MIRA INFORM REPORT

Report Date :

17.02.2007

IDENTIFICATION DETAILS

Name :	JINDAL STAINLESS LIMITED
Registered Office :	P. O. Box No. 6 K. M. Stone, Delhi Road, Hisar – 125 005, Haryana
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	18.11.1970
Com. Reg. No.:	05-5456
CIN No.: [Company Identification No.]	L26922HR1980PLC010901
TAN No.: [Tax Deduction & Collection Account No.]	RTKJ01831E
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturing and Marketing of Various Products.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 40000000
Status :	Good
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well-established and reputed company of Jindal Organization. Available information indicates high financial responsibility of the company. General financial position of the company is good. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	O. P. Jindal Marg, Hisar – 125005, Haryana, India
Tel. No.:	91-1662-222471-83
Fax No.:	91-1662-220476/220499
E-Mail :	jslhsr@nde.vsnl.net.in jindalsp@del3.vsnl.net.in
Website :	http://www.jindalstainless.com
Corporate Office :	Jindal Centre, 12, Bhikaji Cama Place, New Delhi – 110066, India
Tel. No.:	91-11-26188345-60
Fax No.:	91-11-26161271 / 26170691
E-Mail :	jindalsp@del3.vsnl.net.in
Factory 1 :	6 K. M. Stone, Delhi Road, Hisar – 125 005, Haryana Tel. No. : 91-1662-220471 – 75 Fax No. : 91-1662-220476 / 220499 58-17-1/1, Sangeevaya Nagar, Near Nad Kotha Road Junction, Visakhapatnam – 530 009, Andhra Pradesh Tel. No. : 91-891-2558898 Fax No. : 91-891-2558996 Kalinga Nagar Industrial Complex, P. O. Danagadi - 755026 District Jajpur, Orissa, India Phone: 91-6726-266031-32 Fax : 91-6726-266030 E-mail: info@jindalstainless.com Jindal Nagar, Kothavalasa - 535183, District Vizianagaram, Andhra Pradesh, India Phone: 91-8966-273327/273254/273335 Fax: 91-8966-273326 E-mail: jindalkvs@sancharnet.in
Branches :	Jindal Mansion, 5-A, G. Deshmukh Marg, Mumbai – 400026, Maharashtra, India Tel. No.: 91-22-23513000 Fax No.: 91-22-23526400 / 23522600 E-Mail : jindal@bom2.vsnl.net.in 50, H. I. G, BBA, Jaidev Vihar, Bhubaneshwar – 751013, Orissa, India Phone: 91-674-2303560/2301846 Fax : 91-674-2303147 E-mail: jslbbs@sify.com

DIRECTORS

Name :	Ms. Savitri Devi Jindal
Designation :	Chairperson
Name :	Mr. Ratan Jindal
Designation :	Vice-Chairman & Managing Director
Name :	Mr. V. S. Jain
Designation :	Managing Director & Chief Executive Director
Name :	Mr. Ashis Das
Designation :	Joint Managing Director and Chief Operating Officer [Orissa Division]
Name :	Mr. R. G. Garg
Designation :	Deputy Managing Director
Name :	Mr. N. C. Mathur
Designation :	Director – International Marketing
Name :	Mr. Naveen Jindal
Designation :	Director
Name :	Ms. Suman Jyoti Khaitan
Designation :	Director
Name :	Mr. Rajinder Parkash
Designation :	Executive Director
Name :	Mr. Lokesh Kumar Singhal
Designation :	Director
Name :	Mr. T. R. Sridharan
Designation :	Director
Name :	Mr. B. D. Gupta
Designation :	Director

KEY EXECUTIVES

Name :	Mr. A. P. Garg
Designation :	Senior Vice-President (Taxation) & Company Secretary
Name :	Mr. Arvind Parakh
Designation :	Senior Vice-President (Corporate Finance)

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	52975395	40.58
FIs/Banks/Mutual Funds	19076906	14.61
Corporate Bodies	24573420	18.82
FIIs	7727726	5.92
NRIs/OCBs	2506112	1.92
Public	23692297	18.15
Total	130551856	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Various Products.

Products :

¨ Strip Mill/Tandem Mill

¨ Plate/Steckel Mill

¨ Steel Melting

¨ Cold Rolling Mill

Cold Rolled Strips

Cold Rolled Special Steel

¨ Oxygen Plant

Oxygen Gas

Argon Gas

¨ Industrial Machinery

¨ High Carbon Ferro Chrome

¨ Rolling Mill Plant

Item Code No.	Product Description
72.19/72.20	S. S. Hot Rolled Strips, Flats & Plates
72.02	Ferro Chrome

Exports to :

North America, Europe, South East Asia, China, Hong Kong, Middle East, South Africa and Russia.

Imports from :

Europe and Far East

Terms :

Purchasing :

L/C, D/A or D/P terms.

GENERAL INFORMATION

No. of Employees :

6,000

Bankers :

v State Bank of India

v State Bank of Patiala

v Punjab National Bank

v Canara Bank

v American Express Bank

v BNP Paribas

v Standard Chartered Grindlays Bank

v ICICI Bank Limited

v The Bank of Nova Scotia

v UTI Bank Limited

v Export-Import Bank of India

Facilities :

	As on 31.03.2006 [Rupees in Millions]
SECURED LOANS :
Term Loans from Banks
Rupee Term Loans	8460.377
Foreign Currency Loans	4150.516
Car Loans
From Banks	7.443
From Institutions	1.508
Working Capital Loans from Banks	2130.212
UNSECURED LOANS
Loans from Banks	500.000

Banking Relations :	Good
Auditors :	S. S. Kothari Mehta & Company Chartered Accountants Lodha & Company Chartered Accountants COST AUDITORS Ramanath Iyer & Company Chartered Accountants
Associates :	v Jindal Steel & Power Limited v JSW Steel Limited v Jindal Saw Limited v Jindal Industries Limited v Nalwa Sons Investments Limited v Nalwa Sponge Iron Limited v Bir Plantation Limited v Bharat Metals v Saw Pipes Limited v Maharashtra Seamless Limited v Jindal Stainless Tubes Limited v Jindal Iron & Steel Company Limited
Subsidiaries :	v Jindal Holdings Limited v Jindal Steel & Alloys Limited v Jindal Stainless (Mauritius) Limited v Massillon Stainless Inc., U.S.A. v Brahmaputra Capital and Finance Services Private Limited v Cross – Border IT (India) v Jindal Stainless UK Limited v Jindal Stainless FZE, Dubai v PT. Jindal Stainless Indonesia v Jindal Stainless Steelway Limited v Jindal Architecture Limited v Austenitic Creations Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
274500000	Equity Shares	Rs. 2/- each	Rs. 549.000 millions
100500000	Unclassified Shares	Rs. 2/- each	Rs. 201.000 millions
20000000	Non-Cumulative Preference Shares	Rs. 2/- each	Rs. 200.000 millions
	Grand Total		Rs. 950.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
130551856	Equity Shares	Rs. 2/- each	Rs. 261.104 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		261.104	219.820	199.825
2] Share Suspense Account		0.000	0.000	0.000
3] Reserves & Surplus		9830.997	7707.933	5372.477
NETWORTH		10092.101	7927.753	5572.302
LOAN FUNDS
1] Secured Loans		19050.056	10258.838	6565.902
2] Unsecured Loans		3059.583	3393.946	1244.536
TOTAL BORROWING		22109.639	13652.784	7810.438
DEFERRED TAX LIABILITIES		2782.983	2252.647	2012.880
TOTAL		34984.723	23833.184	15395.620
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		17770.230	13832.426	12262.688
Capital work-in-progress		6284.964	3493.414	656.920
INVESTMENT		3102.177	1930.034	312.093
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	6873.584	5209.832	4338.822
	Sundry Debtors	3504.255	3265.905	1444.644
	Cash & Bank Balances	1970.707	567.709	317.735
	Loans & Advances	6847.468	4487.876	2618.618
Total Current Assets		19196.014	13531.322	8719.819
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	9633.650	7724.270	6217.486
	Provisions	1755.395	1245.818	358.421
Total Current Liabilities		11389.045	8970.088	6575.907
Net Current Assets		7806.969	4561.234	2143.912
MISCELLANEOUS EXPENSES		20.383	16.076	20.007
TOTAL		34984.723	23833.184	15395.620

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	32026.098	32007.191	24201.642
Profit/(Loss) Before Tax	2402.270	3578.085	2330.531
Provision for Taxation	805.011	1119.607	688.630
Profit/(Loss) After Tax	1597.259	2458.478	1641.901
Export Value	11243.738	10212.672	N.A.
Import Value	11186.244	10254.756	N.A.
Total Expenditure	29598.350	28429.106	21565.427

QUARTERLY RESULTS

PARTICULARS	30.06.2006 [1^st Qtr.]	30.09.2006 [2^nd Qtr.]	30.12.2006 (3^rd Qtr.)
Sales Turnover	8548.700	11446.400	14455.900
Other Income	49.500	54.100	57.900
Total Income	8598.200	11500.500	14513.800
Total Expenditure	7165.900	9142.800	12202.500
Operating Profit	1432.300	2357.700	2311.300
Interest	255.700	328.600	(07.400)
Gross Profit	1176.600	2029.100	2318.700
Depreciation	378.100	576.400	585.300
Tax	90.800	251.500	110.300
Reported Profit/(Loss) after Tax	507.900	970.500	1130.500

Notes

2006-06 Quarter 1

Gross Sales Includes Domestic Rs 6362.20 million Exports Rs 3063.40 million Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (876.60)million Consumption of Raw Materials Rs 6053.90 million Stores & Spares Rs 375.30 million Power & Fuel Rs 813.30 million Staff Cost Rs 138.00 million Other Expenditure Rs 662.00 million Tax Includes Provision for Taxation Current Tax Rs 89.60 million Deferred Tax Rs 199.80 million Fringe Benefit Tax Rs 1.20 million Depreciation Indicates Depreciation / Amortisation EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 07 Complaints disposed off during the quarter 07 Complaints unresolved at the end of the quarter Nil 1. The above results have been reviewed by the Audit Committee and taken on record by the Board of Directors in their respective meetings held on July 24, 2006. 2. The Hon'ble High Court of Punjab & Haryana, Chandigarh, has approved the Scheme of Arrangement among Jindal Stainless Limited, Austenltic Creations Private Limited and Jindal Architecture Limited, on July 13, 2006 for hiving off the Life Style Product Division and Architecture Division w. e. f April 01, 2005. 3. Interest for the current quarter includes provisions of Rs 122.80 million for revaluation of outstanding foreign currency loans, which is of temporary nature. 4. As the company's business activity falls within a single primary business segment viz. 'stainless steel', the disclosure requirement of Accounting Standard (AS-17) ' Segment Reporting' issued by The Institute of Chartered Accountants of India is not applicable. 5. The figures of previous periods have been re-grouped wherever necessary to confirm to this period /quarter's classification.

2006-09 Quarter 2

Gross Sales Includes Domestic Rs 7045.10 million Exports Rs 5310.40 million Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (471.80)million Consumption of Raw Materials Rs 6422.20 million Goods Purchased for sale Rs 627.80 million Stores & Spares Rs 518.90 million Power & Fuel Rs 1073.20 million Staff Cost Rs 188.20 million Other Expenditure Rs 784.30 million Tax Includes Provision for Taxation Current Tax Rs 249.20 million Fringe Benefit Tax Rs 2.30 million Deferred Tax Rs 230.70 million Depreciation Indicates Depreciation / Amortisation EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter 07 Complaints Received during the quarter 48 Complaints disposed off during the quarter 51 Complaints unresolved at the end of the quarter 04 1. The above results have been reviewed by the Audit Committee and have been taken on record by the Board of Director in their respective meetings held October 27, 2006. 2. The Company has allotted 8,69,350 equity shares of Rs 2/- each on conversion of 80, 2.50% FCCBs due 2006, into GDSs listed on Luxembourg Stock Exchange. Consequent to the above, conversion, the paid up equity share capital of the company has Increased to Rs 262.80 million. Further, in October 2006 the Company has allotted 21,500,000 Warrants to the promoter group, convertible into equity shares on preferential allotment basis in terms of guidelines for Preferential issue. 3. The results for the corresponding period are not comparable as Orissa plant was not in operation during the corresponding period of the previous year. 4. As the Company’s business activity falls within a single, primary business segment viz. 'stainless steel', the disclosure requirement of Accounting Standard (AS-17)' Segment Reporting' issued by the Institute of Chartered Accountants of India is not applicable. 5. The figures have been regrouped wherever necessary.

200612 Quarter 3

EPS is Basic Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter 04 Complaints Received during the quarter 38 Complaints disposed off during the quarter 39 Complaints unresolved at the end of the quarter 03 1. The above results have been reviewed by the Audit Committee and have been taken on record by the Board of Director in their respective meetings held January 24, 2007. 2. Jindal Overseas Holdings Limited a foreign incorporated entity forming part of the promoter group companies has acquired 8,367,492 Global Depository Shares (GDS) representing 16,734,984 equity shares and constituting 12.73% of the equity share capital of the Company. 3. The results for the corresponding period are not comparable as Orissa plant was not in operation during the corresponding period of the previous year. 4. Interest for the quarter and nine months ended December 31, 2006 includes gain of Rs 271.20 million and Rs 212.30 million respectively on account of foreign exchange fluctuations and hedging operations. 5. As the Company's business activity falls within a single, primary business segment viz. 'stainless steel', the disclosure requirement of Accounting Standard (AS-17)' Segment Reporting' issued by the Institute of Chartered Accountants of India is not applicable. 6. The figures have been regrouped wherever necessary.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	1.98	1.59	1.62
Long Term Debt-Equity Ratio	1.82	1.42	1.45
Current Ratio	1.16	1.01	0.90
TURNOVER RATIOS
Fixed Assets	1.74	2.15	1.92
Inventory	5.63	7.03	6.56
Debtors	10.05	14.24	17.25
Interest Cover Ratio	3.86	7.24	4.50
Operating Profit Margin (%)	13.53	16.28	18.32
Profit before Interest & Tax Margin (%)	9.53	12.37	13.99
Cash Profit Margin (%)	8.69	11.23	12.00
Adjusted Net Profit Margin (%)	4.69	7.33	7.67
Return on Capital Employed (%)	12.07	23.77	26.94
Return on Net Worth (%)	17.73	36.42	39.87

STOCK PRICES

Face Value	Rs.10/-
High	Rs.121.75/-
Low	Rs.118.90/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY :

The company was later converted into a Public Limited Liability Company w. e. f. 05.051975.

Jindal Strips Limited has been merged with Jindal Stainless Limited with effect from 01.04.2002.

Subject was promoted by O. P. Jindal and Associates. The company was incorporated to manufacture mild steel, HR plates and coils. It started a mini steel mill at Hisar in 1971. As a strategy to counter low margins in mild steel, the company diversified into production of stainless steel in the late 70’s. Subject was the first company to produce stainless steel HR coils (SAIL started with CR coils and has recently commissioned HR production in its stainless steel plant). In 1983, the company forward integrated with a CR plant for stainless steels at a site adjacent to its sister company Jindal Iron’s plant at Vasind (near Mumbai). In 1990, the company embarked upon major backward integration-cum-expansion by commencing work on a sponge iron plant at Raigarh in Madhya Pradesh. The company has over the years developed a number of technologically new processes to save on capital and operational costs. The company’s indigenously designed rotary kilns, for sponge iron, had teething problems and the setting up of the sponge iron plants was hence considerably delayed.

The subject was incorporated in November 1970 and became public in 1975. It was promoted by O. P. Jindal and Associates. The company, which started with a single plant at Hisar, has become a multi-plant, multi-location company. It manufactures stainless steel strips at Hisar, wide strip hot and cold-rolled coils from imported slabs at Vasind and sponge iron at Raigarh. The company is one of the few companies in the iron and steel industry without any technical collaboration, all its technology is developed in-house. The stainless steel produced by the company is mostly used for utensils, while cold-rolled coils are partially used captivity by a group concern for GP/GC sheets and the remaining is sold to the automobile and two-wheeler industry. One of India’s largest stainless steel producers with a market share of 40 %.

The company came out with an issue of partly convertible debentures in April, 1992 to finance the expansion capacity to 600000 tpa of sponge iron and 500000 tpa of pig iron. It is also to set up a captive power plant of 45 MVA. In 1994-95, Brahmputra Capital and Finance Services Private Limited became a subsidiary.

During the year 1998-99, as per the scheme of arrangement between Jindal Strips and Jindal Steel & Power Limited, the former hived off its Raigarh and Raipur divisions to the company. In December 1999, it placed 5.75% foreign currency convertible bonds to the international investors for an aggregate amount of US$ 30 millions. The issue was oversubscribed to the extent of US$ 3.5 millions. The Vasind division of the company has been hived off to subsidiary Jindal Steel and Alloy Limited, w. e. f. from January, 2000.

The Phase II of the stainless steel cold rolling project, wherein the cold rolling capacity is being increased to 90,000 tpa has commenced trial run production. All the value additional lines constituting of skin pass mill, strip grinding line and bright annealing line have already been commissioned. The company acquired a 60,000 tpa stainless steel cold rolling facility of Bethlehem Steel at Massillon, USA at a project cost of US$ 5 millions.

Subject has decided to incorporate a wholly-owned IT subsidiary, Cross Border IT (India), to foray into the global IT services business. It becomes the second company from the Rs. 40000.000 millions O. P. Jindal Group to diversify into the high net worth IT sector after Jindal Steel & Power.

During the 2001-02 Cold rolling unit has commissioned the coin blanking facility and supply coin blanks to GOI. The Hot Rolling division is currently extending its capacity buy installing a new EAF. The project for increasing the melting capacity will be completed by 3^rd quarter of 2002-03.

Subject is one of the few companies in the iron and steel industry without any technical collaboration, all its technology is developed in-house. It is one of the India's largest stainless steel producers with a market share of 40%.

The company is formed by demerging all the assets and liabilities and also the Stainless Steel manufacturing which was undertaken by Jindal Strips Limited. The Scheme of Arrangement & Demerger entered between Jindal Strips and Jindal Stainless Steel was sanctioned by the Hon'ble High Court of Punjab and Haryana.

To enhance the Shareholders value after the post merger Jindal Stainless Steel issued bonus shares to its shareholders and for this a scheme of arrangement was also entered between both the companies. Subsequently the Share Capital increased to Rs. 189.800 millions comprising 18982172 equity shares of Rs. 10 each. 

During April, 2003 Austenitic Creations Private Limited and J-Inox Creations Std was amalgamated with Jindal Stainless Steel Limited. Both the above companies are into the business of Architecture, Building constriction sector.

During February, 2004 the Equity Shares of the company has been subdivided from One equity share of Rs. 10 each into 5 equity shares of Rs. 2 each. 

The company has acquired an Indonesian company, PT. Maspion Stainless Steel, and formalities has been completed in December 2004. Consequent of this acquisition, PT. Maspion Stainless Steel has become the subsidiary of the company and this Indonesian company has started commercial production. 

PT Jindal Stainless, Indonesia and Jindal Stainless Steelway Limited are the subsidiaries of the company. Further Jindal Stainless Steelway Limited is a joint venture company between the company and Steelway S.r.l Italy and this venture would provide customized stainless steel products, inventory management, technical value engineering, warehousing, material testing and distribution services in stainless steel to meet specific requirements of the customer effectively and efficiently. 

During the year 2004-05, the company has enhanced its installed capacity of Plate/Steckel Mill, Steel Melting, Cold Rolled Strips and Chrome Ore Concentrate by 50000 MT, 50000 MT, 60000 MT and 30000 MT respectively. With this expansion the total installed capacity of Plate/Steckel Mill, Steel Melting, Cold Rolled Strips and Chrome Ore Concentrate has increased to 450000 MT, 550000 MT, 150000 MT and 72000 MT respectively.  

The company has planned to expand the installed capacity of stainless steel melting capacity at Hisar from 550000 TPA to 720000 TPA and also to increase the wider width hot rolling capacity from 450000 TPA to 720000 TPA. Further the company has also planned to enhance the cold rolling capacity from 150000 TPA to 250000 TPA by September 2006. 

The Company is in the process of setting up an integrated stainless steel facility in Duburi, Orissa and for this project The Orissa State Infrastructure Development Corporation has allotted around 678 acres of land. As part of the project the ferro alloys facilities constituting 150000 TPA Ferro Chrome capacity is in advanced stage of implementation and is expected to commence commercial production during 2005-06.   
During 2004-05 the company has entered into a technical assistance with Nisshin Company Limited, Japan to assist the company in improving quality of the finished products. Further the company has set up a service center at Gurgaon by way of subsidiary company in collaboration with an Italian company Steelwat s.r.l. Italy.

SHARE CAPITAL 

During financial year ended 31.03.2006, the company has allotted 3907028 equity shares of Rs. 2/- each upon conversion of 2141 - 0.5% Foreign Currency Convertible Bonds of USD 5000 each. The company has also allotted 16734984 equity shares of Rs. 2/- each (Underlying 8367492 GDS) upon conversion of 1540 - 2.5% Foreign Currency Convertible Bonds of USD 5000 each. After the above allotments, paid up equity share capital of the company has increased to Rs. 261103712/- divided into 130551856 equity shares of Rs. 2/- each. 

ALTERATION IN THE REGISTERED OFFICE OF THE COMPANY 

On 07.08.2006, marking the seventy sixth birth anniversary of Late Mr. O. P. Jindal, founder of O. P. Jindal group, the Haryana State Government has changed the name of Delhi Road' to O. P. Jindal Marg', therefore, the address of the registered office of the company now stands as O. P. Jindal Marg, Hisar – 125005, Haryana, India.

DIVIDEND 

The directors are pleased to recommend a dividend of Rs. 1.60 per equity share of Rs. 2/- each for the financial year 2005-06. 

Dividend, if approved at the ensuing annual general meeting, will be paid to those shareholders whose names appear in the Register of Members of the company as on 9^th September, 2006. Under the Income Tax Act, 1961, the receipt of dividend is tax free in the hands of the shareholders. 

RESTRUCTURING OF THE COMPANY 

The scheme of arrangement for hiving-off of Life Style Product Division and Architecture Division of the company to Austenitic Creations Private Limited and Jindal Architecture Limited respectively w. e. f. 1^st April 2005 was approved by the Hon'ble High Court of Punjab & Haryana, Chandigarh, vide its Order dated 13^th July 2006. The Order of the Hon'ble High Court of Punjab & Haryana, Chandigarh was filed with the Registrar of Companies, Delhi & Haryana on 1^st August 2006. Pursuant to the said scheme, Life Style Product Division and Architecture Division of Jindal Stainless Limited with all the properties, assets, rights and powers have been transferred to and vest in the respective transferee companies without further act and deed w. e. f. 1^st April 2005. 

OPERATIONS 

Hisar - Hot Rolling Division 

The company is in the process of enhancing its stainless steel melting capacity at Hisar from 550000 tons per annum as of March, 2006 to 720,000 tons per annum by March, 2007. During the previous year, the company commissioned slab caster, stainless steel plate annealing line and shot blasting machine in the HR Division. 

During the current financial year, the company has planned to upgrade the steel making technology to save energy cost and improve the product quality. An additional finishing mill stand is planned to be added in the steckel mill. This shall improve the yield of the product and also enhance the capability to produce hot rolled coils in thickness lower than 2.8 mm. A new 220-tpd oxygen plant is also being added. 

Apart from enhanced production capabilities, certain quality initiative like Six Sigma and Kaizen were started in the year 2005-06 which resulted in increased operational efficiency and yield. The technical alliance with Nishhin Steel, Japan, a global leader in the stainless steel industry has helped in knowledge sharing for improved performance.  

During the financial year 2005-06, the steel melt shop produced 547352 tones of stainless steel slabs and blooms as compared to 530185 tones during the previous year. The hot rolling production during the year was 538290 tones as compared to 537873 tones during the previous year. 

Hisar - Cold Rolling Division 

Cold rolling division has taken a leap ahead by setting up international quality equipments and process lines to produce a broad range of high quality semi finished and finished products to cater the diverse customer requirements, worldwide. 

As a major initiative, various projects have been identified and are in advance stages of implementation. With the process of upgradation of facilities and adding of new equipments the operational efficiencies and product performance is bound to increase along-with providing a spectrum of new product range. 

The cold rolling facility at Hisar is also being enhanced from 150000 tons per annum as on March 2005 to 275000 tons per annum by June, 2007. 

During financial year 2005-06, the production of Hisar cold rolling division was at 89731 MT of cold rolled strips, 11869 MT of cold rolled special steel and 486 MT of coin blanks.  

Hisar - Special Product Division: 

During financial year 2005-06, the Special Product Division produced 101600 MT of Precision Stainless Strips as compared to 77348 MT produced during the last financial year. During this financial year, two new major equipments, namely Skin Pass mill & Narrow CRAP line, were added to augment the production as well as to enhance the Quality of the Products. The Capacity utilization, during the year, exceeded 100%. 

To meet the growing demand for Precision Stainless Strips, the division has taken necessary steps to augment the production capacity. As part of the capacity enhancement plan, new bright annealing facilities along with a stretch leveler is being planned to be commissioned during next financial year. 

Vizag Division 

The division produced 30861 MT of High Carbon Ferro Chrome during the year 2005-06 as compared to 35698 MT during the preceding year. The production during the year decreased by 4837 MT, due to shutdown of 16 MVA furnace w. e. f. 31^st December, 2005 for refractory relining and renovation. The relining and renovation works have been completed and the furnace is operational. Sales during the year 2005-06 was at 31063 MT, inclusive of export of 1630 MT. The turnover of Vizag division during the year accounted for Rs. 1318 millions as compared to Rs. 941.500 millions during the previous year. 

The division is planning to put up a Metal Recovery Plant to recover the metal from the accumulated Slag of High Carbon Ferro Chrome. After commissioning of this plant, the total recovery per annum would be about 500 MT of High Carbon Ferro Chrome. 

Integrated stainless steel project at Orissa / Chromite Mines 

The Company has already initiated the process of setting up a Greenfield Integrated Stainless Steel Project at Jajpur, Orissa. The state of Orissa is rich in mineral resources viz. Chrome, Manganese, Iron Ore, Coal etc. The Company has already taken possession of 678 Acres of Land from Industrial Development Corporation of Orissa and the balance 562 Acres has been acquired and the formalities for undertaking possession is underway. 

A part of the Ferro Alloys facility of constituting 2 SAFs which have a capacity to produce 150000 MTPA Ferro Chrome has commenced operation. The other Ferro Alloys facilities like High Carbon Ferro Manganese of 50000 MTPA and Low Carbon Silico Manganese of 50000 MTPA are in progress and expected to commence production during first half of 2007-08. 

The company is also setting up a coal based 2 X 125 MW Captive Power Plant which is expected to be commissioned by the first half of next year. The work relating to setting up a recovery type Coke Oven Battery with a capacity of 425000 MTPA is in progress and it is expected to commence production during first half of next financial year. Construction of other enabling Central Utilities and facilities are going on full swing. 

The company has entered into a Memorandum of Understanding with the Government of Orissa for setting up Stainless Steel project at Orissa. 

During the financial year 2005-06, the Chromite Mines division has produced 82201 MT of Chrome Ore and 34318 MT of Concentrate Ore as compared to 58075 MT and 32972 MT respectively during previous year. The development of lumpy zone has already been started and lumpy ore production is expected to start in next financial year. 

MARKETING 

Exports 

The company has recorded a growth in sales that stands at Rs. 34946.100 millions, with exports representing 34.26% of the total sales. During the year, the quantum of exports has gone up by 14% as compared to the figures of the previous year. Sale of Cold Rolled products have gone up by 50%. Blade Steel Exports grew by 33% over the previous year. 

Market development activities have been initiated in South Africa, Latin America, CIS countries etc. A new office has been established in Russia for procurement of raw material and sourcing orders. Company has also planned to establish a warehouse in Italy. 

Domestic Market 

During the year, the company was the only supplier of stainless steel to DMRC through ROTEM for production of Metro Coaches. The company was the only company which was approved by Ministry of Defense for supply of stainless steel coils for Water Browser sector. 

Domestic CR quantity has increased from 60167MT (2004-2005) to 77126MT (2005-2006), showing an increase of 28%. Domestic turnover in CR has increased by 28.26%. Sales of Special grades have also increased. 

The company is in trade terms with :

• Katni Tile Works
• Seal Jet India (Private) Limited
• Metals Aids, Haridwar
• Jalan Refractories Private Limited, Alwar
• AMI Enterprises (Private) Limited
• Associated Jute Industries, Howrah
• Inox Air Products Limited, Vizag
• Subhodaya Enterprises, Vizag
• Vikash Iron & Steel Company, Howrah
• Advanced Reinforced Plastic Private Limited

The company’s fixed assets of important value include Freehold Land, Leasehold Land, Live Stock, Buildings, Plant & Machinery, Electric Installation, Vehicles and Furniture, Fixtures & Equipments.

Press Release:

JSL’s Q2 Results Break all Previous Record with 120% Increase in Profit After Tax

(Dated: October 27, 2006)

v 40% increase in turnover

v 102% rise in EBITA

v 120% increase in PAT

v 67% jump in exports

Jindal Stainless Limited (JSL) today announced its second quarter results for the fiscal 2006-07. The unaudited financial results for the second quarter were taken on record by the company’s Board of Directors meeting held today. The company registered a increase of 102% in EBIDTA to Rs. 2360 millions against Rs. 1170 millions registered during the corresponding period of the previous financial year. Profit after tax (PAT) was at Rs 970 millions registering an increase of 120% over the same corresponding period. The phenomenal growth in turnover, which grew by 40%, was affected by Export sales which grew by 67% while domestic sales grew by 24%.

“Major improvement in techno economic parameters, higher production, increased demand in domestic and international markets and better operational efficiencies has effected significant gains this quarter.” said Mr. Ratan Jindal, Vice Chairman & Managing Director, Jindal Stainless Limited

Adding further, he said “ The global demand of Stainless Steel was projected to rise in 2006 by 8.4% in May, 2006, was revised to 14.3% in October, 2006 by ISSF(International Stainless Steel Forum). The projected growth in the Asian markets this year is 17.5%. Today, Jindal Stainless Limited is exporting to over 30 countries worldwide and they are looking at opportunities across Europe, US, China, South East Asia & CIS countries.”

Jindal Stainless will attain a production exceeding 600000 MT this year at the Hisar plant compared to 547352 MT last year. The cold rolling capacity is also being expanded from 150000 MT to 250000MT by the end of the financial year, with impetus to value added stainless steel products. The new facility will process Ferretic grades of 400 series, stainless steel which has a growing market.

JSL is pioneer in production of high value added precision strips of razor blade quality and other grades for critical applications. The production capacity of the precision strip unit is also being increased from 15000 MT to 30000 MT by the end of the financial year.

As part of JSL’s mega expansion plans, 1.6 million tonnes Greenfield project at Orissa is underway by starting operations of 2x60 MVA Ferro-Chrome furnaces. JSL expects to start the 250MW power plant by mid next year subsequently followed up by setting up of other Ferro alloys units of Ferro-Manganese and Silico - Managanese.

In 2004, JSL acquired Maspion Stainless Indonesia, which has added strength to its reach in South East Asian markets and has also helped to build in synergies as the Hot rolled coils manufactured at the Indian plant is being cold rolled at Indonesia and used for servicing the South East Asian and global market. JSL has been able to effect a turn around and expects a production of 65000 MT this year, which is 120% of the installed capacity. JSL has further decided to increase the installed capacity to 150000 MT considering the importance of emerging South East Asian and other global markets by adding few balancing equipments.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.09
UK Pound	1	Rs.86.59
Euro	1	Rs.57.92

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions