs that (i) you are a Relevant Person; and (ii) you have read and agree to comply with the contents of this notice In the event that a person who is not a Relevant Person receives this document notice. document, such person should not act or rely on this document and should return this document immediately to the Company. By participating in this presentation or by accepting any copy of this document or the slides presented, you agree to be bound by the foregoing limitations. Steel Authority of India Limited (the Company) is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offering (the "Offer) of its equity shares (the "Equity Shares and proposed to file a Red Herring Prospectus (RHP) with the Registrar of Companies, National Capital Territory of Delhi and Haryana. The RHP, when filed, will be available on the website of the SEBI at www.sebi.gov.in and the websites of the Book Running Lead Managers (the "BRLMs). Any potential i t ti l investor should note that investment in equity shares involves a high degree of risk. For details, potential i t h ld t th t i t ti it h i l hi h d f i k F d t il t ti l investors should refer t th RHP including the section titled t h ld f to the RHP, i l di th ti titl d Risk Factors.

Section 1
Overview of SAIL

SAIL Largest Steel Producer in India(a)

FY2010 saleable steel production of 12.63MT Identified modernisation and expansion plan expanding 20.23MTPA capacity to 20 23MTPA of saleable steel by FY2013 Second largest iron ore mining operations in India

One of only four PSEs in India accorded Maharatna status FY2010 saleable steel sales of 12.1MT, revenue of US$8,954m and net income of US$1,511m Market capitalization of US$16.9 billion(b)

Notes: USD-INR exchange rate of 45.31 as on January 6, 2011 (a) For the year ended 31-Dec-09. Source: Joint Plant Committee, Ministry of Steel (b) Market capitalization as on January 6, 2011, Bombay Stock Exchange

...With an Established and Successful Operating Track Record...

Over 50 years of experience in the steel sector

1954
Hindustan Steel Ltd (HSL) established HSL comprised p Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant and Alloy Steels Plant

1973

1978

1986

1989

1992

1995

1996

1997

1998

2006

2010

SAIL became an Maharashtra operating Elektrosmelt company Limited (MEL) taken Steel making g over as a subsidiaries subsidiary dissolved and merged into SAIL Demerger of HSCL and NMDC as independent companies Indian Iron & Steel Company (IISCO) taken over as a subsidiary

Listing of SAIL on Bombay Stock Exchange (BSE) Listing of SAIL on National Stock Exchange of India (NSE)

SAIL accorded Navratna status

IISCO merged with SAIL SAIL embarked on the modernization and expansion plan

SAIL incorporated as a holding company for HSL, Bokaro Steel Ltd, Salem Steel Ltd, Hindustan Steel Works Construction Ltd (HSCL), Bharat Coking Coal Ltd (BCCL) N ti (BCCL), National Mi l Mineral D l Development l t Corporation Ltd (NMDC)

Visvesvaraya Iron & Steel Ltd (VISL) taken over as a subsidiary

Listing of SAIL GDRs on the London Stock Exchange E h

VISL merged with SAIL

SAIL accorded Maharatna status

...and Strategically Located Operations

Manufacturing facilities g
Current nameplate capacity (MTPA) FY10 production (MT) Planned installed capacity (MT)(a)

Total current saleable steel capacity p y FY10 saleable steel production Total saleable steel capacity post expansion

11.20MTPA 12.63MT 20.23MTPA

Plant
Integrated steel plants Bhilai Steel Plant Durgapur Steel Plant Rourkela Steel Plant Bokaro Steel Plant IISCO Steel Plant Special steel plants Salem Steel Plant Alloy Steels Plant Visvesvaraya Iron & Steel Plant Total
Note: (a)

3.15 1.59 1.67 3.78 0.55 0 55

4.37 1.88 2.00 3.46 0.41 0 41

6.56 2.12 3.99

Madhya Pradesh Jharkhand West Bengal

4.18 2.39 2 39
Odisha Maharashtra Chhattisgarh

0.18 0.18 0.10 11.20

0.23 0.18 0.10 12.63

0.34 0.43
Karnataka

Integrated steel plants Alloy and special steel plants Ferro alloy plant
Tamil Nadu

0.22 20.23

Iron ore mine Limestone mine Dolomite i D l it mine Coal mine

Capacity numbers refer to saleable steel capacity After implementation of modernisation and expansion plan

Note: Map not to scale

Section 2
Positive Sector Dynamics

India A High Growth Economy

India one of the fastest growing economies
12% 10.5%

Re GDP growth eal

10% 8% 6% 4% 2% 0%

9.6% 9.5%

9.7%

8.4% 8.1%

7.5% 4.1% 4.1% 5.0% 3.9% 3.8% 4.0% 4.3% 4.0%

2.7% 2.2% 2.4%

China

India

Brazil 2011P

Mexico 2015P

Russia

Advanced economies

Note: Source:

2010P Annual percentage change in GDP at constant prices International Monetary Fund, World Economic Outlook, October 2010 update

...with rapidly increasing infrastructure spend

Sector-wise infrastructure investment
600

Infrastructure investment as % of GDP

Infrastruc cture investment as % of GDP

514.0

10% 8.2% 8% 6% 4% 2% 0% FY08 FY09 FY10 FY11 6.0% 6.5% 7.3%

9.3%

(US$ bn)

400

217.9
200 0 X plan
Electricity (incl. NCE) Railways (incl. MRTS) Ports Gas Roads and Bridges Irrigation (incl. Watershed) Airports

XI plan
Telecommunication Water Supply and Sanitation Storage

FY12

Note: Source:

USD-INR of INR40/$ Planning Commission

Source:

Planning Commission

With a High Growth Potential Steel Market

Steel consumption in India has been growing rapidly...
70 60 50 40 30 20 10 0 49.1 55.5 53.6 57.6

(MT)

31.2

34.0

34.2

39.2

43.1

2001

2002

2003

2004

2005

2006

2007

2008

2009

Source:

World Steel Statistical Yearbook 2010

...with growth projected to sustain

15% 13.6%

However, per capita consumption is low

2009 per ca apita consumption (kg)

500 400 300

447.0 447 0

422.1

10%

8.2%

5%

0% 2010 2011

India is expected to be the 3rd largest steel consuming country after China and USA by 2011

Dem mand growth

203.1 200
100 0 Japan China US

193.3

49.8

World

India

Source:

World steel short range outlook, October 2010, World Steel Association

Source:

World Steel Association Statistical Yearbook 2010

Driven by Large, Growing End Markets

Strong growth on the back of improved economic conditions and strong infrastructure spending by the government Rising Ri i construction activity i the real estate, i f i i i in h l infrastructure and i d d industrial segments expected to b i l d boost the h demand for long steel products

Construction

Automobile

Sector has grown at a CAGR of 10.34% from FY2004 to FY2010(a) Prime demand driver for alloy steel y Production of passenger and commercial vehicles expected to reach 4.9 million and two and three-wheeler production expected to reach 36.5 million in 2016(b) Growth in auto components resulting from growth in automobiles demand to further support the growth of steel industry

Consumer Durables

Sector expected to witness robust growth on account of rising consumer income levels Domestic appliances market expected to drive demand for flat steel products

Oil & Gas Industry

Major consumer of steel tubes and pipes Expected to increase demand for long products, such as pipelines Expected to drive demand for steel used in the construction market due to increases in refinery capacity(b)

Machinery & Equipment

Major consumer of steel products and has been witnessing strong growth

(a) Source: Society of Indian Automobile Manufacturers (b) Source: India Brand Equity Foundation (Ministry of Commerce and Industry)

Section 3
SAIL: Well Positioned to Benefit

Leadership Position in India

Largest steel producer in India
Crude steel
SAIL Tata Steel JSW Rashtriya Ispat Essar Ispat JSPL 5% 5% 4% 3% 8% 10% 21% SAIL Tata Steel JSW Rashtriya Ispat Essar Ispat JSPL 2% 5% 5% 4% 8% 8%

Finished steel
17%

with leadership across products

Non-flat products
SAIL Rashtriya Ispat Tata Steel JSW JSPL Ispat Essar
Note: Source:

Flat products
10% 10% SAIL JSW Tata Steel Essar E Ispat JSPL Rashtriya Ispat 0% 2% 12% 10% 9% 15% 23%

5% 2% 1% 0% 0%

Share of production for sale for FY2010 Joint Plant Committee

11

Fully Integrated Producer with Strategically Located Operations...

Bhawanthpur Satna Madhya Pradesh Kuteshwar Hirri Nandini Baraduar Bhilai Steel Plant Odisha Dallij Rajhara Barsua Taldih Kalta Tulsidamar

Bokaro Steel Plant

Chasnalla Jitpur Ramnagore

Jharkhand Chhattisgarh Purnapani

IISCO Steel Plant West Bengal Bolani Thakurani Chiria, Gua, Kiriburu Meghahatuburu Rourkela Steel Plant Durgapur Steel Plant

Maharashtra

Integrated steel plants Alloy and special steel plants

Bhadigund

Kenchapura

Ferro alloy plant Iron ore mine Limestone mine Dolomite mine

Karnataka

Coal mine

Five integrated steel plants and three special steel plants located principally in eastern and southern India
Tamil Nadu

Easy and cost efficient access to raw materials

Note: Map not to scale

Ready supply of substantial portion of raw materials

12

...and Access to Large Resource Base

Access to large captive raw materials base

Second largest mining operations in India in FY2010 99.9% of iron ore requirement in FY2010 through captive supplies Plans to ramp up existing mines to meet post expansion requirements 41% of dolomite and 38% limestone requirements in FY2010 met through captive sources Developing new coking coal mines at Tasra and Sitanala

Large land bank

Sizeable land bank provides flexibility for expansion and growth at existing locations

Relative self sufficiency in power p

Owns and operates four captive power plants (aggregate capacity of 211MW) 50% interest in four captive power plants (aggregate capacity of 1,116MW) Approximately 70% of FY2010 power requirement sourced through captive sources

Large skilled L kill d manpower base

114,000 full-time employees including over 15,000 executives Reducing employee cost / tonne - expanded capacity planned to be operated with the current number of employees b f l Management Training Institute plays key role in enhancing the managerial competence of executives Emphasis on skill based training to remain competitive

13

Diversified Product Mix Supported by Strong Distribution and Sales Network

Comprehensive product portfolio
HRC CRC Wire Rails
Jammu & Kashmir

Strong distribution and sales network

37 branch sales offices and 67 warehouses Over 2,500 dealers across 630 districts
Arunachal Pradesh Sikkim

Himachal Pradesh Punjab Uttaranchal

Steel Plate

Steel Bar

Sections

TMT

Haryana Delhi

Rajasthan

Uttar Pradesh Bihar Assam Nagaland

Manipur

FY2010 sales breakup by products

Semis 10.9% Rods / bars 16.7% Coated products 2.0% CR coils / sheets 6.7% Structurals 7.1% 7 1% Railway materials 7.3% HR coils / sheets 28.2% Pipes 0.5% Plates 20.6%

Gujarat

Madhya Pradesh

Jharkhand West Bengal

Tripura Mizoram

Maharashtra

Chhattisgarh

Orissa

Andhra Pradesh

Karnataka

Corporate office CMO Headquarters Tamil Nadu Kerala Regional offices Departmental warehouse Consignment agency yard Shipping office Customer contact office

Branch sales offices 1. Northern region 2. Eastern region 3. Western region 4. Southern region

Note: Map not to scale

14

In-house R&D Centre and Captive Engineering Shops

Strong management focus on R&D initiatives providing competitive edge
Improving processes and products New technologies and products

Cost reduction

Energy conservation

Quality improvement

Automation

Product development and application

Equipped with over 300 scientists and engineers Strong track record of developing and commercializing improved processes and products

Multiple t t M lti l patents (58 li patents) and copyrights fil d t d t live t t ) d i ht filed to date Bagged 10 prestigious awards for excellence in FY2010 Q&T plates for gun carriages DMR 249 Gr. B Q&T plates used in aircraft carrier ships Roof / rock bolt TMR rebars used in mines and tunnels

Significant products developed include:

Captive engineering shops and refractory plants enable refurbishment and manufacturing of certain costly equipment and spares in-house

15

Experienced Management Team Supported by Strong Execution Team

Experienced Management Team

C S Verma
Chairman

Soiles Bhattacharya
Director(Finance)

B B Singh
Director (Personnel)

Shuman Mukherjee
Director (Commercial)

Devinder Kumar
Executive Director

..Supported by Strong Execution Team

V K Arora
Executive Director (In-Charge), Bhilai Steel Plant

P K Bajaj
CEO, Durgapur Steel Plant

S N Singh
CEO, Rourkela Steel Plant

S S Mohanty
CEO, Bokaro Steel Plant

N K Jha
Executive Director (In-Charge), IISCO Steel Plant

16

Responsible Corporate Citizen

Focus on CSR initiatives Environmental Protection and Conservation

Measures undertaken to minimize environmental impact include

Established environmental department at each of the facilities Installed various types of anti-pollution equipment for the treatment of waste water, air pollution, solid waste and noise pollution emitted from our production facilities Cu e t y us g ode , c ea e technology Currently using modern, cleaner tec o ogy in modernisation and expansion projects Objective to plant over 20 million trees

Implementing various schemes to improve the quality of life of the local population in vicinity of our steel plants Focus on Education & Health issues Adopted 79 villages across eight states that are gradually being developed as model steel villages (MSV). 54 MSVs have been completed Our CSR programme has received various awards and accolades

Committed to minimising waste generation and promoting recovery, recycle and reuse y, y Shown a positive trend recently in reduction in air emissions, effective water and effluent management and enhanced waste utilization Ongoing modernisation and expansion p g g g p programme includes pollution control measures and equipment in new facilities as well as certain upgrades to our existing facilities

17

Section 4
Growth Strategies

Consolidate Leadership Position through Capacity Expansion and Modernization

Ongoing modernization and expansion at key facilities

Initiated a modernisation and expansion plans, over last four years, in order to maintain leadership position in the Indian steel market Board approved investment of approximately Rs. 701,690 m of which Rs. 220,890m incurred as of Dec 31, 2010 , , Key objectives of the plan include: Expansion of saleable steel capacity to 20.23MTPA Expansion of hot metal capacity to 23.46MTPA Modernise facilities by achieving entire production of steel through Basic Oxygen Furnaces (BOF) and approximately 96% by continuous casting Establishing up to ten steel processing units to increase production of finished steel
MTPA

7.0 6.0 5.0 4.0 3.0

6.56

3.41 3.99 3 99

4.18 0.40

2.12 2.0 3.15 1.0 10 0.0 Bhilai 0.53 1.59

2.32 3.78

2.39

1.84 1.67 0.55 0.22 0.12 0.34 0.16 0.18 0.10 0.43 0.25 0.18

Durgapur Rourkela Bokaro Current

IISCO Visvesaraya Salem Alloy Steels Under expansion

supported b d t d by development of mines t meet additional raw material requirements l t f i to t dditi l t i l i t

16.0 14.0

Annual production capacity of mines expected to increase by 10 12 MTPA to 39MTPA to meet expanded capacity 4MTPA pellet plant planned at Gua mines Plans to develop new mines at Rowghat and Taldih and expand production potential of Chiria

12.0

10.0 6.5 4.1 4.3 4.3 2.4

10.0 7.0 5.5 4.3

MTPA

8.0

4.0

0.0 Bolani Meghahatuburu Kiriburu Current Gua Taldih Chiria Rowghat Post-expansion

19

Increase Focus on Finished Steel

Focus on value added products
FY2010 product mix
Value added steel 37.0%
Rods / bars 16.7% Coated products 2.0% CR coils / sheets 6.7% Other finished steel products 63.0% Structurals 7.1% Railway materials 7.3% HR coils / sheets 28.2% Other finished steel products 45.0% Coated products 4.8% CR coils / sheets 10.4% Structurals 15.0% Railway materials 7.4% HR coils / sheets 22.1%
Semis 10.9% Pipes 0.5%

Targeted post expansion product mix

Pipes 0.6% Rods / bars 23.3% Plates 16.4%

Plates 20.6%

Value added steel 55.0%

Key products to be added

Autograde CR Products, Galvanised Coils / Sheets Plates / Pipes to meet upto API 80 Grade specification p p p Universal Beams / Heavy Beams in the sizes upto1100mm to support increasing infrastructural requirements Rails for Metro-Railways Increased production of Rails to meet the increasing requirements of Indian Railways Quantum jump in Rounds and Structural p j p production leading to elimination of entire semi-finished steel g Wider Plates in the size of 4,300mm

20

Continuous Improvement in Operating Efficiencies

Reduction in energy consumption
7.2 7.16

Gradual reduction in coke rate

545 540 541 533
Coke rate (kg/thm) r

Specific ene ergy consumption (Gc / TCS) cal

7.1 7.0 6.9 6.8 6.95

535 530 525 520 515 510 505 FY07

6.74 6 74

521 517 1

6.72

6.7 6.6 6.5 FY07 FY08 FY09 FY10

FY08

FY09

FY10

Improvement in manpower productivity

240

Tonnes of crude steel / man / year

226

Focus on raising continuous casting and Basic Oxygen Furnaces (BOF) steel making

220 200 180 160 140 120 100 80 FY01 FY05 FY10 98 134

Likely to require less energy Permits more automated process and greater flexibility Improved yield from crude to saleable steel y

Implementing new technologies to use Indian coal in plants Installing coal dust injection systems at Rourkela and Bokaro to use non-coking coal in furnaces Implement programmes designed to increase worker productivity through retraining and rationalization

21

Augment Raw Material Base and Improve Quality of Inputs

Aim to expand annual production capacity of iron ore mines by 10 12 MTPA Plan to develop new mines at Rowghat and Taldih and expand production of Chiria mines New 4MTPA pellet plant planned to enable use of Iron Ore fines

Iron ore

Developing new coking coal mines at Tasra and Sitanala in Jharkhand 35 3-5 year contracts to cover 95% of import requirements, quarterly pricing w e f FY2011 requirements w.e.f Exploring new alliances / linkages and acquisitions for thermal and coking coal mines

Coking coal

International Coal Ventures Pvt Ltd - JV with CIL, RINL, NMDC and NTPC set-up to acquire coal assets globally

Exploring technologies which do not require coking coal / require less coal in steel manufacturing JV with Tata Steel Limited to acquire and develop coal blocks and mines in India

Limestone & Dolomite D l it

Entered into long-term agreements with dolomite and limestone producers to meet remaining requirements MoU to jointly develop limestone mine in Himachal Pradesh with expected capacity of 3MTPA

Increasing captive power generation, through JVs with NTPC and DVC, to ensure dependable supply of power and substantial reduction in energy costs Entered into a MoU with Larsen & Toubro to develop and implement captive or independent power plants to meet future power requirements from FY2012 to FY2020 Installation of coal dust injection systems at Rourkela and Bokaro to allow use of non-coking coal in furnaces Exploring technical and economic feasibility of employing ITmk3 furnace technology to reduce input of coking coal p g y p y g gy p g Setting-up of captive pellet plant

Power

Others

22

Strategic Alliances to Further Support Growth Initiatives

Area of focus
Technological upgradation

Key Strategic Alliances / Partnerships

Key Objectives
MoU with Posco to explore utilizing FINEX technology and manufacture and commercialization of CRNO steel MoU with Kobe Steel to explore employment of ITmk3 single step furnace technology at ISPs International Coal Ventures Ltd set up as JV with CIL, RINL, NMDC and NTPC to acquire coal assets globally JV with MOIL to produce ferro-manganese and silico-manganese to lower cost of steel production MoU with NMDC to jointly develop limestone mine in Himachal Pradesh with expected capacity of 3MTPA S&T Mining JV with Tata Steel for acquisition and development of coal blocks/mines JVs with NTPC and DVC for power plants for captive consumption MoU with L&T to develop and implement captive or independent power plants to meet future power requirements 26% stake in Bokaro Jaypee Cement Ltd which is constructing a 2.1MTPA 2 1MTPA cement plant at Bokaro t l t tB k 26% stake in Bhilai Jaypee Cement Ltd which is constructing a 2.2MTPA cement plant at Bhilai JV with Shipping Corporation of India for shipping of imported coking coal JV for manufacture of specialized wagons JV with Tata Steel to promote e-commerce activities in steel and related areas

Raw Materials

Energy

Cement

Shipping Wagon Manufacturing E-Portal

23

Section 5
Robust Financial Performance

Financial Performance

Net sales
12,000 10,000 9,538 8,954

EBITDA
3,000 2,500 2,000 2 000 1,500 1,000 500
FY09 FY10 1H FY10 1H FY11

2,692 2,457 25.8% 30.1% 27.5% 27 5% 1,149 21.9% 949

(US$m m)

8,000 6,000 4,000 2,000 0 4,171 4,333

0 FY09 FY10 EBITDA 1H FY10 1H FY11 % Margin

35% 30% 25% 20% 15% 10% 5% 0%

Net income
1,600 1,400 1,200 1,378 1,511 1 511 15.8% 16.9% 14.5% 661 500 8% 4% 0% FY09 FY10 1H FY10 1H FY11 11.5% 20% 16% 12%

(US$m)

ROE(1) and ROCE(2)

25.0% 24.0% 22.0% 20.3% 20.0% 23.3%

( (US$m)

1,000 800 600 400 200 0

15.0% FY09 FY10 ROE ROCE (1) Calculated as net income/Networth (2) Calculated as profit before tax/(Net fixed assets (excluding CWIP) + working capital)

Net income % Margin Note: US$ INR of 45.31 as on January 6, 2011 Note: H1FY10 and H1FY11 numbers are standalone

25

Financial Performance (continued)

Sound leverage position
Net debt
0 (500)

Debt/Equity
0.60x 0.50x 0.40x (1,128) 0.30x 0.20x 0.10x (2,175) FY09 FY10 0.00x FY09 FY10 0.31x 0.52x

Debt/EBITDA
1.60x 1.20x 0.80x 0.40x 0.00x FY09 FY10 0.78x 0 78x 1.45x

(US$m m)

( , (1,000) ) (1,500) (2,000) (2,500)

Strong cashflow generation

Cash flow from operations
1,600 1,200 1,364 1,125

Working capital(1)
7,000 6,000 5,000 5,960 6,428

Cash balance(2)
6,000 5,000 4,093 5,021

(U US$m)

(U US$m)

800 400 0 FY09 FY10

4,000 3,000 3 000 2,000 1,000 0 FY09 FY10

(U US$m)

4,000 3,000 2,000 1,000 0 FY09 FY10

Note: US$ INR of 45 31 as on January 6 2011 45.31 6, (1) Calculated as current assets Net current liabilities Net provisions (Short term) (2) Calculated as Cash & Bank balances + marketable investment in shares

26

Section 6
Summary

Key Strengths

Experienced management supported by strong execution team

Largest steel producer in g p high growth markets of India

1 2

Strategically located fully integrated operations

Robust financial position

Diversified product mix supported by strong marketing and distribution network

5
Ongoing O i modernization and expansion plan

28

Appendix

Details of Operations

Saleable steel production

Nameplate Capacity (in MTPA) FY2010 (in MT) FY2009 (in MT)

Plant Integrated Steel Plants

Location

Primary Products

Bhilai Steel Plant (BSP) Bhilai, Chhattisgarh 3.15 4.37 4.49

Plates, rails/long rails; h Pl t il /l il heavy structural (b t t l (beams; channels, angles), crane h l l ) rails, merchant products (angles, channels, rounds and TMT bars), wire rods (TMT, plain and ribbed); semis Railway wheels & axles; TMT bars and rounds, skelp; medium structural (beams; channels, angles), semis Plates, HR coils/plates; CR coils/sheets; GP/GC sheets; ERW/SW pipes, CRNO electrical steel, tin plates, special plates for defence HR coils/sheets/plates; CR coils/sheets; GP sheets/coils and GC sheets; TMBP, slabs Heavy/medium/light structural (beams, channels, angles),bulb bars (defence), special sections (Z-bar, Z-piling, MS Arch), heavy & light rails, rounds/bars

Durgapur Steel Plant (DSP) Rourkela Steel Plant (RSP) Bokaro Steel Plant (BSPL)

Durgapur, West Bengal Rourkela, Rourkela Odisha Bokaro, Jharkhand

1.59 1.67 1 67 3.78

1.88 2.00 2 00 3.46

1.79 1.99 1 99 3.38

IISCO Steel Plant (ISP) Sub Total Special Steel Plants Alloy Steels Plant (ASP) Salem Steel Plant (SSP) Visvesvaraya Iron & Steel Plant (VISP) Sub Total Total

Burnpur, West Bengal

0.55 10.74

0.41 12.13

0.40 12.05

Durgapur, West Bengal Salem, Tamil Nadu Bhadravati, Karnataka

0.18 0.18 0.10 0.46 11.20

0.18 0.23 0.10 0.50 12.63

0.17 0.18 0.09 0.44 12.49

Alloy steel blooms, bars, plates, forged products, stainless steel slabs and armour grade slabs (for special plates for defence) HR & CR stainless steel products, HR carbon steel products, coin blanks Bars, rounds, billets, blooms, and forged alloy & special steel products

30

Financial Performance

Net sales
500,000 400,000
(INRm)

EBITDA
432,187 405,726

125,000 100,000 100 000

111,307 30.1%

121,978 27.5% 25.8% 52,046 21.9% 42,992

40% 30% 20% 10% 0%

(INRm)

300,000 200,000 100,000 0 FY09 FY10 1H FY10 1H FY11 188,990 196,323

75,000 50,000 25,000 0

FY09

FY10 EBITDA

1H FY10

1H FY11

% Margin

Net income
80,000 70,000 60,000 50,000 40,000 30,000 30 000 20,000 10,000 0 FY09 FY10 Net income 1H FY10 % Margin 1H FY11 62,453 14.5% 29,939 22,667 22 667 68,461 16.9% 20% 15.8% 11.5% 16% 12%

ROE(1)
25.0%

and

ROCE(2)
24.0% 22.0% 20.3% 23.3%

( (INRm)

20.0% 8% 4% 0% 15.0% FY09 FY10 ROE ROA (1) Calculated as net income/Networth (2) Calculated as Profit before tax/(net fixed assets (excluding CWIP) + working capital)

Note: H1FY10 and H1FY11 numbers are standalone

31

Financial Performance (continued)

Sound leverage position
Net debt
0 (20,000)
(INRm m)

Debt/Equity
0.60x 0.50x 0.40x 0.31x 0.52x

Debt/EBITDA
2.00x 1.50x 1.00x 0.50x 0.00x FY09 FY10 FY09 FY10 0.78x 1.45x

(40,000) (60,000) (80,000) (100,000) (120,000) (98,564) FY09 FY10 (51,128)

0.30x 0.20x 0.10x 0.00x

Strong cashflow generation

Cash flow from operations
70,000 60,000 50,000 61,815 50,972

Working capital(1)
300,000 270,070 291,256

Cash balance(2)
250,000 200,000 185,469 227,506

(I INRm)

(IN NRm)

40,000 30,000 30 000 20,000 10,000 0 FY09 FY10

(IN NRm)

200,000

150,000 100,000 100 000 50,000

100,000

0 FY09 FY10

0 FY09 FY10

(1) (2)

Calculated as current assets Net current liabilities Net provisions (Short term) Calculated as Cash & Bank balances + marketable investment in shares

32