The world is witnessing an interesting phase of transformation, towards an unprecedented realignment. I had indicated about this phenomenon in my last communication to you, and I would like to reiterate that we are moving towards a multi-polar world; a new socio-economic dispensation in which the emerging economies have a far greater role to play in shaping the future than ever before. India is the poster boy of this new era, attracting global attention and scrutiny. Twenty years ago, the Government of India initiated the intrepid step towards economic liberalisation, which eventually transformed India, and that process is still continuing. The economy has averaged 8% GDP growth in the last decade and per capita income has shot up from $300 to $1700 in two decades, accelerating domestic consumption and savings.

The inference: even with modest foreign capital inflows, India can now afford an investment rate of 36-38% of GDP, which can sustain 8-9% GDP growth in the foreseeable future. Besides, unprecedented economic development has enhanced government spending on socio-economic infrastructure. There has been another visible advantage: Indian businesses, including JSPL have successfully aligned their operations and mindset to global benchmarks, and have become multinationals in their own right. Something that was rare two decades ago.

Although India, China and Latin America witnessed considerable economic activity in 2010-11 the US and Eurozone economies registered sluggish recovery. These economies are now fraught with uncertainties and looming recessionary trends. Inflation represents the new global economic challenge, leading to a spiralling rise in prices of commodities, mineral resources and energy. The global steel industry has been impacted by the unprecedented increase in the price of iron ore and coking coal. Steel demand in advanced nations has been largely stagnant, while Asia enjoyed robust demands with China continuing its march at the top of the league.

India’s steel industry has played a major role in driving the country’s economic development. Over the decades, India’s ‘steelscape’ has also evolved, characterised by global acquisitions, adoption of advanced technologies and modernisation strategies for cost rationalization and energy efficiency, and finally backward integration into global raw material sources. The result is that India today is the world’s fifth largest steel producer and is poised to emerge as the second largest by 2015. Although modest performance of India’s construction and infrastructure sector in 2010, coupled with high input costs, has impacted the domestic steel sector, the long-term outlook remains robust. Firm international steel prices and strong domestic demand will drive domestic steel prices considerably. Besides, the government’s estimated infrastructure spending is expected to drive the steel demand. The share of the government’s infrastructure spending as a percentage of GDP is expected to touch 9% by the end of the 11th Five Year Plan.

Although operating in a challenging macro-economic scenario, 2010-11 has been a busy and fruitful year for JSPL nationally and internationally. Domestically, we commenced operations at the wire rod mill and bar mill at our Patratu (Jharkhand) plant. Moreover, we have considerably enhanced domestic investments for the creation of additional capacities and capabilities to emerge as a significant player in the steel sector. Internationally, we are focusing on the acquisition of iron ore and coal mines in Australia, Indonesia, South American and African countries to ensure raw material security. I am also happy to report that the acquired Shadeed Iron & Steel Co. LLC (SISCO), a Company incorporated under the laws of the Sultanate of Oman in 2010, through our 100% subsidiary Jindal Steel & Power (Mauritius) has been commissioned in record time and commercial operations began in December 2010, four months ahead of schedule. The Jindal Shadeed plant was dedicated to the Nation of the Sultanate of Oman recently, by H.E. Sheikh Sa’ad Bin Mohammed bin Said al Mardhouf al Sa’adi, Honourable Minister of Commerce and Industry.

Allow me now to share with you our initiatives in South America: through our subsidiary Jindal Steel Bolivia S.A (JSB), we have acquired the development rights for 20 billion tonne of EL Mutun Iron Ore Reserves in Bolivia. Moreover, there are plans to build a 2.52 MMTPA natural-gas-based Midrex Direct Reduction Plant. This new plant will be the single largest module till date of any commercial direct reduction technology in the world. We also commenced dispatch of iron ore from the EL Mutun mines recently. Iron ore from here will be transported mainly to China, Middle East, European and South American countries through the Parana Paraguay Hidrovia riverway. This will be for the first time that iron ore from JSB will be exported.

2010-11 was a financially rewarding year for JSPL, owing to higher steel production and sales, diversified product basket and extensive global reach. The consolidated income stood at Rs. 13,193.59 crores in 2010-11, compared with Rs. 11,152.82 crores in 2009-10. EBIDTA increased to Rs. 6,398.59 crores in 2010-11 from Rs. 5,907.99 crores in 2009-10. Profit after tax escalated to Rs. 3,804.01 crores in 2010-11 from Rs. 3,634.56 crores in 2009-10. Our future strategy would be to sustain and improve upon this operational and financial performance, while remaining steadfast to deep-rooted values that have nourished the organisation since inception.

Energy represents a key input for steel making and the backbone for social advancement. We have commissioned a 300 MW (2x150 MW)-phase–I, out of 600 MW (4x150 MW) power project at Dongamahua, Chhattisgarh to address the additional power requirements. We are setting up captive power plants as part of integrated steel plants at Angul (Orissa) and Patratu (Jharkhand) for meeting their power requirements. We have also forayed into wind energy-- currently operating a 24 MW wind mill in Maharashtra-- as a part of our commitment to a carbon-free world. Besides, Jindal Power Limited (JPL), a company promoted by JSPL, is planning to set up environment-friendly thermal and hydro power projects across India.

Despite our business priorities, our social commitment remains predominant. During the year under review, we enhanced focus on providing healthcare to the underprivileged, impart quality education to the children and youth and work towards women empowerment, livelihood, livestock care, population stabilisation, drinking water and sanitation, youth and sports and infrastructure development. We are equally steadfast in our commitment to a cleaner and greener environment, and as we go along we will enhance our green quotient in terms of acquisition of more environment-friendly technologies, encouraging green practices in our plants and host communities globally and above all generate awareness about global warming and climate change.

Values when actively pursued with deep conviction can generate tremendous wellsprings of energy and focus. This is the true spirit of JSPL. We believe business excellence is not an isolated enterprise. It is the outcome of integrity towards people and community, transparency towards stakeholders and an enduring commitment towards sustainable development.