1. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. K HOUZESTAN S TEEL C O. In The Name Of God Production and Export of Billet & Slab to MENA

2. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir General information - Islamic Republic of Iran  Area : 1,648,195 km 2  GDP : 406.3 Billion USD (2014)  Population: 80.8 Million (2014)  Labor Force : 25.7 Million (2013) http://www.worldbank.org/en/country/iran/overview

3. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Natural resources and infrastructures Crude oil proven reserves :157 Billion barrels Oil production : 4.2 Million BBL/Day Natural gas proven reserves: 33.6 Trillion cu m Natural gas production : 200 Billion cu m / Y Electricity Generation : over 50,000 MW Airports : 319 Railways : 8,442 km Roadways : 172,927 km Iron ore reserves : 4 BMT Semi finished Product Capacity : 22.5 MMT Final Product Capacity : 32.2 MMT

4. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir MENA population may increase by 28% in 2010-2025 vs. 17% of global growth Population projections, millions of people Source: United Nations Statistics Division

5. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Most attractive destinations for investment in end-use sectors are Iran, Saudi Arabia, Egypt, Algeria, Morocco, Iraq Population in MENA countries in 2010, mln persons Source: IMF GDP in MENA countries in 2011, mln USD

6. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Iran GDP - composition by sector GDP - composition by sector: Agriculture: 10.6% Industry: 44.9% Services: 44.5% (2013 est.) Ind. Agri. Serv.

7. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Global Crude Steel Production Country % 2014/2013 20152014201320122011 Rank MM Tone Rank MM Tone Rank MM Tone Rank MM Tone Rank MM Tone China5.61822.717791724.71702 Japan0.12110.72110.62107.22107.6 United State1.5388.3387388.7386.4 India2.5483.2481.2477.6473.5 South Korea7.6571.0666669.1668.5 Russia1.7670.6569.4570.4568.9 Germany0.7742.9742.6742.7744.3 Turkey-2.0834.0834.7835.91034.1 Brazil-0.9933.9934.2934.5935.2 Ukraine2.51027.11032.81033835.3 Italy-1.71123.71124.11127.31128.7 Taiwan4.01223.21222.31220.71220.2 Mexico2.71318.91318.41318.11318.1 Iran5.81416.31515.41514.51613.2 France2.51516.11415.71415.61415.8 Spain2.91614.11613.71613.61515.5 Canada0.01712.51712.51713.51712.9 World1.91,6371,6071,5461536 Source :World Steel Association

8. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Iran’s Crude Steel Production Share in the Middle East World Steel Association, Steel Statistical Yearbook 2013

9. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Crude Steel Production in Iran (m. tons) World Steel Association, Steel Statistical Yearbook 2013

10. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Portfolio of Production Technology Iran Steel IndustryGlobal Steel Industry World Steel Association, Steel Statistical Yearbook 2013 Electric Arc Furnace Blast Furnace

11. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Islamic Republic of IRAN Persian Gulf Caspian Sea Production start : 1989 Nominal Capcity : 1.5 (MMTon) Present Capacity : 3.8 (MMTon) 2015 Production : ~3.5 (MMTon) Products: Slab & Billet&Bloom Technology : DIR+EAF Max Annual Export: 1 (MMTon) 2016 Export Plan: 1.3 (MMTon) Capacity Plan : 2017 5 (MMTon) K HOUZESTAN S TEEL C O.

12. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir

13. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Special Features  Customer orientation, flexibility towards customer requirements  Experience of products Export (Europe – MENA- Asia-Far EAST )  On time delivery of products  Easy access to energy sources (water, gas, electricity).  The first producer of sponge iron using direct reduction technology in Iran  Producing Clean steel with variety of grades with high level of Quality.  Connection with railway transportation network & Accessibility to international waters  Private Jetty and exporting infrastructure  Management standards and systems : ISO-9001:2008 ISO-14001:2004 OHSAS-18001 : 2007 ISO-10015:1999 ISO-27001:2005 ISO-50001

14. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir KPIunit2015201720202025 Capacity MMT 3.75.08.813.6 KSC’s Strategic Destination 2015 2020 2025 Capacity5.0 MMT Capacity8.8 MMT Capacity13.6 MMT Capacity3.7 MMT 2017 KSC Capacity Outlook 25% Capacity Share of Iran’s 2025 Vision

15. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Grow Revenue Productivity-cost reduction Sustainable Growth & Increase Profitability Manage Strategic Costs Competitive price To increase the customer satisfaction Ontime delivery optimum sale in domestic markets Operational ExcellenceEffective management of marketDevelopment and Technology Management Financial Customer Processes Learning & Growth Information Capital Management Social responsibility Human Capital Management organizational capital Management Sustainable & Economic Supply Increasing products with higher value added Increase production and Products quality promotion Optimize consumption rate of materials, Energy and water Development of products with higher added value Presence in the value chain downstream Technology localization Development Of Customer relation Marketing and sales for training services, engineering and technology change the work environment & safety conditions Environmental Protection And improved waste management Improve satisfaction, motivation and loyalty of employees Human capital Development Organizational Leadership Development Improve the effectiveness and integrity of the management system integration the communicatio n infrastructures Development of information systems and integrated automation throughout the value chain Increasing diversity of products offering Products with expected quality increase productivity Financial Resources Management Financial Resources Management supply Optimum Finance resources KSC Strategy Map 2016-2018 promotion of interactions with officials and community representatives Improve safety culture sustainable and economic supply Sustainability in the supply of electrical energy development of spare parts Localization & domestic production support Increase Capacity with development projects To Develop the Export Markets and Sales Strategic partnership With Rolling mill companies

16. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Establishment TitleStandard No. (1996/6/27) Quality Systems. Model for quality assurance in design, development, production, installation and servicing (QS) ISO9001:1994 (2003/12/8)Quality Management Systems (QMS)ISO 9001:2000 (2009/12/22)Quality Management Systems (QMS)ISO 9001:2008 (2002/11/18)Environmental Management Systems (EMS)ISO 14001 : 1996 (2005/11/13)Environmental Management System (EMS)ISO 14001:2004 (2005/5/16) Occupational Health and Safety Management System (OHSAS) OHSAS 18001:1999 (2008/7/13)Occupational Health and Safety Management Systems )OHSAS) OHSAS 18001:2007 (2009/10/2)Information Security Management Systems (ISMS)ISO 27001:2005 (2010/02/17) Quality management guidelines for training:1999 ISO 10015 (2015/01/15)Energy Management SystemISO 50001

17. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Pelletizing Plant : 6.4 MT Direct Reduction Plant : 3.7 MT Steel making Plant : 3.8 MT KSC Main Plants

18. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Pelletizing Plant This section is consist of two Units :  Material handling  Two pelletizing plants This process produces pellets and transfers them to Direct reduction Plants.

19. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Direct Reduction Plant This section is consist of three Units : - 3 Midrex modules - 2 zam zam (Midrex) modules This section produces sponge – Iron using pellets received From pelletizing plants.

20. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Steel Making Plant This unit Produces Slab and Billet’s using Sponge– iron (~% 90) and Scrap (~%10) in EAF’s ( Electric Arc Furnaces ) and they are casted in continuous casting Machines. The main melting and casting facilities are : Six Electric Arc Furnaces. Four Ladle Furnaces ( LF). TWO Slab Casting machines. Three Billet & bloom casting machines

21. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir 201520142013201220112010200920082007 3,4503,3603,5503,4113,3942,9352,5292,2242,169 Ton Ton 0.5% -5%2.6%

22. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Total Export : > 10 MMT 2014-2015 Export 1.6 MMT

23. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Expansion Projects Increasing Capacity KSC 0.8 MMt/y SSC 1 MMt/y 1989200620092017 3.2 5 Trend of Production & Capacity 1989- 2017 MMT 1.55 2.4 Production Capacity

24. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir

25. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir KSC BILLET&SLAB EXPORT 2014 Total Quantity: 493 000MT 000 MT

26. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir 000 MT KSC BILLET&SLAB EXPORT 2015 Total Quantity : 1068 000 MT

27. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir KSC SLAB Specifications Dimention & Tolerances Length (mm)Width (mm)Thickness (mm) 4000 ~ 10000 +/- 1001000 ~ 1250 +/- 10 195+/- 5 245+/- 5 Analysis of grades are according to customer needs and negotiable GI Structural Steel Other Size and tolerances are negotiable

28. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir KSC BILLETS & BLOOM Specifications Dimention & Tolerances Length (mm)Cross section (mm) 8000 ~ 12000 130 * 130 150 * 150 Analysis of grades are according to customer needs and negotiable Other grades are negotiable. GI Structural Steel Other Size and tolerances are negotiable CK 45 RST 37-2 St 3sp ST 44-2 ST 5sp ASTM A615 Gr60 ASTM A572 Gr50 ISIRI 3132 Aj 400 BS 4449 B500B

29. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir TOOL NO. 1 Correlation

30. Analyzing Correlation between Crude Oil and Steel Prices KSC’s approaches to research about future Steel prices for more optimized decisions

31. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir In view of the fluctuating market of Steel and the importance of Steel price forecasting in optimal managerial decisions, creating and embedding Steel forecasting subsystems has a special role in this industry. KSC management team uses more than one approach to understand the upcoming market situation. One of this techniques is finding out the relation between steel price and other economic parameters. Here, we are going to present an analysis about the oil and steel prices..

32. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir The effects of oil price on the prices of steel products can be outlined as follows:  The share of energy costs in Steel production finished cost is approximately 15%, so with increasing of Oil price, Steel products is expected to grow up.  The other mater should be mentioned is the impact of raising oil revenues due to increasing of oil price on the Oil reserve countries and consequently activating their further construction projects. Because of Steel use in the execution of construction projects, with rising Oil prices, relative increase in steel demand and prices is expected

33. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir The following study has been done to discover relationship between Oil prices and Steel prices. Oil and Steel input data is collected for the period of 2012/02 to 2016/02 monthly. Ukraine Billet prices per ton and per barrel of Brent Oil prices are studied. To explore the relationship between the two factors, Oil price considered as a independent factor and Steel Price is supposed dependent factor. Regression relation such as linear, exponential, Power logarithmic, polynomial with different degrees are evaluated. The results of this study show that power regression presents closer prediction.

34. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Prices in USD JanFebMarAprMayJunJulAugSepOctNovDec 2011 Oil Price 103.96114.44123.15114.46113.76116.46110.08110.88109.47110.5107.97 Billet Price 618620610645673670681670599576590 2012 Oil Price 110.99119.7124.93120.59110.5295.59103.14113.34113.38111.97109.71109.64 Billet Price 601581608609596556546556530504522518 2013 Oil Price 112.93116.46109.24102.88103.03103.11107.72110.96111.62109.48108.08110.63 Billet Price 538527532514503492506511497498505503 2014 Oil Price 107.57108.81107.41107.88109.68111.87106.98101.9297.3487.2778.4462.16 Billet Price 498487493501494490494510501471428400 2015 Oil Price 48.4257.9355.7959.3964.5662.3555.8746.9947.2348.1244.4237.72 Billet Price 393359358363373359327318291268270256 2016 Oil Price 30.833.2 Billet Price 249

35. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Logarithmic Regression

36. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Linear Regression

37. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Polynomial Regression

38. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Exponential Regression

39. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Power Regression

40. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Conclusion  As it has been shown in the charts, the rise and fall of Oil and Steel prices for the most cases are the same. Considering the other factors affecting steel prices, it can not be expected to predict exact value of Steel prices with the fitted equations. However, the highest coefficient of determination (R 2 ) is belong to Power Regression with value of 0.88 and equation of y = 22.636x 0.6782.  Correlation Coefficient of between Oil and Steel prices is equal to 0.91.

41. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Equation : Y = 22.636x 0.6782. Correlation Coefficient of between Oil and Steel prices is equal to 0.91.

42. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir TOOL NO2. Leading indicators :PMI

43. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir What are leading, lagging and coincident indicators? What are they for? An indicator is anything that can be used to predict future financial or economic trends. For example, the social and economic statistics published by accredited sources such as U.S. government departments are indicators. Popular indicators include unemployment rates, housing starts, inflationary indexes and consumer confidence. Official indicators must meet certain set criteria; there are three categories of indicators, classified according to the types of predictions they make.

44. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir LeadingLeading - These types of indicators signal future events. Think of how the amber traffic light indicates the coming of the red light. In the world of finance, leading indicators work the same way but are less accurate than the street light. Bond yields are thought to be a good leading indicator of the stock market because bond traders anticipate and speculate trends in the economy (even though they aren't always right). yields Lagging Lagging - A lagging indicator is one that follows an event. Back to our traffic light example: the amber light is a lagging indicator for the green light because amber trails green. The importance of a lagging indicator is its ability to confirm that a pattern is occurring or about to occur. Unemployment is one of the most popular lagging indicators. If the unemployment rate is rising, it indicates that the economy has been doing poorly. Coincident Coincident - These indicators occur at approximately the same time as the conditions they signify. In our traffic light example, the green light would be a coincidental indicator of the associated pedestrian walk signal. Rather than predicting future e events, these types of indicators change at the same time as the economy or stock market. Personal income is a coincidental indicator for the economy: high personal income rates will coincide with a strong economy.

45. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir The Importance Of The Purchasing Managers' Index (PMI) PMI is the headline indicator in the ISM Manufacturing "Report on Business," an influential monthly survey of purchasing and supply executives across the United States. The acronym PMI stood for Purchasing Managers’ Index prior to September 1, 2001. But since that date, the Institute for Supply Management (ISM) has used PMI as a stand-alone acronym to reflect its corporate name change (the ISM was called the National Association of Purchasing Management – NAPM – until January 2, 2002) and broader reach into strategic supply management beyond just the purchasing function One of the most reliable leading indicators for assessing the state of the U.S. economy is the PMI, formerly known as the Purchasing Managers' Index. The ISM Manufacturing "Report on Business" and the PMI number is closely watched by investors, business and financial professionals

46. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir PMI Calculation and Interpretation Data Collection The PMI is based on responses from members of the ISM Business Survey Committee, which includes a range of industries diversified by the North American Industry Classification System (NAICS) and based on each industry’s contribution to U.S. GDP. The survey covers 18 industries that include every aspect of the manufacturing sector. Members receive a monthly questionnaire that asks them to identify month-over-month changes for the following ten business activities that also constitute individual indexes in the Report on Business survey:

47. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir New orders – from customers Production – rate and direction of change in the level of production Employment – whether increased or decreased Supplier deliveries – are they slower or faster? Inventories – increases or decreases in stockpiles Customer Inventories – rates the level of inventories held by the organization’s customers Prices – reports whether organizations are paying more or less for products & services Backlog of Orders – measures whether the order backlog is growing or declining New Export Orders – measures the level of export orders Imports – measures the rate of change in imported materials.

48. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir

49. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir Key Points  Customer requirements and needs.  On time delivery of products.  Producing Clean steel with variety of Steel grades.  Private Jetty and exporting infrastructure  BEST QUALITY APPROVED BY Customers and Management systems Audits  1.3 MMT EXPORT PLAN ( 2016)

50. Khouzestan Steel Co. Khouzestan Steel Steel Co. Co. m.abbaszadeh@ksc.ir b.tajali@ksc.ir KHOUZESTAN STEEL COMPANY Thank you for Your Attention We welcome all Investors to KSC