Going Beyond Boundaries | Jindal Steel & Power Limited

1. Going Beyond Boundaries Jindal Steel & Power Limited A N N U A L R E P O R T 2 0 0 9 - 1 0

2. Our new logo The Jindal Flag is a symbol of integrity, quality and action. The flag’s fluid lines reflect the agility and dynamism that is part of our brand’s essential character. The colours of the Jindal Flag are derived from the Indian tricolour. They are a symbol of our commitment to the nation’s development and the pride we take in its progress. Contents 1 - 19 JSPL Overview 20 - 47 Review of Operations 2 4 5 6 8 12 14 16 Group Highlights Founding Chairman’s Vision Chairperson’s Inspiration EVC & MD’s Message An Introduction to JSPL Financial Highlights JSPL Commitment Product Profile 20 24 28 30 34 40 44 45 46 47 Operational Capabilities and Review Expansion Initiatives Human Capital Review Group Businesses Corporate Social Responsibility Initiatives Environment Conservation Initiatives Recognition and Awards Key Performance Indicators Board of Directors Management Team 48 - 105 Board and Management Reports 106 - 207 Financial Statements 48 60 68 76 93 94 Notice of Annual General Meeting Directors’ Report Annexures to Directors’ Report Corporate Governance Report Auditors’ Certificate on Corporate Governance Management Discussion and Analysis Report 107 Standalone Financial Statements 153 Consolidated Financial Statements 192 Subsidiary Financial Statements (Subansiri Hydro Electric Power Co. Ltd) 207 Proxy Form

3. At JSPL, we have an exciting story to tell. Over the last one and a half decades, JSPL has grown from strength to strength. We manufacture the world’s longest rail (121 m) in India, possess the world’s largest coal-based sponge iron facility, and produce economical power from waste heat. Today, JSPL is a picture of both evolution and constancy. A story of dynamism. Youthful courage. And breaking down of psychological and physical barriers. To extend beyond familiar boundaries. Our priorities, people and possibilities have evolved. Our time-honoured values of passion for people, business excellence, integrity, ownership and sense of belonging and social initiatives remain constant. A leading domestic player in steel, power, mining, coal to liquid and infrastructure, JSPL is extending its global footprint and exploring business avenues in high growth markets. We have consistently tapped global opportunities by increasing production capacity, diversifying investments and leveraging core capabilities to venture into new geographies across the world. And the common thread that binds the ever-changing with the constant is the mind. We believe all constructive movement starts from an energised mind, which later reflects in external initiatives. If we break predefined barriers, focus on the overarching vision with more determination and courage, our initiatives can open new vistas of growth and development, enhancing the quality of life for all stakeholders. We are bringing far-reaching socio- economic difference in multiple cultures and communities across India, China, Georgia, Mozambique, Democratic Republic of Congo and Indonesia, among others.

4. JSPL Overview Review of Operations Notice Directors’ Report Rs. 60,000 crore (USD 12 billion)… …is the size of the O.P. Jindal Group, which has emerged as one of India’s most dynamic business groups over the past three decades, of which JSPL is a part Rs. 11,091 crore (USD 2.5 billion)… …is JSPL’s consolidated turnover in 2009-10 Rs. 1,50,000 crore (USD 30 billion)… …is JSPL’s investment commitments in steel, power, coal to liquid and mining Rs. 30,000 crore (USD 6 billion)… …is the largest private sector investment commitment in Chhattisgarh 15,000… …is the collective pool of JSPL’s strong and committed workforce Performance snapshot (Consolidated figures) Total Income EBIDTA PAT EPS (Rs. in crores) (Rs. in crores) (Rs. in crores) (Rs.) 194.63 11,151.82 10,913.37 5907.99 3634.56 6% 12.92 20.86 5,231.81 3,007.15 Jindal Steel & Power Limited 2 39.05 * 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 2008-09 2009-10 * JSPL allotted 775,651,530 bonus shares of Re. 1 each on 19.09.2009 in the ratio of 5 bonus shares for each existing equity share of Re. 1 leading to an increase in number of outstanding shares from 154,652,683 in 2008-09 to 931,234,082 in 2009-10. This has resulted in a lower EPS.

5. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Global footprint Georgia China India Oman Congo Indonesia Zimbabwe Madagascar Mozambique South Africa Bolivia Australia HisarDelhi Gurgaon Faridabad Patratu Dongamahua Ranchi Ahmedabad Raigarh Kolkata Raipur Barbil Tensa Nagpur Angul Annual Report 2009-10 3 Mumbai Bhubaneswar Hyderabad Registered Office Corporate Office Works Mines Marketing Office Chennai Bangalore Branch Office Stockyards

6. JSPL Overview Review of Operations Notice Directors’ Report Founding Chairman’s vision Late Shri O.P. Jindal, Founding Chairman “India has come a long way since Independence. But if it wants to attain inclusive growth in every sense of the word, the fruits of growth must be equitably distributed to all sections of the society, including the lowliest of the low. I am confident that this is possible if every individual, every government and every corporate joins hands to translate this idea into reality. I look forward to that day when national prosperity will not mean economic growth for a select few, but for India’s entire billion-plus population.” Jindal Steel & Power Limited 4

7. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Chairperson’s inspiration Smt. Savitri Jindal, Chairperson Smt. Savitri Jindal is carrying forward her husband’s life-long mission of bringing about meaningful change in the life of every Indian through corporate and community engagements. She has always believed, like her husband the late Shri O. P. Jindal, that India has to reconcile economic development with social well being to bring about inclusive development; development that is sustainable and development that touches the lives of India’s billion-plus population. She is involved in multiple social welfare initiatives, benefiting disadvantaged sections of society. As the Group Chairperson, she provides guidance and inspiration to JSPL to reach greater heights of glory. Her motivation has also enabled JSPL to enhance its community support initiatives through various welfare projects in the sphere of education, healthcare and environment protection. Annual Report 2009-10 5

8. JSPL Overview Review of Operations Notice Directors’ Report EVC & MD’s message To emerge as a major participant in the growth process, JSPL is continuing with its strategic objectives of expansion and development of existing reserves and capacity, enriching its product portfolio, securing raw material availability globally and implementing high standards of corporate governance. In line with these objectives, there is major action on the ground: expansion plans are being executed at Chhattisgarh, Jharkhand and Odisha. Besides, we have planned a Rs. 10,500 crore investment in Bolivia, South America, in the coming years for mining and setting up of an integrated 1.7 MTPA steel plant, 450 MW power plant, 6 MTPA sponge iron and 10 MTPA iron ore pellet plant. JSPL’s commitment to highest standards of corporate governance is reflected in transparent stakeholder communication, and the underlying element of trust that we have been able to create among local residents in the multi-cultural locations of our presence through corporate and community engagements. Mr. Naveen Jindal, Executive Vice Chairman and Managing Director, JSPL, shares his insight about the Company and the steel industry, domestic and global. The times are momentous. There is a tectonic shift in the concentration of economic strength from the advanced economies to the developing nations of Asia, Latin America and the CIS countries. This is of particular relevance for countries like India and China, which are registering strong and sustainable economic growth in Asia. India’s economic growth is catalysed by growing domestic markets and demand emanating from bottom- of-the-pyramid wealth. The role of the Indian government has been noteworthy in this regard in terms of ensuring a proper regulatory framework under which the economy can grow and provide the necessary fiscal stimulus to accelerate economic revival. I am happy to note that we performed satisfactorily in 2009-10. Our turnover touched Rs. 11,151.82 crores, marginally higher than Rs. 10,913.37 crores that we reported in 2008-09. We reported a Rs. 3,634.56-crores net profit against Rs. 3,007.15 crores in 2008-09. We have always adhered to our long-term strategies of developing market leadership and enhancing our business performance with advanced technologies, efficient cost structures and a discerning knowledge of market opportunities across geographies. We also allotted 77,56,51,530 bonus shares of Re. 1 each in the ratio of 5 bonus shares for each existing equity share of Re. 1 in the last fiscal as a way of rewarding our shareholders and enhancing liquidity. India’s steel industry has been benefited by these developments as domestic requirements are growing rapidly and downstream industries are witnessing a high demand. India’s per capita steel consumption is still abysmally low: around 45 kg, vis-à-vis the world average of 196 kg. So there is a considerable room for consumption growth, which will attract investments for more capacity creation across the next decade. Besides, as the economies of several nations return to normalcy, the demand for steel-based goods will surge. This is reflected in the growing demand for automotive products, building construction and large infrastructure projects, which were deferred owing to the slowdown. Jindal Steel & Power Limited 6 JSPL’s commitment to highest standards of corporate governance is reflected in transparent stakeholder communication, and the underlying element of trust that we have been able to create among local residents in the multi-cultural locations of our presence through corporate and community engagements.

9. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials JSPL, along with its subsidiaries, is in the right sectors, at the right time with the right mix of dedication and talent to emerge as the creator of next-generation steel and power on the strength of its advanced technologies, efficient cost structures, enduring focus on innovation, consistent investments to secure stable sources of raw materials and companywide consolidated management. In continuing with the vision of our founding Chairman late Shri O.P. Jindal, JSPL has always tried to reconcile corporate growth with community uplift. This spirit is reflected in our numerous social outreach programmes in the sphere of education, healthcare, livelihood creation, preservation of indigenous art, culture, sports and so on. It is pertinent to mention here that JSPL was recently conferred with the Corporate Social Responsibility Excellence Award by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) in recognition of its significant contribution for promoting and propagating Corporate Social Responsibility (CSR) initiatives. JSPL has won many accolades for its CSR initiatives. Notable among them is the ‘Transforming Vision into Reality’ Award for 2009-10 that it bagged at the CSR Quest 2010 at Ranchi recently. Steel and power will remain relevant as the major drivers of infrastructure development and economic development, nationally and globally. JSPL, along with its subsidiaries, is in the right sectors, at the right time with the right mix of dedication and talent to emerge as the creator of next-generation steel and power on the strength of its advanced technologies, efficient cost structures, enduring focus on innovation, consistent investments to secure stable sources of raw materials and companywide consolidated management. This futuristic mindset is illustrated by the theme of this year’s report. It is relevant to mention in this context that we have undertaken rebranding initiatives with a new corporate identity to reposition ourselves as a dynamic Indian multinational. This new identity communicates a contemporary mindset, tremendous surge of energy and commitment to harness our energies to create enhanced stakeholder value. Annual Report 2009-10 7 As we move ahead to the next frontier of growth and integrated excellence, I seek the support and encouragement of all our stakeholders, who made our journey since inception smooth and rewarding. Naveen Jindal

10. JSPL Overview Review of Operations Notice Directors’ Report what we want to be Jindal Steel & Power Limited 8 Step into a journey through our world.

11. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Strong pillars Vision “To be a globally admired organisation that enhances the quality of life of all stakeholders through sustainable industrial and business development”. Mission We aspire to achieve business excellence through: • The spirit of entrepreneurship and innovation • Optimum utilisation of resources • Sustainable environment friendly procedures and practices • The highest ethics and standards • Hiring, developing and retaining the best people • Maximising returns to stakeholders • Positive impact on the communities we touch Values Annual Report 2009-10 9 • Passion for People • Business Excellence • Integrity, Ownership and Sense of Belonging • Sustainable Development

12. JSPL Overview Review of Operations Notice Directors’ Report Business Business portfolio and expansion plans • Incorporated in 1979 CURREnT CaPaCITy • Installed capacity of 3 MTPA of steel, 358 MW captive power plant and 1,000 MW of independent power produced with captive coal and iron-ore mines • 3 MTPA integrated steel plant at Raigarh, Chhattisgarh • 1.4 MTPA sponge iron plant • 1.7 MTPA pig iron plant • Mining 6 million tonne coal, the largest mining by a private company Steel • Market leader in coal-based sponge iron industry in India Comprises captive power plants, wind power plants as well as IPPs under Jindal Power Ltd, a company promoted by JSPL • Offers a wide product basket catering to the steel market’s each and every need, which includes large sized parallel flange beams, 121 metre rails, coils and plates, sponge iron, semi finished steel, power and ferro alloys Power • The group includes Jindal Power Limited, Jindal Steel Bolivia and Jindal Cement COaL TO LIqUID PROJECT • Ramchandi Promotional Coal Block in Odisha allotted by the Government of India Presence • Estimated reserves of 1,500 million tonnes Coal to Liquid / Oil & Gas • Headquartered at New Delhi, India • Plants located at Raigarh in Chhattisgarh, Angul in Odisha and Patratu in Jharkhand; Machinery division is located in Raipur; Captive coal mines are located in Dongamahua and Tamnar, Chhattisgarh and Iron ore mines at Tensa, Odisha • Captive coal mine (6 MTPA capacity) at Dongamahua, Chhattisgarh; also set up a coal washery with 6 MTPA capacity • Captive coal mine of JPL at Tamnar extracting about 5.25 MTPA • Offices located at seven locations and six stockyards, ensuring pan-India footprint Jindal Steel & Power Limited 10 mining • Global presence in Brazil, Bolivia, Georgia, China, Mongolia, Mozambique, Democratic Republic of Congo, Indonesia, Madagascar, South Africa and the Sultanate of Oman Plans to set up a 2 MTPA slag and flyash cement plant at Raigarh • Listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in India Cement

13. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Business portfolio and expansion plans CURREnT CaPaCITy InDIa ExPanSIOn PLanS BOLIvIa PLanS • 3 MTPA integrated steel plant at Raigarh, Chhattisgarh • 12.5 MTPA integrated steel plant at Angul, Odisha • 1.7 MTPA integrated steel plant • 6 MTPA sponge iron plant • 1.4 MTPA sponge iron plant • 11 MTPA integrated steel plant at Patratu, Jharkhand • 10 MTPA iron ore pellet plant • 1.7 MTPA pig iron plant • 7 MTPA integrated steel plant at Raigarh, Chhattisgarh CaPTIvE POwER PLanTS JInDaL POwER LImITED Comprises captive power plants, wind power plants as well as IPPs under Jindal Power Ltd, a company promoted by JSPL • 358 MW operational CPP for the steel plant at Raigarh Project portfolio of 15,660 MW at various stages of planning, implementation and operation • 540 MW CPP planned for further expansion • 1,000 MW operational thermal power project at Tamnar in Raigarh • 810 MW CPP planned for the steel plant at Angul • 10,480 MW new capacity under implementation • 450 MW CPP planned for the steel plant at Bolivia • 4, 414 MW under planning COaL TO LIqUID PROJECT JInDaL PETROLEUm LImITED • Production capacity of 80,000 barrels per day (4 MMTPA) • Ramchandi Promotional Coal Block in Odisha allotted by the Government of India An affiliate company, M/s. GTL International (GTLI) owns the Palmar Block (total investments are 20 million dollars in 2 wells plus a production plant). GTLI is studying the deepening of existing wells and has already formed a mixed partnership with the Bolivian State company YPFB, named YPFB GTLI SAM, for exploring 4 blocks (Itacaray, Rio Beni, Almendro and Cupesito) • Technical tie-up with M/s Lurgi of Germany • Fixed Bed Dry Bottom Technology to be used • Total project cost: Rs. 420 billion (US$9 billion) • Estimated reserves of 1,500 million tonnes • Captive coal mine (6 MTPA capacity) at Dongamahua, Chhattisgarh; also set up a coal washery with 6 MTPA capacity • Captive iron ore mine at Tensa, Odisha, extracting about 3 MTPA • Acquired the development rights for 20 billion tonne of EL Mutun Iron Ore Reserves in Bolivia • Also forayed into the exploration and mining of high value minerals (diamonds) in places like Chhattisgarh, Jharkhand and the Democratic Republic of Congo • Captive coal mine of JPL at Tamnar extracting about 5.25 MTPA Annual Report 2009-10 11 PLanT DETaILS CEmEnT PRODUCTIOn Plans to set up a 2 MTPA slag and flyash cement plant at Raigarh • 1.25 MTPA Clinker • 2 MTPA • 0.5 MTPA Slag KEy PROJECT fEaTURES • 0.25 MTPA Flyash • Kiln capacity: 3,500 TPD • Construction period: 24 months

14. JSPL Overview Review of Operations Notice Directors’ Report Our performance over the years # Total Income PAT EBIDTA (Rs. in crores) (Rs. in crores) (Rs. in crores) 11,151.82 5,907.99 3,634.56 10,913.37 5,231.81 3,007.15 5459.87 2,162.61 1,236.96 3,548.78 1,431.58 2,617.76 702.99 1,034.33 572.94 2005-06 2006-07 2007-08 2008-09 2009-10 2005-06 2006-07 2007-08 2008-09 2009-10 2005-06 2006-07 2007-08 2008-09 2009-10 POST BaLanCE ShEET DEvELOPmEnT Through our 100% subsidiary Jindal Steel & Power (mauritius) Limited, mauritius (JSPLm) we acquired Shadeed Iron & Steel Co. LLC (SISCO), a company incorporated under the laws of the Sultanate of Oman. The project is under commissioning and is expected to commence commercial operations in the 1st quarter of fy 2011-2012. This is a significant acquisition for JSPL as the facility is engineered by Kobe Steel (Japan) and midrex (USa), leaders in the field of direct iron technology. The completed cost of the project is estimated to be US$525 million. we have recently acquired several coal and iron ore mines in africa and Bolivia. There is a strong demand for steel in the middle East and north african countries, with a supply shortfall estimated to be more than 15 million tonnes. SISCO is installing 1.5 mTPa gas-based hot Briquetted Iron (hBI) Plant at the industrial port area of Sohar, Oman to cater to this demand. Jindal Steel & Power Limited 12

15. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Dividend Exports Earning Per Share (Rs. in crores) (Rs.) (%) 550 1021.37 194.63 400 360 653.01 592.84 300 80.34 410.41 371.85 45.66 125* 39.05* 37.21 2005-06 2006-07 2007-08 2008-09 2009-10 2005-06 2006-07 2007-08 2008-09 2009-10 2005-06 2006-07 2007-08 2008-09 2009-10 figures relating to 2009-10 and 2008-09 are consolidated and those relating to 2007-08, 2006-07 and 2005-06 are standalone. # JSPL allotted 775,651,530 bonus shares of Re. 1 each on 19.09.2009 in the ratio of 5 bonus shares for each existing equity share of Re. 1 leading to an increase in the number of outstanding shares from 154,652,683 in 2008-09 to 931,234,082 in 2009-10. This has resulted in a lower EPS and dividend percentage. * Annual Report 2009-10 13

16. JSPL Overview Review of Operations Notice Directors’ Report Creating timeless value In our quest for global competitiveness, we are creating capabilities that transcend boundaries. Jindal Steel & Power Limited 14

17. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Strengthening foundation Leveraging capabilities to offer premium grade steel to drive the Indian economy. Spreading light Embarking on a journey towards establishing a ‘Power Sufficient India’. Nurturing people Rearing talent; promising excellence and personal growth to employees. Connecting places Revolutionised the railways sector by introducing the world’s longest rails, for the first time in India. Protecting nature Restoring balance by creating a cleaner and greener environment. Realising hopes Reaching out to bring smiles, realise hopes and touch lives through meaningful social initiatives. Building bases Providing impetus to the construction industry by offering extremely flexible and cost-effective H-Beams. Exploring riches Shaping structures Commissioned India’s first plate mill, producing plates and coils of cutting edge quality. Adding new dimensions to business through exploration of high value minerals, metals and precious stone. Expanding horizons Transcending the national boundary to make meaningful international collaborations. Annual Report 2009-10 15

18. JSPL Overview Review of Operations Notice Directors’ Report Developing holistic excellence We are enhancing innovative capabilities and we are delivering products that integrate resources and customers globally. Jindal Steel & Power Limited 16

19. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Rails We pioneered the manufacture of 121 metre long track rails in the Indian sub-continent. The world’s longest track rails are a testimony of our manufacturing capabilities, thanks to our ceaseless drive for innovation. These ‘A’ class rails ranging from 13 m to 121 m length will make the introduction of high speed rails in India, a reality. We are equipped with state-of-the-art facilities that enable continuous on-line inspection and quality control. This aids compliance of specifications laid down by the Indian Railways and international bodies. JSPL is also a preferred supplier for Crane Rails, which find widespread usage in EOT Cranes as well as Gantry Crane operations. Sectoral use Rail tracks for high speed trains, sidings of power plants, refineries, cement, fertiliser and steel plants. Crane rails for ports and harbours, factories, mines, launch pads and shipyards. Parallel flange sections We pioneered the production of medium-size and large-size Hot Rolled Parallel Flange Beams (H-Beams) and Column Sections in India. As per Indian and international standards, these sections are superior in terms of strength, efficiency, higher axial and bending load bearing capacity, workability and economy, compared with obsolete tapered flange beams. JSPL’s Parallel Flange Beams and Columns enable complex fabrications in high volumes due to inherent functional advantages of these sections. In addition, we enhanced technical innovation and advancement by offering H-Beams that are unmatched in quality, performance and cost effectiveness. JSPL today rolls 32 different series and 91 different variants (unit-weights) of H-Beams and Columns in 150 mm to 900 mm size (UB and UC, NPB/IPE, WPB/HE sections). Sectoral use Refineries, metro rail projects, airports, flyovers, power plants, shopping malls, high rise buildings, stadiums, steel plant and industrial sheds. Annual Report 2009-10 17

20. JSPL Overview Review of Operations Notice Directors’ Report Plates and coils We are equipped with India’s first ‘one of a kind’ advanced plate mill that produces plates and coils of 3.5 metres and 3 metres width, for the first time in the private sector. These flat products enjoy premium quality owing to sound steel refining properties and very close rolling tolerances. Sectoral use General engineering, structural fabrication, hi-tensile and micro- alloyed grades, pressure vessel and boilers, bridges and flyovers, corrosion resistant applications, railway wagons, oil & gas pipe lines and shipbuilding. Fabricated sections Manufacturing of sections H-beam, I-type beam and Box beam is as per user’s specifications. Our fabrication sections meet the quality standards demanded by the industry. Plates for the beams come from our plate mill and are thoroughly inspected through various quality checks, fully backed by mill certificates. Sectoral use Large support columns and beams for the manufacture and process plants, airports, high rise buildings, power plants, stadiums and flyovers, among others. Wire rods Jindal Steel & Power Limited 18 We manufacture superior wire rods with technology from Morgan, USA and equipped with advanced rolling equipment, such as reducing and sizing mill (RSM), high speed shear, pinch rolls and laying heads, along with controlled temperature rolling and controlled cooling to meet the processing requirements of various steel grades. This results in improved mechanical properties due to finer and more uniform grain size, suitable for rapid spheroidised annealing or high-yield strength with optimal scale weight and type. JSPL offers wire rods (ranging from 5.2 mm-22.00 mm diameter) in a wide range of steel grades.

21. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Semi-finished products We annually produce about three million tonnes of semi-finished products, which are primarily used for captive use. We possess about 0.75 million tonne annual capacity in rail and universal beam mill and one million tonne annual capacity in plate and stackle mill. Sectoral use JSPL’s products find application in the Indian pipe industry, as well as various leading integrated mills and rolling facilities in Europe, South East Asia, West Asia and the Middle East. Sponge iron We possess the world’s largest coal-based sponge iron manufacturing facility, emerging as the market leader in India’s coal-based sponge iron industry. This is owing to our efficient backward integration as India’s only sponge iron manufacturer, with captive raw material resources and power generation capacity and product quality. The manufacturing capacity of 1.37 MTPA and metallic iron content of more than 81% uses Direct Reduced Iron Process (DRI) method of production and utilises 10 indigenously developed rotary kilns (6 kilns of 300 TPD and 4 kilns of 500 TPD). Ferro chrome Power Annual Report 2009-10 19 Our high-grade chrome ore is one of the prerequisites for making ferro chrome, which is sourced from the captive chrome ore mines in Odisha’s Sukinda Valley. The ferro chrome plant (36,000 TPA production capacity) is fully equipped with a modern laboratory, complete with state-of-the-art testing facilities in line with international standards. To contribute significantly to India’s growing need for power, we commenced power generation over a decade ago. We operate a 358 MW power plant on the premises of our steel plant in Raigarh. We have operationalised a 24 MW wind energy plant at Satara in Maharashtra.

22. Review of Operations JSPL Overview Notice Directors’ Report Enhancing capabilities Our extensive operations harmonize quality excellence, superior technology and safer practices, aligned to international norms. Jindal Steel & Power Limited 20

23. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Operational capabilities Iron ore mine Coal mine Sponge Iron (coal based) Hot Metal (Pig Iron) Total Steel * Rails and Structurals * Plates and Coils * Slabs, Rounds, Blooms and Billets, Captive Power Plant Wind Power Plant 3 MTPA 6 MTPA 1.37 MTPA 1.65 MTPA 3 MTPA 0.75 MTPA 1 MTPA 1.25 MTPA 358 MW 24 MW 2009-10 in retrospect • Recorded highest production at DRI I and II, Coke Oven, Sinter plant, Blast Furnace I and II, SMS II, Plate Mill and Power Plant • Introduced facilities like bell less top charging and coal dust injection in the mini-blast furnace to enhance productivity • Reduced alumina through washing of iron ore fines • Injected lime fines and sand to control EAF slag condition • Commenced breakout prediction system at slab caster • Modified cross transfer of billet caster to improve productivity • Modified fume extraction system in EAF, which has improved furnace availability as well as improvement of furnace floor environment • Substituted imported limestone and costly limestone with indigenous Dolomitic limestone and stabilisation of its use in EAF • Undertook process development activities for achieving high productivity and reduction in coke rate • Used increased volume of hot metal through launder for improvement in productivity and energy consumption at EAF • Upgraded lamellar cooling for increasing cooling at plate mill Annual Report 2009-10 21 • Fabricated various structurals mostly used by power plants using our own plates • Developed 3,500 wide plates, 165 mm square billets and universal beam (457x152 mm); also developed casted round sections (162, 200, 220, 255, 305 mm diameter) in our steel melt shop, using indigenous technology • Installed Solar Power Generator of capacity 20 KW and 5 KW on the roof tops of TG Building and Guest House respectively as a part of Renewable Energy Development

24. Review of Operations JSPL Overview Notice Directors’ Report Research and development • Used bio-diesel as a substitute of imported coking coal to reduce fuel cost • Reduced accretion in DRI Kilns to enhance productivity • Eliminated longitudinal web crack in Beam Blank casting to enhance product quality • Substituted cast iron coke door and Gas main header with heat-resistant steel plates developed and rolled in the plant • Eliminated internal crack in Boron treated steel for seamless pipe application • Effect of washing of iron ore on sinter quality and parameters of Blast Furnace • Developed low-carbon micro alloyed plate with reference to mechanical properties, grain size and plate surface quality • Developed fly ash brick with Gypsum and Hydrated lime • Conducted study of the effect of spinel and chrome ore fines on accretion formation in DRI • Modified design modification of COMBI caster tundish to reduce tundish skull weight in collaboration with IIT Kanpur • Conducted successful trial run of Break Out Prediction System (BOPS), developed in-house, for the first time in India Quality excellence At JSPL, we focus on delivering consistent product quality, catering to customer requirements and leading to repeat purchase. All products undergo stringent quality tests to address multiple quality parameters at various stages. Some of the equipment used at various stages of the production process comprises- X-Ray fluorescence (raw material stage), Optical emission (steel, in-process and semis) and Universal Testing (finished products), among others. Jindal Steel & Power Limited 22 Rail and Universal Beam Mill

25. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Technology that enhances trust At JSPL, we work with superior knowledge and expertise available in the industry globally. Some of the world-class technologies comprise Steel Melting Shop (BSE, Germany), Coal Gasification Plant(Lurgi, South Africa), Direct Reduced Iron (Danieli, Italy), among others. Coal to Gas plant at Iron Ore Pelletisation plant, Barbil Safer practices Safer industry practices represent a ‘way- of-life’ at JSPL. Each day, we devise plans and make sustained efforts to make our work places safer and more conducive for operations. Some of the relevant initiatives comprise: regular training programmes to enhance safety awareness; stringent monitoring to improve compliance; prevention of water stagnation; scrap yard developed to put all scrap/ wastes at an identified place; waste bins at required locations for waste collection; collected waste is segregated for systematic disposal; and propagation of safety and environment messages through hoardings and banners. Annual Report 2009-10 23 Training on safety awareness

26. Review of Operations JSPL Overview Notice Directors’ Report Reinforcing extended footprint We are leveraging multi-locational opportunities on the strength of our strategically located advanced facilities and a secured raw material base. Jindal Steel & Power Limited 24

27. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Chhattisgarh Process of steel melting Continuous Casters faCILITIES UnDER ImPLEmEnTaTIOn • 2 MTPA coal gasification and gas based DRI • 3 MTPA steel making facilities • 0.7 MTPA medium and light section mill is expected to be commissioned in 2010 • 540 MW power plant is expected to be commissioned by March 2011 RESOURCES • Existing coal mines at Raigarh, having about 200 MT reserves • Existing iron ore mines at Sundergarh, Odisha • Prospecting license for new iron ore mine in Bailadila, recommended by the government of Chhattisgarh (estimated reserves of 80 MT) ROaDmaP • Coal gasifier • Vertical Shaft Kilns for sponge iron production (with syn gas) • 2 MTPA cement plant • Pre-fabrication of pressure vessels • 6 strand billet caster at indigenously developed combi caster • Installation of additional de-dusting system at Steel Melt Shop • 0.7 MTPA medium and light section mill for rolling 100 to 300 MM beams and channels with a provision to extend up to 400 MM. With the commissioning of this mill together with rail and universal beam mill, it would be possible to roll 100-900 MM wide structurals at Raigarh works. It would also have the capability to roll 100 to 150 MM angles • New straightening machine at RUBM Annual Report 2009-10 25

28. Review of Operations JSPL Overview Notice Directors’ Report Jharkhand Overview of Wire Rod Mill at Patratu, Jharkhand faCILITIES • JSPL plans to establish a steel plant of 11 MTPA capacity and a captive power plant with a generation capacity of 2,600 MW in phases • Setting up a 6 MTPA steel plant, a 1,609 MW captive power plant (CPP) at Patratu, a 5 MTPA steel plant and a 1,000 MW CPP at Asanboni. • Independent power plants of 1,320 MW near Dumka and 1,320 MW near Godda are also being set up. ROaDmaP • Setting up a 3 MTPA integrated steel plant at Patratu, Jharkhand. The facility will have two rebar mills of 1 MTPA each, a Wire Rod Mill of 0.6 MTPA, Coke Oven of 1.5 MTPA, a Sinter Plant of 4.27 MTPA and a Blast furnace of 3 MTPA. • Major orders for various equipment have been finalised. • The first unit of 0.6 MTPA Wire Rod Mill was commissioned on 29th March, 2010 and was dedicated to the nation by Shri Virbhadra Singh, Hon’ble Steel Minister, Government of India, Shri Subodh Kant Sahay, Hon’ble Minister for Food Processing Industries, Government of India and Shri Shibu Soren, Former Chief Minister of Jharkhand . • A Bar Mill of 1 MTPA capacity is expected to be commissioned by December, 2010. The integrated steel plant is expected to be commissioned by 2012. DEvELOPmEnTS Jindal Steel & Power Limited 26 • JSPL’s 0.6 MTPA wire rod mill plant at Patratu is equipped with latest technology from Morgan, USA including Reducing and Sizing Mill (RSM), high speed shear, pinch rolls and laying heads, along with controlled temperature rolling and controlled cooling to meet the processing requirements of various steel grades. • JSPL’s re-bar unit started equipment erection for re-heating furnace, cooling bed area and electrical equipment. JSPL expects to commission the unit by end of 2010. OThER maJOR faCILITIES Coke Oven, Blast Furnace, Sinter Plant and Steel Melting Shop

29. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Odisha 4.5 MTPA capacity Pellet Plant at Barbil, Odisha faCILITIES aT anGUL, ODISha • Setting up of a 6 MTPA integrated steel plant at Angul in Odisha in a phased manner. • Of the 4,331 acres required for the project, 4,000 acres have been acquired. • Orders have been placed for equipment and civil structure. • The first phase of the integrated steel plant is expected to be commissioned by 2012. • A captive power plant of 810 MW at Angul is also being set up. RESOURCES fOR ThE anGUL PROJECT • A coal mine with estimated geological reserves of 228 MT has been allotted for the Angul project. • An iron ore mine, to be allotted as per an MoU with the Government of Odisha. • JSPL is setting up a coal gasification unit for its upcoming 6 MTPA steel facility in Angul, Odisha using the ‘fixed-bed dry bottom coal gasification’ technology from Lurgi GmbH (Frankfurt, Germany). The Syngas produced at this plant will replace natural gas used in the process of steel manufacture. DEvELOPmEnTS aT BaRBIL • Commercial production of the pellet plant commenced at Barbil in December, 2009. • As JSPL is actively engaged in the promotion of alternative fuels, at Barbil, the pellet production will be through coal gasification, replacing fuel. This is an innovative initiative, first-of-its-kind in the world, using circulating fluidised bed technology for coal gasification. Annual Report 2009-10 27

30. Review of Operations JSPL Overview Notice Directors’ Report Nurturing boundless talent Our human resource development model is closely aligned to our vision to emerge as a globally acclaimed organisation with a passionate zeal to enhance people competence. Jindal Steel & Power Limited 28

31. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials At JSPL, people play a pivotal role in fostering a culture of excellence and meritocracy. We are institutionalising robust processes, people policies, systems and procedures through a Business Partnership Model. Our people initiative encompasses the following: JInDaL LEaD manaGEmEnT GROUP: yOUnG LEaDERShIP DEvELOPmEnT PLan Fifteen young and best talents from top management schools have been recruited as future leaders and trained to develop a robust leadership pipeline. PROJECT ‘UTTKaRSha’ JSPL has partnered with Hewitt Associates for a leadership capability development project called ‘Uttkarsha’. As part of the project, we identify high performing and potential leaders through a talent mapping process that is validated through our development centre and the 360 degree feedback by Hewitt Associates and Dr. T.V. Rao Learning Systems. We have coached 55 senior leaders on a one- on-one basis up till now. Programmes like Leadership in Pipeline and MDP-1&2 have been launched for the development of high potential employees in the senior and middle management. The average training duration comprised five person-days in 2009-10. TaLEnT aCqUISITIOn Talent acquisition has remained the most critical and focused HR aspect in terms of lateral and fresh hiring. At JSPL, we have not just recruited the right talent to catalyse organisational growth, but also introduced the Psychometric Test and Competency Based Interview to accelerate talent acquisition. KnOwLEDGE manaGEmEnT PORTaL This was launched to harness abundant knowledge assets either in tacit (experience, learning from failure, thumb rules, among others) or explicit (literature, reports, failure analysis, among others) form and to organise and transform the acquired knowledge for relevant use. ORGanISaTIOnaL TRanSfORmaTIOn We have partnered with McKinsey Associates to enhance a culture of professionalism, leading to a transformed organisation. We undertook several initiatives for complete clarity on roles and responsibilities and critical processes, documented well established and effective tools and processes and formed management committees to enhance ownership and accountability. The management committee(s) facilitates collective and superior decision-making. E-LEaRnInG (Gyan-DRIShTI PORTaL) This was launched to offer a holistic learning that utilises various electronic media to fully or partially deliver training. It allows learners to monitor their pace in a single-window interface. The learner can access the repository on various modules. The steel, mining and power technical module has been uploaded for the use of concerned employees, and we are developing the Off-the- Shelf Programme for a different group of employees. SPOnSORED manaGEmEnT PROGRammES JSPL commenced a company sponsored Executive Post Graduate Program in management and has also issued professional membership policy to expedite the process of learning and knowledge accretion. IT InfRaSTRUCTURE JSPL’s Human Resource Information System has facilitated access to critical organisational data, expediting decision-making. Annual Report 2009-10 29 HR training in progress

32. Review of Operations JSPL Overview Notice Directors’ Report Instilling overarching vision Inspired by the vision of embracing new ideas in all aspects of business and performance, our group is moving beyond predefined boundaries with forethought, adaptability and innovation. Jindal Steel & Power Limited 30

33. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials POWER Jindal Power Limited 1,000 MW Thermal Power Plant at Tamnar, Raigarh Driven by JSPL’s vision and ideologies, Jindal Power Limited (JPL), a company promoted by Jindal Steel & Power Limited has been contributing to the growing needs of power in the country since its inception. JPL has earned the distinction of setting up India’s first mega power project in the private sector at Tamnar in Raigarh, Chhattisgarh. The Company has successfully commissioned a 1,000 MW (4x250 MW) Power Plant. Notable highlights of the plant are: • A 7 km conveyer pipeline has been set up for coal transportation between the captive coal mines and the plant. Annual Report 2009-10 31 • The Company has constructed a 258 km, 400 KV Double Circuit transmission line from the plant to the PGCIL sub- station at Raipur through which power can be sold anywhere in India. • An 18 m high dam over the Kurket River, 25 km away from the project site, takes care of the plant’s water requirements.

34. Review of Operations JSPL Overview Notice Directors’ Report 18 m high dam on River Kurket 7 km long Conveyor Pipeline ThERmaL 4,000 MW Etalin Hydroelectric Project, 500 MW Attunli Hydroelectric Project and 1,600 MW Subansiri Middle in Arunachal Pradesh in a joint venture with the Hydro Power Development Corporation of Arunachal Pradesh Limited (A Government of Arunachal Pradesh Enterprise) on a Build, Own, Operate and Transfer (BOOT) basis. We believe that the 4,000 MW Etalin Hydroelectric Project will be India’s largest hydro project. All the projects are run-of-the-river hydroelectric projects and will complement the state’s power supply. We also plan to build a 454 MW hydro power plant at Chainpur Seti in Nepal. JPL has signed an MoU with the State Government of Jharkhand to set up a 2,640 MW thermal power plant. This step will catalyse growth and the development for the mineral-rich region. JSPL plans to add 2,400 MW to the existing capacity of the 1,000 MW thermal power plant at Tamnar with around Rs. 13,410-crore investment. hyDRO POwER With its sights set to usher in a powerful future for the nation, JPL has signed agreements to develop the PETROLEUM Jindal Petroleum Limited Jindal Steel & Power Limited 32 As part of its diversification process, in 2008, the Group has forayed into the oil and gas sector, operating under Jindal Petroleum Limited. The company has acquired five oil and gas blocks in Georgia. Mr. Naveen Jindal led a delegation to Georgia to sign contracts with the Government of Georgia for exploration and production, indicating the importance of petroleum business. The company has so far invested US$60 million (Rs. 280 crore) and would be investing over US$300 million during the next three years. • Downstream business: Jindal Petroleum Limited is considering venturing into refining and marketing of various petroleum products. • midstream business: The company is also planning to set up transportation as well as storage facilities for crude oil and natural gas.

35. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials STEEL BOLIVIA Jindal Steel Bolivia Mr. Naveen Jindal, EVC & MD, JSPL visiting the El Mutun Iron Ore reserves in Bolivia The Company’s penchant for global growth is evident from the diversified interests undertaken and implemented with precision. • The Company has acquired the development rights for the 20 billion tonne of El Mutun iron ore reserves in Bolivia, and plans to invest US$2.1 billion in the next few years. • It will set up an integrated 1.7 MTPA steel plant, a 6 MTPA sponge iron and a 10 MTPA iron ore pellet plant in Bolivia. This will be the largest investment by an Indian company in South America and also the largest investment by a foreign company on a single project in this country. • The other affiliated company M/s. GTL International in Bolivia is currently engaged in the development of PALMAR FIELD, having estimated recoverable reserve of 24.7 BCF Gas and 0.87 MMBBL of condensate. M/s. GTLI has already completed drilling of one well having 3,500 m depth and expects to commence the supply of 6 mmcfd of “Natural Gas” and 120 bbl of “Condensate” shortly. The drilling of the second well is in process. GTLI owns the Palmar Block (total investments till now is 20 million dollars in 2 wells plus a production plant). The recent discovery of a deeper productive zone in a neighbouring field (Iquiri zone in the Rio Grande Field) enhances the potential for the Palmar Field, as that zone is as well present within the Palmar concession. GTLI is studying the deepening of existing wells in order to test that formation. GTLI has already formed a mixed partnership with the Bolivian State company YPFB, named YPFB GTLI SAM, for exploring 4 blocks (Itacaray, Rio Beni, Almendro and Cupesito). Annual Report 2009-10 33 Jindal Cement The Company plans to diversify its business operations to set up a 2 million tonne annual capacity slag and flyash cement plant at Raigarh, Chhattisgarh. The plant is proximate to the existing steel unit at Raigarh, about 2 km away and plans backward integration by utilising slag from the blast furnace and fly ash from its power plant. A projected kiln capacity of 3,500 TPD has also been targeted and the construction will take 24 months. The project will be completed in two phases. In the first phase, the construction of a 0.5 MTPA slag grinding unit and in the second phase, the construction of a 2 MTPA cement plant will be completed.

36. Review of Operations JSPL Overview Notice Directors’ Report Envisioning a humane world Our social commitment is a part of our corporate philosophy to foster a society of mutual respect, engagement and collaboration. Jindal Steel & Power Limited 34

37. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Chhattisgarh To bring about a positive difference in the millions of lives in these underprivileged regions, JSPL has adopted 40 villages and contributes to holistic regional development. O.P . Jindal Institute of Technology at Punjipathra, Chhattisgarh In RETROSPECT, 2009-10 • Project NAUNIHAL coaches rural school children to prepare them for annual examinations. • Distributed school uniforms, bags and cycles to 1,500 girls of primary, middle and high schools. • Workshops were organised to improve teaching skills. Education • O. P. Jindal English medium primary school was constructed at a cost of Rs 30 lac with a 240-children capacity. • Government Middle School Dhourabhata was renovated. • 109 teachers were enlisted for 30 schools to meet teacher deficiency, benefiting around 8,000 students. • Financial support was provided to 20 meritorious students. • 190 ST/SC/BPL boys and girls were provided computer training. • Additional classrooms were constructed for regional schools. • RK Mission School, Raigarh was renovated. • Renovation and repairs were conducted at several schools. • 25 computer sets were distributed to five different schools to set up computer labs. • Project CHETNA benefited 324 women in adult education. health • A mobile medical van was commissioned to provide in-situ medical help to villagers; approximately 14,317 persons were examined, treated and provided free medicines. • More than 300 BPL patients were sponsored for treatment at the O.P. Jindal Hospital & Research Centre. • 534 persons were operated for family planning under the National Population Control Program. • 80 persons were operated for cataract under Blindness Eradication Program in adopted villages. • 157 hydrocoele operations were carried out in collaboration with the government hospital at OPJHRC. • 196 critical cases were financially assisted to undergo heart, kidney and surgery operations at India’s various hospitals. Annual Report 2009-10 35

38. Review of Operations JSPL Overview Notice Directors’ Report • 67 differently-abled persons were provided assistive devices (tricycle, wheel chairs, hearing aid, among others). • 6,061 animals were treated in rural animal husbandry camps. • 23,680 persons were treated and provided free medicines in community health centres. Stitching Training Centre at Raigarh, Chhattisgarh Special Education at ASHA THE HOPE, O.P . Jindal Vocational & Rehabilitation Centre, Raigarh Sports, art & culture • Rural youth clubs were commissioned and local tournaments were organised. • All India Body Building Competition was organised at O.P. Jindal School campus Kunjemura, Tamnar. • A Kabaddi tournament was organised at Patrapali, Raigarh. • Various sports kits like cricket, football and carom were provided to youth clubs. • Heritage buildings were renovated in adopted villages and financial help was extended for spiritual functions. Infrastructure • ASHA the Hope – O.P. Jindal Vocational & Rehabilitation Centre for the physically handicapped was constructed at Patrapali. • A new OPD building was constructed in the district hospital, Raigarh. • The ITI building at Kunjemura is currently under construction. • 4 km of road in tribal area (Sharda Mandir to Amgaon) was repaired. • Potable drinking water sources were developed. • 9 ponds were constructed, excavated and renovated. • 3 community halls and vocational training centres were constructed. • 5 RCC water tanks and 2 Sintex water tanks were provided in adopted villages. • A 1.6 km road stretch was constructed along the Kelo River (Marine drive) at Raigarh. asha the hope - O.P. Jindal vocational & Rehabilitation Centre • By opening a school and rehabilitation centre for special children, JSPL has added another dimension to its CSR activities. Around 2,782 special children have been registered and are being treated and imparted vocational training. The services being provided comprise physiotherapy, occupational therapy, special education, speech therapy and audiometry, computer training, music and recreational therapy, counselling and guidance. • Besides institution-based services, the OPJV & RC also aims at 100% coverage and empowerment of persons with disabilities through sustainable community programmes. Jindal Steel & Power Limited 36 Livelihood programs • 165 SHG members are being provided vocational training for skill enhancement in various disciplines. • 9 differently-abled persons were provided financial support for self employment ventures. • 41 women were trained in mushroom cultivation and food processing under project UTTHAAN. • A stitching and tailoring program (SAMRIDDHI) has commenced, benefiting 240 women.

39. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Odisha CSR initiatives at JSPL Angul are conceptualised around a holistic development strategy with a long-term and unwavering perspective. The basic thrust of this strategy is to bring about an integrated socio- economic transformation, addressing different sections of community in terms of caste, creed, age, gender and occupation. We stimulated social business enterprises through public-private partnership, promoting sustainable livelihoods and micro-entrepreneurship. Annual Report 2009-10 37 Tribal Girls High School at Bonai, Tensa, Odisha

40. Review of Operations JSPL Overview Notice Directors’ Report R&R Colony at Angul, Odisha In RETROSPECT, 2009-10 • Adopted Dhableswar High School, Deojhar, added class rooms, staff quarters, teachers, drinking water facilities, pipe connection, toilets, among others; also adopted ITI Barbil under public private partnership. • Barbil College and Joda Women’s College were renovated with modern facilities. Rehabilitation and resettlement 78 families across villages in Deojhar Panchayat were each provided with 4,300 square feet of land to rebuild their homes. Education • A 250-student tribal high school was constructed. • Financial assistance was provided to residential schools, together with assistance to meritorious and disadvantaged students. • The O.P. Jindal School (10+2), a co-educational school with all modern facilities at Barbil has 570 students. healthcare • A mobile dispensary caters to 15 villages, touching over 15,000 lives. • Around seven to eight health camps were conducted annually, benefiting over 30 villages, together with specialised camps that treat eye, gynaecological and dental cases. Livelihood • PDF members attended the Employees Skill Development Programme at Barbil Government ITI. • 55 PDF members were employed and had undergone training at ITI Barbil for skill development. Society development • Installed 11 deep bore wells with submersible pumps for piped water supply covering five villages (220 families), 18 hand pumps covering eight villages (640 families) and dug wells covering two villages (30 families). • Initiated electrification projects at Kitbeda, Sialijoda, Gobardhanpur, Deojhar, Mahadevnasa and Kuldum areas by liasioning with NESCO officials. Jindal Steel & Power Limited 38 Practical classes at JITS, Angul, Odisha

41. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Jharkhand At Patratu, community engagements are undertaken through various programmes. In RETROSPECT, 2009-10 women’s empowerment • JSPL in collaboration with ‘JHARCRAFT’ commenced its embroidery training centres. Jharcraft Department of Industries, Government of Jharkhand, has established a corporation named ‘JHARCRAFT’ for the development of handlooms, handicrafts and Silk “JHARCRAFT” in Ranchi. • JSPL provides training to 150 women in Kantha and Zardouzi stitches in five villages of Patratu. • 38 SHGs have been formed and monitored. • JSPL trains SHGs in the making and marketing of papads. Drinking water and sanitation • Model toilets were constructed. • Hand-pumps were installed. • Soak pits were constructed. Sports • Inter-village sports competitions (kabaddi, cricket, football) were organised. Education • Benches and desks were distributed in 10 schools in our operational area. • Competitive books were distributed in our surrounding villages. • Inter-school educational competition was organised. • Inter-school athletic meet was organised. • Science exhibition and bal mela were organised. health • Village health camps were regularly organised in all operational areas of JSPL; cataract operation of rural people was conducted. • 4 mega health camps were organised. • 20 patients were provided referral services. • Mosquito nets were distributed to control malaria. Annual Report 2009-10 39 Jharcraft at Patratu, Jharkhand Health Camp at Patratu, Jharkhand

42. Review of Operations JSPL Overview Notice Directors’ Report Making a greener difference We share a responsibility to the planet because in its sustainability lies the key to our continued wellbeing. Jindal Steel & Power Limited 40

43. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Children’s park within the Raigarh Steel Plant Green investments In a world endangered by resource depletion and global warming, environmental protection remains crucial. The need to protect our environment and conserve resources is explicitly communicated through JSPL’s mission and vision statements. JSPL is committed to help protect the environment and foster a resource- sensitive society through its various polices and practices. JSPL’s Environment management Department (EmD) comprises a multi- disciplinary team of professional and technical staff. The laboratory helps JSPL monitor levels of atmospheric pollution and also perform multiple research activities. The following equipment are used: EDxRf, Combustion flue Gas analyzer, Stack monitoring Kits, high volume Sampler and Respirable Dust Samplers, ph meter, Spectrophotometer, Turbidity meter, autoclave, Laminar flow, mercury analyzer, flame Photometer, CO monitor and personal heat stress monitors. for testing water qualities, a microbiological laboratory has also been constructed recently. Annual Report 2009-10 41

44. Review of Operations JSPL Overview Notice Directors’ Report Environment Management within the Steel Plant at Raigarh, Chhattisgarh EmISSIOn COnTROL mEaSURES are trapped and treated gas is passed through a chimney. •Coke oven plant: Waste gases are burnt completely and the heat generated is used in Waste Heat Recovery Boilers (WHRB) for power generation. •Other fugitive emissions: The fugitive emissions, caused through non-process activities (haul roads and stockyards), are managed through good housekeeping practices and regular dust suppression through water sprinkling. •Sinter plant: A centralised de-dusting system with an Electrostatic Precipitator has been installed for dust control in raw material handling area. A high capacity ESP also exists to control process emissions. EffLUEnT COnTROL mEaSURES •Blast furnace: Blast furnace is cleaned through cyclone and two-stage venturi scrubber (Gas Cleaning Plant). Pulse jet and invertible bag filters have been installed to control emission from stock house and junction points. •Coke oven quenching: The wastewater generated during quenching is taken to settling tanks. After settling, the water is reused for quenching. •Sinter plant: Blow-down water is used in sinter nodulising. •SmS (Eaf & Ladle furnace): The gases are sucked through Fume Extraction System and taken after combustion chamber for converting CO to CO2. Thereafter, the gases are passed through a cooling system, forced draft cooler, spark arrester to control coarse dust and subsequently through high efficiency bag filters to separate particulates. •Blast furnace: Dust laden wastewater is treated in effluent treatment plants and treated water is recycled back to the process. •SmS: The wastewater is taken to a settling tank and outlet water of the tank is reused. The blow-down water is used in slag granulation. Jindal Steel & Power Limited 42 •DRI kilns: Dust Settling Chambers and ESPs (Electrostatic Precipitators) have been installed to control process emissions. Fugitive dust is controlled through multiple point suction hoods attached to bag filters. •Rolling mill: Process wastewater is skimmed for oil and scale and then recycled back to the plant. No wastewater is discharged. •DRI: A cooling close-circuit effluent-recycling system has been installed. Wastewater from cooling section is taken to the hot water well, from where it is taken to the cooling tower and then to the cold water well, from where it is recycled back to process. •Power plant: The flue gas from boilers is passed through ESPs and discharged through stack. •Saf: The emissions from furnace are drawn into high capacity dust extraction system, where the particulates

45. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials •Power plant: DM plant wastewater is treated in a neutralisation pit. Following treatment, the water is reused for wet ash handling system. OThER InITIaTIvES • 100% effluent recycling to conserve water. • Installation of flow meters in all make-up water lines to optimise water consumption through close monitoring. •Submerged arc furnace: Wastewater is reused for slag cooling and dust suppression. •Sewage treatment plants: Three sewage treatment plants have been installed. The treated water is reused in greenery development. • Establishment of water reservoirs to harvest 29 lac m3 rainwater. • Use of waste material from the washery and sponge iron unit as a fuel in waste heat recovery boilers to generate power and conserve coal. •Garage, DG set and compressor houses: Oil separators were provided; clean water is further treated in STP. • Conducting energy audit to implement energy-saving actions. SOLID waSTE manaGEmEnT • In the sponge iron unit, the temperature of the after burn chamber (ABC) is being maintained at 950-960°C for burning of unburnt carbon, so that maximum steam and power can be generated. • In order to generate bio-gas from cow dung, two bio- gas plants were constructed for use in cooking and other domestic needs. • Large-scale bio-diversified afforestation and horticulture activities are conducted annually. Till now, more than 1 million plantations have been done and due to proper maintenance, over 85% survival rate is achieved. • The vermi-composite plant allows conversion of organic waste to manure by using earthworms. The resultant manure is used for the purpose of gardening. • Power is generated from coal rejects, fines and char through fluidised combustion boilers. Waste heat of the sponge iron plant is being used in the boiler for power generation. • An extended green cover across all units, covering almost 20 per cent of the area, with a target of planting three million tree saplings. • The blast furnace waste gas is used as an alternative fuel in the reheating furnace, DRI and coal dryer. • A number of nurseries like Sanjivani Nursery, Vasundhara Nursery, Taru Mitra Nursery and Green Wood have been established, together with gardens for employees and their children. • SMS slag is used for road-making, while that from the blast furnace is used for making cement. • All construction activities at JSPL are done through fly ash bricks. • Established and maintained the Kamla Nehru Park in Raigarh (Chhattisgarh) with a Rs. 25 lacs investment. It has various exotic birds. • Sanjeeveni Botanical Park, has been established where rare plants, foliage, cactus and herbal plants are collected. Annual Report 2009-10 43 Serene living environment at the plant in Raigarh, Chhattisgarh

46. Review of Operations JSPL Overview Notice Directors’ Report Recognition and awards • Corporate Social Responsibility Excellence Award was conferred on Jindal Steel & Power Limited by ASSOCHAM for promoting and propagating Corporate Social Responsibility (CSR) initiatives • Mr. Naveen Jindal received the CNBC’s Most Promising Entrant into the Big League at IBLA 2009 award for Jindal Steel & Power Limited • Jindal Steel & Power Limited accorded the Forbes Asia’s ‘Fabulous 50’ international award for being the best of Asia Pacific’s biggest listed companies showing long term profitability, sales and earnings growth as well as projected earnings and stock price gains • JSPL was accorded with the ‘Think Odisha Leadership Award’ for the third year consecutively for its excellence in the field of Corporate Social Responsibility. The Company received the award for bringing about outstanding changes in the field of ‘Peripheral Development’ • JSPL was rated among one of the highest wealth creators for investors in the last five years by Dalal Street Journal • ‘Transforming Vision into Reality’ award for 2009-10 was awarded to JSPL at the CSR Quest 2010 at Ranchi • National Energy Conservation Award 2009 (Top Rank Award in Integrated Steel Sector) • JSPL won the Golden Peacock Innovation Management Award 2010 • Golden Peacock Innovation Award 2009: Organised by the Institute of Directors • JSPL commended with ‘Strong Commitment to HR Excellence’ at CII NATIONAL HR EXCELLENCE AWARD 2009 organised at New Delhi • Winner of ‘Shrishti Green Cube Award 2009’: Organised by Shrishti foundation, New Delhi • Mr. Naveen Jindal, EVC & MD, JSPL was awarded the ‘Distinguished Alumni Award’ for 2010 by the University of Texas at Dallas for his contribution to public service, being a responsible corporate citizen and guiding his company to become a global player. • Greentech Safety Award 2009: Gold Award: Organised by Shrishti Foundation Jindal Steel & Power Limited 44 • SAIL HR Excellence Award 2009: Organised by SAIL and IIM-A • Mega India Excellence Award 2009 (for Best Company in Corporate Social Responsibility): Organised by Plan • Jindal Steel & Power Limited was selected as the top Indian company in the Iron and Steel sector for the Dun & Bradstreet – Rolta Corporate Awards 2009 • ‘Good Green Governance (G-Cube)’ Awards 2009-10: Organised by Srishti Foundation Man Media, Sunday India and IIPM • JSPL was rated as one of the 50 best Blue Chip companies in India by Dalal Street Investment Journal

47. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Key performance indicators (Rs. in crores except otherwise stated) 2009-10 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04 2002-03 2001-02 2000-2001 INCOME STATEMENT Consolidated Standalone Consolidated Standalone Standalone Standalone Standalone Standalone Standalone Standalone Standalone Standalone Domestic Sales 11209.12 7485.17 10634.98 7436.16 5478.62 3326.95 2506.10 2120.83 1309.69 989.57 572.18 510.25 Exports 410.41 410.41 1021.37 1021.37 653.01 592.84 371.85 329.04 83.10 3.61 3.37 0.24 Other Income 60.28 117.31 38.64 122.52 49.12 28.97 27.51 17.43 11.25 8.50 5.86 7.05 Gross Sales & Other Income 11679.81 8012.89 11694.99 8580.05 6180.75 3948.76 2905.46 2467.30 1403.94 1001.68 581.41 517.54 Net Sales & Other Income 11151.82 7484.90 10913.37 7799.43 5459.87 3548.78 2617.76 2271.03 1272.86 889.11 516.69 455.12 Operating Profits (PBIDT) 5907.99 2612.13 5231.81 2603.82 2162.61 1431.58 1034.33 907.54 511.78 350.90 209.56 181.68 Profit After Tax (PAT) 3634.56 1479.68 3007.15 1536.48 1236.96 702.99 572.94 515.70 305.46 145.08 107.55 101.25 Cash Profit 4759.96 2107.07 4193.57 2074.61 1768.10 1174.21 858.41 765.76 434.25 267.15 152 19 133.41 BALANCE SHEET Gross Block 21109.48 15249.49 14927.77 9680.92 6579.42 5866.87 4389.32 2875.98 1966.97 1504.00 1128.27 782.09 Net Block 17844.40 13139.34 12686.28 8063.91 5396.31 5085.12 3846.99 2514.22 1719.97 1324.69 1006.63 698.68 Share Capital Equity 93.12 93.12 15.47 15.47 15.40 15.40 15.40 15.40 15.40 14.63 12.90 12.71 Preference - - - - - - - - - 10.00 71.00 71.00 Net Worth 10386.61 6720.64 7021.16 5385.11 3722.12 2475.17 1837.92 1317 37 853.87 571.17 463.41 412.47 Borrowings 8604.29 8383.26 8113.31 4962.65 3863.35 3507.72 2745.37 1495.86 1025.96 885.26 697.51 404.53 SIGNIFICANT RATIOS Operating Profit to Net Sales (%) 53 35 48 33 40 41 40 40 40 39 41 40 Net Profit to Net Sales (%) 33 20 28 20 23 20 22 23 24 16 21 22 Total Debt to Equity Ratio 0.83 1.25 1.16 0.92 1.03 1.40 1.49 1.13 1.09 1.41 1.49 1.04 Return on Capital Employed (%) 30 16 33 24 25 21 22 28 24 27 18 22 Return on Net Worth (%) 35 22 43 29 33 28 31 39 36 25 23 25 PER EQUITY SHARES (Of Re. 1/* each) Book Value (Rs.) 111.54 72.17 454.00 348.21 241.76 160.77 119.40 85.60 55.40 39.00 36.00 32.60 EPS (Annualised) (Rs.) 39.05** 15.90** 194.63 99.44 80.34 45.66 37.21 33.50 20.04 10.40 7.60 7.20 Dividend Rate (%) 125** 125** 550 550 400 360 300 300 200 125 70 50 Pursuant to the resolution passed at the EGm held on 27.12.2007 the Company’s Equity Shares of the face value of Rs. 5/- each have been sub-divided into Equity Shares of the face value of Re. 1/- each. The Book value & EPS for previous years have been re-stated taking into account the shares split. * JSPL allotted 775,651,530 bonus shares of Re. 1 each on 19.09.2009 in the ratio of 5 bonus shares for each existing equity share of Re. 1 leading to an increase in number of outstanding shares from 154,652,683 in 2008-09 to 931,234,082 in 2009-10. This has resulted in a lower EPS and Dividend percentage. ** Annual Report 2009-10 45

48. Review of Operations JSPL Overview Notice Directors’ Report Board of Directors Shri S. ananthakrishnan Nominee Director - IDBI Bank Ltd. Shri vikrant Gujral Group Vice Chairman & Head Global Ventures Shri hardip Singh wirk Director - Independent Shri anand Goel Jt. Managing Director Shri arun Kumar Purwar Director - Independent Shri Ratan Jindal Director Shri Rahul mehra Director - Independent Smt. Savitri Jindal Chairperson Shri R.v. Shahi Director - Independent Shri Sushil maroo Director Shri naveen Jindal Executive Vice Chairman & Managing Director Jindal Steel & Power Limited 46 Shri arun Kumar Additional Director -Independent Shri haigreve Khaitan Director - Independent Shri a.K. mukherji Whole time Director

49. Management Discussion and Analysis Report Consolidated & Subsidiary Financials Corporate Governance Report Standalone Financials Other key officials Shri n.a. ansari Executive Director Patratu Shri Jasper marais Director, Coal Gasification Shri v.R. Sharma Dy. MD & CEO (Steel Business) Shri J.B. Karamchandani President (Architectural Cell) Shri G.D.S. Sohal Executive Director Zimbabwe Shri D.n. abrol Executive Director Raw Materials Shri K.K. Sinha Director - Group HR Shri Praveen Purang Management Adviser (SCM) Shri P.S. Rana Executive Director Fabrication, Raigarh Shri n.D. Rao Executive Director Mines Shri John C. Elmore Director - Strategy & Business Coordination Annual Report 2009-10 47 Shri D.K. Saraogi Executive President JSIS, Oman Shri Rajesh Jha Executive Director Angul

50. Notice JSPL Overview Review of Operations Directors’ Report Jindal Steel & Power Limited O.P. Jindal Marg, Hisar - 125 005, Haryana To, Notice The Members, Jindal Steel & Power Limited Notice is hereby given that 31st Annual General Meeting of the members of the Company will be held on Tuesday, the 28th September, 2010 at 12.00 noon at the Registered Office of the Company at O.P. Jindal Marg, Hisar – 125 005, Haryana, to transact the following business : ORDINARY BUSINESS 1. To receive, consider and adopt the Balance Sheet as at 31st March, 2010 and Profit & Loss Account for the financial year ended on that date and the Reports of Directors and Auditors thereon. 2. To declare final dividend on equity shares. 3. To appoint a Director in place of Shri Naveen Jindal who retires by rotation and being eligible offers himself for re-appointment. 4. To appoint a Director in place of Shri Vikrant Gujral who retires by rotation and being eligible offers himself for re-appointment. 5. To appoint a Director in place of Shri Ram Vinay Shahi who retires by rotation and being eligible offers himself for re-appointment. 6. To appoint a Director in place of Shri Arun Kumar Mukherji who retires by rotation and being eligible offers himself for re-appointment. 7. To appoint M/s S.S. Kothari Mehta & Co., Chartered Accountants (Firm registration No. 0000756N) as Auditors of the Company to hold office from the conclusion of this meeting to the conclusion of the next Annual General Meeting and to fix their remuneration. SPECIAL BUSINESS 8. To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: “RESOLVED THAT in accordance with the provisions of Section 257 and all other applicable provisions, if any, of the Companies Act, 1956, Shri Arun Kumar, be and is hereby appointed as Director of the Company, liable to retire by rotation.” Jindal Steel & Power Limited 48 9. To consider and, if thought fit, to pass with or without modification(s) the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to Section 293(1)(d) of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force) and Articles of Association of the Company, consent of the Company be and is hereby given to the Board of Directors of the Company to borrow moneys whether rupee loans or foreign currency loans or other external commercial borrowings (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) from the Banks and/ or Financial/ Lending Institutions or from any other sources, such as, Foreign Banks, Foreign Investment/ Financial Institutions or Funds or other Bodies,