• JSW Steel is planning to incur a capex to the tune of Rs. 2500 crore during the next 2 years. JSW Steel is planning to incur a capex of Rs. 1800 crore by the end of FY 2005-06 and another Rs. 700 crore by the end of FY 2006-07.JSW Steel is planning to fund the total capex by way of Internal accruals and debt. The Internal accruals will be approx. Rs. 1750 crore while the debt will be to the tune of Rs. 750 crore.

• JSW steel is one of the lowest steel producer globally. It standing globally is amongst the top 5% of the low cost steel producers in the world. As per Mr. Jindal JSW Steel has been able to achieve this position due to the low manpower cost. Additionally JSW Steel does not have to incur that heavy expenditure to keep its plant environmentally friendly, which the global players in the countries like USA and Europe have to incur. This helps the company have an edge over its global competitors.

• Mr. Sajjan Jindal feels that due to the buoyant domestic demand the steel Industry in India will be consistently able to register an 8% growth. This growth in the steel industry will be fuelled mainly by the rising demand from the Housing, Infrastructure and the Automobile sector.

• As per Sajjan Jindal JSW Steel has plans to completely exit the CDR scheme during the second quarter of FY 2005-06. This will help in reducing the WAIC (Weighted Average Interest Cost) below 8% level thus curtailing the Interest cost of the company.

• As per Mr. Jindal the merger of Euro Ikon Iron & Steel (EIISPL) - Blast Furnace Company, Euro Coke & Energy (ECEPL) - Coke Oven Battery company and JSW Power (JPL) - Power company will be completed during the third quarter of the FY 2005-06. With the help of the merger the management feels that the company operations will be carried out more economically.

• During the year 1993 the top 10 steel producers produced approx. 150 Million Tonnes (MT) of steel. This figure has risen to 300 MT during the year 2004.Going forward due to the consolidation-taking place in the steel Industry this figure is anticipated to rise to 400 MT levels. Mr. Sajjan Jindal feels that the consolidation-taking place in the steel sector is a prudent sign for the Industry because it helps in stabilising the steel prices.

• As per Mr. Raman Madhok in next two years value added products will contribute 55% of the total output of JSW Steel.

• The Cold Commissioning of PPGI line (Pre Painted Galvanised Iron line) having a capacity of 0.1 Mtpa (Million tonnes per annum) has already been commenced from July 2005 .It is expected that the PPGI will be fully operational during the second quarter of FY 2005-06.

• During third Quarter of FY 2005-06

• During the third quarter of the FY 2005-06 the company will carry out the commissioning of the 130 MW power plant in Phases. After the commissioning of the 130 MW power it is expected that the company will make significant savings in the power cost. Currently the pre-commissioning activities in case of the boiler have been commenced and the Erection of the tube generator has been completed.

• During fourth Quarter of FY 2005-06

• Completion of Pellet plant expansion through augmenting its capacity from 4.2 Mtpa to 5 Mtpa. Incase of the pellet plan expansion over 90% of the civil and 60% of the structural work has been completed. Additionally orders have been placed for purchase of all the major equipments.

• Commissioning of 1.3 Mtpa expansion project in phases by way of increasing the steel plant capacity from 2.5 Mtpa to 3.8 Mtpa.

• Completion of HSM modernisation and capacity enhancement by 0.5 Mtpa.

• As per the management the basic steel making is expected to move to BRIC countries (Brazil, Russia, India & China) due to the competitive cost advantage. The developed countries with sustained consumption pattern will focus on the value added products.

• As per Mr. Jindal the consolidation will benefit the steel Industry in terms of stabilising the steel prices.

• Mr. Jindal feels that the globally the Operating Margins are expected to remain under pressure due to the rising input costs and higher Inventory levels.

Outlook on the Domestic Steel Industry

• As per the management, the encouraging growth seen in the IIP (Index of Industrial Production) - 10.8% for May'05 and the healthy GDP growth around 6 - 7% will help in sustaining the buoyant growth in the Steel Industry.

• There has been a substantial rise seen in demand for value added products in South India. Additionally the Southern India is set to become an Auto hub of the country .The company management feels that it is well positioned to cater this rising demand.

• As per the management of the company a sustained growth can be seen in the Domestic Steel Industry since the user Industry are expected to deliver a robust performance. For the FY 2005-06 the Manufacturing sector is expected to register a 11.5% growth while the Automobile sector is anticipated to grow at 18%. Additionally the Government thrust on Infrastructure development is anticipated to boost the performance of the Housing and Infrastructure sector.

Over the last few months the drop in steel prices have been mainly due to the over stocking in certain markets and slack in demand in Western Europe. However the continued buoyancy in steel consumption in China, robust recovery in the US economy, large Infrastructure built up in the Middle East and strong growth prospects of the Indian Economy are expected to cushion the drop in demand. Additionally it is expected that the production cuts announced by various European Steel mills will also bring balance in the global demand supply position.

The management of the company feels that JSW steel will be able to maintain the profitability even in current market conditions due to the benefits that may accrue on account of commissioning of color coated line in the second quarter of the FY 2005-06, commissioning of second power plant during the third quarter of the FY 2005-06 and commissioning of the expansion projects by the end of fourth quarter of FY 2005-06.