Performance Highlights Q3 Fy09

Contents

Performance Highlights SAIL’s Expansion Plan CSR & Environment Management Awards & Accolades

Financial Highlights –9 months FY09 vs. 9 months FY08 9 months Turnover of Rs.35674 crore 9 months PBT – Rs. 7116 crore 9 months PAT of Rs.4688 crore EBIDTA to Total Sales 23% Debt / Equity Ratio : 0.24:1(as on 31-122008) against 0.13:1 as on 31-12-2007 EPS of Rs. 15.13 (annualised)

Financial Highlights – 9 months FY 09 Vs 9 months FY08 Amount in Rs. Crore

Rs. Crore TURNOVER EBIDTA PBT PAT

Apr-Dec.08

Apr-Dec. 07

Increase

% change

35674 8284 7116 4688

30026 8921 7804 5160

5648 -637 -688 -472

+19 -7 -9 -9

Financial Performance PBT (Rs. Cr.)

PBT (Rs. Cr.)

7804

11469

12000 9423

7116

5400

10000

5100

8000 5706 6000

4800

4000

4500 9 months FY08 9 months FY 09

2000 2005-06

2006-07 2007-08 Highest ever Profit before Tax in 2007-08

9 months PBT – Rs. 7116 crore - down 9%

Financial Performance PAT (Rs. Cr.)

8000 7000 6000 5000 4000 3000 2000 1000

PAT (Rs. Cr.)

5160

7537

4688

4000

6202

3800 3600

4013

3400 3200 3000

2005-06

2006-07

2007-08

Highest ever profit after tax during 2007-08.

9 months FY 08 9 months FY 09

9 months PAT – Rs. 4688 crore - down 9%

Sales Turnover Unit : Rs Crore

Best ever

48000

45555

45000 39189

42000 39000 36000

32280

33000

39000 36000 33000 30000 27000 24000 21000 18000 15000

35674 30026

Year 9 months 07-9 months 0808 09

30000

'05-06

'06-07

'07-08

Year Highest ever Turnover in 2007-08

9 months Turnover of Rs35674crore – up 19%

Quarter-wise Profit PBT

3500

3067

2922 (Rupees in crore)

PAT

2500

1935

2010 1257

1500

843 500 Q3 FY 08

Q2 FY 09

Q3 FY 09

Earning Before Interest Depreciation and Tax Unit : Rs Crore

14000 12500 11000 9500 8000 6500 5000

12955 10967

10000 9000

8921

8284

8000

7381

7000 6000

2005-06

2006-07

2007-08

5000 9 months FY08 9 months FY09

Borrowings Unit : Rs Crore

5000

4298

4181

4000 3045 3000

Borrowings

6000

7000 6000 5000 4000 3000 2000 1000 0

2000 31-03-06

31-03-07

Year D/E Ratio

0.13

31-03-2008 0.13

280 240

2792 212

199

200 160

31-12-07

31-03-08

31-12-2007

Borrow ings 6371 Interest Cost

Interest Cost Q1

Borrowing Annual

31-12-08

31-12-2008 0.24

Investments Unit : Rs Crore

13136

12000

9034

9000 6000 3000

5645

31-03-06

31-03-07

31-03-08

Investments 18000

Interest Earned 16126

15500 1221

13000 10500 8000

1400 1200 1000

9838 814

31-12-2007

Interest Earned Q1

15000

Short Term Investment in Banks

Investments Annual

800 31-12-2008

Performance Highlights – 9 months FY 09  Sales of 7.7 million tones  Semis component reduced to 7.4 % [ 5 ISPs] of sales of saleable steel

 Saleable steel production of 9.1 million tones  Hot Metal production of 10.9 million tonnes  Crude steel production of 10.1 million tones  Special Steel Production – 2.9 million tones  Production through Concast – 6.6 million tones

Performance Highlights – 9 months FY 09 Major Techno Economic Parameters

 Coke Rate at 525 kg/T - lower by 2% over CPLY  Fuel Rate at 564 (kg/thm) – marginally lower over CPLY  Energy Consumption 6.78 (G.Cal/tcs) –lower by 4% over Corresponding Period Last Year.  Avg. Capacity utilisation (Saleable Steel)– 110%  Avg. Capacity utilisation (Hot Metal)– 105%  Avg. Capacity utilisation (Concast Production)– 126%

Production April –Dec.

Saleable Steel (in Million Tons) 13.0

13.00 12.50

12.6

10.00

9.6

9.50

12.1

9.1

9.00

12.00

8.50 8.00

11.50

7.50

11.00

7.00

10.50

6.50 6.00

10.00

'07-08

'05-06

'06-07

'08-09

'07-08

Production Growth 4% over PY

PRODUCTION LOWER BY 5% OVER CPLY Capacity Utilization - 110%

Including Special Steels Plants

Special Steel Production (in Million Tonnes)

Production of Value added materials of 5 ISPs Apr.– Dec. Best ever

4

2.87

3.36

3.5

2.9 2.7

3

2.5

2.5

2.3 2.1

2 1.5

2.35

1.26

1.46

1.9 1.7

1

1.5

'05-06

'06-07

'07-08

9 months FY 08

9 months FY 09

22% increase in production of Value Added Products

Salable Steel Production Plant-Wise, Quarter-Wise (in Million Tonnes) 1400 1110

1136

1037

866

854

428

444

536 413

800 600

520

1000

405

1200

1160

95

200

97

99

400

0 Q3 FY08

Q2 FY09

BSP

DSP

RSP

Q3 FY09

BSL

(Five Integrated Steel Plants Only)

ISP

Production of Salable Steel Plant Wise Category wise (in Million Tonnes) 3500 3000

Semi Finished Flat Products Long Products

608

2500

86 922

2000 1500

Semis 18% 2397

1000

802

Flats 55%

1784 1416

500

Long 27%

124 46 236

383

0 DSP

BSP

RSP

BSL

9 months FY 09 – 5 Integrated Steel Plants

ISP

TE Parameters Specific Energy Consumption (Gcal/TCS) Apr. – Dec.

7.4

7.4

7.24 7.16

7.2

7.04

7.2

6.78

7 6.8

6.95

7

6.6 6.4 6.2 6

6.8 '05-06

'06-07

'07-08

'9 months FY08

Reduction in Energy Consumption

9 months FY09

TE Parameters Coke Rate (Kg/THM)

560 550

543

550

541 533

540

Apr.-Dec.

537

540

525

530

530

520

520 510

510

500

500

'05-06

'06-07

'07-08

Continuous efforts to contain coke rate

9 months FY08

9 months FY09

Coke Rate at 525 kg/T - lower by 2% over CPLY

Labour Productivity Tonnes Crude Steel /man / year 230 210

214 200

Labour 190 Productivity of 289 tcs/m/y170 at BSP 150 130 110 '06-07

' 07-08

Current manpower : 1,24,522 numbers as on 31.12.2008.

Saleable Steel Sales Volume (In Million Tonnes)

4.0

3.8 3.5

3.5

3.0 2.7 2.5

3.0 3.0

2.9 3.0

2.5

2.6

2.5

2.4

2.0

1.5 Q1

Including Special Steel Plants

Q2

Q3 2006-07

Q4 2007-08

2008-09

Saleable Steel Sales Volume (In million tonnes) 1.5

1.0 1.0

0.9

0.9

0.9 0.7

0.5

0.4

0.7

0.5

0.5 0.4 0.3

0.4 0.1

0.1

0.1

0.0 Q3 FY08

Plant-wise, Integrated Steel Plants

Q2 FY09

BSP

Q3 FY09

BSL

DSP

RSP

ISP

Saleable Steel Sales Volume (in million tonnes)

13.0 12.0

12.3 11.9

9.0

8.5

8.5

11.3

8.0

11.0

7.7

7.5 7.0

10.0

6.5

9.0

6.0

2005-06

2006-07

2007-08

9 months FY08

Including Special Steel Plants

9 months FY09

Saleable Steel Sales Volume (In Million Tonnes) 5.0 4.0

4.2

4.0

3.6

3.6

3.0

Plant-wise

2.0

1.6

1.0

2.0

1.9

1.6 0.4

0.4

0.0 2006-07

2007-08 BSP

BSL

DSP

RSP

ISP

Sales through Dealers Network No. of Dealers and Districts Covered Districts Covered

Dealers Appointed

2139

2200

1897

2000 1800 1600 1400 1200 1000 800

602

604

600 400 31-3-2008

31-12-2008

During April-Dec. 08, the volume has increased by over 80% to a level of 3.4 lakh tonne as compared to CPLY.

Performance of SAIL Share price vis-à-vis BSE Sensex 275

255

255 214

33000

215 185

Share Price (Rs)

195

185

175

28000

160

155

115 95

156 139

135

23000

141 128

17579

17287

17649

18000

16415

15644

13461

14356 14565

85

12860

75

9788

55 8 8 8 r0 b0 n0 a e a J F M

Sensex (Points)

235

38000

8 8 r0 y0 p a A M

67

78

9093 9647

74 9004

9 8 8 8 8 8 8 8 t0 t0 c0 n0 g0 y0 n0 v0 l c p e a u u o J J O D A Ju N Se th Month 7 2

Closing Share Price & Sensex as on the last day of the month

13000

8000 SAIL SENSEX

Dividend Year

Interim %

Final %

Total %

Dividend (Rs. in Crs)

2008-09

13.0

2007-08

19.0

18.04

37.0

1528

2006-07

16.0

15.0

31.0

1280

2005-06

12.5

7.5

20.0

826

2004-05

15.0

18.0

33.0

1363

537

As per Govt. guidelines, profit making PSUs are required to declare dividend equal to 20% of PAT or 20% of paid-up capital, which ever is more

Dividend cheque for Rs. 638 crore handed over to the Hon’ble Prime Minister of India

Road Map For Future

EXPANSION AND MODERNISATION PLAN

SAIL’s Expansion Plan Million Tonne Particulars

2007-08 2010-11 (Actual) (Plan)

Hot metal

15.2

26

Crude Steel

14.0

24.5

Saleable Steel

13.0

23

Expansion Plan : Technological Shift Technology

Current Status After Expansion

BOF Steel making

77%

100%

CC Route

66%

100%

Pelletisation Plant

No

Yes

Coke Dry Quenching

No

Yes

Top Pressure Recovery Turbine

No

Yes

Auxiliary Fuel Injection in BF

Partial coverage

Full coverage

Desulphurization of Hot Metal

Partly

100%

Thin Slab Casting - Compact Strip Mill

No

Yes

Beam Blank Casting

No

Yes

Coupled Pickling & Tandem Mill

No

Yes

Beneficiation Plant

Partial

Full

Ongoing Projects Total Investment expected to be more than Rs. 54,000 Crore (US 11.0 Billion).

Financing in a manner that SAIL remains within debtequity ratio of 1:1.

Total Capex for 2007-08 was Rs. 2181 crore and the

Estimated Capex For 2008-09 is Rs. 5000 Crore. Capex during 9 months FY09 was 3231 crore.

Orders for Rs.36,000 crore approximately have already been placed for various Modernisation / Expansion Projects.

Discussions are going on with bankers for financing

import components of expansion through ECA / ECB route.

Ongoing Projects Expected Outcome Enhancement of Production Capacity and Market Share

World Class Technology and Products Improved Product mix/ proportion of value added products

Complete elimination of Semi-finished steel Enhanced Pollution control measures, with environmental conservation

Captive Power generation capacity to increase from 872 MW to 1922 MW

Ongoing Projects The Products to be added: Auto grade CR Products, Galvanealed Coils/ Sheets Plates/ Pipes to meet up to API 100 Grade specification Universal Beams/ Heavy Beams in the sizes up to 1100

mm to support increasing Infrastructural requirements

Rails to support increasing requirements of Metro rails Increased production of Rails and wheels to meet the increasing requirements of Indian Railways

Quantum jump in Rounds and Structural production to consume entire semi-finished steel

Wider Plates in the size of 4500 mm

Capacity increase after Expansion Plant

Hot Metal (Mtpa)

Saleable Steel (Mtpa)

2007-08 Actual

After Expansion

2007-08 Actual

After Expansion

BSP

5.27

7.50

4.43

6.53

DSP

2.19

3.50

1.72

2.83

RSP

2.23

4.50

2.07

3.88

BSL

4.66

7.44

3.90

6.53

ISP

0.64

2.91

0.41

2.37

VISL

0.22

0.33

0.13

0.22

ASP

-

-

0.15

0.43

SSP

-

-

0.23

0.34

15.20

26.18

13.04

23.13

Total

SAIL’S Growth Plan 2010-11 Saleable Steel Production Capacity

7.0

6.5

6.5

6.0

Million Tonne

2.1

2.6

5.0 3.9

4.0 2.8

3.0 2.0

4.4

1.0

1.8

1.1

2.4 3.9 2.0

2.1

1.7

0.4

0.0 BHILAI

DURGAPUR

ROURKELA

Production 07-08

BOKARO

IISCO

Planned Increase

SAIL’S Growth Plan 2010 Saleable Steel Production Capacity Specialty Steel Plants 0.50

0.43

0.45 0.40

0.34

Million Tonne

0.35 0.30 0.25 0.20 0.15

0.22

0.11

0.09 0.23

0.10 0.05

0.28

0.13

0.15

VISL

ASP

0.00

Production 2007-08

SSP Planned Increase

Total Existing .45 MT and After Expansion 1MT

Product Mix - Saleable Steel Production FY2007-08

ROUNDS / BARS 23.3% PIPES 0.6%

PLATES 21.2%

SEMIS 17.9% PIPES 0.5%

HR COILS / SHEETS 22.1%

COATED PRODUCTS 4.8%

CR COILS / SHEETS 10.4%

ROUNDS/ BARS 10.2%

STRUCTURALS 15.0%

COATED PRODUCTS 2.8% CR COILS / SHEETS 8.7% STRUCTURALS 5.2%

PLATES 16.4%

HR COILS / SHEETS 24.1% RAILWAY MATERIALS 8%

RAILWAY MATERIALS 7.4%

FY2010-11

Raw Materials Iron Ore

Raw Materials IRON ORE LINKAGES Year

2007-08

2010

2020

Mtpa

Hot Metal Production

Iron Ore Requirement

15

25

Existing Mines

43

Existing Mines + Raoghat, Chiria & Taldih + Thakurani

100

Existing Mines + Raoghat, Chiria & Taldih + Thakurani

26 ~ 60

Linkages of Iron Ore

Raw Materials Coal

Raw Materials COAL LINKAGES Year

2007-08

Hot Metal Production

15

Mtpa Coking Coal Requirement

14

2010

26

23

2020

~ 60

50

Linkages for Coking Coal Import Component – 70% (80% through long term contracts from Australia, New Zealand and US and 20%from spot market) Indigenous – 30% -Import component to increase -Long term component to go up to 90% w.e.f. FY09 -Existing mines to be worked/ developed -New alliances/ linkages/ acquisitions to be explored

New Strategic Initiatives 

As per the approval of Union Cabinet for the proposal of merger BRL with SAIL, all the activities are being pursued to complete the merger as per schedule of March 2009.

Corporate Social Responsibility –Model Villages

79 villages have been adopted as Model Steel Villages across 8 states for exclusive development of Medical facilities, Education, Roads, Sanitation, Community Centre etc. and 15 such villages have already been completed during 200708 and 9 months FY09.

Corporate Social Responsibility

Corporate Social Responsibility  Initiative towards 100% literacy in steel townships

during 2007-08, five free schools set up for under privileged -children providing free mid-day meals, school uniforms, text books, stationery items and transportation.

 Medical health centres set up at Bhilai, Bokaro,

Rourkela and Burnpur for providing free medical consultation, medicines for needy population.

 A new school, Bokaro Steel Balika Vidyalaya has been started exclusively for girls from BPL families, during the 9 monthsFY09.

 Model steel village at Gorabali, Jharkhand got completed by BSL during 9 monthsFY09.

Corporate Social Responsibility

 SAIL has undertaken special drive to fill up SC/ST back log in recruitment.

 SAIL has instituted “SAIL HR Award for

Excellence” in collaboration with IIM Ahemdabad, as knowledge and process partner, for Indian Manufacturing Industries – on the occasion of Golden Jubilee celebration of commencement of production in SAIL.

Accolades

Outstanding Achievement for Rural and Community Development

Accolades  SAIL Quality Circle Teams have won highest number of awards in

the country at the International QC Meet in Bangladesh held in the last week of Oct’08; 7 Excellent, 7 Extra Ordinary & 1 Meritorious Awards won by SAIL teams.

SAIL is among the Top Companies for National Award for Excellence in Corporate Governance 2008 by the Institute of Company Secretaries of India.

PHD Chamber Good Corporate Citizen 2008 has been bagged by SAIL.

SAIL has got Commendation Certificate on Good Corporate

Governance for the Year 2006-07 by SCOPE which was conferred on 21st November 2008.

Indian Institute of Metals (IIM) award conferred to four SAIL professionals including the O P Jindal Award.

Accolades







3 SAIL executives got declared ‘Metallurgist of the year/ young Metallurgist of the year by IIM. First prize to Salem steel Plant amongst Secondary steel plants/Alloy Steel Plants category by IIM. SAIL received Plaque from Institute of Chartered Accountants of India for the year 2007-08 for better financial reporting practices and commended Annual Report, in the category of the manufacturing and trading enterprises.

PHD Chamber Good Corporate Citizen 2008 has been bagged by SAIL. The Award was presented by Hon’ble Central Cabinet Minister Shri Pranab Mukherjee on 17th December 2008

Abbreviations used              

ASP BF BOF BPL BSL BSP CS CPLY DSP EBIDT G.Cal/tcs GoI IISI ISP

Alloy Steels Plant Blast Furnace Basic Oxygen Furnace Below Poverty Line Bokaro Steel Limited Bhilai Steel Plant Crude Steel Corresponding Period Last Year Durgapur Steel Plant Earnings Before Interest Depreciation & Taxes Giga Calories per tonne of Crude Steel Government of India International Iron & Steel Institute IISCO Steel Plant

Abbreviations used            

JPC Kg/thm MEL MT Mtpa PAT PBT RDCIS RINL RSP SSP VISL

Joint Plant Committee Kilo Gram Per Tonne of Hot Metal Maharashtra Elektrosmelt Limited Million Tonne Million Tonne Per Annum Profit After Tax Profit Before Tax Research & Development Centre for Iron & Steel Rashtriya Ispat Nigam Limited Rourkela Steel Plant Salem Steel Plant Visvesvaraya Iron & Steel Plant

Disclaimer Statements / Data which do not relate to SAIL and are used / made in this presentation are from sources which are considered reliable and Company cannot be held for its authenticity. Further, statement describing the Company’s projections, estimates, expectations are “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed depending on the circumstances / situations. Major factors that could affect the Company’s operations include, among others, economic conditions affecting demand / supply and prices in the domestic and global markets in which the Company operates, changes in Government regulations, tax laws and other statutes etc.