1. China Steel Corporation India Private Limited Experience of Investment from CSCI By C K Chang 8 September 2014 New Delhi, India

2. China Steel Corporation India Private Limited Shri Narendra Modi Prime Minister and Former Gujarat Chief Minister Dr. Didar Singh Secretary General of Federation of Indian Chambers of Commerce Mr. Amitabh Kant, Secretary, Ministry of Commerce and Industry Mr. Pradeep Rawat Joint Secretary, Minister of External Affairs Mr. Sidharth Birla President of Federation of Indian Chambers of Commerce

3. China Steel Corporation India Private Limited Mr. Vakil Mr. Saurabh Patel Minister of Finance Energy & Petrochemical, Labour and Employment, Government of Gujarat Dr. Nanda Additional Chief Secretary of Home Department, Government of Gujarat Mr. Swain GIDC Managing Director Mr. Vakil GIDC Executive Director Mr. Pandian GIDC Chairman, Additional Chief Secretary of Industry & Mines Department,and Former Principal Secretary, Mr. Sahu

4. 4 CSCI Brief Introduction 1. CSC considered the India GDP growth over 6.3%. 2. CSC has provided energy-saving Electrical Steel into Indian market, from 42,000 to 80,000 ton, since 3 years ago. Last year is 92,000 ton. 3. The India tax remission and exemption schemes. 4. CSCI try hard to do more short time customer services to reach the win-win situation. 5. CSCI Stage I annual ES capacity is 200,000 ton, focuses on motor, transformer and pump Industries, with investment up to USD 237M. 6. In the future, CSCI anticipates to provide automobile, home appliance more high grade materials.

5. 5 Ahmedabad Vadodara Dahej Port Ahmedabad has Gujarat’s only international airport. CSCI corporate office is in Vadodara, where is 110km and 120km from Ahmedabad and Dahej respectively. CSCI Factory CSCI Factory Location

6. 6 CSCI Brief Introduction Furthermore, for Operating Capital sufficiency CSCI has applied short-term loan from local banks. Until 05.09.2014 extra USD 30M is ready to be invested. Total Investment of Stage I 237.00 Long-Term Loan(46.5%) 110.00 Equity Capital(53.5%) 127.00 Unit: million USD

7. 7 Office Buildings Stage 1 (Anneal and Coating Line) Utility Areas Future Expansion Reserve for Coil Centre CSCI Brief Introduction Focus on Cold-rolled and Galvanized product of 1 million tonnes per annum whose application are on automobile, home appliance and construction.

8. 4. CSCI Brief Introduction

9. UncoilingWelding Surface Cleaning Annealing Coating Drying & Curing Side Trimming (Optional) Recoiling Production Process (ACL) 1. Through ACL to gain the energy efficiency and precise shape for customer further processing. 2. Focusing on chrome-free E.S. market, to improve its anti-rust performance which is energy-saving product.

10. ※ Specification & Application for ES ClassificationSpecificationMain Application Normal Grade (CSC & CSCI) 50CS1300 50CS1000 General Motor & Small Transformer Semi-Processed (CSC) 50HE1 ARO 50NE1 ANC Compressor Motor Medium Grade (CSC & CSCI) 50CS600~800 Compressor Motor, Small/Medium Industry Motor, Small Generator, Medium Transformer 50CS600H High Grade (CSC & CSCI) 50CS470C Compressor Motor for Variable-Frequency, High Efficiency Motor; Medium/Huge Industry Motor, Generator, & Transformer 50CS470~350 Top Grade (CSC) 50CS290~230 35CS300~210 Compressor Motor for Variable-Frequency, High Efficiency Motor; Accurate Motor, Huge Industry Motor & Generator Thin Gauge (CSC) 25/20/15CSXXXXHF Driving Motor for Electric Vehicle,, High Frequency Motor, Commercial Transformer 10

11. 11 4. CSCI Brief Introduction CSCI Organization Chart Finance & Information Department Chairman Managing Director Secretary Special Assistant Management DivisionProduction Division Human Resources & General Affairs Department Utilities Department Production Support Department Construction & Engineering Committee Production & Equipment Department M M1 M2 W W1 W2 W3 Commercial Division C Sales & Transportation Department C2 V0 Planning Office

12. Employee Training Program: 1. Internal Training (On Job Training & Off Job Training ) 2. External Training (Out side Training Institute) 3. Overseas Training (CSC Taiwan) 1. Meal Allowance (Canteen Under Construction) 2. Employee Medical Insurance (Family included) 3. Free Transpiration from Bharuch to Factory Site 4. Uniform, Safety Equipment (Staff and Worker) 5. Employee Colony (dormitory for 250 employees, 1,2BHK for Staffs) Employee Benefits / Welfare: 1. CSCI Brief Introduction 12

13. 13 CSCI Chronicle 1.20.10.2011: CSCI Incorporated in Ahmedabad 2.02.07.2012: CSCI Project started 3.02.08.2013: Machinery installation started 4.06.06.2014: ACL individual test run 5.25.08.2014: Cold Run 6.30.09.2014: Hot Run (estimated)

14. 14 Experience of investment from CSCI 1.Gujarat and its Geographical Location 2.Taxes Structure 3.Duty Exemption and Remission Schemes 4.Bilateral Preferential Investment Policies 5.Prominent Characteristics 6.Basic Necessities for Expatriates 7.Advices for Potential Investors

15. 15 1. Gujarat and its Geographical Location New Delhi Mumbai

16. 16 Most industrialized state in India. Surplus of power supply. Easy-access to major markets(within DMIC). Has a coastline of 1600km with 42 ports connecting Has 55 SEZs and more than 200 industrial zones. Business friendly government. 1. Gujarat and its Geographical Location

17. Central Tax a. Customs Duty - 1)Basic - 5% 2)CVD - 12% 3)SP. CVD - 4% b. Excise duty - 12.36% c. Service tax - 12.36% 2. Taxes Structure 16

18. 18 Customs Duty Items (A)CIF100.00 (B)Landing Cost (1% on CIF)1.00 (C) Assessable Value (A+B) 101.00 (D) Basic Duty 5% on (C) 5.05Non-creditable (E) CVD 12% on (C+D) 12.78creditable (F)Education Cess 3% on (D+E)0.53Non-creditable (G)Sub total119.36 (H)Special CVD 4% on (G)4.77creditable (I)Total price inclusive all taxes124.13 (J)Creditable taxes(E) + (H) (K)Price after non-creditable taxes106.58 2. Taxes Structure

19. Sales Taxes 1.) VAT: Value Added Tax 5.00% 2.) CST: Central Sales Tax 2.00% 2. Taxes Structure 18

20. 20 Inner and inter state sales taxes Items Inner State Transaction Inter State Transaction (A)Ex-work Price 100.00 (B) ED : 12.36%12.36 creditable (C) VAT : 5%5.62N/Acreditable (D) CST : 2%N/A2.25Non-creditable (E) Price inclusive taxes 117.98114.61 (F)Creditable taxes 12.36+5.6212.36 (G) Price after non- creditable taxes 100102.25 GST(Good & Service Tax) can be imposed as soon as 2014-15, in order to replace CST/VAT. 2. Taxes Structure

21. 21 3. Duty Exemption and Remission Schemes Advance License : 1.Benefit : Raw materials can be imported at 0% import duty. 2.Obligation : Imported materials need to be exported with 15% added value. EPCG (Export Promotion Capital Goods) : 1.Benefit : Capital goods & spare parts can be imported at 0% import duty. 2.Obligation : Export 6 times of duty saved on capital goods imported, and to be fulfilled in 6 years.

22. 22 Essential preferential policies negotiate with governments in advance. such as : Single window for coordination with central and state government Easing import duty on Working in Process materials Win-Win Studying the Bulk Berth in Dahej port 4. Bilateral Preferential Investment Policies

23. 23 5. Prominent Characteristics DESCRIPITIONTAIWANINDIAREMARKS Manpower -Skilled manpower available - Low-Cost Labour Knowledge -Competency -Expertized -Eager to learn Attrition Rate -Average level-Beneficiary policy Industry Standard Major Countries’ Standards -Indian Standard -drawing must be converted fully Materials Availability -Plenty of suppliers -Patience to find -To find suppliers for comparison Schedule Control Tight Control -Depend Nature -Intertwine with third parties’ contract

24. 24 Gujarat is a dry state High percentage of vegetarian Drinking bottle water Summer(before monsoon) is dry and hot. Road system in Gujarat is relatively better Gujarat is a relatively safer state Cinemas, malls are available in big cities 6. Basic Necessities for Expatriates

25. 25 Study preferential policies before investment Taxes Issue from beginning try to find a good Charter Account and a Lawyer Negotiate with associated Government officials Future attraction on Taiwanese industrial zone Extra costs should be predicted practically 7. Advices for Potential Investors

26. 26 Thank you for attention The end