Jindal Saw Ltd

To

The Members,

Your Directors are pleased to present the 25th Annual Report and Audited Statement ofAccounts of the Company for the period ended 31st March, 2010.

I. FINANCIAL RESULTS

2. REVIEW OF OPERATIONS

Your Company reported net sales of Rs. 6,777 crores for the 15 months period ended 3lstMarch 20l0as against Rs. 5,003 crores for the 12 months period ended 3lst December, 2008showing a pro-rata increase of 8.4%. However, operating margins (EBITDA) increased by44.5% on pro-rata basis showing an all round increase in profitability at operating level.The profit after tax also increased to Rs. 723 crores as against Rs 342 crores in thesimilar period showing a pro-rata increase of app. 69%. The higher profitability couldhave been achieved due to efficient operations, controls on the overheads, optimization offinancial resources and impact of the foreign exchange volatility.

New Projects :

During the reporting period, the Company has commenced operations with additionalcapacities added in the first six months. With these additions production capacity of SAWPipe division stands at 1840,000 MTPA & the rolling capacity in Seamless Divisionstands at 250,000 MTPA. The increase in capacity in Seamless Division has been done withtechnology from SMS Germany which is expected to yield better efficiency in times to come.Your Company has also installeda7.5 MW(l.5 MWx5 Mills) wind mill power project in Gujarat,in the month of March 20l0 which is a step towards green energy, a requirement of presenttime.

Infrastructure Management and Allied Businesses

In 2008, Jindal SAW Ltd set-up its subsidiary, Jindal ITF Ltd., which owns and operatesbusinesses in three segments of the Indian economy - Infrastructure, transportation andfabrication. identifiable as follows:

* Water, waste water and solid waste management

* Domestic transport and logistics

* Transportation equipment fabrication

Of the above businesses, only water management and domestic water transport businesseshave begun operations. During the 15 months period ended March 31, 2010, Jindal ITF hadrevenues of Rs 236 crores.

WATER INFRASTRUCTURE

Jindal Water Infrastructure Limited (JWIL) provides "total water solutions"for potable water, desalination, moving water inland, and waste water management. The overarching focus area for this SPV will be the fast developing water concession market inIndia. The target customers for JWIL are Municipal/Urban Local Bodies, Industria Clusters,SEZ/Builders, etc. JWIL is designing sustainable and innovative solutions to manage publicutilities for government bodies in public & private partnership, businesses,industries and SEZs in water and waste water management, on EPC or turnkey models. JWIL iscommitted towards developing products and processes that are economically viable as wellas socially and environmentally acceptable.

The Company is nearing completion of its raw water piping EPC project of Rs. 315Crores. It is currently implementing a Rs. 20 Crores CETP in Sitarganj, Uttarancha n a SPValong with an EPC for supplying water in Angul, Orrisa valuing approx. Rs. 240 Crores. Inthe current financial year, the Company has bagged two STP projects n Bhavnagar, andRajkot alongwith a water supply project n Naya Raipur, Chattisgarh. It has also been prequalified for multiple projects both in Municipalas well as in industria sectors.

WATER TRANSPORTATION

Jindal Waterways Ltd. (JWL) is focusing on logistics and domestic cargo movement. Thestrategy is to build a waterborne transportation backbone for initiating domestic cargomoving business. The company started its operation n FY 2007-08 and has the largest fleetin the country. It has already acquired 7 ships and I barge primarily for domesticinter-modal terminal operations. JWL is operating ts ships between select terminals andports having adequate cargo potential. The vessels are being used for container and bulkcargo movement along the east and west coasts. The barge is being utilized fortransportation of dry cargo, etc. on the Ganges and Brahmaputra river and other n landwaterways besides Bangladesh.

URBAN INFRASTRUCTURE - WASTE TO POWER PROJECT

Jindal Urban Infrastructure Limited (JUIL) is implementing a Municipal Solid Waste toPower Project in Delhi. The project is housed under a SPV named Timarpur Okhla WasteManagement Company Private Ltd. (TOWMCL), which has a 25 years concession for generatingand selling power. The project will have a capacity of 20 MW to generate power from MSWsupplied by NDMC and MCD to the plant. The project is currently under mplementation and isslated to commence operations by second quarter of 20II. This is the first project of suchscale in the country and once implemented, it will remove the waste management problems ofthe Capital significantly.

WAGON MANUFACTURING

Jindal Rail Infrastructure Ltd. is aimed at fabrication for transportation sector. Inview of the tremendous growth being witnessed in the industrial sphere, and despite theslowdown in the global economic activities, the Indian Growth story remaining intact, thevolume of cargo is bound to exceed the presently available infrastructure. Railways arethe largest supporter of cargo transportation. The requirement of wagons is envisaged toincrease manifold, both by Indian Railways as well as by Private operators. The Company iscurrently setting up a wagon manufacturing facility at Karjan in Gujarat, with aninstalled capacity of 3000 wagons p.a. and with an estimated project cost of Rs. I50Crores. The total land required for the project i.e. approx 200 bighas, has already beenacquired. The project is currently under implementation and will commence operations byDecember '20I0.

3. DIVIDEND

The Board has, subject to the approval of Members at the ensuing Annual GeneralMeeting, recommended a dividend of Rupee I.25 per equity share of Rs. 2/- for the periodended 3Ist March, 20I0 (Previous year Rs. 5.00 per equity share of Rs. I0/-).

The Board's recommendation for a stable and steady dividend is linked to Company's longterm requirements of funds for meeting the working capital needs, capita expenditures forits growth plans & modernization and to finance such plans by retaining back theprofits.

Together with the corporate tax on dividend, the total outflow on account of equitydividend is Rs. 40.26 crores.

4. CONVERSION OF FCCBs

67900 FCCBs of JPY 1,00,000 each aggregating to JPY 6790 million were outstanding as on3Ist March, 20I0. These are convertible till 24th June, 20II at the option of bondholders.

After the close of Financial Year on 3Ist March, 20I0, the Company has allotted 26I2036equity shares of Rs. 2/- each on conversion of 8932 FCCBs at a price of Rs. 135/- perequity share.

5. SUB-DIVISION OF FACE VALUE / ALLOTMENT OF EQUITY SHARES

With your approval, the face value of equity shares of Rs. I0/- each was sub-dividedinto equity shares of Rs. 2/- each w.e.f. 11th December, 2009.

The Company had allotted 2600897 equity shares of Rs. I0/- at a price of Rs. 8I9/- onconversion of equal number of Compulsorily Convertible Debentures which were allotted onpreferential basis.

6. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

A separate report on Management Discussion and Analysis relating to business andeconomic environment surrounding your Company is enclosed as a part of the Annual ReportAnother report provides information / status on the Corporate Governance.

7. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 2I7(2AA) of the Companies Act, 1956 withrespect to Directors' Responsibility Statement, it is hereby confirmed by the Board ofDirectors: -

a. that in the preparation of the annual accounts for the financial year ended 3IstMarch, 20I0, the applicable accounting standards had been followed along with properexplanation relating to material departures;

b. that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the period under review ;

c. that the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records n accordance with the provisions of the Companies Act, I956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. that the Directors had prepared the accounts for the financial period ended 3IstMarch, 20I0 on a 'going concern' basis.

8. DIRECTORS

Shri Kuldip Bhargava and Dr. Raj Kamal Agarwal retire by rotation and, being eligible,offer themselves for re-appointment.

9. AUDITORS & THEIR REPORT

M/s N. C. Aggarwal & Co., Chartered Accountants, Auditors of the Company retire atthe end of ensuing Annual General Meeting, and, being eligible, offer themselves forre-appointment.

Auditors' remarks in their report read with the notes to accounts referred to by themare self-explanatory.

10. COST AUDIT

Pursuant to Section 233 B of the Companies Act, I956 and as per the order of theCentral Government, the Company carries out audit of Cost Accounts relating to Steel Tubesand Pipes every year. The Board, subject to the approval of Central Government, hasappointed Mr. S.N. Balasubramanian, Cost Accountant, to audit the Cost Accounts relatingto manufacture of steel tubes and pipes for the period ended 3Ist March, 20I0.

11. PUBLIC DEPOSITS

The Company had repaid the deposits matured during the year except unclaimed depositsaggregating Rs. 3.04 crores at the end of the year.

12. PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

Information in accordance with the provision of Section 2I7(I)(e) of Companies Act,I956 read with the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 regarding conservation of energy, technology absorption and foreignexchange earnings and outgo are given in the statement annexed hereto.

13. SUBSIDIARY COMPANIES

The Company has totalI8 direct and step down subsidiary companies as on 3Ist March,20I0. The members may refer to the Statement under Section 2I2 of the Companies Act, I956and the information on financial of subsidiaries appended to the above statement in thisAnnual Report for further information of these subsidiaries. The Ministry of CorporateAffairs vide its letter No. 47/397/20I0-CL-III dated I8.5.20I0 granted the approval to theCompany for not attaching the Annual Reports of the subsidiary companies with the AnnualReport of the Company for the financial period ended 3Ist March, 20I0.

The members, if they desire, may write to the Company Secretary at Jindal Centre, I2,Bhikaiji Cama Place, New Delhi - II0 066 to obtain the copy of the Annual Report of thesubsidiary companies.

14. PERSONNEL

The industrial relations remained cordial throughout the year. As required by theprovision of Section 2I7 (2A) of the Companies Act, I956 read with the Companies(Particulars of Employees) Rules, I975, as amended, the names and other particulars of theemployees are set out n Annexure to this Report. However, as per the provisions of Section2I9(I)(b)(iv) of the Companies Act, I956, the Report and the Accounts are being sent toall Members of the Company excluding the aforesaid information. Any member interested inobtaining such particulars may write to the Company Secretary at Jindal Centre, I2,Bhikaij Cama Place, New Delhi - II0 066.

15. ACKNOWLEDGEMENT

Your Directors express their grateful appreciation to the concerned Departments ofCentral / State Governments, Financial lnstitutions & Bankers, Customers and Vendorsfor their continued assistance and co-operation. The Directors also wish to place onrecord their deep sense of appreciation for the committed services of the employees at alllevels. We are also grateful for the confidence and faith that you have reposed in theCompany as its member.

(a) ENERGY CONSERVARTION MEASURES TAKEN:

1. Commissioning of Wind Power Machines of total capacity of 7.5 MW involvinginvestment of Rs. 46 Crores at Khodaser Distt Kutch Gujarat which s a natural source ofpower generation and help in reducing the Green House Gas (GHG) emissions.

2. Installation of AC drive panel to reduce the power consumption and replacement ofall EOT cranes pane (Over head cranes) to reduce breakdown time.

3. Installation of VFD at Miller Press, C Press, Dust Blower & EOT Cranes.

4. Replacement of old PE extruder with CINCINATTI make Monos+l20, resulting in savingof 280Kw/Hr

5. Replaced 4 Nos heavy duty exhaust fan with self driven air ventilators with noenergy consumption, saving of 20Kw/Hr

6. Installation of 2 Nos higher capacity pumps of 600 m3/hr in place of4 Nos pumpsof275m3/hr in DISP cooling tower hot well, resulting in saving of 1000 kwh/day.

7. Replacement of Aluminum fan with FRP fan in SDPP cooling tower

8. Modification of pipe conveying system in Zinc coating station with plain gantry andkicker system

9. Use of producer gas in Quench and temper furnace to reduce the fuel cost andconserve oil.

10. Installation of sophisticated temperature controls to reduce the fuel consumptionin the furnace.

11. Old capacitor have been replaced with new capacitor to improve power factor

12. Installation of one Hydrolic Power pack of 50 HP in place of3 Nos 40 HP HighPressure Pump for hydro testing

(b) ADDITIONAL INVESTMENT AND PROPOSAL FOR REDUCTION OF CONSUMPTION OF ENERGY :

1. Installation of VFD with panel& accessories for hoist motor, HPP motor &Miller motors

2. Replacement of 400 copper ballasts with electronic ballasts

3. Installation of solar hot air system for flux oven

(c) IMPACT OF ABOVE MEASURES :

The continued focus on energy conservation measures has resulted in improvement inpower factor & saving in energy consumption per ton of production.

FORM "A"

Form for disclosure of particulars with respect to Conservation of Energy

POWER & FUEL CONSUMPTION

FORM "B"

Form for disclosure of particulars with respect to technology Absorption for 2009-2010

5. Technology absorption, adaptation and innovation

i. Efforts made, in brief, towards technological absorption, adaptation and innovation

a. The company commissioned the PQF Mill in Seamless plant at Nashik with technology& design supplied by SMS of Germany.

b. Waste Heat Recovery based power plant by using flue gases & exhaust from cokeoven batteries

c. Installation of Steam Injection System

d. Introduction of Dual Fuel Burner

e. Installation of Air Separation Plant

f. Installation of zero skull system & sand reclamation plant

ii. Benefits derived as a result of the above efforts

The above efforts will improve the operational efficiency, low fuel consumption,minimize wastage and contribute towards better environment.

6. Foreign Exchange