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STEEL AUTHORITY OF INDIA LIMITED

Performance Highlights FY2006

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Global Steel Scenario

Globally Steel is considered as a cyclic industry.Globally Steel is considered as a cyclic industry. After last recession, Global Steel Industry has been consolidating itsAfter last recession, Global Steel Industry has been consolidating its

position and has been marked by many mergers and acquisitions.position and has been marked by many mergers and acquisitions. Appetite for steel by China has been the driving force of the growth inAppetite for steel by China has been the driving force of the growth in

production/consumption of Steel.production/consumption of Steel. 1132 million tonnes Crude Steel Production in 2005, registering a growth1132 million tonnes Crude Steel Production in 2005, registering a growth

of 6% over 2004. China accounted for most of the incrementalof 6% over 2004. China accounted for most of the incrementalproduction.production.

Region wise crude steel production (in Million Tonnes) is as under:Region wise crude steel production (in Million Tonnes) is as under: Further growth in production/consumption is expected to come from BRICFurther growth in production/consumption is expected to come from BRIC

countries (Brazil, Russia, India and China).countries (Brazil, Russia, India and China). Cost/Availability of raw materials (mainly iron ore & coal) a majorCost/Availability of raw materials (mainly iron ore & coal) a major

challenge.challenge.

RegionRegion 20052005 Production Growth Over 2004Production Growth Over 2004 Growth (%)Growth (%)

ChinaChina 349349 6969 25%25%

IndiaIndia 3838 66 17%17%

JapanJapan 113113 -- --

South AmericaSouth America 4545 -0.6-0.6 -1%-1%

North AmericaNorth America 126126 -8-8 -6%-6%

EUEU

187187

-7-7

-4%-4%

WorldWorld 11321132 6565 6%6%

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Overview of Indian Steel Industry

TISCO

11%RINL8%

SAIL

34%

ESSAR,ISPAT &

JSWL

17%

OTHERS

30%

Crude Steel Production 2005-

06

CompanyCompany 05-0605-06

(Million tonnes)(Million tonnes)

SAILSAIL 13.47013.470

TISCOTISCO 4.7294.729

RINLRINL 3.4953.495

ESSAR, ISPAT & JSWLESSAR, ISPAT & JSWL 7.1007.100

OthersOthers 12.55012.550

TOTALTOTAL 41.34441.344

Source: JPC / Internal

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Overview of Indian Steel Industry

8th largest steel producing nation in the world with crudesteel production of 38.1 million tonnes in 2005 (as per IISI)

Apparent consumption of finished steel in 2005-06 - approx.38.11 million tonnes, growth of 10.8% over 2004-05.

Per capita steel consumption: approx. 33 kg

Finished steel exports in 2005-06: approx. 4.45 milliontonnes (growth of 1.6 % over 2004-05)

India is a net exporter with imports of approx. 3.8 milliontonnes in 2005-06 (78.5% growth in imports)

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Steadily increasing consumption of steel in the country

Finished Steel Production, Consumption & Exports

Indian Steel Industry

Source: JPC

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

MillionTonne

FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY06

Production

Consumption

Exports

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Production FacilitiesProduction Facilities:: 5 Integrated Steel Plants5 Integrated Steel Plants 3 Special Steel Plants3 Special Steel Plants

1 Subsidiary - Ferro Alloy Plant (under merger)1 Subsidiary - Ferro Alloy Plant (under merger)

Marketing Network:Marketing Network:

34 Branch Sales office34 Branch Sales office 14 Customer Contact Office (CCO)14 Customer Contact Office (CCO) 4242Warehouses (Departmental 24 & Consignment Agencies 18)Warehouses (Departmental 24 & Consignment Agencies 18)

Captive Mines:Captive Mines: 9 Iron Ore Mines9 Iron Ore Mines 5 limestone mines5 limestone mines

2 Dolomite Mines2 Dolomite Mines

3 Collieries3 Collieries

Overview of SAIL

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Formed in 1973 as a holding company with the objective:

Of bringing in companies producing steel and related inputsunder one umbrella

In 1978, SAIL became an operating company:

Steel making subsidiaries were dissolved & merged with SAIL

Other companies in the area of mining, collieries, construction &consultancy etc. were spun off as independent companies

Subsequently, the following companies were taken over assubsidiary companies:

Indian Iron & Steel Company (IISCO) 1979 (merged with SAILin 2005-06)

Maharashtra Elektrosmelt Limited (MEL) 1986 (under mergerwith SAIL )

Visvesvaraya Iron & Steel Limited (VISL)- 1989 (merged withSAIL in 1998-99)

Overview of SAIL

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SAIL

(13.47)

Integrated Steel Plants

Special SteelPlants

Subsidiary

BSL(4.23)

RSP(1.66)

DSP(1.80)

BSP(5.05)

SSP(0.17)

Sal..Steel

ISP(0.44)

MEL(0.10)

Ferro Alloys

Figures in bracket are crude steel production in 2005-06 in million tonnes.

VISL(0.15)

ASP(0.14)

Overview of SAIL

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17th largest steel producer in the world in 2005 as per IISI

Diversified product portfolio Both in Longs and Flats Segment

Leading Steel Producer in India - around 34% share of crudesteel production

Captive mines of iron ore & fluxes Largest producer of Ironore in India

Marketing network of 48 Branch Sales Offices & CustomerContact Offices.

Material delivered to customers from 42 warehouses includingconsignment agencies attached to BSOs /CCOs.

Overview of SAIL

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Gross Sales of Rs.32280 crore and PAT of Rs.4013 crore

EBDIT/SALES 22.9%

PAT / Net worth 32.4%

Reduction in borrowings by Rs.1472 crore

Debt / Equity Ratio 0.35:1

Declared Dividend @ 20% of paid up equity capital (12.5%interim & 7.5% Final)

Financial Highlights FY 06

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Highest ever saleable steel production of 12.05 million tonnes(MT) growth of 6.6%

Avg. Capacity utilisation (saleable steel) (For 4 Integrated

Steel Plants) about 109%

Production through Concast up by 4%

Lower energy consumption by 1.2%

Coke Rate lower by 6 kg per tonne of hot metal

BF productivity up from 1.43 to 1.46 tonnes/cum/day

Performance Highlights FY 06

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Highest ever sales volume at 11.3 million tonnes. Growth of2.6%

SAIL continues to be virtually debt-free, with companies shortterm deposit in banks exceeding borrowings.

Overall borrowings Rs. 4298 crore as on 31.3.06

Debt to equity ratio improved to 0.35:1 from 0.58:1

Performance Highlights FY 06

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Category of ShareholdersCategory of Shareholders(as on 31st March 2006)(as on 31st March 2006)

% age Holding% age Holding

Government of IndiaGovernment of India 85.8285.82

Domestic Financial InstitutionDomestic Financial Institution 4.734.73

Foreign Institutional InvestorsForeign Institutional Investors 5.085.08

Individuals (Incl. Employees, NRI, GDRs)Individuals (Incl. Employees, NRI, GDRs) 3.163.16

OthersOthers 1.211.21

TOTALTOTAL 100.00100.00

Shareholding Pattern

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Production Performance

9.710.4

11.0

11.0

12.0

0.0

1.0

2.0

3.0

4.0

5.0

6.07.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

FY 02 FY 03 FY 04 FY 05 FY06

Saleable Steel (Million Tonnes)

7.5

8.3

8.9

9.3

9.8

6.0

6.5

7.0

7.5

8.0

8.59.0

9.5

10.0

10.5

11.0

11.5

FY 02 FY 03 FY 04 FY 05 FY 06

Finished Steel (Million Tonnes)

% ofsal.

Steel7878 7878 8080 8181 8484 8181

Highest saleable steel and finished steel

production in 2005-06. FY 06 includes

ISP.

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Product Mix Of Saleable Steel ProductionFY 2006

PIPES

0.5%

RAILWAY MATERIALS

8%STRUCTURALS6.7%

CR COILS / SHEETS

8.7%

COATED PRODUCTS

2.8%

ROUNDS / BARS

10.2%

SEMIS

19.6%

PLATES

19.8%

HR COILS / SHEETS

24.1%

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Techno-Economic Improvements

Energy Consumption (Gcal/tcs)

7.27.29

7.467.50

7.69

7.33

7.24

6.50

7.00

7.50

8.00

FY 02 FY 03 FY 04 FY 05 FY06

5.96

6.53

7.25

7.637.92

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

FY 02 FY 03 FY 04 FY 05 FY 06

Concast Production(Million Tonnes)

Incl. ISP

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Techno-Economic Improvements

557

538542

536

549

529

543

520

530

540

550

560

570

580

FY 02 FY 03 FY 04 FY 05 FY 06

Coke Rate (kg/thm)

Coke rate has reduced by:

Higher sinter usage

Increase in hot blast temperature of blast furnaces.

Use of alternate fuels like tar & Coal Dust Injection

Up-gradation of BF 4 at RSP

Incl. ISP

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Quarter-wise Profit (Incl. ISP)

1704 1707

1036

1258

1126 1127

656

1103

0

200

400

600

800

1000

1200

1400

1600

1800

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

(Rupeesincrores)

PBT

PAT

FY 2005-06

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Manpower Vs Production

138211

126,857

131,910

137,496

147,601

156,719

159,940

174,736 13.47

12.1012.08

11.30

10.68

10.54

9.9910.07

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

Manpower(N

os.

8.00

9.00

10.00

11.00

12.00

13.00

14.00

Production(millio

ntonne

Manpower Crude Steel Production

FY 06 Includes ISP

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Manpower Productivity

96105

111

123

137144

150

70

80

90

100

110

120

130

140

150

FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

Crude steel production per man per year (tonnes)

FY 06FY 06IncludesIncludes

ISPISP

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Sales Turnover

16233 15502

19207

24178

3180532280

10000

15000

20000

25000

30000

35000

------RsCrore------

FY 01 FY 02 FY 03 FY 04 FY 05 FY 06

-------Year------

FY 06

Includes

ISP

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Sales Volume

8.9

9.2

9.5

10.6

10.7

8.5

9.0

9.5

10.0

10.5

11.0

FY 02 FY 03 FY 04 FY 05 FY 06

0.56

0.86

1.17

0.47

0.58

0.20

0.30

0.40

0.500.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

1.50

FY 02 FY 03 FY 04 FY 05 FY06

Domestic Sales (Million Tonnes) Exports (Million Tonnes)

FY 05 and FY 06 Includes ISP

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Profitability

4013

6817

2512

-304

-1707-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

7000

FY 02 FY 03 FY 04 FY 05 FY 06

Net Profit after tax/Loss [Rs./Crs.]

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Profitability Ratios

62.9

35.6

22.9

12.895.73

29.2834.9

19.2311.276.52

0

10

20

30

40

50

60

70

FY 02 FY 03 FY 04 FY 05 FY 06

%

EBDIT /Cap. Employed EBDIT/turnover

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Reduction in Borrowings

3000

5000

7000

9000

11000

13000

15000

FY 02 FY 03 FY 04 FY 05 FY 06400

600

800

1000

1200

1400

1600Borrowings

Interest Cost

YearYear FY 02FY 02 FY 03FY 03 FY 04FY 04 FY 05FY 05 FY 06FY 06

D/E RatioD/E Ratio 6.236.23 6.506.50 1.871.87 0.580.58 0.350.35

SAILs market borrowings stood at Rs.4298 crore, a reduction of Rs.1472 crore from

the previous year. Interest outgo was also lower by Rs.137 crore during FY 06.

Borrow

ings(R

s.InC

rore

)

InterestCost(Rs.

InCrore)

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Performance of SAIL Share price vis--vis BSE Sensex

63.65

82.30

79.70

53.0554.65

48.1552.70

62.05

65.10

51.30

50.70

54.00 56.20

83.30

9,397.93

9,919.89

8,788.81

7,892.32

8,634.48

11851.93

10398.61

6,154.44

10,370.24

7,805.437,635.42

6,715.11

7,193.85

11,279.96

10

20

30

40

50

60

70

80

90

Apr-0

5

May-05

Jun-05

Jul-0

5

Aug-05

Sep-05

Oct-0

5

Nov-05

Dec-05

Jan-06

Feb-06

Mar-0

6

Apr-0

6

May-06

2000

4000

6000

8000

10000

12000

14000

SAIL

SENSEX

Sensex(Points)

Sh

areP

rice(R

s)

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

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Neelanchal Ispat Nigam Limited (NINL)Neelanchal Ispat Nigam Limited (NINL) Committee of secretaries, Government of India, haveCommittee of secretaries, Government of India, have

recommended merger of NINL with SAIL.recommended merger of NINL with SAIL. SAIL board approved in principle the merger and final decisionSAIL board approved in principle the merger and final decision

on this after valuation.on this after valuation. Appointment of valuer for valuation of NINL is underway.Appointment of valuer for valuation of NINL is underway.

Maharashtra Elektrosmelt Limited (MEL)Maharashtra Elektrosmelt Limited (MEL) Ministry of Steel has accepted the recommendation of expertMinistry of Steel has accepted the recommendation of expert

committee on merger.committee on merger. SAIL & MEL board have approved the merger in principle.SAIL & MEL board have approved the merger in principle. Enabling activities for merger are in progress.Enabling activities for merger are in progress.

National Iron & Steel Company (NISCO)National Iron & Steel Company (NISCO)

SAIL board approved in principle the acquisition of NISCO.SAIL board approved in principle the acquisition of NISCO. Final decision after confirmatory letter from Govt. of WestFinal decision after confirmatory letter from Govt. of West

Bengal regarding taking over of NISCO by SAIL on clean slateBengal regarding taking over of NISCO by SAIL on clean slatebasis, etc.basis, etc.

Mergers & Acquisitions in SAIL

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Corporate Plan - 2012

ParticularsParticulars

Production (Million Tonnes)Production (Million Tonnes)

(Including ISP)(Including ISP)

2005-062005-06(Actual)(Actual)

2011-122011-12

(Corporate Plan)(Corporate Plan)

Hot metalHot metal 14.6014.60 22.5522.55

Crude SteelCrude Steel 13.4713.47 21.5921.59

Saleable SteelSaleable Steel 12.0512.05 20.2520.25

Production through BOF (% OF CS)Production through BOF (% OF CS) 7676 100100

Continuous Casting Production (% OF CS)Continuous Casting Production (% OF CS) 5959 100100

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Total Investment envisaged Rs. 35000 crore

Capital schemes valued at over Rs.4400 crore are under variousstages of implementation

Major Capital Schemes

Bhilai Steel Plant

Rebuilding of Coke Oven batteries # 5,6 & 9

Modernisation of Blast Furnaces (including GCP) # 1 to 7Installation of new Slab Caster, 2nd RH Degasser & 2nd LF inSMS-II

Revamping of existing slab casters-2 Nos. in phased manner

New Bar & Rod Mill (1.0 mtpa)

New Pipe Plant of 0.2 mtpa capacity

AMR & other Schemes including logistics & infrastructure

Installation of new SMS III (3.9 mtpa cap.) with associatedfacilities by phasing out SMS-I & BBM.

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Durgapur Steel PlantDurgapur Steel Plant

Bloom Caster & associated facilitiesBloom Caster & associated facilities New 0.7 mtpa Bar & Rod Mill & 0.4 mtpa MediumNew 0.7 mtpa Bar & Rod Mill & 0.4 mtpa Medium

Structural MillStructural Mill

Upgradaton of Blast Furnace #1 & CDI in BF #1,3 &Upgradaton of Blast Furnace #1 & CDI in BF #1,3 &

44

Rebuilding of Coke Oven battery # 4Rebuilding of Coke Oven battery # 4

Installation of a new Billet CasterInstallation of a new Billet Caster

Rourkela Steel PlantRourkela Steel Plant Rebuilding of Coke oven battery # 1Rebuilding of Coke oven battery # 1

New Blast Furnace # 5 2000 m3New Blast Furnace # 5 2000 m3 CDI & Reconstruction of BF -1CDI & Reconstruction of BF -1

Phase II SMS : BOF Vessels/Casters/VADPhase II SMS : BOF Vessels/Casters/VAD

Revamping of SP-I incl. Pollution Control SchemeRevamping of SP-I incl. Pollution Control Scheme

New Plate Mill (0.7 1.0 mtpa capacity- Wide width)New Plate Mill (0.7 1.0 mtpa capacity- Wide width)


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Bokaro Steel PlantBokaro Steel Plant New 2.5 mtpa hot strip mill & 0.6 mtpa Cold rolling millNew 2.5 mtpa hot strip mill & 0.6 mtpa Cold rolling mill

Installation of 3nos. of Slab Caster in SMS-IInstallation of 3nos. of Slab Caster in SMS-I

Installation of New modern BOFs (3 nos.) in SMS-IInstallation of New modern BOFs (3 nos.) in SMS-I

Rebuilding of Coke Oven batteries # 1,2 & 5Rebuilding of Coke Oven batteries # 1,2 & 5

CDI in blast furnace # 2 & 3CDI in blast furnace # 2 & 3

IISCO Steel PlantIISCO Steel Plant Modernisation of Steel making facilities

New Multi purpose Section Mill/ Universal Mill

Development of collieries

Raw Materials DivisionRaw Materials Division Development of Chiria & Rowghat MinesDevelopment of Chiria & Rowghat Mines

Installation of Pellet PlantInstallation of Pellet Plant


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Accolades

Excellent MoU Rating for 2003-04, and 2004-05 (assessed) from

Government of India Bhilai Steel Plant won the Prime Ministers Trophy for best

performing Integrated Steel Plant for the 7th time for 2004-05

Institute of Cost & Works Accountants of India awarded SAIL withGood Performance Award for 3rd consecutive year under the

category National Award for Excellence in Cost Management 2005

Dept. of Science & Technology, Ministry of Science & Technologyawarded SAILs RDCIS National Award for R&D efforts inIndustry for pioneering contributions in design, development &

application of new special steel products for the year 2005 World Environment Foundation awarded RSP with Golden Peacock

Environment Management Award 2005 for excellence ineffective environment system

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AMRAMR Additions, Modifications & Replacements ASPASP Alloy Steel Plant BBMBBM Blooming & Billet Mill BFBF Blast Furnace BOFBOF Basic Oxygen Furnace BSLBSL Bokaro Steel Limited BSOsBSOs Branch Sales Offices BSPBSP BhilaiSteel Plant CCOCCO Customer Contact Office CDICDI Coal Dust Injection CSCS Crude Steel DSPDSP Durgapur Steel Plant EBDITEBDIT Earnings Before Depreciation Interest & Taxes G.Cal/tcsG.Cal/tcs Giga Calories per tonne of Crude Steel GCPGCP Gas Cleaning Plant IISIIISI International Iron & Steel Institute ISPISP Iisco Steel Plant

Continued

Abbreviations used

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JPC Joint Plant Committee

Kg/thm Kilo Gram Per Tonne of Hot Metal LF Ladle Furnace MEL Maharashtra Elektrosmelt Limited MT Million Tonne Mtpa Million Tonne Per Annum

PAT Profit After Tax PBT Profit Before Tax RDCIS Research & Development Centre for Iron &

Steel RINL Rashtriya Ispat Nigam Limited RSP Rourkela Steel Plant SMS Steel Melting Shop SP Sinter Plant SSP Salem Steel Plant VAD Vacuum Arc De-gassing VISL Visvesvaraya Iron & Steel Limited

Abbreviationsused

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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 Companys 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 Companys 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

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