29th Annual Report 2009-10
BOARD OF DIRECTORS

Shri A K Srivastava Chairman-cum-Managing Director

Shri S. K. Nayak, IAS Part-time Official Director

Shri B. L. Bagra Director (Finance)

Shri Joy Varghese Director (P&A)

Shri A. K. Sharma Director (Production)

Shri P. K. Padhi Director (P&T)

Shri Ansuman Das Director (Commercial)

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National Aluminium Company Limited
INDEPENDENT DIRECTORS

Dr. A. Sahay

Shri S. S. Sohoni IAS (Retd.)

Shri K. S. Raju

Shri S. B. Mishra IAS (Retd.)

Shri N. R. Mohanty

Dr. Jyoti Mukhopadhyay

Shri R. K. Sharma

Maj. Gen. (Retd.) Samay Ram, UYSM, AVSM, VSM

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29th Annual Report 2009-10
EXECUTIVE DIRECTORS

Smt. Srabani Guha, IES CVO

Shri P. K. Parida

Shri B. N. Swain

Shri A. Sapra

Shri S. C. Dash

Shri P. K. Mohapatra Shri K. N. Ravindra Company Secretary

Shri K. S. Sreedhara

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29th Annual Report 2009-10
The sale of 7,094 MT Special Grade Alumina was the highest surpassing the previous high of 4,769 MT achieved in 200809. The sale of Special Grade Hydrate at 12,815 MT was the highest ever sale surpassing the previous best of 11,670 MT achieved during 2007-08. FINANCE Your Company posted a lower total income of ` 5,548 crore in the year under report, as against ` 5,631 crore during the previous year. Profit After Tax for the year stands at ` 814 crore, as against ` 1,272 crore in the previous year. The decline in net profit during the year compared to previous year was due to combined effect of lower sales realization, reduced earnings from investment of surplus funds and increase in operating cost. Your Company has recorded higher export earning of ` 2,209 crore during the year as against ` 2,071 crore achieved during the previous year. MARKETING You will be pleased to know that your Company achieved the highest ever sale of 4,35,979 MT metal as against sale of 3,53,589 MT metal during the previous financial year. This comprises of 2,89,031 MT, the highest ever domestic sale of metal surpassing the previous best of 2,71,274 MT achieved in 2008-09 and the highest ever export sale of 1,46,948 MT against the previous best of 1,32,730 MT achieved in 200405. The realization from sale was however low due to recessionary conditions prevailing during most part of the year. In order to improve margins, your Company has been putting thrust on sale of value added products. The sale of billets, wire rods and rolled products during the year under report have been the highest-ever surpassing the previous best. You will be pleased to know that as a part of e-commerce efforts, your Company adopted e-tendering procedure for export of Aluminium metal and Calcined Alumina during the year under report. Your Company achieved a total chemical sale of 7,51,410 MT (including Calcined Alumina Export of 7,02,554 MT) during the year compared to 8,93,332 MT (including Calcined Alumina export of 8,51,886 MT) during the previous year. The reduction in sale of Alumina was due to utilization of more quantity of Calcined Alumina at the expanded Smelter Plant. The domestic sale of Chemicals at 45,951 MT was the highest ever achieved, surpassing the previous best of 36,695 MT achieved in 2008-09. The summarized financial results for the year under report visà-vis previous year are furnished below: (` in crore) 2009-10 2008-09 Net Sales Other Income Total Income Expenses Gross Margin Less: Interest & depreciation Profit Before Tax (PBT) Provision for Taxes Profit After Tax (PAT) Appropriation: a) General Reserve b) Dividend including Dividend Tax Earning per Share (In `) 630 188 12.64 900 377 19.75 5,055 493 5,548 4,072 1,476 321 1,155 341 814 5,108 523 5,631 3,428 2,203 276 1,927 655 1,272

DIVIDEND AND APPROPRIATIONS Your Company had paid an interim dividend of ` 1.50 per share (15%) in March, 2010. The Board of Directors of your Company have recommended a final dividend of ` 1.00 per share (10%) making aggregate of ` 2.50 per share (25%) for the year under report as against ` 5.00 per share (50%) paid

6

National Aluminium Company Limited the apprehensions in the minds of people on aftermath of Naxal attack at Panchpatmali Bauxite Mines last year, your Company bounced back to normalcy very soon by virtue of an amicable understanding with the employees of Mines. The time tested policy of participative management helped and saw the culmination of several nagging issues through bipartite discussions. VISIT OF NATIONAL COMMISSION FOR SCHEDULED CASTES Hon’ble National Commission for Scheduled Castes visited the Corporate Office of the Company at Bhubaneswar and held discussions with senior officials as well as representatives of various SC/ST associations of your Company on 9th October, 2009. COPU RECOMMENDATIONS The Hon’ble Committee on Public Undertakings (COPU) examined the working of your Company during the year. The Hon’ble Committee has presented its report inter-alia consisting of 18 recommendations to the Parliament during April, 2010. Your Company is taking necessary action on the recommendations of the Hon’ble Committee. AWARDS & RECOGNITIONS Receipt of various awards during the year as detailed below stands ample testimony for the excellent performance of your Company in various fields: Ø EEPC Gold Trophy, as ‘Top Exporter’ 2006-07 in the Large Enterprise Category, for outstanding export performance. Ø All India Export Award of EEPC as the ‘Star Performer’ in large enterprise category, for the year 2007-08.

for the year 2008-09. Your Directors have recommended a lower rate of dividend keeping in view the requirement of funds for the growth projects under consideration. The final dividend will be paid after your approval. Your Directors have also proposed to transfer ` 630 crore to General Reserve Account from the profits of the year under review as against ` 900 crore transferred in the previous year. PRESIDENTIAL DIRECTIVES Your Company continued its efforts to implement the Presidential Directives on recruitment/promotion of SC/ST candidates. Your Company is also complying with the provisions of the Persons with Disabilities Act, 1995. Out of 7,467 employees (including Trainees) on your Company’s roll as on the last day of the year under report, there were 1,186(15.88%) SCs, 1,307(17.50%) STs, 716(9.59%) OBCs and 73 (0.98%) persons with Disabilities. Every third employee in the Company belongs either to SC or ST category. The total number of lady employees in the organization as on 31.03.2010 was 339. Your Company received a Presidential Directive during the year in respect of revision of salary package of executives and directors. The same has been duly complied with. INDUSTRIAL RELATIONS You will be pleased to know that the overall Industrial Relations (IR) climate in your Company remained cordial and conducive through out the year, which helped the organization in maintaining a zero mandays loss record on account of IR problems. Belying

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29th Annual Report 2009-10
Ø ‘Best Environment Care’ and ‘Best Workplace Practices' at Think Odisha Leadership Awards function, organized by The Times of India & Tefla's. Ø Status of ‘Premier Trading House’ as per Foreign Trade Policy 2009-10 by Ministry of Commerce, Govt. of India for the period 2009-14. Ø ‘Organisation with innovative HR Practices’ Award at World HRD Congress at Mumbai. Ø Alumina Refinery bagged the first Runner-up award from CII, Orissa State Centre for best Safety, Health & Environment practices and also the Pollution Control Excellence Award 2009 from Orissa State Pollution Control Board. Ø Bauxite Mines bagged 1st prize in Reclamation & Rehabilitation from Indian Bureau of Mines (IBM) at Mine Environment and Mineral Conservation Week. Ø Bauxite Mines also bagged the following prizes from Director General of Mines Safety (DGMS) for sound mining practices and for safe mining performance. a. 1st Prize in Training & Safety Performance. b. 1st Prize in Haul Roads and general lighting. c. 1st Prize in Compliance of 10th Safety Conference Recommendation. d. 2nd Prize in Open Cast working. e. 2nd Prize in Maintenance of Crusher & Conveyor System. f. 2nd Prize in First Aid, Welfare & Occupational Health and Safety facilities.

Excellence in CSR

GROWTH PLANS EXPANSION You will be pleased to know that commissioning of all the 240 Pots under second phase expansion of Smelter was completed by December, 2009. Similarly, the 9th Unit of CPP under second phase expansion was commissioned during August, 2009. The 10th Unit of CPP is likely to be commissioned by end August, 2010. Second phase of Alumina Refinery to enhance the capacity from 1.575 Million Tonnes to 2.1 Million Tonnes is expected to be completed by January, 2011. The present capacity of the various project segments and the capacity after ongoing 2nd phase expansion is given below: Project Segment Bauxite Mine Alumina Refinery Aluminium Smelter Captive Power Plant Unit Million Tonnes per year -do-doMW Present Capacity 4.8 1.575 0.345 960 Capacity after 2nd Phase Expansion 6.3 2.1 0.46 1,200

Of the approved project cost of ` 4,402 crore, financial commitments of ` 4,173 crore had been made upto 31.07.2010.

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National Aluminium Company Limited

Hon’ble Union Minister of Mines & DoNER Shri B.K. Handique inaugurating Fume Treatment Centre at Smelter Plant, Angul

UP-GRADATION OF 4TH STREAM OF REFINERY You will be happy to know that your Company’s proposal for upgradation of 4th Stream of Refinery to upgrade total capacity from 2.1 Million TPY to 2.275 Million TPY got a further boost with environmental clearance by MOEF during December, 2009. The upgradation is likely to be completed by March, 2012. UPGRADATION OF SMELTER POTLINE FROM 180 KA TO 220 KA You will be pleased to know that your Company has embarked on a plan to enhance the amperage in the pot lines from 180 KA to 220 KA at an estimated investment of ` 1,500 crore for both Smelter and Captive Power Plant. On completion of the project, the metal production will increase by about

1,00,000 MT per annum. The project is scheduled to be completed by 2017.

Awards of Excellence

9

Panaromic view of Alumina Refinery, Damanjodi

29th Annual Report 2009-10
UTKAL – E COAL BLOCK Your Company has been allotted ‘UTKAL-E’ Coal Block, having a reserve of around 70 million ton by the Government of India for its 9th and 10th units at Captive Power Plant. Mining of coal from the Utkal-E Block is scheduled to commence from June, 2012, at a capital outlay of ` 280 crore. MOU PERFORMANCE Based on results, your Company has been rated ‘Very Good’ under Memorandum of Understanding (MOU) signed with Government of India for the year 2009-10. IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY Your Company continued its efforts for the progressive use of official language in all its Offices. In that direction the following steps were taken during the year under report: q Your Company continued to issue Circulars, Office Orders, Memoranda etc. in bilingual form i.e. in Hindi & English. Letters received in Hindi were answered in Hindi.

Construction activities at Cathode Sealing Shop

A section of Alumina Refinery

12

National Aluminium Company Limited employees, Vigilance Awareness Week was organised in November, 2009 at all the units and regional offices of your Company. Nine training sessions were organized at different units of the organization for sensitizing employees on the evil effects of corruption. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO You will be pleased to note that your Company’s in-house R&D Units located at M&R Complex, Damanjodi and S&P Complex, Angul have been recognized by the Department of Scientific & Industrial Research (DSIR), Ministry of Science & Technology, Govt. of India. The particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are provided in the Annexure-1 to this report. q To promote use of Official Language among employees, Hindi Teaching Programme was implemented. Employees from Non-Hindi speaking areas were nominated for Praveen & Pragya courses under Hindi Teaching Scheme. After passing the examinations, incentives and cash awards were given as per the rules. q Six Hindi workshops were organized during the year under report to enhance the working capabilities of employees who had acquired working knowledge in Hindi. q To propagate awareness among employees for use of Hindi, Hindi Day and Hindi Week were celebrated at all the units of your Company during the year and many competitions for employees of Hindi speaking areas, Non-Hindi speaking areas and students were organised and prizes given. q Official Language Implementation Committee meetings were organised regularly for review of implementation of Hindi. VIGILANCE As a part of preventive vigilance and to make administration efficient, effective, clean and free of corruption, multifaceted strategies like surprise checks, sample tests, regular inspections, Chief Technical Examiner (CTE) type intensive examination of works and contracts were continued during the year under report. To reduce the possibilities of corruption, your Company has implemented e-tendering, e-payments, e-auctioning etc. With Enterprise Resource Planning (ERP) going live, the system is likely to become more robust. For creating awareness among PARTICULARS OF EMPLOYEES Having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the Annual Report of your Company excluding the information on employees in receipt of remuneration of ` 2,00,000 per month or ` 24,00,000 per

Cooling Tower for Unit #9 at CPP

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National Aluminium Company Limited
Social Facets of Corporate Success

Supporting periphery schools

Ensuring drinking water

Hon’ble Chief Minister Shri Naveen Patnaik laying the Foundation Stone for NALCO sponsored ITI at Damanjodi

Mobile Health Camp at Damanjodi

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29th Annual Report 2009-10
Ø Shri A K Srivastava was appointed as Chairman-cumManaging Director with effect from 01.10.2009. with effect from 28.10.2009.

Ø Shri Ansuman Das was appointed as Director (Commercial) Ø Shri Sundeep Kumar Nayak, IAS, Joint Secretary, Ministry of Mines was appointed as Director with effect from 07.01.2010. Cessation:

Ø The tenure of Shri C R Pradhan as Chairman-cum-Managing Ø Shri V K Thakral, IAS ceased to be a Director with effect from 07. 01.2010.

Director and Shri K K Mallick as Director (Commercial) ended on 30.09.2009 on attaining the age of superannuation.

Ø Shri S. Vijay Kuamr, IAS ceased to be a Director with effect from 31.07.2010. Your Directors wish to place on record their appreciation for the valuable services rendered by S/Shri C R Pradhan, K K Mallick, V K Thakral and S. Vijay Kumar during their tenure on the Board of your Company. ACKNOWLEDGEMENT Your Directors acknowledge with deep sense of appreciation, the co-operation, support and guidance received from various Ministries of the Government of India, particularly Ministry of Mines. Your Directors also express their sincere thanks to the Government of Odisha, Indian Railways, Mahanadi Coal Fields and other Government agencies. Your Directors also place on record their appreciation for the shareholders, various Banks and Financial Institutions for the confidence reposed by them in your Company. The Board also appreciates the contribution of customers, vendors, solicitors and business associates during the year and look forward to continuance of this mutually supportive relationship in future. Your Directors also acknowledge the constructive suggestions received from the Government and the Statutory Auditors. Your Directors also wish to place on record their appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the Company continues to grow and excel. For and on behalf of Board of Directors

C&AG COMMENTS Comments of the Comptroller and Auditor General of India on the Accounts for the year ended March 31, 2010, are enclosed. PUBLIC DEPOSITS Your Company has not accepted or renewed any public deposits during the year under review and as such no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet. AUDITORS The details of auditors appointed during the year under review are given below: a) Statutory Auditors b) Cost Auditors d) Internal Auditors : M/s. P.A & Associates and M/s C.K. Prusty & Associates : M/s. S C Mohanty & Associates : M/s. Patro & Co., M/s. Tej Raj & Pal and M/s. Dass Maulik Mahendra K. Agrawala & Co. DIRECTORS The changes that took place in the Board of Directors of your Company since the last report are given below: Appointment: Ø Shri P K Padhi was appointed as Director (Projects &Technical) with effect from 03.09.2009.

c) Secretarial Auditors : M/s. Sunita Mohanty & Associates

Place : Bhubaneswar Date : 25.08.2010

(A K Srivastava) Chairman-cum-Managing Director

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National Aluminium Company Limited
Annexure-I

STATEMENT OF PARTICULARS UNDER SECTION 217(1)(e) OF THE COMPANIES ACT, 1956 AND RULES MADE THEREUNDER
A. CONSERVATION OF ENERGY Various energy conservation measures that have been adopted for optimal utilization of energy resources in different units of the Company during the period under review are noted as under: Bauxite Mines Ø Replacement of DC drives of Acceleration Conveyor & Apron Feeder-1 : Calculated energy saving is 95,710 KWH per year having financial benefit of ` 4.45 Lakh annually. Ø Modifications in two Komatsu Loaders (No. - 17 & 18) to reduce fuel consumption: Turbo Charger , Fuel Pump & Acceleration Pedals were changed in 2007 & benefit still continues. Calculated saving is 29.58 KL of HSD having financial benefit of ` 09.17 Lakh annually. Ø Radiators of HEMM top up with mineral water: Expected saving is 0.5% of HSD consumption in each machine at ` 6.6 Lakh every year. Alumina Refinery Reduction in specific fuel oil consumption in Calcination: q Regular and continuous operation of Hydrate bypass system. q Maintaining the PTS in calcination for operation of fine hydrate bypass most of the time. q Maintaining product LOI and BET at slightly higher side of the allowable range also helped in reduction in oil consumption. q Improvement in specific Oil consumption: 0.03 Lt/MT of Calcined Alumina. # Financial Benefits of ` 115 Lakh per year. Reduction in specific coal consumption in hydrate circuit: q Reduction in Specific steam consumption in process w.r.t hydrate production from 2.08T/T. q Improvement in Milling system output by regular classifier cleaning and other proactive maintenance measures like time based replacement/ maintenance of critical spare parts like gearbox. q Detailed inspection of PA fan impellers and replacement of inefficient impellers of PA fans during overhauling, thereby achieving adequate velocity profile of pulverized coal from Mill to furnace. q Time based replacement of AH baskets which resulted in effective heat recovery from flue gas to Air, and ultimately reduction in coal consumption. q Improvement in specific coal consumption: 0.001 T/T of hydrate. # Financial Benefits of ` 28 Lakh per year. Optimizing, use of street lights q 50% of street lights from Plant Main gate to Vejaput junction are off after 11PM. q 30% of street lights are put off after 11PM from Vejaput gate to Kantabausuni gate and from Kantabausuni gate to Railway station. q 1800 nos. of LEDs have been replaced in 11KV switchgear panel. Indication lamp is 15W & LED is 01W. Net energy saving is 14W. q Saving in electrical energy consumption by 221 KWH. # Financial Benefits of ` 5 Lakh per year. Lubricants of Mill, PA fan, FD fan, BFP and Voith Couplings of ID fans were reused after centrifuging during boiler overhauling q The coal mill Main oil tank requires 8 barrels of ENKLO 460. In both the mills of one boiler, total 16 barrels amounting to 3200 Lts. have been reused which was normally discarded for disposal after one year use only. This year this oil has been reused after necessary conditioning through centrifuging in Boiler-3 and 4 during overhaul. q The PA and FD fans of Boiler-4 have lubricating system with tank and recirculation which also requires a change every year. But this year the same oil has been reused after necessary filtration and centrifuging. q Similarly hydro coupling oil in Voith coupling of ID fans and BFP of Boiler-4 also reused after centrifuging during overhaul. q Saving in Lub oil consumption by 8200 Lts. # Financial Benefits of ` 9.87 Lakh per year. Smelter Plant Optimize operating voltage in identified HT transformers (CII Project No-34): q Reduction of operating voltage in HT transformers (11/6.6KV) from normal Tap T4) to Reduced Tap (T3), i.e 2.5% less in all transformers. q Annual saving of electrical energy/ HFO (in Kwh/kl) is 526631 KWH. # Financial Benefits per year is ` 10.53 Lacs (@ ` 2.00 per unit )

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29th Annual Report 2009-10
Reduce the operating voltage of lighting circuit in the lighting transformers (CII Project No-35): q Reduction of operating voltage of light feeders by reduction of off-load tap of lighting transformers in 220 KV conversion S/s & various remote substations. q Annual saving of electrical energy/ HFO (in Kwh/kl) is 169725 KWH. # Financial Benefits per year is ` 3.39 Lacs (@ ` 2.00 per unit). Re-set the minimum fuel flowing to Ingot casting machines furnace in Cast House-B. q ICM furnaces (four in number) temperature setting has been reduced from 7400C to 7300 C with 100 % auto control. q Complete stoppage of oil flow when the desired temp. is achieved from earlier practice of a minimal opening (19 %) of both burners. q The sp. HFO Consumption in Cast House-B has been reduced from 44.150 Lt/Mt. to 38.03 Lt/MT. # Financial Benefits per year ` 91.7 Lacs (@ HFO landing price ` 15/lt). Optimize the temperature setting of furnaces in Cast House-A. q ICM furnaces temperature setting has been reduced from 7400 C to 7300 C. q WRM furnaces temperature setting has been reduced from 7800 C to 7600 C with the installation of PID Loop controlled furnace firing in furnaces 5,6,7,8. q Launder cover for all the launders has been provided to arrest the heat losses . q Improved technology of AIR SLIP in Billet production was implemented to enhance the productivity. q The sp. HFO consumption for product-mix of Cast House-A has been reduced from 54.457 Lt/ Mt to 47.852 Lt/ MT. # Financial Benefits per year is ` 182 Lacs (@ HFO landing price ` 15/Lt) Captive Power Plant q By providing energy efficient coating on the impeller and inner casing of RCW pump, the specific power consumption reduced from 0.1066KW/ M3 to 0.0869KW/ M3 . Considering flow of 10500 M3/Hr power saving is 207kw/Hr. With 300 days operation energy saving is 489320 KWH having financial benefit of ` 20.47 Lakh per year (Cost of Power taken as ` 1.77 per KWh). q Replacement of 450 Nos, 125 Watt MV lamp with 70 Watt SV lamp in boiler#4: Saving per fitting is about 55 watt. Saving per year is 108405 KWH having financial benefit of ` 1.92 Lakh per year (Cost of Power taken as ` 1.77 per KWH). q Replacement of normal fluorescent light fitting (2 Nos tubes and 2 chokes with power consumption of 110 watts) with T-5 fitting and electronic ballast (power consumption 66 watts): Saving per fitting is 44 Watt. Saving per year is 19272 KWH, having financial benefit of ` 0.34 Lakh per year (Cost of Power taken as ` 1.77 per KWH). q Replacement of normal choke with electronic ballast. Power saving is 10 watt per fitting. Saving per year is17520 KWH, having financial benefit of ` 0.31 Lakh per year (Cost of Power taken as ` 1.77 per KWH). q On line testing (Trevi Test) of Safety Valves of boiler drum & main steam line is done by simulation procedure which reduced steam consumption. This has been done for unit #1, #3, #4, #5 & #7. Reduction in fuel oil consumption per unit/test is 15 KL having financial benefit of ` 3.75 Lakh. q CWPH fore bay & Ash water fore bay Level indication has been provided in the DM Plant control room. This has avoided the over flow of water from the fore bays and saved the pump running hours. q Running hour counters have been provided in Compressors drives to know the exact running hours. This has helped to identify if there is leakage of air from instruments. Once these leakages are attended there is saving in energy. q Auto drain traps have been provided in the instrument air lines for draining moisture to achieve proper dryness of instrument air. This has saved the trip out arising out of failure of instruments. This has indirectly saved man power & energy loss caused due to unit trip out. q Earlier units were tripping due to equipment failure on account of abnormal temperature rise in bearing and winding of HT drives. In order to avoid such trip outs ramp has been provided in software for tracking the temperature rise. This modification has saved Unit trip outs and there by saving energy. q Electronics speed regulation has been provided in the plough feeders in New CHP to avoid spillage of materials & chocking of belts. Spillage of coal has been avoided resulting in power saving. Total Power and Fuel consumption and consumption per unit of production is given in Form-A.

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National Aluminium Company Limited
FORM – A PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY
A. Power and Fuel Consumption: CAPTIVE POWER PLANT Current year Previous year 2009-10 2008-09 1. Electricity (a) Purchased from GRIDCO Unit (Million Kwh) Total amount (` in lakh) Rate/Unit (`/Kwh) (b) Own Generation i) Through Diesel Generator Units per Ltr. of diesel oil Cost/Unit ii) Through Steam Turbine/ Generator Units (Gross)/Million Kwh Units per litre of fuel oil/gas Cost/Units (`/Kwh) Coal (Specify quality & where used) Quantity (MT) Total cost (` in lakh) Average rate (`/MT) Captive Power Plant Current year Previous year 2009-10 2008-09 3. Furnace Oil Quantity (KL) Total Amount (` in lakh) Average rate (`/Tonne) Others/Internal generation Quantity Total Cost Rate/Unit Consumption per unit of production Products with details 1. Alumina (a) Power (b) Fuel oil for calcination (c) Coal for steam (d) Oil for steam 2. Aluminium a) A.C. Power b) Fuel Oil c) Others i) CP Coke ii) CT Pitch Unit (Kwh/MT) (Kg/ MT) (Kg/ MT) (Kg/ MT) (Kwh/ MT) (Ltr./ MT) (Kg./MT) (Kg./MT) Standards (If any) 335 78 620 4.00 14,850 93 383 99 Current year 2009-10 323 71.56 621 5.37 14,664 76 378 89 Previous Year 2008-09 324 77.59 618 6.87 14,762 89 382 93 17,668 4,717.32 26,700 NA 5,677 1,602.45 28,227 NA ALUMINA REFINERY Current year Previous year 2009-10 2008-09

184.455 8,217.38 4.45 NA

144.060 5,639.04 3.91 NA

117.275 5,181.42 4.42 NA

69.319 2,714.31 3.92 NA

2.

6,849.28 387.67 1.78 5,707,112 65,690.54 1,151.03

6,199.45 1,092.03 1.82 4,857,511 49,500.72 1,019.06

335,526 – – 972,011 17,914.67 1,843.05

335,996 – – 962,264 17,188.38 1,786.24

Alumina Refinery Current year Previous year 2009-10 2008-09 130,648 30,033.36 22,988 NA 134,024 33,957.49 25,337 NA

Smelter Plant Current year Previous year 2009-10 2008-09 32,559 7,489.19 23,002 NA 32,119 8,195.90 25,517 NA

4.

B.

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29th Annual Report 2009-10
B. TECHNOLOGY ABSORPTION

FORM-B PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
RESEARCH & DEVELOPMENT (R&D) 1. Specific areas in which R&D Activities carried out by the Company are: (A) In-house R&D Activities (a) Alumina Plant – – – – – – – – – – – – – – – – – Development of RP analyser control system to replace the imported control system. Studies related to M2M Technology for recovering alumina from settler underflow mud Study on the effect of lime from various sources on the quantity and quality of aluminate liquor output and CaO content in the product. Studies to establish the effectiveness of Green liquor filter aids on the clarity and specific filtration rate of aluminate liquor Development of a process for preparation of high temperature resistant resin for sodic condensate polishing. Studies related to alternate flocculant and defoamer development. Utilisation of flyash to make quick settling cement. Neutralisation of Sodic condensate for economically utilizing the available condensate. Development of an innovative process for preparation of sodium aluminate from alumina hydrate. Green liquor filter aid (GLFA) plant scale trials were carried out. Plant scale trial with anodes of deeper stub hole depth (+20mm) with and without 10mm increased pin length to reduce pin to carbon voltage drop. Metallographic studies of cast products for quality improvement. Inclusion analysis of molten metal. Vendor development for cathode block. Plant scale trial with HFO additives for reduction in specific oil consumption. Trial with Colloidal graphite coating in place of rapeseed oil in ICM. Mathematical Modeling: – Simulation studies at different amperage levels. – Simulation study for optimum metal height at different amperage. – Simulation studies to predict pin & clad temperatures at various anodes cover heights. – Simulation of Billet casting and Wire rod casting process. Anode bench scale studies: – Impact of varying percentage of pitch on anode quality. – Impact of permuting cycle in baking furnace on anode quality. – Bench scale studies on utilization of rejected ramming paste in anode paste completed. – Bench scale studies on blending of fines of two types coke completed. – Characterisation of baked anodes for process monitoring. – Testing of samples of ramming paste with the anode bench scale set up carried out. – Revision of specification of c.p.coke proposed. Discussions were held with the existing coke suppliers to improve the quality of supplied material & were appraised about quality implications & future quality requirements.

(b) Smelter Plant

–

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National Aluminium Company Limited
– – – Large scale plant trial of additive in anode manufacturing to improve oxidation behaviour successful. Heat balance study carried out in Anode baking furnace. Pots started with alternate supply of cathode blocks, reprocessed rejected paste, partially damaged cathode blocks & indigenously developed ramming paste are being monitored. During the year, 3 pots have been lined with indigenously developed ramming paste. Laboratory scale trial for using SPL Carbon portion for electrode paste manufacturing is successful. In-house study carried out to optimize boric acid addition in pots. Monitoring of the improvement in anode quality due to improvement in Grain to sand ratio. Plant scale trial for utilization of rejected ramming paste in anode carbon matrix completed & found successful.

– – – – – – – – – – – – – – – – – – – – – – 2. – –

(B) Collaborative R&D Activities Pilot scale development of constructional blocks, bricks, chips, tiles and light weight aggregate from Red Mud in collaboration with JNARDDC, Nagpur. Establishing empirical relationship between physical properties of alumina through computer simulation and modeling in collaboration with SIT, BBSR and its implementation in plant. Pilot scale optimization of extraction of alumina from PLK (partially lateratised khondalite), collaborative project with MESIS, Russia. Preparation and certification of reference material for selected ores in collaboration with JNARDDC, Nagpur. Project completed and is being implemented. Plasma smelting of Red mud for production of Pig /Cast iron and Alumina rich slag in collaboration with IMMT, BBSR. Infra Red Thermography studies and Estimation of Scaling Height in precipitators at Refinery. Refinery collaborative project with JNARDDC, Nagpur. Project findings are being implemented. Evaluation of grain refining efficiency of commercially available grain refiner alloy in collaboration with JNARDDC, Nagpur. Project completed. Preparation of TEFR for extraction of Nickel from chromite over burden. The IRR was not found to be encouraging, hence project closed. Dev. of high speed extrusion alloys for Indian Industries in collaboration with JNARDDC, Nagpur. Characterisation of various casting & Rolling Defects of Strip Cast Aluminium Alloys at NALCO (RPU) in collaboration with JNARDDC, Nagpur. Study of effect of alumina quality on solubility of electrolytic bath in collaboration with JNARDDC, Nagpur. Techniques & tools for Per fluoro carbon (PFC) measurements in aluminium electrolysis cells in collaboration with JNARDDC, Nagpur. Preparation of Low Ferric Alum from low grade aluminium dross in collaboration with JNARDDC, Nagpur. Development of probe for liquidus temperature determination for electrolysis bath in collaboration with JNARDDC, Nagpur. Development of Heat Treatment Process for Destruction of Toxic Cyanide and Recovery of Valuables. (Sodium, Fluorides, etc.) from Spent Pot-Linings Materials (SPL) in collaboration with JNARDDC, Nagpur. Development of nano alumina and aluminium composite material for Automobile application in collaboration with IIT, Kharagpur. Development of Metal matrix composites based on NALCO’s Al-using in-situ Al2O3-SiC-C & Al2O3-SiC-SiO2 composite ceramic powder in collaboration with IMMT, Bhubaneswar. Increasing Productivity of ATH using additives in collaboration with IMMT, Bhubaneswar.

Benefits Derived as a Result of The Above R&D (In-House & Collaborative): Use of filter aids results in improved the specific filtration rate and hence production as well as reducing lime consumption. Patent has been filed for the high temperature resin development process and is under commercialization. Use of the high temperature resin results in conservation of water and energy.

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29th Annual Report 2009-10
– – – – – – – – – – – – 3. – – – – – – – – – – – – – 4. Use of high efficiency flocculant results in better control on mud washing. Sodic Condensate neutralization in addition to environmental protection helps in energy conservation and soda recovery from red mud pond water. Reduction in the cost of production of Zeolite has been addressed. Fly ash utilization has been increased. Implementation of higher grain to sand ratio in GAP2 has resulted in improvement of anode density by .005- .01 gm/cc. Usage of reprocessed rejected paste has helped in a saving of Approx 27 lakh for 10 pots lined with this material. Trials with indigenously developed ramming paste will help in development of indigenous vendors. Lining of 3 pots with such paste will result in saving of Rs 20000/T hot metal, produced from these 3 pots. Studies conducted in anode bench scale plant and regular characterizations of anodes have helped in process and anode quality improvements. Optimisation of Boric acid addition in pots has resulted in reduced consumption of boric acid to the tune of approx. 5 MT/month i.e. saving of approx. ` 2 lakh/month. Higher stub hole depth anodes reduces voltage drop across anode carbon to pin. Inclusion analysis and metallographic studies improve product quality. Mathematical modeling enhances process understanding and optimization of process parameters. Setting up of Nalco Research & Technology Centre (NRTC) at BBSR. (Implementation in progress) Pilot plant / Demonstration unit for production of construction bricks from Red mud for commercialization. Commercialization of few R&D processes. Utilisation of Fly ash in Tiles manufacturing (developing a feasible process). Implementation of Bayer process Simulation package for better process control and reduction in Cost of production. Salt removal studies to prevent scale formation in equipments and pipelines. Use of high Chrome grinding media and liner in Ball Mills for improved availability of mills and higher grinding capacity. Developing Green Liquor Filtration Aid. Implementation of high resistance resin for condensate recovery. Optimisation of quantity of butts in anode matrix Trials with higher percentage of AlF3 in pots to optimise pot parameters. Plant level trials by blending of different types of cokes. Trial with Indigenous Tepid ramming paste in pots 2009-10 266.79 0.05 ( ` in lakhs) 2008-09 347.65 0.07

Future Plan of Action:

New Projects:

Expenditure on R&D: (a) Total Expenditure (b) Total R&D Expenditure as % of total turnover

22

National Aluminium Company Limited

5.

TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION: (a) M&R Complex, Damanjodi: Sl. No. 1 2 3 4 5 6 Details of Modification Fine seed addition as external seed. Split feeding in precipitators. High rate settling technology. Use of CAIS as filter aid. Advanced vertical Diaster filters in place of Kelly filters. Two stage PHE eliminating water cooling stage in existing 3 stage PHE. Benefits thereof Reduced soda impurity and marginal increase in production. Reduced soda impurity. Lower reversion loss of alumina , soda loss and heat losses, Reduced foot print area and Capex. Improved specific filtration rate. Enhanced flow rate and reduced CAPEX. Higher heat recovery.

(b) Smelter Plant, Angul: Sl. No. 1 2 Details of Modification Firing system revamping with PID loop controlled furnace firing installed for the wire rod furnaces. PLC revamping in Ingot Casting Machine of CAST HOUSE-A. Benefits thereof Since a better controlled firing, it has benefited in fuel saving. HMI (Human-Machine interface) based PLC enables logging of process output and enables easier fault finding. ABB Variable Frequency Drive with AC Motor employing Dynamic Speed Accuracy of 0.2% and Encoder Feedback. Very smooth operation with speed control in the full range; very less noise. Minimum interruption in stacking crane operation due to motor drive problem. AlF3 consumption reduction trend is observed.

3

Stacking Crane-1 of Carbon Area: DC Motor with ROTAVAR control which was a tailor made system supplied by M/s. Syprim having only two step speed control, i.e., slow and fast. The system became obsolete and thus no spares were available. AlF3 charging is done by AlF3 hopper through the twin hopper opening. Twin hoppers in pot super structure modified to enable AlF3 to be fed to the pot through additional feeder assembly as & when required. Computerised ticket printing system for Billets commissioned.

4

5

Reduction in Customer complaints on account of human errors. Bar code generation will help in better product tracking & traceability, Better aesthetic look of final product, Additional MIS reporting functions.

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29th Annual Report 2009-10
(c) Captive Power Plant, Angul: Sl. No. 1. Details of Modification DCS has been retrofitted successfully in Unit#5 replacing the conventional analog control system. Benefits thereof – Obsolete technology for which no spares available. – Efficiency improvement due to monitoring of operating parameter. – Operating man power reduced from 3 to 2. – Analysis of abnormalities and trip out faster & accurate. 2. CBD Utilization system installed and commissioned in Unit#6 in January-2010. Refrigeration type Hydrogen Gas dryer installed in Unit#6 in December-2009. – The waste heat of the boiler blow down will be recovered. – Savings of ` 37.0 Lakhs per year per Unit. 3. – Improved dryness of Hydrogen gas in generator. – Reduction in Hydrogen consumption. – Regular replacement of Silica gel not required. – Oil vapour in addition to moisture is also removed. – Enhance the life of generator winding. 4. RLA study of Boiler after 25 years of service was done in November-2009 for Unit#6 and in February-2010 for Unit#5. – Met the statutory requirements. – Through assessment of life of all critical pressure part were done to improve reliability. The life was found to be in order for continuous operation. Air heater leakages have been reduced to below 10%. MOCBs are prone to explosion and fire causing total power disruption from the distribution board. This problem has been eradicated completely. Water level in CWPH and AWPH Forebay is directly controlled by DM Plant Control Room by the advance signal system. Due to this telephonic monitoring of level has been avoided.

5.

Installation of soft touch radial seals at the hot end basket of APH- A& B in the Unit#4, #5, #6 & #8, thus complete in all units. Additional 30 nos. of VCB (Vaccum Ckt Breaker) commissioned in place of MOCB (Minimum Oil Circuit Breaker) in CHP-1. Capacitance type instrument by ultrasonic level measurement has been adopted in CWPH and AWPH Forebay level monitoring.

6.

7.

DETAILS OF TECHNOLOGY IMPORTED/UPGRADED DURING LAST 5 YEARS M&R Complex , Damanjodi: Technology Imported/Upgraded Potentiometer analysis of Bayer liquor for soda and dissolved alumina in place of titration based analysis. Seed grain size control through addition of micro fined hydrate. Ion Chromatograph for analysis of Fluoride, Oxalate etc. Year of import 2008-2009 Has technology been fully absorbed ? Fully absorbed. If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action —

2008-2009 2008-2009

Fully absorbed. Fully absorbed.

— —

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National Aluminium Company Limited
Smelter Plant, Angul: Imported/Upgraded Year of import 2008-2009 Has technology been fully absorbed ? Improvement in product quality.Improvement in surface of the billet. Reduction in shell zone depth, surface segregation and secondary dendrite arm spacing. Technology fully absorbed. 1. The alumina feeding is done through pipe in the pot alumina hoppers. No PTM is required for alumina filing in pots. Hence, PTM availability is more and maintenance problems are not there. 2. Dust pollution in pot line is reduced. 3. Anode effects are minimized. Technology fully absorbed. ALPSYS pot regulation system: In potline-2 2008-2009 1. AlF3 is fed at regular intervals as calculated from ALPSYS regulation. %Ex.AlF3 in bath. ALPSYS maintains a constant target level of Ex.AlF3 in bath. It improves current efficiency and pots become more stable. 2. It has improved feeding algorithm which prevents anode effect. Technology fully absorbed. Additional Nitrogen Plant (PSA) Commissioned to cater to nitrogen requirement of Degasser, operationalised in both wire rod machines. 2008-2009 Operation of degasser with supply nitrogen has improved product quality in terms of reducing dissolved hydrogen in melt. This subsequently significantly reduces blow hole and inclusions. Technology fully absorbed. C. FOREIGN EXCHANGE EARNINGS AND OUTGO (ON CASH BASIS) The foreign exchange earnings of your Company for the year under review is ` 2,075.04 crore as against ` 2,097.32 crore in the previous year. The foreign exchange outgo of your Company for the year 2009-2010 is ` 443.23 crore as against ` 645.62 crore in the previous year. — — If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of action

Maxi Cast billet casting in Cast House-A was replaced by Air -slip billet casting for 6 & 7 inch dia billets.

—

HDPS: ( HYPER DENSE PHASE SYSTEM) Hyper dense phase alumina conveying system is introduced in Potline-4.

2008-2009

—

— —

—

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29th Annual Report 2009-10
Annexure II

REPORT ON CORPORATE GOVERNANCE
Philosophy Corporate Governance is a process that enables the Company to operate in a systematic manner to meet its ethical, legal and business expectations and at the same time fulfils its social responsibilities. The core value of Corporate Governance lies in integrity, transparency, high degree of disclosures, emphasis on product quality, adopting best business practices, making distinction between corporate ethics and personal convenience. In NALCO, Corporate Governance means a set process to leverage the resources at its disposal and create an environment for growth and development of human resources. It not only believes in earning the investors’ and stakeholders’ trust but also focuses on retaining the same on sustainable basis. The Board exercises its fiduciary role towards the Company with effective accountability, respect for law, maintaining Corporate Governance standard beyond law, putting the system in place for planning, budget, internal controls, risk management, communication policy on various facets of Company’s operations. It uses Corporate Governance as a tool for generating trust and goodwill among business partners, customers and investors and to earn respect from the society at large. 2.0 Board of Directors Composition The Company maintains optimum combination of Executive and Non-Executive (Independent) Directors. As on 31.03.2010, the Board consisted of 16 Directors out of which 6 were whole time directors including the Chairman-cum-Managing Director. Besides, there were 2 Non-Executive (non independent) directors nominated from the Government and 8 Independent Directors. Half of the strength of the Board was thus comprised of Independent Directors. All Directors furnish statement individually about the committee positions they occupy in other Companies and notify any changes in it. None of the Directors on the Board is member of more than 10 Committees or is acting as Chairman of more than 5 Committees. Board meetings, procedures and attendance A. Institutionalised decision making process (i) The Board is responsible for setting the policy and planning all directions of the organization and ensure processes are in place that will deliver the results. The whole time directors manage the day-to-day affairs of the Company. (ii) Board meetings are usually held at the Company’s Registered office at Bhubaneswar and also at New Delhi. (iii) Advance notice convening the Board meetings are given to all Directors. Sometimes, meetings with shorter notice are convened to meet urgent needs or in case of exigencies, resolutions are passed by circulation. (iv) All units/departments are informed well in advance about date of meeting so that matters at their end requiring discussion/approval/decision of the Board are communicated to Company Secretary Department for including in the agenda for the meeting. Agenda items of confidential nature are placed on the table. In exceptional circumstances supplementary items on the agenda are placed on the table before the Board. (v) The agenda papers are prepared by the departments and approved by the concerned functional director and CMD. Agenda items having financial implications are concurred by Director (Finance) before they are put up to CMD for approval. (vi) Members of the Board have complete access to all information and are free to call any senior official during the meeting for additional information/clarification on any agenda item. (vii) The Board is given presentation covering Production, Marketing, Finance, Business developments, Growth plans, Collaboration/Joint venture operations etc.

26

National Aluminium Company Limited
(viii) The information placed before the Board include: – Annual operating plans and budgets and revisions therein. – Capital Budgets and revisions. – Quarterly results of the Company and of its business segments. – Formation/reconstitution of Board Committees. – Terms of reference of Board Committees. – Minutes of meeting of Audit Committee and other Committees of the Board. – Show cause, demand, prosecution notices and penalty notices of materially important matters. – Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. – Any material default in financial obligations to and by the company, or substantial non payment for goods sold by the company. – Any issue, which involves possible public or product liability claims of substantial nature, including any judgment or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding another enterprise that can have negative implications on the company. – General notice of interest of Directors. – Proposal for investments, mergers and acquisitions. – Details of joint ventures, acquisitions and collaboration agreements. – Sale of material nature, of investments, subsidiaries, assets, which is not in normal course of business. · – Non compliance of any regulatory, statutory or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer etc. – Wage negotiation and settlement, significant labour problems and their proposed solutions. – Brief on statutory developments, change in Government policies etc. with impact thereof. B. Recording minutes of proceedings of Board and Committee meetings The Company Secretary records the minutes of the proceedings of each Board/Committee meeting. Draft minutes are circulated amongst all functional Directors of the Board/Committee for their comments. Comments, if any, received from functional Directors are incorporated in the minutes which are finally approved by the Chairman of the Board/ Committee. These minutes are confirmed in the next Board/ Committee Meeting. Any amendments suggested at the time of confirmation are given effect. The final minutes are entered in the Minutes Book within 30 days from conclusion of the meeting. C. Post Meeting follow-up mechanism The Guidelines for Board and Committee meetings facilitate an effective post meeting follow-up, review and reporting process on the decisions taken by the Board and Committees thereof. The Company Secretary intimates the Action Points arising out of deliberation during the meeting to the concerned department heads and to the functional Directors. The concerned department head provides information to the Company Secretary with approval of the respective functional Directors on the action taken, which are placed in the succeeding meeting for information of the Board/Committee, after taking approval of CMD. D. Compliance Nodal officers have been identified in each department to ensure adherence to all the applicable provisions of laws, rules, guidelines etc. The nodal officers furnish a monthly Compliance report to Company Secretary confirming adherence to all the applicable laws, rules, guidelines pertaining to their departments. Company Secretary compiles all data relating to compliance of all laws, non compliance, if any, and reasons thereof and places the same before the Board for information and guidance.

27

29th Annual Report 2009-10
Board Meetings The Board met 9 times during the year ended March 31, 2010. The minimum and maximum time gap between any two Board meetings was 16 days and 57 days respectively. Details of Board meetings are as follows: No. of Board Meeting & Date 233/17.04.2009 234/03.06.2009 235/19.06.2009 236/31.07.2009 237/ 23.09.2009 238/30.10.2009 239/04.12.2009 240/24.12.2009 241/19.03.2010 Board Strength 15 15 15 15 16 16 16 16 16 No. of Directors Present 11 13 13 14 16 11 13 13 15

Directors’ attendance at the Board Meetings, at the last Annual General Meeting, number of directorships in other companies and membership in other committees etc. during the year are as follows: a. Whole time Directors Name & Director Board Meetings Attendance No. of Membership in the Designation Identification at AGM held other Committees of other Number (DIN) on 19.09.2009 directorships Companies* Held during Attended Member- Chairmanthe tenure ship ship Shri A.K. Srivastava, 00302121 Chairman-cumManaging Director (1) Shri B.L. Bagra, 00090596 Director (Finance) Shri Joy Varghese, 01955109 Director (Pers. & Admn.) Shri A.K. Sharma, 02600938 Director(Production)(2) Shri P.K. Padhi, 02780916 Director (P&T)(3) Shri Ansuman Das, 02845138 Director (Commercial) (4) Shri C. R. Pradhan, Former 00127539 Chairman-cum-Managing Director (5) Shri K. K. Mallick, Former 00198005 Director (Commercial)(6) Shri P. K. Routray, Former 01282938 Director (Production) (7) (i) Part - time official Directors (Non-independent) Shri V. K. Thakral,IAS (8) 00402959 Shri S. Vijay Kumar, IAS 02230985 Shri S.K. Nayak, IAS (9) 02140600 4 9 9 8 5 4 5 5 1 4 8 9 8 5 4 5 5 1 NA Yes Yes No Yes NA Yes Yes NA Nil 1 Nil Nil Nil Nil Nil 1 Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil NIl Nil Nil Nil Nil Nil Nil Nil Nil

b.

8 9 1

6 7 1

No No NA

1 Nil Nil

Nil Nil Nil

1 Nil Nil

28

National Aluminium Company Limited b (ii) Part time non official (Independent) Directors Shri S.S. Sohoni, IAS (Retd.) Dr. A Sahay Shri K.S. Raju Shri S.B. Mishra, IAS (Retd.) Shri N.R. Mohanty Dr. Jyoti Mukhopadhyay Shri R.K. Sharma Maj. Gen.(Retd.) Samay Ram, UYSM,AVSM,VSM 01877231 01115233 01863178 00030975 00237732 02224647 00164387 00663816 9 9 9 9 9 9 9 9 7 4 5 8 6 9 8 9 No No Yes Yes Yes Yes No Yes Nil Nil Nil 3 5 Nil Nil Nil Nil Nil Nil 1 Nil Nil Nil Nil Nil Nil Nil 2 1 Nil Nil Nil

* As per clause 49 of the Listing Agreement, Membership/Chairmanship in only the Audit Committee and Shareholders/ Investors’ grievance Committee have been considered. (1) Appointed w.e.f. 01.10.2009. (2) Appointed w.e.f. 01.05.2009. (3) Appointed w.e.f. 03.09.2009. (4) Appointed w.e.f. 28.10.2009. (5) Appointed as CMD w.e.f. 03.08.2009.Superannuated on 30.09.2009. (6) Superannuated on 30.09.2009. (7) Superannuated on 30.04.2009. (8) Ceased to be Director w.e.f. 07.01.2010. (9) Appointed w.e.f. 07.01.2010. Directors’ Profile The brief resume of Directors retiring by rotation and additional directors seeking appointment, nature of their expertise, names of Companies in which they hold directorship, membership and their shareholding in their companies are provided in the Notice convening Annual General Meeting. Stock Option details The Company is in the process of implementing ESOP in terms of guidelines from the Government as part of Performance Related Pay (PRP) of executive remuneration. However, no stock option has been issued to Directors/employees during the year. Training to Non-Executive Directors The Company has initiated action for nominating the Independent Directors for training. 3.0 Board Committees Depending on the business needs and legal requirements, the Board has constituted the following Committees: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Audit Committee Human Resource Committee Technology Committee Share Transfer Committee Committee of Directors for sales Committee of Directors for procurements Investment Committee Committee of Directors for consideration of unaudited results Committee of Directors for reviewing court cases Committee of Directors on Corporate Social Responsibility Committee of Directors on Indonesia project

The above Committees of the Board have been constituted with specific responsibilities assigned to each of these Committees. 3.1 Audit Committee The terms of reference of Audit Committee is derived from Section 292A of the Companies Act, 1956, guidelines set out in clause 49 of the Listing Agreement and guidelines on Corporate Governance for Central Public Sector Enterprise issued by Department of Public Enterprise (DPE).

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29th Annual Report 2009-10
Audit Committee comprises of six independent directors and one non-executive non-independent director as detailed below: Independent Directors Shri S.S. Sohoni Dr. A. Sahay Shri K.S. Raju Shri N.R. Mohanty Maj. Gen.(Retd.) Samay Ram Shri S.B. Mishra (w.e.f. 03.06.2009) Non-Executice Non-independent Director Shri Sundeep Kumar Nayak,IAS (w.e.f. 07.01.2010) During the absence of Chairman in any meeting, any one of the independent directors present is elected as the chairman for the meeting. Director (Finance), Statutory Auditors, Chief of Internal Audit and Cost Auditors are permanent invitees to the meetings. Functional directors, Operational heads are invited to the meetings on need basis. The Company Secretary acts as the Secretary of the Audit Committee. The role of the Audit Committee includes: (i) Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. (ii) Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditors and the fixation of audit fees. (iii) Approval of payment to statutory auditors for any other services rendered by the statutory auditors. (iv) Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to: – – – – – – – Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of Clause (2AA) of Section 217of the Companies Act,1956. Changes, if any, in accounting policies and practices and reasons for the same. Major accounting entries involving estimates based on the exercise of judgment by management. Significant adjustments made in the financial statements arising out of audit findings. Compliance with listing and other legal requirements relating to financial statements. Disclosure of any related party transactions. Qualifications in the draft audit report. - Chairman

(v) Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. (vi) Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems. (vii) Reviewing the adequacy of internal audit function including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit. (viii) Discussion with internal auditors any significant findings and follow up thereon. (ix) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. (x) To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case of non payment of declared dividends) and creditors. (xi) Carrying out any other function as is mentioned in the terms of references of the Audit Committee.

30

National Aluminium Company Limited
Chairman of the preceding Audit Committee meeting was present in the last Annual General Meeting. Audit Committee meetings and attendance The Audit Committee met 6 times during the year. Attendance Name Held during the tenure Shri S. S. Sohoni 6 Shri. V. K. Thakral (upto 07.01.2010) 5 Dr. A Sahay 6 Shri K. S. Raju 6 Shri N.R. Mohanty 6 Maj. Gen.(Retd.) Samay Ram 6 Shri S.B. Mishra (w.e.f. 03.06.2009) 4 Shri Sundeep Kumar Nayak, IAS (w.e.f. 07.01.2010) 1

Attended 3 2 4 4 5 6 4 1

Shareholders’ Grievance Committee Audit Committee also looks after the redressal of complaints/grievances of the shareholders/investors and focuses on strengthening of investor relation. The terms of reference of the Shareholders’ Grievance Committee include redressal of shareholders’/investors’ complaints/grievances pertaining to share transfers/transmissions, non receipt of dividend/Annual Reports, issue of duplicate certificates, rematerialization/dematerialization of shares, change in address, bank particulars etc. Shri K. N. Ravindra, Company Secretary is the compliance officer. The Company addresses all complaints/grievances of the shareholders/investors, debenture holders expeditiously and usually resolves in 2-3 days time except in case of issue of duplicate warrants/DDs or cases which requires certain legal compliance. Details of complaints/grievances received and settled are published along with the quarterly financial results of the Company. During the year, the Company received and resolved 48 complaints / grievances from the shareholders/investors of the Company. Besides, various queries / correspondence from shareholders/investors were promptly attended to. The status of these complaints/grievances is as under:

Particulars No. of cases received during the year 2009-10 No. of cases attended and redressed to the satisfaction of the shareholders/investors. No. of pending cases remained unresolved/un-redressed.

Complaints/grievances received from Individuals & Institutions Stock Exchanges 47 47 Nil Nil NA Nil

SEBI 01 01 Nil

3.2 HR Committee Terms of reference of HR Committee include recommendation to the Board on framing of rules and regulations and changes therein relating to recruitment, transfer, promotion, deputation and other conditions of service in respect of below Board level employees, wage structure and scale of pay of the non-executives and any changes therein, organization chart including manpower planning and any other references made by the Board from time to time. The Committee is headed by an independent Director. The Committee met 7 times during the year. Attendence Name Held during the tenure Attended Shri N.R. Mohanty 7 7 Maj. Gen.(Retd.) Samay Ram 7 7 Dr. Jyoti Mukhopadhyay 7 6 Shri Joy Varghese 7 7 Shri P.K. Routray (upto 30.04.2009) 1 Nil Shri S.B. Mishra (w.e.f. 03.06.2009) 6 6 Shri B.L. Bagra (w.e.f.03.06.2009) 6 6 Shri A.K. Sharma (w.e.f. 01.05.2009) 6 5

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29th Annual Report 2009-10
Remuneration Committee NALCO being a Government Company, the appointment, terms and conditions of remuneration of the Whole time directors are decided by the President of India through administrative ministry. Remuneration (a) Whole time Directors Name Relationship with other Directors Business relationship with the Company, if any Chairman cum Managing Director Director (Fin.) Director (P&A) Director (Prodn.) Director(P&T) Director (Comm.) Chairman cum Managing Director Director (Comm.) Director (Prodn.) Remuneration for the year 2009-10# All elements of Other remuneration package, benefits i.e. salary, PF (`)* contribution, pension, gratuity etc. (`) 7,88,893 24,80,474 21,15,004 12,65,754 8,93,164 8,14,822 29,79,598 18,73,959 9,71,595 7,07,037 11,77,896 12,40,754 11,80,340 6,19,222 4,42,405 1,43,102 1,95,795 6,98,703

Total (`)

Shri A.K. Srivastava (w.e.f. 01.10.2009) Shri B.L. Bagra Shri Joy Varghese Shri A.K. Sharma (w.e.f. 01.05.2009) Shri P.K. Padhi (w.e.f. 03.09.2009) Shri Ansuman Das (w.e.f. 28.10.2009) Shri C.R. Pradhan (upto 30.09.2009) Shri K. K. Mallick (upto 30.09.2009) Shri P. K. Routray (upto 30.04.2009) # Figures are based on revised scales.

Nil Nil Nil Nil Nil Nil Nil Nil Nil

14,95,930 36,58,370 33,55,758 24,46,094 15,12,386 12,57,227 31,22,700 20,69,754 16,70,298

* Other benefits include Medical facilities, Leave Travel Concession, Residential Accomodation, Electricity & water charges, Upkeep allowance, Entertainment allowance , productivity and performance related incentives etc. (b) Part-time Non-official (independent) directors There are eight part time non-official (independent) Directors on the Board. The independent Directors are paid sitting fees of `10,000/-for attending each meeting of Board/ Committees thereof. Details of sitting fees paid to the independent Directors for the year are given below: Name Dr. A. Sahay Shri S. S. Sohoni Shri K. S. Raju Shri S.B. Mishra Shri N.R. Mohanty Dr. Jyoti Mukhopadhyay Shri R.K. Sharma Maj. Gen.(Retd.) Samay Ram, UYSM, AVSM, VSM Sitting Fee (`) Board Meetings Committee Meetings 40,000 70,000 50,000 80,000 60,000 90,000 80,000 90,000 80,000 30,000 70,000 1,20,000 1,30,000 1,00,000 40,000 1,40,000 Total (`) 1,20,000 1,00,000 1,20,000 2,00,000 1,90,000 1,90,000 1,20,000 2,30,000

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National Aluminium Company Limited
(c) Part-time official directors There were two part-time official directors on the Board of the Company as on 31.03.2010. No remuneration was paid to the part-time official directors. Service contracts, notice period, severance fee The Chairman-cum-Managing Director and other whole time directors are appointed by the President of India for a period of five years from the date of taking over charge or till the date of superannuation (presently 60 years of age) or till further order from the Government of India, whichever event occurs first. Government Nominee Directors who are appointed by the President of India are from the Ministry of Mines. They retire from the Board on ceasing to be officials of Ministry of Mines. Independent Directors are appointed by the President of India for a period of three years usually. There is no provision for payment of severance fees. Technology Committee The terms of reference of Technology Committee include monitoring and paying special attention to the assessment of the Company’s technology status, acquiring and assimilating technologies necessary to make it competitive and to its own R&D efforts for maintaining sustained strength in the technological field. The Technology Committee consists of four independent directors and two whole time directors. Dr. A. Sahay, Independent Director is Chairman of the Committee. The committee met 4 times during the year. Share Transfer Committee The Share Transfer Committee considers and approves issue of new share certificates in case of torn/mutilated/defaced/lost/rematerialisation, share transfer, transmission, transposition and other related activities in physical mode besides taking note of beneficial owners’ position under demat mode. The Board has also authorized the Company Secretary to approve requests for only transfer/transmission of shares. 30 meetings of Share transfer Committee/Share transfer approval took place during the year ended 31st March, 2010. Committee of Directors for Sales The terms of reference of Committee of Directors for Sales includes decision on all short term contracts of sale both for alumina and aluminium i.e. the contracts for a period of one year or less in the cases where the value exceeds the powers delegated to CMD. Chairman-cum-Managing Director, all whole time directors and one co-opted officer(s) of the Marketing department are members of the Committee. The committee met 9 times during the year. Committee of Directors for Procurements The terms of reference of the committee of Directors for procurement includes approval of contracts/items/packages/tenders with financial limit upto ` 50 crore in each case, in respect of all capital expenditure which have been included in the capital budget, duly approved by the Board and for procurement of all raw materials which are beyond the powers delegated to CMD. Chairman-cum-Managing Director and all functional directors of the Company constitute the Committee. The committee met 11 times during the year. Investment Committee The terms of reference of Investment Committee include formulation of procedural guidelines for investment of surplus funds subject to overall guidelines issued by the Government of India in this regard. The Committee met once during the year. Committee of Directors for consideration of unaudited financial results The Committee of Directors for consideration of unaudited financial results was constituted in terms of Clause 41 (II) of the Listing Agreement, to consider and take on record, the quarterly financial results after the same are considered by the Audit Committee. The quarterly financial results approved by the Committee are placed before the Board in next Board meeting. The Committee consists of 3 whole time Directors, 1 Part-time Official Director and 2 Independent Directors. The quorum of the meeting is 2 Directors personally present including 1 Independent Director. CMD is Chairman of the Committee. The Committee met once during the year. Committee of Directors to review court cases A Committee of Directors was constituted during the year for examination and review of various legal cases between the Company and the Government of Odisha.

3.3

3.4

3.5

3.6

3.7

3.8

3.9

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29th Annual Report 2009-10
The Committee consists of Director (Finance) and 3 Independent Directors. Shri S.B. Mishra, Independent Director is Chairman of the Committee. The Committee met once to review the court cases. 3.10 Committee of Directors on Corporate Social Responsibility The terms of reference of the Committee of Directors on Corporate Social Responsibility includes proper planning, execution and monitoring of the NALCO Foundation an independent trust formed and registered for managing and overseeing the Corporate Social Responsibility activities of the Company. The Committee consists of 3 whole time Directors, 1 Part time official Director and 1 Independent Director. CMD is Chairman of the Committee. 3.11 Committee of Directors for Indonesia Project Committee of Directors on Indonesia projects was constituted during the year with 2 whole time Directors including CMD, 1 Part time official Director and 1 Independent Director. The terms of reference of the Committee is to negotiate and recommend to Board on the issues relating to Indonesia project. The Committee has since been rechristened as ‘Committee of Directors for Overseas ventures’ to study and recommend to the Board, all proposals for pursuing business interests abroad. 4.0 Statutory Auditors Comptroller and Auditor General of India (C&AG) has appointed M/s. P A & Associates, Bhubaneswar and M/s. C.K. Prusty & Associates, Bhubaneswar as joint Statutory Auditors of the Company for the financial year 2009-10. The fees paid/payable to the joint statutory auditors for the year was ` 11 lakhs towards statutory audit fees, ` 11 lakhs towards Limited Review Report for all four quarters, ` 2.25 lakhs towards fee for Tax audit and ` 0.5 lakhs towards fee for certification on Corporate Governance. 5.0 General Meetings of Shareholders Particulars of the General Meetings of the shareholders held during last 3 years: Annual General Meeting Year Date Time Location 2006-2007 21.09.2007 11.00 A.M. NALCO Bhawan, Bhubaneswar 2007-2008 20.09.2008 11.00 A.M. NALCO Bhawan, Bhubaneswar 2008-2009 19.09.2009 11.00 A.M. NALCO Bhawan, Bhubaneswar Extraordinary General Meeting : NIL No special resolution was passed either through postal ballot or at any of the General Meetings of the members held during the year under report. 6.0 Disclosures Material Contracts/Related Party Transactions The Company has not entered into any material financial or commercial transactions with the Directors or the Management or their relatives or the companies and firms, etc. in which they are either directly or through their relatives interested as Directors and/or Partners. The Company has obtained declarations from all concerned in this regard, which were noted by the Board. Compliance The Company has complied with all applicable rules and the requirement of regulatory authorities on capital market and no penalties or strictures were imposed on the Company during last three years except one adjudication notice issued by SEBI for non-compliance of Clause 49 of the listing agreement regarding composition of the Board. However, the adjudication proceeding was dropped by SEBI on suitable reply by the Company. Code of Conduct for Directors and Senior Executives The Company’s Board of Directors and Management are committed for conducting business in accordance with the highest standards of business ethics and complying with applicable laws. A comprehensive code for whole time and Non-Executive Directors as well as for the senior management of the Company has been evolved and adopted by the Board. All members of the Board and senior management affirm compliance with the Code of Conduct at the beginning of the financial year. Copy of the code of conduct is also posted at Company’s website: www.nalcoindia.com. A declaration to this effect signed by Chairman-cum-Managing Director is given below: “I hereby confirm that the Company has obtained from the members of the Board and senior management (Key Executives), affirmation that they have complied with the Code of Conduct for Directors and senior management in respect of the financial year 2009-10.”

(A K Srivastava) Chairman-Cum-Managing Director

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National Aluminium Company Limited
CEO/CFO certification In terms of Clause 49 of the Listing Agrement, the certification by the CEO and the CFO on the financial statement of the Company and internal controls relating to financial reporting has been submitted to the Board. Non-Mandatory Requirements The Company has not adopted any non-mandatory provisions specified in Annexure ID of Clause 49 of the Listing Agreement. Accounting Treatment The financial statements are prepared under the historical cost convention and have been prepared in accordance with applicable mandatory Accounting Standards and relevant presentational requirements of Institute of Chartered Accountants of India and provisions of the Companies Act, 1956. Risk Management Risk assessment and mitigation reports are placed to the Audit Committee periodically. More details on the subject are given under “Management Discussion and Analysis Report”. Whistle Blower Policy The Company being a CPSE, the CVC guidelines are applicable which provide adequate safeguards to the employees. No separate whistle blower mechanism has been formulated. 7.0 Corporate Ethics Code of Conduct for Prevention of Insider Trading In accordance with the Securities and Exchange Board of India (Insider Trading) Regulations, 1992, the Board has approved a comprehensive ‘Code of Conduct for Prevention of Insider Trading’. Under this code, Directors, Key Executives and designated employees are prohibited to deal in shares of your company during the closure of trading window and other specified period. Permission of Compliance officer is required for dealing in shares beyond specified limit. All Directors, Key Executives and designated employees are also required to disclose related information periodically as defined in the code. Company Secretary is the Compliance officer under this code. 8.0 Means of Communication Quarterly/annual financial results The Company regularly intimates un-audited as well as audited financial results to Stock Exchanges soon after these are taken on record by the Board and publish them in leading English and vernacular newspapers in India. The results are also promptly uploaded in Corporate Filing & Dissemination System (CFDS) and displayed in Company’s web site: www.nalcoindia.com. News releases, presentations Official news releases, presentations made to media and to Institutional investors/analysts are displayed at Company’s website: www.nalcoindia.com. Such presentations are also sent to the Stock Exchanges in which Company’s shares are listed. Website The Company’s website: www.nalcoindia.com contains separate dedicated section ‘Investors’ page’ wherein all shareholders/investors, debenture holders’ information are available. Company’s Annual Report, shareholding pattern, Quarterly financial results are available on the website in downloadable form. Annual Report Annual Report containing Directors’ Report, Management Discussion and Analysis Report, Corporate Governance Report, Auditors’ Report, Audited Accounts, Consolidated Financial statements and other important shareholders information is circulated to the members and others entitled thereto. It is also hosted in the Company’s website. 9.0 Shareholders’ information Annual General Meeting Date: 30th September, 2010 Time: 11.00 A.M. Venue: NALCO Bhawan, P/1, Nayapalli, Bhubaneswar-751 061 Financial Calendar for 2010-11: Events Tentative Date Unaudited Financial results for the first quarter ending 30th June, 2010 14th August, 2010 Unaudited Financial results for the second quarter ending 30th September, 2010 By 14th November, 2010 Unaudited Financial results for the third quarter ending 31st December, 2010 By 14th February, 2011 Unaudited / audited Financial results for the year ending 31st March, 2011 By 14th May, 2011 Annual General Meeting for the year ending March 31, 2010 September, 2011 Book Closure Dates Book Closure/Record Date Purpose 25th March, 2010 Interim Dividend @ `1.50 per share for 2009-10 31st August,2010 to 4th September, 2010 Final Dividend @ `1.00 per share for 2009-10

35

29th Annual Report 2009-10
Dividend payment Dividend is paid within 30 days of declaration of dividend as per the provisions of the Companies Act, 1956. The final dividend for 2009-10 shall be paid within 30 days from the date of declaration i.e. before 29th October, 2010. Details of dividend paid during the last five years are as follows: YEAR 2005-06 2006-07 Interim Final 1st Interim 2nd Interim Final 2007-08 2008-09 2009-10 Interim Final Interim Final Interim Dividend/share (`) 2.00 3.00 3.50 1.50 2.50 4.50 1.50 3.50 1.50 1.50 Total Dividend paid (` in crore) 128.86 193.29 225.51 96.65 161.08 289.94 96.65 225.51 96.65 96.65 08.02.2006 26.10.2006 19.02.2007 30.03.2007 08.10.2007 25.02.2008 15.10.2008 25.02.2009 14.10.2009 30.03.2010 Date of Payment

Transfer of unpaid/unclaimed interest/dividend to IEPF During the year, an amount of ` 8,37,629/- pertaining to unpaid and unclaimed dividend for the financial year 2001-02 has been transferred to the Investor Education and Protection Fund (IEPF) in terms of Section 205A of the Companies Act, 1956 and the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. Further, a total amount of ` 3,32,435/- pertaining to unpaid and unclaimed 6th & 7th half yearly interest on 14.5% NCDs was transferred to IEPF during the year. The proposed dates for transfer of other unpaid and unclaimed dividends and debenture interest on expiry of 7 years is given in the Notice convening the Annual General Meeting. Listing on Stock Exchanges NALCO shares are presently listed in following Stock Exchanges: National Stock Exchange of India Ltd. Scrip code: NATIONALUM Traded from : 28.04.1999 ISIN CODE : INE 139A01026 Listing fees for the year 2010-11 has been paid to both the Stock Exchanges. Final approval for delisting of shares from The Calcutta Stock Exchange is still awaited. Out of the total paid-up equity capital of ` 644.31 crores, the President of India holds 56,14,99,635 equity shares of ` 10/- each fully paid up, in physical form. The Company has listed balance 8,28,09,993 shares of ` 10/- each fully paid-up, comprising 12.85% of the total paid-up capital with the above Stock Exchanges. Of the listed shares, 99.14% were held in demat mode as on 31.03.2010. Bombay Stock Exchange Ltd. Scrip code: 532234 Traded from : 19.10.1992

36

National Aluminium Company Limited
Market Price Data MONTH H April, 2009 May June July August September October November December January,2010 February March 260.00 396.00 373.00 312.00 352.00 369.20 369.95 403.80 421.35 525.90 405.90 427.00 (Amount in ` ) SHARE PRICE (BSE) L 207.15 213.10 296.00 246.00 298.25 327.05 331.50 347.00 366.00 369.15 356.10 385.75 V 17,98,856 21,89,349 31,25,340 19,43,051 19,10,252 12,47,586 9,69,321 8,80,499 11,32,996 88,67,482 16,36,419 15,32,378 H 260.90 400.00 373.40 312.00 355.00 321.60 370.45 403.60 421.00 526.80 409.00 426.35 SHARE PRICE (NSE) L 207.00 214.80 296.00 245.10 300.55 374.80 331.10 345.25 358.70 368.60 356.10 371.70 V 75,84,534 1,03,94,549 1,39,41,134 68,96,154 73,28,870 5,15,769 43,69,354 28,99,192 32,92,346 2,68,04,621 47,46,651 51,45,567

H=Highest, L=Lowest & V=Volume(No.) Source: Web-sites of BSE &NSE Performance in comparison to broad - based Indices
210 200 190 180 % variation over the base 170 160 150 140 130 120 110 100 90 80 Apr '09 May '09 June '09 July '09 Aug '09 Sept '09 Oct '09 Nov '09 Dec '09 Jan '10 Feb '10 Mar '10

NALCO'S SHARE PRICE MOVEMENT VIS-A-VIS BSE SENSEX AND NSE NIFTY

Movement of Share Price/Sensex over the base of March 2009 figures in percentage terms BSE NALCO NSE

37

29th Annual Report 2009-10
Registrar and Transfer Agents All kinds of investors’ related services, both for physical as well as electronic segments are provided from its in-house Share Registry at the following address. Complaints/Grievances are resolved within 2-3 days time on an average. National Aluminium Company Ltd. Share Registry NALCO Bhawan, Plot No. P/1, Nayapalli, Bhubaneswar – 751 061(Odisha) Tel : 0674-2303197 0674-2301988 to 2301999 (12 lines) (EPABX) – (Extn. 2585-87) Fax: 0674-2300677 E-mail addresses: i) knravindra@nalcoindia.co.in ii) dmrao@nalcoindia.co.in iii) nkmohanty@nalcoindia.co.in iv) bharatsahu@nalcoindia.co.in Pursuant to Clause 47-C of the Listing Agreement, half-yearly certificate on compliance of share transfer formalities obtained from Practicing Company Secretary have been submitted to Stock Exchanges in time. The total number of transfer deeds processed and shares transferred during the last three years are as under: Years 2009-10 2008-09 2007-08 Shareholding pattern as on 31.03.2010 Sl. No. Category 1. 2. 3. 4. 5. 6. 7. 8. Promoters (Government of India) Mutual Funds Banks/ Financial Institutions Insurance Companies FIIs Bodies Corporate Indian Public Others TOTAL * President of India along with 6 nominees
4.1 3.34

No. of Transfer Requests Received 102 59 60 No. of Shareholders 7* 21 18 12 88 930 37,598 1,476 40150

No. of shares transferred 8110 4261 5200

No. of shares 56,14,99,635 80,856 78,29,446 2,69,41,874 2,63,92,215 1,64,51,986 44,61,622 6,51,994 64,43,09,628

Percentage of shareholding 87.15 0.01 1.22 4.18 4.10 2.55 0.69 0.10 100.00

5.4 0.01

Government of India 87.15 Mutual Funds Banks, FIs, Insurance Companies FIIs Others

87.15 0.01 5.4 4.1 3.34

38

National Aluminium Company Limited
Distribution schedule of shareholding Number of Shares 1-200 201-500 501-1000 1001-50000 50001-100000 100001 and above

No. of Shareholders 35625 2999 801 676 6 43

Total shares held 21049200 10473260 6404040 26902170 3786230 6374481380

% of share capital 0.33 0.16 0.10 0.42 0.06 98.93

Dematerialisation/Rematerialisation of Listed Shares & Liquidity NALCO shares are compulsorily traded in demat form in NSE and BSE. Demat requests are confirmed to the respective Depositories (NSDL/CDSL) within 8-10 days of receipt of Demat Request Forms (DRFs) along with original share certificates from the DPs. During the financial year, total no. of 21,799 shares has been demated under both the Depositories as detailed below: NSDL : 15,401 CDSL : 6,398 99.14% of the Company’s total listed share capital stands dematerialized as on 31st March, 2010 as compared to 99.11 % as on 31st March, 2009.
18.45 0.86

NSDL

Dematerialisation of Listed Shares

CDSL Physical 80.69

During the year, the Company has confirmed 2 rematerialisation requests for 11 shares and the physical share certificates were dispatched to the respective shareholders in time. 10.0 Outstanding GDRs/ADRs/Warrants or any Convertible Instruments, Conversion Date and likely impact on equity The Company has neither issued any GDR / ADR nor any convertible instrument outstanding as on date. 11.0 Plant locations of the Company Mines & Refinery Mines & Refinery Complex Damanjodi - 763 008 Dist.-Koraput (Odisha) Smelter Plant Nalco Nagar Angul - 759 145. (Odisha) Captive Power Plant Angul - 759 122. (Odisha) Port Facilities Opposite Ore Handling Complex Port Area, Visakhapatnam – 530 035 (Andhra Pradesh) Address for correspondence Registered Office : NALCO Bhawan Plot No. P/1, Nayapalli, Bhubaneswar – 751 061 (Odisha)

39

29th Annual Report 2009-10
AUDITORS’ CERTIFICATE
To The Members National Aluminium Company Limited, Bhubaneswar

We have examined the compliance of conditions of Corporate Governance by NATIONAL ALUMINIUM COMPANY LIMITED, for the year ended on 31st March, 2010 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement. We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For P.A . & Associates Chartered Accountants FRN 313085E (CA S.S. Poddar) Partner Membership No.51113 Place : Bhubaneswar Date : The 11th day of August, 2010 For C.K.Prusty & Associates Chartered Accountants FRN 323220E (CA C.K. Prusty) Partner Membership No.57318

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National Aluminium Company Limited
Annexure-III Annexure-III

SECRETARIAL AUDIT REPORT
To The Members National Aluminum Company Limited Bhubaneswar We have examined all secretarial records and the compliance of various provisions of the Companies Act, 1956 and the rules made under that Act, the regulations, guidelines and the instructions prescribed under the Securities and Exchange Board of India (SEBI) Act, 1992, relevant clauses of the Equity Listing Agreements with Bombay Stock Exchange Limited and National Stock Exchange of India Limited, the Depositories Act, 1996 and the regulations and bye-laws framed under that Act, for the financial year ended 31st March, 2010 and we report that : 1. Maintenance of Statutory Records The Company has kept and maintained upto date statutory registers & records as required under various provisions of the Companies Act, 1956 and the rules made there under and has made the necessary entries therein. 2. Filing of Statutory Returns The Company filed all statutory forms and returns timely with the Registrar of Companies and other Statutory Authorities and all documents/intimations under various Statutes/Listing Agreement were regularly filed with the Stock Exchanges within the due date. 3. Composition of the Board Clause 49 of listing agreement requires that if the Chairman of the Company is executive Chairman then not less than half of the Board of Directors should comprise of independent directors. The Company had sixteen directors on its Board as on 31st March 2010. In compliance of Clause 49 of the listing agreement, the Board comprised eight independent directors. 4. Board Meetings All the Board meetings of the Company were duly held during the year after giving proper notices and observing the presence of proper quorum. After completion of all these meetings, the proceedings including resolutions by circulation were properly recorded and signed in the Minutes Book by the Chairman within due time. 5. In -House Share Registry All share related activities both physical and electronic segments are handled at the In -house Share Registry of the Company located at its Registered Office at NALCO Bhawan, P/1, Nayapalli, Bhubaneswar-751061 and the same is in compliance with the SEBI Circular No. D&CC/FITTC/CIR-15/2002 dt.27.12.2002. 6. Share Transfer Committee The Share Transfer Committee, formed under Clause VI C of Clause 49 of listing agreement considers and approves issue of new share certificates in case of torn/mutilated/defaced/lost/rematerialisation of shares in addition to transfer/transmission of shares. For quick disposal of requests, Company Secretary has been authorized by the Board to consider the transfer/transmission of shares. During the year ended 31 st March, 2010 share transfer/transmission including issue of new share certificates arising out of torn/mutilated/defaced/lost/rematerialisation were approved 3 times through Share Transfer Committee and Company Secretary approved only transfer/transmission of shares 27 times. 7. Redressal of Investor Grievances All complaints/grievances relating to share transfers, transmissions, demat/ remat of shares, issue of duplicate share certificates, payment of dividend etc. were not only attended but also resolved within 2-3 days time of their receipt. Details of these complaints/ grievances, share transfers, electronic holding of shares (both NSDL and CDSL) were put up in every Audit Committee Meeting (Audit Committee is also entrusted with the job of looking into redressal of investor grievances). 8. Daily Reconciliation of Listed and Paid-up Capital The Company has complied with the provisions of Depositories Act, 1996 and the bye-laws framed thereunder by the Depositories with regard to reconciliation of records of dematerialised securities with all securities issued by the Company. The reconciliation of physical and dematerialised shares with the total shares issued by the Company is carried out on daily basis. The Company has adequate transparent systems and procedures to carry out the above reconciliation. 9. Dematerialisation /Rematerialisation The Company has complied with the provisions of Depositories Act, 1996 and the bye-laws framed thereunder by the Depositories with regard to dematerialsiation/rematerialisation of securities. The requests for dematerilisation/ rematerilisation were confirmed to the respective Depositories (NSDL/CDSL) within a week’s time of receiving the physical documents from the DPs as against 15 days from the date of receipt stipulated by the Depositories and 21 days from the date of uploading the individual requests stipulated by SEBI.

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29th ANNUAL REPORT 2009-10
Annexure-III (contd.)
10. Payment of Corporate Cash Benefits to the Shareholders The Company paid dividends on time to its shareholders after their declaration and wherever necessary rights to dividends were kept in abeyance, pending registration of transfer of shares/ pending final settlement of suits in compliance with the provisions of the Companies Act, 1956. 11. Transfer to Investor Education and Protection Fund On expiry of 7 years period from the date of declaration/payment, the Company transferred the following unpaid/unclaimed interest and dividend to the Investor Education and Protection Fund in terms of Section 205A of the Companies Act, 1956 and the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001 : A. Transfer of unpaid/unclaimed Interest on 14.5% NCDs Period 26.09.2001 to 25.03.2002 26.03.2002 to 25.09.2002 B. Transfer of unpaid/unclaimed Dividend Financial year 2001-2002 Amount (`) 8,37,629/Date of Transfer 25.11.2009 Amount (`) 1,64,772/1,67,663/Date of Transfer 08.04.2009 19.10.2009

12. Insider Trading Regulations The Company has complied with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 with regard to disclosures by the directors, officers and designated employees and has maintained proper records required under these regulations. The Company has also framed code of internal procedures and conduct as per the regulations. 13. Legal Notice During the year under review, the Company has not received any legal notice from any Statutory Authorities like SEBI, Stock Exchanges and Registrar of Companies. 14. Public Deposits The Company has not accepted any Public Deposits under Companies (Acceptance of Deposits) Rules, 1975 during the year under review. The Company has neither issued any GDR/ADR nor any convertible instrument during the year under review.

M/s. Sunita Mohanty & Associates (Company Secretaries)

Place : Bhubaneswar Date : 28.07.2010

CS Jyotirmoy Mishra, Partner (C.P.No-6022)

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National Aluminium Company Limited
Annexure IV

MANAGEMENT DISCUSSION & ANALYSIS REPORT
1. INDUSTRY STRUCTURE AND DEVELOPMENTS Economies of different countries started recovering after unprecedented sharp fall in FY’09. The recovery has been impressive but burdened with some element of uncertainty. As a result of FY’09 meltdown most of the producers in Aluminium Industry resorted to strategies in response to the situation faced such as curtailing production, closures, etc. However, some of these producers considering the improved situation have subsequently re-started these facilities. Alumina & Chemicals During the year 2009, the world consumption of Alumina was 73.859 million MT against the world production of 74.309 million MT thus showing a surplus of 0.45 million MT. The world Alumina production and consumption declined by approx. 5.9 % and 5.8% respectively during 2009 as compared to 2008. In 2009, the spot price of alumina averaged around $249 a tonne. Prices showed signs of recovery in Q1, 2010 to an average of $340 a tonne, which reflected the improved outlook for aluminium. The refinery curtailments during the first half of the year 2009 reduced availability thereby providing necessary impetus for alumina prices to rise from rock bottom level of $180/tonne. The recovery in aluminium prices triggering smelter restarts saw alumina prices recover to above $300/tonne level. Stronger demand mainly from smelter restarts and an unprecedented level of curtailments in refining capacity helped the market to return to balance during the course of the year. Delayed restarts and fresh commissioning of refineries helped in the balancing act of fundamentals. Alumina demand and supply are expected to be balanced in medium term. Increase in bauxite and freight costs, as well as energy cost is likely to support the alumina price in medium-term. Aluminium During the year 2009, the world consumption of primary Aluminium was 34.341 million MT against world supply of 37.781 million MT, showing a surplus of 3.440 million MT. The world consumption declined drastically by approximately 8.2% while the supply declined by 5.9% respectively during 2009 as compared to 2008. Aluminium price averaged at $ 1664.8/T in 2009 which is 34% lower than the average price in 2008, primarily because of weaker demand for aluminium in major consuming countries. Lower consumption and a relatively weaker response from global aluminium production resulted in stocks build-up which stood at historical highs of 4.63 million tonnes at LME by the end of 2009. Analysts expect production to remain around current levels for most of 2010. 2. STRENGTH AND WEAKNESS Strength Your Company’s strength lies in its skilled and committed manpower, good quality bauxite reserves, efficient technology, various well planned and ideally located infrastructure facilities, efficient operations, production of good quality products at competitive cost, excellent customer service and commitment to good Corporate Governance practices in all facets of its operations. Weakness Your Company is affected by the wide fluctuations in the LME prices, exchange rate fluctuation, shortage of coal and limited product range. 3. OPPORTUNITIES AND THREATS Opportunities Revival of world economy has opened many opportunities for your Company to grow. Grant of Mining Leases over Gudem and KR Konda bauxite blocks in Andhra Pradesh and proposed establishment of Alumina Refineries in Andhra Pradesh and Odisha will ensure your Company’s leadership position as one of the leading manufacturer of alumina in the world. Your Company will have over a million MT of surplus alumina on completion of 2nd Phase Expansion. Your Company can set up Aluminium Smelter Plants in India and abroad where energy costs are cheaper. Having good experience in operation of power plants will stand in good stead to enter into the business of Independent Power Producer. Your Company is exploring various options including Nuclear Power option in this direction. Nuclear Power is termed as the energy source of the future. Your Company’s foray into nuclear power generation will be a significant step in realizing the goal of becoming an Independent Power Producer.

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29th ANNUAL REPORT 2009-10
Threats Being nearer to the Naxal infested areas could be a threat to your Company’s operations at Mines & Refinery. However, your Company has taken adequate security measures in coordination with the State and Central Governments to address the naxal threat. Although the State Government is very much supportive for the proposed Bauxite Mines and Alumina Refinery project in Andhra Pradesh, security concerns in view of the threat perception from Naxals may be a major impediment in achieving the target as per schedule. 4. SEGMENT-WISE PERFORMANCE For the year under review, your Company achieved net profit of ` 814 crore on a total income of ` 5,548 crore. The detailed segment wise information is furnished below: Total Chemicals Aluminium Power Unallocable# (Alumina) ` in cr. Share ` in cr. Share ` in cr. Share ` in cr. Share ` in cr. Net Sales & Operating revenue PBIT Capital Employed ROCE (%) PBIT Margins (%) *Internal transfers have been eliminated. # includes cash balance and capital works in progress. 5. OUTLOOK Domestic Market Outlook The Indian economy showed strong resilience in FY’09 in withstanding the economic crisis and staged recovery largely on the back of stimulus packages by the Government. India witnessed a recovery as the GDP grew by approx. 7.4% in FY’10 from about 6.7% in FY’09. A sharp turnaround in the end-user segments of aluminium industry such as automobiles, industrial & infrastructure and thrust on power sector growth propelled the industry growth. The current demand-supply situation for aluminium is largely balanced with consumption in line with existing production plus imports and a relatively small volume of exports. However, the aluminium sector faces a significant concern of medium-term over-capacity due to projects pursued by the three major players in the country. Capacity expansion through planned projects would almost treble production to 4.4 million tonnes by 2013. Considering that all aluminium projects would begin commercial production with expanded capacity as envisaged, there could be at least two million tonnes of additional capacity for exports by 2013. India’s per capita consumption of aluminium is about 1.3 kg as against about 30 kg in the developed world for which the industry need to explore new application areas and untapped demand potential thereby setting up preference for aluminium in the future. International Outlook Aluminium Global aluminium consumption is expected to grow annually around 5% during the next decade, supported by continued urbanisation, industrialisation and economic development particularly in developing economies. Industry experts forecast that 2010 would witness considerable growth of the aluminium market generated by rising demand from the automotive and packaging sectors. Aluminium consumption is likely to grow by 12% in 2010 over 2009 because of such growth and of low base effect. Alumina For 2010 as a whole, alumina prices are forecast to average $325 a tonne, which is around 30 per cent higher than the average for 2009. In the short term, prices are expected to be supported by higher assumed world economic activity and thus, increased demand for aluminium. Over the medium term, spot alumina prices are projected to ease, as production increases following the commissioning of new refining capacity. 1,945 514 1,432 26% 44% 13% 36% 26% 4,095 53 2,895 55% 05% 26% 02% 01% 1,455 371 882 19% 32% 08% 42% 25% _ 217 5,847 _ 19% 53% 5,548* 1,155 11,056 10% 21%

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National Aluminium Company Limited
6. RISKS & CONCERNS An important factor to keep in mind over the coming quarters would be the potential unwinding of some of the stock financing deals in LME. Because of these deals the aluminium market could be more sensitive than other commodities and base metals. This might be more of a point to watch for in late 2010 or even 2011. Evolving views on the timing of monetary policy changes, central banks’ exit strategies and the associated tightening of interest rates could impel speculative activity and give direction to Aluminium prices. Risk Management Your Company continues to believe that managing risk is critical for its growth and sustenance. As such, your Company is constantly monitoring and assessing the internal as well as external risk factors associated with its day to day business operations and financial management and thereby effectively mitigating possible risks associated therewith . Your Company’s approved Integrated Approach for Enterprise Risk Management is under implementation in all process units as well as in operational areas. 7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Your Company has well established internal control systems commensurate with the nature and size of its operations. Internal audit function of your Company has been entrusted to three reputed and well experienced external Chartered Accountants’ firms .The internal audit reports submitted by the auditors are discussed at functional directors level in the first instance and then submitted to the Audit Committee for its review , analysis and advice to further strengthen the internal control systems covering all material controls, financial controls, compliance controls and risk management systems . Action taken reports on the observations of Audit Committee on internal audit reports are regularly submitted to the Audit Committee. 8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE Details on financial performance with respect to operational performance are given in the Directors’ Report. 9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT INCLUDING NUMBER OF PEOPLE EMPLOYED. Human Resources Manpower strength of your Company as on 31.03.2010 was 7,467 as against 7,461 at the last day of the previous year. The detailed break up is given below: Position* Executive Supervisory Skilled/Highly skilled Unskilled/Semi skilled Total * Including GETs/MTs/SOTs/JOTs As on 31.03.2010 1,829 855 3,727 1,056 7,467 As on 31.03.2009 1,839 888 3,631 1,103 7,461

Training & Development Your Company believes that success of any organization is dependant on its experienced, trained and dedicated employees. To keep the employees abreast of the latest developments, constant efforts are made by your Company for functional and developmental training based on the needs identified for the individual as well as for the organisation. Emphasis is placed on specific position related

45

29th ANNUAL REPORT 2009-10 training needs. Training effectiveness evaluation is also carried out to measure the benefits derived from the training imparted. The training statistics for the year 2009-10 is given below: Category Executives Non-executives Total 10. CORPORATE PLAN AND BUSINESS DEVELOPMENT The new Corporate Plan and Vision 2020 were adopted by the Company in 2009-10. The new Vision Statement of the Company is: ‘To be a Reputed Global Company in the Metals and Energy Sectors’ New Mission statement adopted by the Company is: – – – – – to achieve sustainable growth in business through diversification, innovation and global competitive edge. to continuously develop human resources, create safe working conditions, improve productivity and quality, and reduce cost and waste. to satisfy the customers and shareholders, employees, and all other stakeholders. to be a good corporate citizen, protecting and enhancing the environment as well as discharging social responsibility in order to ensure sustainable growth. to intensify R&D for Technology development. Mandays 7,133 10,246 17,379

The major thrust will be diversification and capacity addition. The major goals identified by your Company are: – – – – – – – – – to achieve annual turnover of over ` 25,000 crore by 2020. to achieve annual production of 1.7 million ton Aluminum and 4 million ton Alumina by 2020. to transform from being only an “aluminum producer” to become a metal producer and energy provider. to venture into new fields of activity beyond Aluminum by setting up at least two diversified projects by 2016. to target at least one 1000 MW IPP by 2016. to maximize value and long term return to share holders through a strategy of new investments, cost competitive mines and business driven by the quality of products and services. to develop long-term relations with domestic and foreign clients and Joint Venture partners. to develop a powerful scientific and technical base. Apart from investments in volume growth, the Company shall substantially finance R&D and modernization of facilities, laboratories, achieving improvements in the quality of products and satisfying customer demands. to adopt main strategic priorities aimed at end user orientation.

In line with its Corporate Plan and Vision 2020, your Company is actively considering the possibilities of setting up of Aluminium Smelter Plants in other countries, where power is cheaply available. Your Company has opened a project office in Jakarta to expedite preproject activities in Indonesia. Your Company is also planning to set up a second aluminium smelter plant in India and preparing mining

46

National Aluminium Company Limited

plan for grant of Mining Lease over Gudem and KR Konda blocks in Andhra Pradesh for which the Govt. of India has accorded consent for grant of Mining Lease. Your Company has signed MoU with Nuclear Power Corporation of India Ltd. (NPCIL) for establishment of a nuclear power plant in Joint Venture (JV). Project identification is in hand. Your Company has signed an MoU with Orissa Industrial Infrastructure Development Corporation (IDCO) to set up an Aluminium Park at Angul in joint venture. The JV Company named ‘Angul Aluminium Park Private Limited’ has been incorporated. Your Company is also exploring various opportunities for securing mineral assets abroad. In this connection, your Company is in discussion with various firms overseas. 11. COMPUTERIZATION ACTIVITIES INCLUDING ENTERPRISE RESOURCE PLANNING (ERP) Your Company went live on Enterprise Resource Planning (ERP) with SAP R/3 in staged manner since February, 2010 and has covered Materials Management with Supplier Relationship Management (SRM), Finance and HR under the program in staged manner. Other modules shall follow. Your Company has strengthened its data pipelines both to the Internet and to the Works Locations with fault tolerant high bandwidth links, to ensure un-interrupted data connectivity. This has also enabled tele-presence activities between Corporate Office and Works locations. Multi Protocol Label Switching (MPLS) Virtual Private Network (VPN) has been set-up with all Marketing Offices to provide secure and adequate bandwidth for all applications. E-governance in your Company is now broadened with the SRM module of ERP. The applications implemented earlier like e-tendering, on-line Vigilance complaints, on-line property returns and e-helpline continue to be supported. 12. TOTAL QUALITY MANAGEMENT All the manufacturing units of your Company have upgraded their Quality Management System to the latest standard i.e. ISO 9001 : 2008. Recertification audits of Alumina Refinery, Port Facilities and Smelter Plant were successfully completed during the financial year while other units successfully underwent Surveillance Audits. Management continued its thrust on encouraging Quality Circles in the organisation. Thirteen Quality Circles from different units of your Company were selected through Chapter level competitions of QCFI for participating in the National Convention of Quality Circles held at Bangalore in December, 2009. Out of these, four Quality Circles qualified for the highest level of award at the National Convention. For the 14th year in succession your Company organised the All-Orissa Quality Circle Convention in April, 2009. This Convention is a flagship event in the quality movement in the State. 13. SAFETY & HEALTH Your Company has always laid due importance on development on the safety and health of its employees and peripheral communities for their sustained well being. Proactive engagement with the interested parties and focus on exceeding in performance beyond statutory requirements has been the hallmark of your Company’s intent towards Safety and Health. In order to systematically manage the Occupational Health and Safety Management System, your Company has not only successfully retained the ISO 14001:2004 and OSHAS 18001:2007 certification but has been continuously improving upon them.

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29th ANNUAL REPORT 2009-10
14. ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENT, FOREIGN EXCHANGE CONSERVATION Environmental Protection & Conservation Environment Management plays a very important role in any organization for smooth running, growing and expanding its business from its existing boundaries to global boundaries and the same is given utmost importance by your organization to all these factors to meet the statutory requirements and improve beyond it. The main highlights in that direction are detailed below: – – – – All the Units of your Company are operating with valid ‘Consent to Operate’ under the Air and Water Acts for the existing capacities. All the five major Production Units have valid authorization to handle hazardous wastes. Hospitals at Damanjodi and Angul have valid authorization for scientifically processing biomedical wastes. In line with its objective of ensuring greater transparency in the Unit’s operations, the critical environmental parameters are now being displayed prominently outside the plant gate, as well as uploaded on the Company’s website, for information of all interested parties. – – The Environment Management System of all five operating units is certified as per ISO 14001:2004 version. Recertification/Surveillance Audit for all units have been completed and recommended for continuation of certificate. For control of emission of suspended particulate matter (SPM), CPP unit has obtained the permission for use of Ammonia Flue Gas Conditioning system. The system has been designed indigenously & installed in unit I, III, IV & VI. The system is successfully working on continuous basis. – New Sewage Treatment Plant at CISF Colony, Angul has been commissioned & is operating under trial run.

Technological Conservation Your Company adopted the then latest technology AP-18 of Aluminium Pechiney, France, following technical collaboration with the global leader in Aluminium Refining and Smelting. The Technical Collaboration Agreement was signed with Aluminium Pechiney (AP) in 1981 and was subsequently extended from time to time to avail the Continued Technical Assistance (CTA) of AP and implementation of PhaseI and Phase-II expansion projects of your Company. Renewable Energy Development With steady economic growth, the demand for electric power in the country is also increasing manifold. To power this growth, the use of conventional fossil fuels in boilers is posing high degree of environmental problems apart from the growing concern on the fast depletion of these non renewable resources. NALCO which operates 10X120 MW coal fired units also shares this concern as a responsible corporate citizen and is making efforts to tap the renewable sources of energy for its own and for commercial sale. In this endeavor, your Company has plans to set up a 50MW Wind Power Plant in any of the wind bearing locations in India. Global tenders for the same have been invited and the order for the project is likely to be finalized soon. Foreign Exchange Conservation The foreign exchange earnings and foreign exchange outgo of your Company for the year under report are ` 2,075.04 crore and
` 443.23 crore respectively.

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National Aluminium Company Limited
15. ANCILLARY DEVELOPMENT In the direction of development and promotion of ancillary industries, your Company has awarded Ancillary status to 50 Small Scale Industry (SSI) units till date. Your Company continued its efforts to encourage SSI units by placing orders on them for various items like liquid Coal Tar Pitch, CP Coke etc. During the year 2009-10 the value of orders placed on SSI units was to the tune of ` 50.57 crore. Your Company also participated in the National Vendor Development Programme (Buyer-Sellers Meet) and Seminar-cum-Exhibition held on 22nd & 23rd of Dec,2009 at Exhibition Ground, Bhubaneswar organized by Micro Small & Medium Enterprises Development Institute(MSME) & Director of Industries, Govt. of Odisha. 16. CORPORATE SOCIAL RESPONSIBILITY You will be pleased to know that your Board has taken a decision to set up a ‘NALCO Foundation’ with a vision ‘To be an Agent to Engineer Holistic Development’ to augment the existing periphery development activities being undertaken through Rehabilitation & Periphery Development Advisory Committees (RPDACs) as a part of discharging its Corporate Social Responsibility (CSR). The Foundation has been registered under the Indian Trusts Act and your Board has taken a decision to contribute 1% of Net Profit of your Company every year, in addition to 1% of net profit being spent through RPDACs. The Foundation will discharge its responsibilities within the guidelines issued by the Government of India from time to time. With the setting up a Foundation, your Board is confident that there will be special attention on CSR activities of your Company, which will generate enough goodwill for the Company. The peripheral development activities undertaken during the year under report are: Mines and Refinery Complex, Damanjodi • Release of ` 11.28 crore, being the balance amount under Periphery Development Programme of previous years and ` 3.05 crore towards mobilization advance against the new projects for the year 2009-10. • Operation of a mobile health care unit since June, 2009 to reach out to the needy people living in the nearby villages with medicines. During the year, 297 camps were organized in which 23,166 patients were treated. • Contribution of ` 20 lakhs, double the amount of previous years, to organize ‘PARAB’, a 3-day Tribal Festival of Koraput district by the District Administration. • Continuation of operation of a Grievance Cell for the land losers and people of periphery villages.

Smelter and Power Complex, Angul • Two Mobile health care services started in November, 2006 continued to be provided at 38 identified venues in 27 peripheral villages. The teams of doctors, pharmacists and attendants provide medical services and distribute medicines to the patients. During the year, 809 such camps were organized in which 33,501 patients were treated. • A third mobile health care unit has started catering to the needs of villagers in the vicinity of Utkal-E Coal Block Project of your Company. • Organised 16 animal health camps in the four identified villages in which 3,987 animals were treated.

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29th ANNUAL REPORT 2009-10
• • • • Organised science exhibition, literary competitions and rural sports among the students of 20 Peripheral High Schools. Provided financial assistances to different peripheral schools to purchase educational kits, furniture and books, as also for organizing cultural functions. Provision of drinking water tankers to 23 affected villages. Organised Special Camps for physically challanged.

Corporate Office, Bhubaneswar • • • • SPORTS Your Company continued to play an active role in promotion of sports. In that direction, your Company sponsored ‘Nalco Cup’ Tennis Tournament, Basketball Tournament, Hockey Championship and other games during the year under report. Inter Unit Volleyball, Badminton, Cricket tournaments were also organized at Corporate Office, Angul and Damanjodi Sectors. Your Company also sponsored some rural games organised at different parts in Odisha. Your Company’s teams participated in All India Public Sector Volleyball Tournament held at Dehradun and All India Public Sector Football Tournament held at Salt Lake, Kolkata. You will be pleased to know that Debasis Mohanty of your Company captained All India Public Sector Cricket Team for Corporate Cup 2009, footballer Sradhanjali Samantaray of your Company captained Orissa Women football Team, which participated in National Championship held at Chennai during the year. Athlet Anuradha Biswal of your Company won silver medals in National Athletic Championships held at Bhopal and Chennai. IMPLEMENTATION OF SOCIAL ACCOUNTABILITY STANDARD Your Company believes and practices transparency and accountability in business practices and supply chain to ensure basic human rights in work place. Keeping the above in mind, your Company has implemented the requirements of SA 8000 Standard in all its units. SA 8000 standard (Social Accountability Management System) measures the performance of an organization in eight key areas viz. Child Labour, Forced & Compulsory labour, Health & Safety, Freedom of Association & Collective Bargaining, Discrimination, Disciplinary Practices, Working Hours and Remuneration. Implementation of SA 8000 Standard will go a long way in building the brand image of your Company and also serves as a measure of implementation of CSR. IMPLEMENTATION OF THE RTI ACT, 2005 The Company has been complying with the requirements under the Act and providing required information to the information seekers that is permissible to be provided under the Act. Providing 15 PCR vans to Commissionerate of Police, Bhubaneswar to help people in need and maintain law and order in the city. Contribution to Corpus Fund of National Foundation for Communal Harmony, Govt. of India. Contribution to Centurion School of Rural Enterprise Management for purchasing equipment for imparting training to tribal youth. Contribution to Directorate of Sports & Youth Services, Govt. of Odisha for National Youth Festival – 2010.

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National Aluminium Company Limited
During the year 2009-10, your Company regularly reviewed and updated the pro-active disclosures published under 17 different templates in the Right to Information segment of the Company’s website www.nalcoindia.com as required to be published under the Act. The status of information requests received by the Company at various stages during the year 2009-10 is given below: No. of requests/ appeals rejected under under various various provisions of the Act 22 01 N.A. No. of requests/ appeals accepted and information provided during 2009-10 156 31 7

Information Requests/Appeals Information requests received by PIO First Appeal before Appellate Authority of the Company 2nd Appeal before CIC, New Delhi

Opening Balance as as on 01.04.2009 16 Nil Nil

Received during the year 2009-10 180 32 10

No. of requests transferred to other Public Authorities Nil Nil N.A.

No. of requests/ appeals pending for disposal as on 31.03.2010* 18 Nil 3

*All the cases pending as on 31.03.2010 have been subsequently disposed off.

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29th Annual Report 2009-10
AUDITORS’ REPORT
To THE MEMBERS NATIONAL ALUMINIUM COMPANY LIMITED, 1. We have audited the attached Balance Sheet of NATIONAL ALUMINIUM COMPANY LIMITED, as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4 A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that: a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account, d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3c) of the Companies Act, 1956, e. In terms of Government of India, Ministry of Finance, Department of Company Affairs, Notification No.GSR 829 (E) dated 21st October, 2003, Government Companies are exempt from the applicability of provisions of Section 274 (1) (g) of the Companies Act, 1956, f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and notes on accounts appearing in Schedule X and Schedule Y respectively give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010; ii. in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date; and iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. For P.A . & Associates Chartered Accountants FRN 313085E For C.K.Prusty & Associates Chartered Accountants FRN 323220E

(CA S.S. Poddar) Partner Membership No.51113 Place : New Delhi Date : 06th August,2010

(CA C.K. Prusty) Partner Membership No.57318

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National Aluminium Company Limited
ANNEXURE TO THE AUDITORS’ REPORT

(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE) 1. (a) The Company has maintained records showing full particulars including quantitative details and situation of fixed assets. (b) The Company has a programme of conducting physical verification of non-movable assets at an interval of three years, which in our opinion is reasonable having regard to the size of the company and nature of its assets. All the movable assets, were physically verified during the year. As informed to us, no material discrepancies were noticed on such verification wherever reconciliations have been carried out and the same have been adjusted in the books. (c) In our opinion and according to the information and explanations, the Company has not disposed off substantial part of fixed assets during the year. 2. (a) In respect of its inventories as explained to us, all inventories except stocks relating to expansion project, stocks lying with third parties and stocks in-transit, have been physically verified by the management at reasonable intervals during the year. (b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical stock and book records relating to shortages have been dealt with in the books of account, while excesses have been ignored except in case of finished goods. 3. According to information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to/from Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii)(a) to (g) of paragraph 4 of the order are not applicable. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal control system. 5. According to information and explanations given to us, the Company has not entered into any contracts or arrangements which require to be recorded in register maintained under section 301 of the Companies Act, 1956. 6. The Company has not accepted any deposits from the public during the year. 7. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business. 8. We have broadly reviewed the books of accounts maintained by the Company, pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act., 1956 in respect of manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate and complete. 9. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess, Electricity duty with the appropriate authority. According to the information and explanations given to us, no undisputed amounts are payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date on which they become payable. According to the information and explanations given to us, there are disputed statutory dues which have not been deposited are given herein below: Statute Sales Tax Nature of Dues Sales Tax Amount Disputed ` in Crore 226.64 219.78 16.41 462.83 26.8 32.35 8.46 67.61 63.88 35.58 99.46 0.13 3.1 3.23 151.24 79.23 230.47 863.60 Amount Deposited ` in Crore 29.61 60.4 4.76 94.77 10.73 23.09 4.1 37.92 2.5 0.59 3.09 0.06 Nil 0.06 94.9 128.66 223.56 359.40 Forum where disputes are pending Commissionrate Tribunal High Court Commissionrate Tribunal High Court Commissionrate Tribunal Commissionrate Tribunal Commissionrate Tribunal

Entry Tax

Entry Tax

Central Excise Act, 1944 Customs Act, 1942 Income Tax Act, 1961

Excise Duty Customs Duty Income Tax

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29th Annual Report 2009-10
10. The Company does not have accumulated losses at the end of the financial year . The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year. 11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders. 12. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion the Company is not a chit fund/nidhi/mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company. 14. The Company is not dealing or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4(xiv) of the Order are not applicable to the Company. 15. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. 16. Based on our examination of the records and the information and explanations given to us, the Company has not raised any term loan during the year under audit. 17. According to the information and explanations and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment of the company. 18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. 19. Based on our examination of the records and the information and explanations given to us, the Company has not issued debenture during the year. 20. The Company has not raised any money by way of public issue during the year. 21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For P.A . & Associates Chartered Accountants FRN 313085E

For C.K.Prusty & Associates Chartered Accountants FRN 323220E

(CA S.S. Poddar) Partner Membership No.51113 Place : New Delhi Date : 06th August, 2010

(CA C.K. Prusty) Partner Membership No.57318

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National Aluminium Company Limited

COMMENT OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF NATIONAL ALUMINIUM COMPANY LIMITED FOR THE YEAR ENDED 31st MARCH 2010
The preparation of financial statements of National Aluminium Company Limited for the year ended 31st March 2010 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the Company. The Statutory Auditor appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 is responsible for expressing opinion on these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing and assurance standards prescribed by their professional body, the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Report dated 6 August 2010. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 619(3)(b) of the Companies Act, 1956 of the financial statements of National Aluminium Company Limited for the year ended 31st March 2010. This supplementary audit has been carried out independently and is limited primarily to inquiries of the Statutory Auditors and the Company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ report under Section 619(4) of the Companies Act, 1956.

For and on the behalf of the Comptroller & Auditor General of India

Dated : Kolkata, The 24 August 2010

(Nandana Munshi) Principal Director of Commercial Audit & Ex-Officio Member Audit Board – I KOLKATA

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29th ANNUAL REPORT 2009-10
Balance Sheet as at March 31, 2010
(` in crore) Schedule No SOURCES OF FUNDS Shareholders’ Fund Share Capital Reserves and Surplus Deferred Tax Liability (Net) TOTAL APPLICATION OF FUNDS Fixed Asset Gross Block Less: Depreciation Net Block Capital Work-in-Progress Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances Less: Current Liabilities & Provisions Current Liabilities Provisions Net Current Assets TOTAL Significant Accounting Policies Notes on Accounts Schedules A to Y annexed hereto form part of the Accounts
In terms of our report of even date attached. For P.A. & Associates For C.K.Prusty & Associates Chartered Accountants Chartered Accountants (CA. S.S. Poddar) Partner (M.No.:51113 ) Place : New Delhi Dated : 6th August, 2010 (CA.C.K.Prusty) Partner(M.No. :57318) For and on behalf of Board of Directors (CS. K.N. Ravindra) Company Secretary (CA. B.L. Bagra) Director (Finance) (A.K.Srivastava) Chairman-Cum-Managing Director

As at March 31, 2010

As at March 31, 2009

A B C

644.31 9,751.27 660.59 11,056.17

644.31 9,125.50 621.35 10,391.16

D

11,017.96 6,181.65 4,836.31

9,899.84 5,868.30 4,031.54 2,836.52 7,079.71 6,868.06 895.93 873.50 26.50 2,869.04 175.35 616.02 4,560.41 1,603.40 329.84 1,933.24 2,989.71 11,056.17 2,627.17 10,391.16 986.75

E F G

2,243.40

944.92 181.78 3,152.35 145.00 785.59 5,209.64 H I 1,849.95 369.98 2,219.93

X Y

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National Aluminium Company Limited
Profit and Loss Account for the year ended March 31, 2010
(` in crore) Schedule No INCOME: Sales Less: Excise Duty Net sales Finished goods internally consumed/capitalised Other income TOTAL EXPENDITURE: Decretion /(Accretion) to stock of finished / intermediary products / work-in-process Raw Materials Power & Fuel Repairs & Maintenance Other Manufacturing Expenses Employees’ Remuneration & Benefits Administrative Expenses Other Expenses Selling and Distribution Expenses Interest and Financing Charges Provisions Depreciation TOTAL PROFIT FOR THE YEAR Add/(Less) : Prior Period Adjustments (Net) PROFIT BEFORE TAX Less : Provision for taxation Current Fringe Benefit Deferred Earlier years PROFIT AFTER TAX Balance brought forward from previous year Transfer from Capital Reserve Amount available for appropriation APPROPRIATIONS: Interim dividend Proposed final dividend Tax on dividend Transfer to General Reserve Balance carried to Balance Sheet EARNINGS PER SHARE (Face value ` 10/- each) Profit after Tax Average number of equity shares (No) Basic & Diluted earnings per share (`) Significant Accounting Policies Notes on Accounts Schedules A to Y annexed hereto form part of the Accounts
In terms of our report of even date attached. For P.A. & Associates For C.K.Prusty & Associates Chartered Accountants Chartered Accountants (CA. S.S. Poddar) Partner (M.No.:51113 ) Place : New Delhi Dated : 6th August, 2010 (CA.C.K.Prusty) Partner(M.No. :57318) For and on behalf of Board of Directors (CS. K.N. Ravindra) Company Secretary (CA. B.L. Bagra) Director (Finance) (A.K.Srivastava) Chairman-Cum-Managing Director

Year ended March 31, 2010 5,311.40 255.74 5,517.52 423.00

Year ended March 31, 2009

J

K

5,055.66 24.20 468.75 5,548.61 21.63 782.30 1,601.14 296.37 210.78 843.60 115.29 127.55 89.04 2.28 (3.91) 319.39 4,405.46 1,143.15 11.71 1,154.86

5,094.52 26.44 495.84 5,616.80 (85.35) 696.31 1,311.55 250.52 175.43 771.06 103.33 123.10 84.33 3.96 (3.23) 272.44 3,703.45 1,913.35 13.81 1,927.16

L M N O P Q R S T U V

W 315.31 – 39.25 (13.92)

340.64 814.22 10.79 0.04 825.05

634.92 10.87 13.91 (4.81)

654.89 1,272.27 15.39 0.04 1,287.70

96.65 64.43 27.38 630.00

818.45 6.60 814.22 644,309,628 12.64

225.51 96.65 54.75 900.00

1,276.91 10.79 1,272.27 644,309,628 19.75

X Y

57

29th ANNUAL REPORT 2009-10
Schedules forming part of the Balance Sheet
(` in crore) As at March 31, 2010 Schedule A SHARE CAPITAL Authorised: 130,00,00,000 Equity Shares of ` 10/- each Issued, Subscribed and Paid up: 64,43,09,628 Equity Shares of ` 10/- each fully paid up. Out of these, Government of India holds 56,14,99,635 shares 644.31 644.31 1,300.00 1,300.00 As at March 31, 2009

Schedule B RESERVES & SURPLUS Capital Reserve: Grants-in-aid received from Government of India : As per last Balance Sheet Less: Transferred to Profit & Loss Account General Reserve: As per Last Balance Sheet Add: Transferred from Profit & Loss Account 9,114.21 630.00 9,744.21 Balance in Profit & Loss Account TOTAL 6.60 9,751.27 8,214.21 900.00 9,114.21 10.79 9,125.50 0.50 (0.04) 0.46 0.54 (0.04) 0.50

Schedule C DEFERRED TAX LIABILITY (Net) Deferred tax liability: Depreciation on Fixed Assets Less: Deferred tax assets : Taxes, duties etc. Provision for doubtful debts, claims, etc. Employee separation/retirement and others TOTAL 88.59 35.08 0.11 123.78 660.59 9.19 66.37 0.21 75.77 621.35 784.37 697.12

58

Schedules forming part of the Balance Sheet
(` in crore) Gross Block As on 1.4.2009 62.63 21.36 461.65 61.09 70.71 79.55 622.91 8,070.26 30.74 19.75 34.77 70.29 9,605.71 5.18 0.62 202.38 23.62 26.51 18.87 0.14 2.69 1.31 9.66 290.98 3.15 – – 0.00 9,899.84 9,137.26 1,119.49 777.45 – – – – – – (1.38) (14.87) 1.01 0.00 21.03 (0.08) 311.94 4.17 0.00 0.00 0.00 11,017.96 9,899.84 85.77 3.03 2.83 9.57 12.40 5,868.30 5,606.31 6.04 0.13 (0.21) (0.72) (0.93) 319.42 273.01 1.22 – 15.97 0.70 1.07 0.70 0.01 0.11 0.92 0.33 – 0.01 1.76 (0.01) (1.58) (0.02) (0.11) – (0.14) 6.40 0.63 220.11 24.31 27.58 18.00 0.13 2.69 2.23 9.85 – 0.34 47.44 6.23 11.80 11.96 0.10 2.31 0.66 4.93 – – 3.71 0.46 0.59 0.55 0.01 0.07 0.16 0.49 1,097.45 (1.30) 10,701.85 5,767.10 314.18 (5.12) – – (0.01) 0.01 (0.01) (0.84) (0.01) (0.05) 0.02 (0.06) (0.95) – – – – (6.08) (11.02) 6,076.16 – 0.34 51.14 6.70 12.38 11.67 0.09 2.34 0.83 5.36 90.86 3.17 2.62 8.85 11.46 6,181.65 5,868.30 4,625.69 6.40 0.28 168.97 17.61 15.20 6.32 0.04 0.36 1.40 4.49 221.08 1.00 (2.62) (8.85) (11.46) 4,836.31 4,031.54 – 8.34 50.67 1.99 – 44.02 7.73 963.01 9.05 1.11 4.03 7.49 (0.59) (0.23) (0.18) – – – (0.10) 2.35 (1.77) (0.11) (0.27) (0.39) 62.04 29.46 512.15 63.08 70.71 123.56 630.54 9,035.62 38.02 20.76 38.53 77.39 – 8.45 213.11 15.02 56.61 51.14 253.45 5,081.49 21.44 14.10 21.97 30.32 – 2.89 17.56 0.96 1.09 1.96 24.03 257.01 2.24 1.01 2.31 3.14 – 0.28 (0.05) – – – 0.83 (3.91) (1.69) (0.09) (0.23) (0.25) – 11.62 230.62 15.98 57.71 53.10 278.31 5,334.59 21.98 15.02 24.05 33.20 62.04 17.85 281.53 47.10 13.00 70.47 352.23 3,701.03 16.04 5.74 14.48 44.19 62.63 12.91 248.54 46.07 14.10 28.41 369.46 2,988.77 9.30 5.65 12.80 39.97 3,838.61 5.18 0.28 154.94 17.39 14.71 6.91 0.04 0.38 0.65 4.73 205.21 0.12 (2.83) (9.57) (12.40) 4,031.54 Additions Sales / Adjustments As on 31.3.2010 As on 1.4.2009 For the Year Sales / adjustments Upto 31.3.2010 As on As on 31.3.2010 31.3.2009 Depreciation Net Block

Schedule D FIXED ASSETS

Particulars of Assets

A. PLANT , MINES AND OTHERS Freehold land including development costs Leasehold land including development costs Buildings Roads , bridges and culverts Railway sidings Water supply , drainage and sewerage Power supply , distribution and lighting Plant and machinery Office equipments Furniture and fittings Vehicles Miscellaneous equipments

Sub-total

B. SOCIAL FACILITIES Freehold land including development costs Leasehold land including development costs Buildings Roads , bridges and culverts Water supply , drainage and sewerage Power supply , distribution and lighting Office equipments Furniture and fittings Vehicles Miscellaneous equipments

Sub-total

C. INTANGIBLE ASSETS

D. IMPAIRMENT PROVISION Building Plant and machinery

Sub-total

Total for current year

Total for previous year

Notes: (Sums ` in crore)

1. Depreciation for the year includes ` 0.05 transferred to expenditure during construction period, pending capitalisation to Fixed assets (Previous year ` 0.04) and ` 0.01 charged to prior period adjustment (Previous year ` 0.53).

2 . Gross Block includes the following capital expenditure represented by assets not owned by the Company.

a) Buildings - ` 2.24 (Previous year ` 2.21 ) d)Power supply , distribution and lighting - ` 14.88 (Previous year ` 14.88).

b) Roads, bridges and culverts - ` 4.08(Previous year ` 4.08) e) Railway sidings - ` 6.53 (Previous year ` 6.53).

c)

Water supply, drainage and sewerage - ` 1.29(Previous year ` 1.29).

National Aluminium Company Limited

3 . The Sales/Adjustment column includes adjustments arising out of migration to ERP system.

59

29th ANNUAL REPORT 2009-10
Schedules forming part of the Balance Sheet
(` in crore) As at March 31, 2010
Schedule E CAPITAL WORK - IN - PROGRESS Construction and other work - in - progress at cost Less: Provisions Advances to contractors and suppliers for capital goods (Unsecured, considered good) Stock of construction materials (at cost)(Including materials with contractors ` 0.32 Crore, Previous year ` 1.01 Crore) Construction materials and Plant & Machinery - in - Transit (at cost) Expenditure during construction pending allocation (Schedule E.1) TOTAL Schedule E.1 EXPENDITURE DURING CONSTRUCTION (Pending allocation) Opening Balance Expenditure/Adjustments during the year : Preproject Expenses Technical Knowhow Technical Consultancy Startup & Commissioning Other expenses Excise Duty Selling & Distribution Expenses Depreciation Less: Income/Adjustments during the year : Income out of trial operation Export Incentive Other Income Stock of Products from trial Net Expenditure during the year Total Expenditure Less Adjustment to EDC Less: Amount allocated to Fixed assets Balance carried forward Schedule F INVESTMENT ( At Cost) Non–Trade Un Quoted : Equity Shares in Bhubaneswar Stock Exchange Ltd Equity Shares in Excel Services Ltd Long Term Debt Fund (Fixed Maturity Growth Plan) SBI DF Series - 7 - 13 Months SBI DF Series - 8 - 13 Months SBI DF Series - 9 - 13 Months SBI DF Series -1 - 370 Days SBI DF Series - 2 - 370 Days UTI FTIF Series - IV - Plan - V - 13 Months UTI FTIF Series - IV - Plan-VI - 15 Months UTI FTIF Series - V - I - 13 Months UTI FTIF Series - V - II - 20 Months UTI FMF Yearly Series Fund LIC MF FMP Series - 43 - 13 Months LIC MF FMP Series - 44 - 13 Months Canara Robeco FMP Series - 2 -14 Months UTI FIIF–Annual investment plan Series-I - I.G. UTI FMF Yearly SeriesYFMP–09/09 - I.G. UTI FTIF Series VII,Plan-1-I.G. UTI FTIF Series VII,Plan-11-I.G. SBI Debt Fund Series–Series -V UTI FMP YFMP–03/10-I.G. Current Investments UTI-FIIF-Series II-Qtrly Int Plan–V LIC MF Interval Fund-QtrlyPlan-Series-2 UTI FIIF Qtrly Int Plan-Series -III SBI Magnum Insta Cash LIC MF Liquid Fund - Dividend Plan Face value per unit (` ) 1.00 10.00 0 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 12.061 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 16.7503 10.9801

As at March 31, 2009

1,745.35 0.00

1,745.35 33.75 202.33 51.79 210.18 2,243.40

2,214.12 4.83

2,209.29 64.62 228.19 156.94 177.48 2,836.52

177.48 0.01 – 42.58 74.96 32.81 0.78 0.25 0.05 151.44 72.42 0.23 – – 72.65 0.11 4.30 41.32 24.54 4.21 1.01 0.18 0.04 75.71 14.13 0.08 0.02 5.54 19.77

162.37

78.79 256.27 0.20 45.89 210.18

55.94 218.31 2.79 38.04 177.48

No.s in ‘000 289 1.46 0 0 200000 0 0 0 0 0 20000 10000 0 0 0 8291 75000 20000 35000 50000 50000 50000 50000 20000 1 396722 0.03 0.001 – – 200.00 – – – – – 20.00 10.00 – – – 10.00 75.00 20.00 35.00 50.00 50.00 50.00 50.00 20.00 0.001 396.72 986.75

No.s in ‘000 289 – 50000 100000 200000 50000 25000 15000 50000 70000 20000 10000 50000 100000 20000 – – – – – – – – – – 123770 0.03 – 50.00 100.00 200.00 50.00 25.00 15.00 50.00 70.00 20.00 10.00 50.00 100.00 20.00 – – – – – – – – – – 135.90 895.93

60

National Aluminium Company Limited
Schedules forming part of the Balance Sheet
(` in crore) As at March 31, 2010 Schedule G CURRENT ASSETS, LOANS & ADVANCES Current Assets Inventories (As certified by the Management and valued as per Accounting Policy No.1.5) Raw materials (Including in transit ` 8.86 Crore, Previous year ` 12.75 Crore) Coal and fuel oil (Including In Transit ` 7.11 Crore Previous year ` 7.94 Crore) Stores & spares ( Including in transit ` 20.63Crore, Previous year ` 50.38 Crore) Scrap and unserviceable materials awaiting disposal Stock of Finished/Intermediary Products / Work-In-Process Finished Goods Intermediary Products Work-In-Process Sundry Debtors (Unsecured) Debts over six months Considered good Considered doubtful Less: Provision for doubtful debts Other debts, Considered good Cash and Bank Balances Cash on hand including stamps Cheques on hand Balance with Scheduled Banks: In Current Accounts In Unpaid Dividend Accounts In Unpaid Debenture Interest Accounts In Term Deposits * * Includes ` 295.50 Crore (Previous year ` 220.93 Crore) as per direction of court against demand of Electricity duty. Other Current Assets Interest accrued : Bank deposits and others Loans to Employees Accrued Export Incentives Less: Provision for shortfall in realisation Sub-total As at March 31, 2009

64.57 88.64 422.90 17.81 142.06 62.62 146.32 131.91 116.25 114.74

64.96 67.58 363.11 14.95

351.00

944.92

362.90

873.50

0.12 39.10 39.22 39.10

0.12 181.66 0.17 0.00 5.10 2.17 0.31 3,144.60

0.44 39.12 39.56 39.12 181.78

0.44 26.06 0.18 0.23 12.96 0.92 0.34 2,854.41

26.50

3,152.35

2,869.04

70.76 37.93 37.83 1.52

108.69 36.31 145.00 4,424.05

125.44 36.39 14.89 1.37

161.83 13.52 175.35 3,944.39

61

29th ANNUAL REPORT 2009-10
Schedules forming part of the Balance Sheet
(` in crore) As at March 31, 2010 Schedule G (contd.) Loans and Advances : (Unsecured, considered good unless otherwise stated) Loans Loans to employees (Secured ` 45.86 Crore, Previous Year ` 53.28 Crore) Advances recoverable in cash or in kind or for value to be received Stores on loan basis Advances to Employees Payments made towards disputed Taxes Income Tax receivable Customs and Excise Duty receivable Advances to Suppliers and others: Considered good Considered doubtful Less: Provision for doubtful recovery Prepaid Expenses Claims Recoverable : Considered good CENVAT credit claims VAT credit claims DEPB claims Other claims Considered doubtful Less: Provision for doubtful recovery Deposits with Govt and other agencies: Considered good Considered doubtful Less: Provision for doubtful recovery Sub-total TOTAL As at March 31, 2009

52.82

61.33

0.33 17.25 222.75 135.45 143.24 2.67 145.91 2.67 143.24 1.35 169.98 132.15 48.20 2.65 50.85 2.65

0.12 11.99

358.20

302.13

48.20 0.99

107.07 12.84 17.83 12.56 150.29 7.84 158.13 7.84 150.29 62.11 1.93 64.04 1.93 62.11 785.59 5,209.64

151.47 13.05 4.35 10.85 179.72 7.95 187.67 7.95 179.72 11.54 1.93 13.47 1.93 11.54 616.02 4,560.41

62

National Aluminium Company Limited
Schedules forming part of the Balance Sheet
(` in crore) As at March 31, 2010 CURRENT LIABILITIES & PROVISIONS Schedule H CURRENT LIABILITIES Sundry creditors : Due to Micro and small enterprises On capital account Others* Bank Overdraft Security deposits TOTAL Schedule I PROVISIONS For taxation(net of advance payment) For proposed dividend For tax on dividend For employee benefits Gratuity Leave encashment Post retirement medical benefit Retirement benefit Leave travel benefit NEFFAR scheme Long Service reward TOTAL As at March 31, 2009

2.35 92.92 1,493.23 8.61 252.84 1,849.95

0.62 148.67 1,147.97 – 306.14 1,603.40

32.77 64.43 10.95 92.87 114.56 6.02 10.74 4.91 15.86 16.89 51.46 95.71 3.07 10.20 5.55 6.73 14.59

29.46 96.65 16.42

261.83 369.98

187.31 329.84

*Includes advance from customers ` 49.59 Crore (Previous Year ` 42.52 Crore) and Unpaid dividend of ` 2.17 Crore (Previous Year ` 0.92 Crore). Amount transferred to Investor Education and Protection Fund ` 0.12 Crore (Previous year `0.09 Crore)

63

29th ANNUAL REPORT 2009-10
Schedules forming part of the Profit & Loss Account
(` in crore) Year ended March 31, 2010 Schedule J SALES Export : Alumina Aluminium Rolled Products Domestic : Alumina Aluminium Rolled Products Electricity TOTAL Year ended March 31, 2009

870.29 1,332.84 6.11 2,209.24 93.12 2,833.65 171.01 4.38 3,102.16 5,311.40

1,220.26 846.12 4.73 2,071.11 85.24 3,176.91 170.79 13.47 3,446.41 5,517.52

Schedule K OTHER INCOME Operating : Export incentives Exchange variation gain Non-Operating : Interest on/from : * Bank Deposits and others Loans to Employees Dividend on Investments Profit on Sale of Long Term Investments Profit on Sale of Current Investments Profit on sale of fixed assets Sale of general scrap, bath etc. (net of excise duty) and its accretion Rent, electricity & water charges Miscellaneous Income TOTAL

94.65 – 94.65

90.26 6.04 96.30

265.74 3.74 20.87 63.57 0.02 0.38 10.18 3.88 5.72 374.10 468.75

353.51 3.93 8.71 – 4.39 0.28 13.05 3.27 12.40 399.54 495.84

* Tax deducted at source from interest income from deposits with banks and financial institutions ` 30.38 Crore (previous year ` 80.63 Crore).

64

National Aluminium Company Limited
Schedules forming part of the Profit & Loss Account
Schedule L ACCRETION/DECRETION TO FINISHED/ WORK-IN-PROCESS/INTERMEDIARY PRODUCTS (` in crore) Opening Stock Finished Products : Bauxite Alumina* Aluminium Rolled Products Intermediary products: Anodes & Butts Aluminium scraps Others Work-in-process Total of Stock & Accr/Decrn Add: Accretion to Excise Duty liability on closing stock Net accretion to stock Note : Figures in italics represent those pertaining to previous year *Includes Zeolite, Alumina Hydrate, Calcined Alumina, Special Grade Hydrate & Special Grade Alumina. Schedule M RAW MATERIALS CONSUMED Year ended March 31, 2010 Quantity (MT) Caustic soda C.P.Coke C.T.Pitch Aluminium fluoride Lime Others TOTAL 109,343 150,627 35,725 7,979 54,118 Value (` in Crore) 271.34 314.71 89.08 50.82 28.36 27.99 782.30 111.59 75.51 4.66 7.90 — — 114.74 81.48 362.90 266.93 (22.78) 0.26 (1.65) 0.48 0.38 — 23.92 6.37 9.77 7.70 88.81 75.77 3.01 8.38 0.38 — 138.66 87.85 372.67 274.63 51.36 111.59 0.83 4.66 10.43 — 146.32 114.74 351.00 362.90 (37.45) 35.82 (2.18) (3.72) 10.05 — 7.66 26.89 (21.67) 88.27 0.04 (2.92) (21.63) 85.35 13.31 14.24 46.40 48.17 66.91 29.04 5.29 10.59 0.08 — 6.72 0.00 5.40 0.56 (2.30) 0.03 13.39 14.24 53.12 48.17 72.31 29.60 2.99 10.62 16.91 13.31 76.34 46.40 43.34 66.91 5.46 5.29 3.52 (0.93) 23.22 (1.77) (28.97) 37.31 2.47 (5.33) Adjstments Trial and Others Adjusted Opening Stock Closing Stock Accretion / Decretion

(` in crore) Year ended March 31, 2009 Quantity (MT) 114,991 144,108 34,738 8,348 53,157 Value (` in Crore) 189.58 304.50 86.68 66.64 24.96 23.95 696.31

65

29th ANNUAL REPORT 2009-10
Schedules forming part of the Profit & Loss Account
Year ended March 31, 2010 Schedule N POWER & FUEL Coal Fuel oil Duty on self generation Power transmission charges Power from trial operation Purchased power TOTAL Schedule O REPAIRS & MAINTENANCE Buildings Plant & Machinery Others TOTAL Schedule P OTHER MANUFACTURING EXPENSES Royalty & Cess Freight inwards Consumption of stores Water charges Technical assistance fee & expenses Entry Tax TOTAL Schedule Q EMPLOYEES’ REMUNERATION AND BENEFITS Salaries, wages, bonus & exgratia Contribution to Provident & Pension funds Staff welfare expenses Provision for employee benefits TOTAL Schedule R ADMINISTRATIVE EXPENSES Rent Rates and taxes Insurance Repairs and Maintenance : Buildings Others Bank charges Legal expenses Printing, Stationery and EDP expenses Communication expenses Advertisement & publicity Electricity and water charges Travelling expenses Directors Sitting Fees Hire charges for machinery and vehicles Management development and training Consultancy charges Security and fire fighting expenses Exchange Variation Loss Miscellaneous expenses TOTAL 836.05 443.28 140.71 1.75 45.36 133.99 1,601.14 28.00 251.11 17.26 296.37 46.41 60.60 92.52 2.56 8.69 – 210.78 578.67 70.52 67.96 126.45 843.60 1.16 1.24 2.93 0.57 1.07 0.52 1.04 5.58 3.49 4.48 2.91 10.48 0.12 6.67 2.57 4.25 48.49 10.38 7.34 115.29 (` in crore) Year ended March 31, 2009 666.89 457.44 127.98 2.85 56.39 1,311.55 23.98 210.07 16.47 250.52 39.28 52.03 64.66 2.16 8.40 8.90 175.43 558.12 39.69 61.54 111.71 771.06 1.24 1.13 1.33 0.16 1.84 1.20 0.64 3.97 3.85 6.55 2.35 12.54 0.10 6.40 6.07 6.91 39.70 0.00 7.35 103.33

66

National Aluminium Company Limited
Schedules forming part of the Profit & Loss Account
Year ended March 31, 2010 Schedule S OTHER EXPENSES Research and development expenses Plantation and horticulture Environment and pollution control Peripheral development expenses and provisions Interest on disputed Govt. dues and others Auditors’ remuneration : Audit fee Audit expenses Tax audit and other certification fee Cost audit fee and expenses Demurrage Loss on sale of assets Stores and spares written off Claims, receivables, debts, shortages etc written off TOTAL Schedule T SELLING AND DISTRIBUTION EXPENSES Packing and forwarding Freight outwards and handling Commission to selling agents Wharfage Bank charges Others Less Transferred to Capital Work-in-Progress TOTAL Schedule - U INTEREST AND FINANCING CHARGES Interest on short term loans Interest on bill discounting TOTAL Schedule V PROVISIONS Retired assets, CWIP and unserviceable materials Doubtful Debts Doubtful Other current assets Doubtful advances Doubtful claims TOTAL Schedule W PRIOR PERIOD ADJUSTMENTS (NET) Sales Other Income Raw Materials Power and Fuel Repairs and maintenance Other manufacturing expenses Employees’ remuneration & benefits Administrative and other expenses Selling and Distribution Expenses Provisions Depreciation TOTAL Note : Figures in brackets represent credits. 2.67 3.62 0.62 13.84 82.41 0.11 0.15 0.15 0.03 4.10 0.18 19.54 0.13 127.55 4.37 74.67 0.07 2.37 0.20 7.58 89.26 0.22 89.04 (` in crore) Year ended March 31, 2009 3.48 2.80 0.69 22.25 76.77 0.11 0.12 0.09 0.03 4.80 0.25 6.72 4.99 123.10 7.59 67.95 0.40 2.58 0.24 5.76 84.52 0.19 84.33

0.24 2.04 2.28 (4.04) 0.01 0.17 0.01 (0.06) (3.91)

1.04 2.92 3.96 1.37 (1.44) (2.72) 0.81 (1.25) (3.23)

0.93 (0.02) 3.70 15.72 (0.01) (0.09) (30.15) (1.71) – (0.09) 0.01 (11.71)

(13.54) (0.57) – – (0.10) 0.24 – (0.33) (0.04) – 0.53 (13.81)

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29th ANNUAL REPORT 2009-10
Schedule-X SIGNIFICANT ACCOUNTING POLICIES 1.1 BASIS OF ACCOUNTING: 1.1.1 The financial statements are prepared under historical cost convention on accrual basis of accounting, in accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India, and the relevant provisions of the Companies Act, 1956. 1.2 USE OF ESTIMATES: 1.2.1 In preparing the financial statements in conformity with accounting principles generally accepted in India, the company makes estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities as at the date of financial statements and the amount of expenses during the reported period. Actual result in some cases could differ from those estimates. Any revision of such estimates is recognized in the period in which the same is determined. 1.3 FIXED ASSETS: 1.3.1 All fixed assets are stated at historical cost less depreciation. Cost includes all direct expenditure of acquisition, attributable borrowing cost and net of CENVAT/VAT credit, wherever applicable. 1.3.2 Expenditure on development of land including leasehold land are capitalised as part of cost of land. Expenditure of capital nature incurred on assets on land not owned by the company is capitalised under appropriate asset head. 1.3.3 Fixed assets acquired out of financial grant from Government are shown at cost by crediting the grant-in-aid received to Capital Reserve. Equivalent amount of depreciation provided on such assets each year is transferred from Capital Reserve to Profit & Loss Account. 1.3.4 Insurance spares valuing more than ` 1 lakh per unit are capitalized with the related fixed assets. 1.3.5 Application Software package like ERP and application development tools like RDBMS are treated as intangible assets and amortized over a period of three years or the period of license whichever is earlier. 1.3.6 Fixed assets retired from active use and held for disposal are stated at net book value and considered as current asset till the time of its disposal. 1.4 INVESTMENTS: 1.4.1 Long-term investments are carried at cost, after providing for diminution in value, if it is of a permanent nature. Current investments are carried at lower of cost and market value. 1.5 INVENTORIES: 1.5.1 Raw materials, stores and spares are valued at lower of weighted moving average price on real time basis net of CENVAT/ VAT credit wherever applicable. Shortage of coal up to 1% of receipt quantity is treated as normal loss and beyond 1% is treated as abnormal loss. 1.5.2 Work in process is valued at lower of cost and net realizable value. Cost is ascertained at moving average price of material on real time basis, appropriate share of labour and related overheads. 1.5.3 Finished goods are valued at lower of cost and net realizable value. Cost is determined at moving average price of materials on real time basis, apportioned share of labour and related overheads. 1.5.4 Semi-finished goods and intermediary products are valued at moving average price determined on monthly basis based on production confirmation, except for anode butts and rejects which are valued at 45% of direct material cost. 1.5.5 Scrap of various nature is valued at estimated net realisable value and inventorised periodically. 1.5.6 Stores and spares, other than insurance spares not moved for more than 5 years is valued at 5% of the cost. 1.5.7 Unabsorbed purchase overheads lying at the end of the year are charged to Profit & Loss Account at the year end. 1.6 PROVISIONS: 1.6.1 A provision is recognized when there is present obligation as a result of a past event and it is probable that an out flow of resources will be required to settle the obligation and in respect of which reliable estimate can be made. These are reviewed at end of each year and adjusted to reflect the best current estimate. 1.6.2 Provision is made /written back in respect of balances on account of sums payable/receivable for more than 3 years, in respect of parties other than Govt. Dept./Companies. In case of Govt. Dept./ Companies the same is made on case to case basis depending upon the merit of the case. 1.7 FOREIGN CURRENCY TRANSACTIONS : 1.7.1 Monetary assets and liabilities related to foreign currency transactions remaining unsettled are translated at year-end exchange rates. 1.7.2 The difference in translation of monetary assets and liabilities and realised gains and losses in foreign exchange transactions are recognised in the profit and loss account. In respect of transactions covered by forward exchange contracts, the difference between the contract rate and spot rate on the date of the transaction is recognised in the profit and loss account over the period of the contract.

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1.7.3

1.8 1.8.1

1.8.2 1.8.3 1.8.4 1.8.5 1.8.6 1.9 1.9.1 1.10 1.10.1 1.10.2 1.10.3 1.11 1.11.1 1.12 1.12.1 1.12.2 1.13 1.13.1 1.14 1.14.1 1.15 1.15.1

1.16 1.16.1

In all import cases, Bill of Lading/ Bill of Entry is considered as the date of transaction based on which Foreign Exchange liability is created in the books. Date on which amount is debited by Bank is considered as the settlement date. The exchange variation between sums of liability and settlement is charged to Profit & Loss Account. DEPRECIATION AND AMORTISATION: Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956 except in case of certain assets where depreciation at higher rates is provided based on their estimated remaining useful life, evaluated on the basis of technical estimate made annually in respect of the following assets. Earth work portion of: a) Red mud pond at Alumina Refinery b) Ash pond at Alumina Refinery c) Ash ponds at Captive Power Plant Certain assets at Port Facilities are depreciated at rates calculated on the basis of balance lease period of land belonging to the Port Authority on which these assets are installed. Assets costing ` 5,000 or less individually are depreciated fully in the year in which they are put to use. Assets on land not owned by the Company are depreciated over a period of five years. Cost of leasehold land including development expenses thereon is amortised over the period of lease. However, where lease agreement is yet to be signed, such expenses is amortised over a period of 20 years commencing from the year of commercial operation. Classification of plant and machinery into continuous and non-continuous is made on the basis of technical opinion and depreciation provided accordingly. PRIOR PERIOD INCOME/ EXPENDITURE & PRE-PAID EXPENSES: Income/ Expenditure relating to prior period and pre-paid expenses not exceeding ` 1 lakh in each case is treated as income/ expenditure for the current year. RECOGNITION OF REVENUE: Sales include excise duty and are net of rebates and price concessions. Sales in the domestic market are recognised at the time of despatch of materials to the buyers. Export sales are recognized on issue of bill of lading Claims and interest receivables are accounted for in the Profit and Loss Account based on certainty of their realisation. Export incentives in the form of duty credit on exports made during the year, under Duty Entitlement Pass Book (DEPB) scheme, are accounted for on accrual basis after providing for expected shortfall in realization based on last sale. REPAIRS AND REPLACEMENTS : Pot relining expenses are charged to Profit & Loss Account as and when incurred. EMPLOYEE BENEFITS : Contribution to Provident Fund and Pension Scheme, defined contribution schemes, are charged to Profit & Loss Account on the basis of actual liability. Liabilities towards Gratuity, leave encashment, post retirement medical facilities, retirement benefits, leave travel benefits, family rehabilitation scheme and long service reward are provided for on the basis of actuarial valuation. RESEARCH & DEVELOPMENT EXPENDITURE: Research expenditure is charged to Profit & Loss Account in the year in which incurred. Development expenditure except of capital nature is charged to Profit & Loss Account in the year incurred after setting off of incidental income, if any. BORROWING COST : Borrowing costs attributable to the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset. Other borrowing costs are recognised as expenses in the period in which these are incurred. DEFFERED TAXATION: Deferred Tax expense or benefit is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. BUSINESS DEVELOPMENT EXPENSES: Expenses on account of new potential projects incurred till investment approval are charged to revenue. Expenditure incurred thereafter in case of successful projects are accounted for under Capital Work-in-Progress and capitalized subsequently.

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Schedule –Y NOTES FORMING PART OF ACCOUNTS: 1. Balance Sheet: 1.1 Land: a) Freehold land includes land acquired through Government of Odisha, for which relevant title deeds have been executed except for land measuring 17.25 acres. Process of conversion of freehold land for Industrial use has been taken-up with Revenue Authority. b) Leasehold land includes payment to the Government of Odisha in respect of which lease deeds are yet to be executed for 1238.63 acres, though the Company has been permitted by the Government to use such land for industrial purposes. 1.2 In order to compensate substantially land affected persons (SAPs) at Angul Sector in lieu of employment, the Company has offered a cash assistance package ranging from ` 2.50 lakhs to ` 15.00 lakhs per person depending upon the quantum of land, based on recommendation of Rehabilitation Advisory Committee (RAC), constituted by Government of Odisha for the said purpose. Compensation paid/payable to such SAPs has been determined at ` 8.32 crore. 1.3 Registration formalities in respect of office space for 6,459 Sq.ft purchased from Kolkata Municipal Development Authority, valuing ` 5.50 Crore in Kolkata is under process. 1.4 Rolled Products Unit at Angul, established earlier as a 100% Export Oriented Unit (EOU), was debonded w.e.f 15.05.2007, as one time option to exit from 100% EOU Scheme to EPCG Scheme by paying additional import duty of ` 6.44 crore after furnishing legal undertaking to the Development Commissioner, FALTA special Economic Zone, Kolkata. As per the direction of the Juridictional Commissioner of Central Excise, Bhubaneswar a Bank Guarantee of ` 14.31 crore and a bond of ` 143.08 crore has been furnished towards Central Excise Duty liability. 1.5 52 nos of EPCG licences have been obtained between the period from 18.10.2006 to 31.03.2010 for 2nd phase of expansion on payment of concessional import duty. The value of concession availed by paying duty at lower rate amounts to ` 272.46 crore, on the stipulation that the export obligation to the extent of (i) 50% of the duty saved has to be fulfilled over a block period of 1st to 6th year and (ii) 50% of the duty saved over a period of 7th and 8th year, commencing from the date of issue of authorisation. 1.6 The Company has obtained plot of land measuring 18.210 acres at Gothapatna in exchange of plot of land measuring 11.700 acres at Chandaka Industrial Estate, both at Bhubaneswar for a lease period upto 30.11.2097 as per decision of a committee set up by Hon’ble High Court of Odisha consisting of Cabinet Secretary, Government of India (Chairman), Secretary (Mines), Government of India, Chief Secretary, Government of Odisha, Secretary Industries, Government of Odisha and CMD of the Company. The lease deed is yet to be executed. 1.7 The Company has availed Bank Guarantees, Letters of Credit and PCFC credit facilities, secured against stock and book debts from State Bank of India, HDFC Bank and Axis Bank. 1.8 Contingent Liabilities not provided for: (` in crore) As at As at 31st March 2010 31st March 2009 a) Estimated amount of contracts to be executed on capital account (net of advances and L/Cs opened) 905.73 1,015.98 b) Outstanding letter of credit, Guarantees and counter guarantees 238.78 217.83 c) Claims against the Company not acknowledged as debts: i) Sales Tax 442.74 464.33 ii) Excise Duty 253.55 105.66 iii) Customs Duty 3.66 3.57 iv) Claims of contractors, suppliers & others 122.90 89.77 v) Land acquisition and interest thereon 222.00 39.84 vi) Unrealised bank guarantees due to court injunctions 2.55 2.55 vii) Income Tax & Wealth Tax 231.35 203.48 viii) Entry Tax and Road Tax 69.72 55.77 ix) Employee State Insurance 0.32 0.32 x) Provident Fund Commission 0.05 0.05 xi) Water charges 2.23 0.74 xii) Royalty on bauxite and interest thereon 15.48 13.71 xiii) NPV on forest land under Mining lease 144.00 – TOTAL 1510.55 979.79

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1.09 Details of Investments Purchased and Sold During the year. Name of the Scheme LIC MF Liquid Fund Dividend Plan LIC Liquid + Fund LIC MF Floating Rate Fund UTI Treasury Advantage Fund-IP Daily Dividend UTI Floating Rate Fund UTI Liquid Cash Plan Institutional Daily Income Option SBI-SHF Ultra Short Term Fund IP Daily Dividend SBI Magnum Insta Cash Fund Face Value (`) 10.9801 10 10 1000.2141 1000.7707 1019.4457 10.0006 16.7503 Units 1639896331 992528371 312000000 4328784 1009702 6037838 503540916 236418324 Amount (`) 18006225700 9925283711 3120000000 4329710176 1010480560 6155248041 5038131799 3960077853

1.10 Dues paid/payable to Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 have been determined to the extent such parties have been identified on the basis of information available with the Company. (` in crore) As at As at 31st March 2010 31st March 2009 i) Principal amount due 2.35 0.62 ii) Interest on principal amount due Nil Nil iii) Interest and principal amount paid beyond appointment day Nil Nil iv) The amount of interest due and for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the amount of interest specified under MSME Development Act 2006. Nil Nil v) The amount of interest accrued and remaining unpaid at the end of the year. Nil Nil vi) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest due as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23 of MSME Development Act 2006. Nil Nil 2. Profit and Loss Account: 2.1 Depreciation was charged in respect of main Plant and Machinery and related Factory Buildings and Storage go-downs etc., at the rate of 5 per cent up to 31st March 1994, based on estimated useful life of assets being 20 years without retention of 5 per cent residual value. The useful life of these assets has been revised to 18 years to bring it at par with the life of “Continuous process plant” as envisaged in Schedule XIV to Companies Act, 1956. Such change in life of assets has been considered from 1.4.93 i.e. from the year of introduction of “Continuous process plant” in Schedule XIV to Companies Act, 1956. Depreciation rates on all such assets have been recomputed based on guidelines issued under Circular No.14/93 dated, 20.12.93 by Department of Company Affairs, by allocating the unamortized value over the remaining life after retention of 5 per cent residual value except for assets already written off fully. 2.2 Liability on account of pay revision of non-executives w.e.f. 1.1.2007 has been calculated provisionally, considering the benefits extended to executive employees. The total liability for non-executives, so accounted, works out to ` 70.87 crore during the year. 2.3 Expenses on employees working exclusively for 2nd phase expansion project amounting to ` 32.08 crore charged to Profit & Loss Account upto the Financial Year 2008-09 and ` 9.30 crore for the Financial Year 2009-10 have been capitalized relating to units commissioned and those in progress. Depreciation on such capitalized amount has been charged prospectively. 2.4 The valuation of 7821.780 MT of Alumina valuing at ` 6.48 crore lying under Goods in Transit (GIT) was not valued last year which has been corrected. 2.5 Liabilities in respect of employees benefit as per AS-15 (Revised 2005) has been provided on the basis of Actuarial valuation. 2.6 As a result of amendment in Payment of Gratuity Act with effect from 24th of May 2010, enhancing the maximum ceiling limit from ` 3,50,000/- to ` 10,00,000/-, the Company has provided an additional net liability of ` 92,40,43,063/- in respect of non-executive employees. In respect of executive employees, the enhanced ceiling of ` 10,00,000/- was already considered in previous year, based on Presidential Directives on revision of pay of executives. 2.7 Electricity power required for execution of project activity for expansion at all units of the company has been met from captive power plant.

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2.8 SIGNIFICANT ADDITIONS / MODIFICATIONS: The Company has adopted ERP system of business process during current year. The treatment of certain transactions in ERP system differ from the one adopted by the Company hitherto. These additions and modifications confirm to relevant Accounting Standards and are exhibited at Schedule-X (Significant Accounting Policies). The implication of these additions and modification is not material. 3. CHANGES IN ACCOUNTING PRACTICES DUE TO IMPLEMENTATION OF ERP: 3.1 Company has gone live to ERP system in February 2010. The essential modules required for preparation of financial results namely (i) Finance (ii) Materials Management and (iii) Production Planning have been activated and these accounts have been prepared based on these modules under ERP. A few more supporting modules such as (i) Sales and Distribution (ii) Quality Management and (iii) Human Resource will be implemented in a phased manner. Due to implementation of ERP system, there have been a few changes in Accounting practices which has resulted in improved presentation of financial results whose implication on net result is not material, are enumerated here under: a) In case of fixed assets, where gross value has undergone change due to value adjustment at subsequent date, depreciation has been accounted for prospectively over the residual useful life of the asset, in line with the provisions of AS-10. b) Stock of steel (imported and indigenous) and cement for construction work was grouped under work-in-progress. On implementation of ERP system, steel and cement other than expansion project has been accounted under inventory. c) Entry tax on raw-material was booked separately and charged against “other manufacturing expenses”. In ERP, it is loaded to the cost of input materials at the time of receipt of goods. d) Semi finished goods i.e. raw-water, clarified water, filter water, DM water, feed water, Steam, overburden, spent anode and dross have been inventorised and valued under ERP system as intermediary products. 4. RELATED PARTY DISCLOSURES: 4.1 As per AS-18 on “Related Party Disclosures” issued by the Institute of Chartered Accountants of India, the names of the related parties are given below:i) Whole time Directors: a) Shri A.K. Srivastava (joined on 01.10.2009) b) Shri B.L. Bagra c) Shri Joy Varghese d) Shri A.K. Sharma (joined on 01.05.2009) e) Shri P.K. Padhi (joined on 03.09.2009) f) Shri Ansuman Das (joined on 28.10.2009) g) Shri C.R. Pradhan (superannuated on 30.09.2009) h) Shri K.K. Mallick (superannuated on 30.09.2009) and i) Shri P.K. Routray (superannuated on 30.04.2009). ii) Part time Official Directors: a) Shri S. Vijay Kumar, IAS b) Shri V.K. Thakral, IAS (ceased to be Director from 07.01.2010). c) Shri S.K. Nayak, IAS (appointed as Director from 07.01.2010). iii) Part time non-official Director: a) Dr. A Sahay b) Shri S.S. Sohoni, IAS (Retired) c) Shri K.S. Raju d) Shri S.B. Mishra, IAS (Retired) e) Shri N.R. Mohanty f) Dr. Jyoti Mukherjee g) Shri R.K. Sharma h) Maj. Gen. (Retired) Samay Ram Note: Only sitting fee is payable to part time non-official Director.

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4.2 Related party transactions: Remuneration and loans to whole time directors are disclosed in Note No.1 of Additional information forming part of accounts. 5. SEGMENT REPORTING: 5.1 The Company has considered Chemicals, Aluminium and Electricity as the three primary business segments. Chemicals include calcined alumina, alumina hydrate and other related products. Aluminium includes aluminium ingots, wire rods, billets, strips, rolled and other related products. Bauxite produced for captive consumption for production of alumina is included under chemicals. 5.2 India and Outside India are the two geographical segments. Since all production and other facilities are located in India, segment assets except export debtors are shown under one geographic segment i,e. India. 5.3 Inter-unit transfer of Calcined Alumina is considered at lower of average price from export sales during the period less freight and cost plus 15.50% return on investment on gross fixed assets. For electricity, lower of the average sale price to GRIDCO and cost plus 15.5% return on investment on gross fixed assets (as per CERC guidelines), has been considered for transfer pricing. Earlier the segment transfers were considered at average export sales realization less freight for alumina and average sale price to GRIDCO for electricity and which have been changed from this period for more appropriate presentation of segment revenue/results. As a result of the above change in basis of pricing of inter segment transfer, the implication on yearly results between the earlier basis and revised basis are given below: (` in crore) Year ended Year ended 31st March 2010 31st March 2009 Segment Revenue a) Chemical (21.83) (184.19) b) Aluminium 0.00 0.00 c) Electricity (370.46) 0.00 TOTAL Less: Inter segment revenue Net sales/ Income from operations Segment Results: Profit before tax and interest a) Chemicals b) Aluminium c) Electricity (392.29) (392.29) – (16.15) 386.61 (370.46) (184.19) (184.19) – (184.19) 184.19 0.00

Absolute figures denote addition in revenue /profit, whereas those in bracket denote reduction in revenue/ profit. 5.4 Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities. Revenue, expenses, assets and liabilities, which relate to the enterprise as a whole and are not allocable on a reasonable basis, have been included under Unallocated Common segment. 5.5 Segment report of electricity does not include electricity co-generated at Refinery Division, as it is an integral part of steam generation plant. 6. Previous year’s figures have been regrouped / rearranged wherever necessary to make them comparable.

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Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 Current Year 1. a) Whole-time Directors’ Remuneration: Salaries Provision for pay revision liability Company’s contribution to Provident Funds & Gratuity scheme Leave travel concession Medical benefits Other benefits TOTAL (In addition, each whole time director is allowed use of Company’s car for private purposes up to 750 kms per month as per their terms of appointment) b) Loans and advances due from Directors: Outstanding as at end of the year Maximum amount due any time during the year 2. Expenditure incurred in Foreign Currency on cash basis: Technical assistance and consultancy Travelling expenses Other expenses TOTAL 3. Earnings in Foreign Currency on cash basis: Export of goods Other Income TOTAL 4. Value of Imports calculated on CIF basis: Raw materials Components, spare parts and construction materials Capital goods TOTAL 5. Value of Raw materials, stores , spares & components consumed during the year: Current Year Value a) Raw materials: Imported Indigenous TOTAL b) Stores, spares and components: Imported Indigenous TOTAL 85.61 696.69 782.30 120.29 204.67 324.96 % 10.94 89.06 100.00 37.02 62.98 100.00 Value 88.45 607.86 696.31 74.14 182.85 256.99 Previous Year % 12.70 87.30 100.00 28.85 71.15 100.00 1.28 0.45 0.22 0.00 0.03 0.10 2.08

(` in crore) Previous year 0.44 0.81 0.05 0.02 0.01 0.16 1.49

0.02 0.03 38.87 0.14 0.39 39.40 2,074.12 0.92 2,075.04 253.99 80.08 69.76 403.83

0.02 0.04 25.89 0.23 1.28 27.40 2,096.30 1.02 2,097.32 242.64 60.52 315.06 618.22

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Installed Capacity Actual Production/Generation Current year Previous year Current year Previous year (In MT) (In MT) (In MT) (In MT) Bauxite 4,800,000 4,800,000 4,878,888 4,700,027 Detergent Grade Zeolite 10,000 10,000 3,187 4,958 Alumina Hydrate 1,575,000 1,575,000 1,591,500 1,576,500 Calcined Alumina 1,575,000 1,575,000 1,563,100 1,557,000 20,600 20,600 15,859 11,385 Special Grade Alumina and hydrate 460,000 402,500 431,488 365,867 Aluminium Metal Rolled Products 45,000 45,000 15,277 13,795 Electricity 1,080 MW 960 MW 6,293(MU) 5,541 (MU) Note: 1. Installed capacities are as per project report and licenced capacity is not given as licencing is not applicable. 2. Installed capacity of Aluminium Metal has increased by 57,500 MT during the year on commissioning of 120 pots. Installed capacity of Electricity has increased by 120 MW on commissioning of 9th unit of Captive Power Plant at Angul. 3. Current Year’s Production of Aluminium Metal,Rolled Product & Power includes 2,168MT (previous year 1670 MT) , 56MT(previous year 56 MT) and 205MU(Previous year nil ) respectively out of trial operations. 7. Stocks and Sales: Opening Stock Sales Closing Stock Products Quantity Value Quantity Value Quantity Value ` in crore In MT ` in crore In MT ` in crore In MT Bauxite 466,916 13.31 – – 541,483 16.91 541,529 14.24 – – 466,916 13.31 Alumina* 53,613 74.32 746,974 963.41 80,304 76.34 65,148 48.17 889,523 1,305.50 53,613 74.32 Aluminium Metal 9,089 74.22 419,055 4,166.49 4,550 43.34 4,141 29.04 338,015 4,023.03 9,089 74.22 Rolled products 512 5.29 15,047 177.12 714 5.46 759 10.59 13,992 175.52 512 5.29 Electricity (in MU net) – – 15 4.38 – – – – 81 13.47 – – Note: 1. Figures in italics pertain to those of previous year. 2. Stock of Bauxite, Alumina and Strips are valued and disclosed as finished products. 3. Current year’s sales excludes sale of 1,831 MT (previous Year 1,534 MT) of Aluminium Metal of ` 20.19Crore (previous year ` 15.60 Crore) and 46 MT(previous year 50 MT) of Rolled Products ` 0.67 Crore(previous year ` 0.60 crore) out of Hot Metal produced from Trial Operations. *Includes Zeolite, Alumina Hydrate,Calcined Alumina, Special Grade Hydrate & Special Grade Alumina. 8. Social Amenities: (` in crore) Expenses Township Education Medical Social/Cultural Canteen Total Payments to employees 8.64 0.01 21.22 0.01 3.44 33.32 Welfare expenses – 17.68 20.78 1.68 4.05 44.19 Materials consumed 0.15 0.10 3.81 0.10 – 4.16 Repairs & maintenance 11.45 – – – – 11.45 Power, fuel & water 7.05 0.08 0.00 – – 7.13 Depreciation 5.47 0.15 0.16 0.24 0.02 6.04 Total 32.76 18.02 45.97 2.03 7.51 106.29 4.09 Less: Recoveries 3.91 – 0.18 – – Net Expenditure 28.85 18.02 45.79 2.03 7.51 102.20 For previous year 24.11 15.28 40.93 2.46 6.65 89.43 Products

Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 (contd...) 6 Licenced Capacity, Installed Capacity and Actual Production/Generation:

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Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 (contd...) 9. Employee Benefit Obligations: Gratuity Leave Encashment 114.56 95.71 – – – – – 95.71 17.97 19.87 6.85 3.35 – – 13.95 35.40 38.77 58.62 95.71 52.26 38.77 58.62 19.92 15.17 – – 114.56 95.71 8.00 7.50 – – 5.00 5.00 Post Retirement Medical Benefit 6.02 3.07 – – – – – 3.07 – – 0.24 0.14 – – 2.91 1.16 3.15 1.30 3.07 2.06 3.15 1.30 0.20 0.29 – – 6.02 3.07 8.00 7.50 – – 5.00 5.00 Retirement Benefit 10.74 10.20 – – – – – 10.20 1.80 1.71 0.81 0.63 – – (1.92) (0.52) 0.69 1.82 10.19 8.49 0.69 1.82 0.14 0.11 – – 10.74 10.20 Leave Travel Benefit 4.91 5.55 – – – – – 5.55 – – 0.27 0.07 – – 3.38 7.89 3.65 7.96 5.55 1.81 3.65 7.96 4.29 4.22 – – 4.91 5.55 (` in crore) Long NEFFAR Service Scheme Reward 15.85 6.72 – – – – – 6.72 – – – – – – 9.13 2.73 9.13 2.73 6.72 3.99 9.13 2.73 – – – – 15.85 6.72 8.00 7.50 – – 5.00 5.00 16.89 14.59 – – – – – 14.59 0.84 0.75 1.06 0.58 – – 2.91 6.60 4.81 7.93 14.59 8.90 4.82 7.93 2.52 2.24 – – 16.89 14.59 8.00 7.50 – – 5.00 5.00

A. Amount Recognised in Balance Sheet: Present value of obligation Fair value of Plan Asset Funded Status[Excess/(Short)] Net Liability recognised B. Amount Recognised in Profit & Loss Account: Current Service cost Interest cost Expected Reurn on Plan Asset Net Actuarial (gain)/loss Expenses recognised C. Movement of Net Liability Recognised in Balance Sheet: Opening Net Liability Expenses recognised Benefits paid Contributions Closing Net Liability D. Actuarial Assumptions: Discount Rate Return on Plan Asset Salary Escalation Mortality Table Superannuation Age

226.41 124.82 133.55 73.35 (92.86) (51.47) 92.86 51.47 13.95 12.13 9.84 5.28 5.87 5.61 74.48 41.49 92.40 53.29 51.47 1.54 92.40 53.29 51.00 – – – 92.86 54.83 8.00 7.50 8.00 8.00 5.00 5.00

8.00 8.00 7.50 7.50 – – – – 5.00 5.00 5.00 5.00 LICI 1994-1996 LICI 1994-1996 60 Years 60 Years

Note : 1 Figures in italics pertain to previous year. 2 Gratuity is a Post Employment Funded Defined Employee Benefit Plan 3 Other Benefits are Un-Funded Defined Employee Benefit Plan

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Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 (contd...) 10. Balance Sheet Abstract and Company’s General Profile : i) Registration Details: Registration No State Code Balance Sheet Date 1500920 15 31st March 2010 Current Year ii) Capital raised during the year: iii) Position of mobilisation and deployment of Funds: Total Liabilities Total Assets Sources of Funds: Paid-up Capital Reserves & Surplus Secured Loans Unsecured Loans Deferred tax liabilities Application of Funds: Net Fixed Assets Investments Net Current Assets Misc. Expenditure Accumulated losses iv) Performance of the Company: Gross Turnover Total Expenditure Profit/Loss before Tax Profit/Loss after Tax Earning per Share (In Rupees) Dividend rate (%) v) Generic Name of Principal products/services: Item Code no. Product 335000000 and 76.06 Aluminium Ingots and cold rolled aluminim strips/coils/sheets 5,311.40 4,156.54 1,154.86 814.22 12.64 25.00 5,517.52 3,590.36 1,927.16 1,272.27 19.75 50.00 7,079.71 986.75 2,989.71 Nil Nil 6,868.06 895.93 2,627.17 Nil Nil 644.31 9,751.27 Nil Nil 660.59 644.31 9,125.50 Nil Nil 621.35 11,056.17 11,056.17 10,391.16 10,391.16 Nil (` in crore) Previous Year Nil

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29th ANNUAL REPORT 2009-10
Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 (contd...) 11 Segmentwise Information Chemicals Aluminium Current Previous Current Previous Year Year Year Year BUSINESS SEGMENTS A. Revenue External sales 956.01 1,309.16 4,095.27 3,785.43 Inter-segment transfers 988.68 1,026.48 – – Total Revenue 1,944.69 2,335.64 4,095.27 3,785.43 Less: Elimination Net Revenue B. Result Segment result 513.88 1,065.57 52.97 573.50 Interest expense Interest income Income taxes Net Profit C. Other Information Segment assets 1,791.52 1,583.84 3,379.74 2,953.86 Segment liabilities 359.75 298.04 484.68 426.42 161.26 136.32 450.98 784.30 Capital expenditure Depreciation 95.94 94.43 160.23 117.07 Non-cash expenses 26.02 22.68 36.75 22.10 (other than depreciation) GEOGRAPHIC SEGMENTS Current Year 2,845.49 13,133.16 549.97 India Previous Year 3,023.41 12,319.57 1,418.99 Outside India Current Previous Year Year 2,209.24 134.34 – 2,084.65 4.83 – Current Year 5,054.73 13,267.50 549.97 Total Previous Year

Electricity Current Previous Year Year

Unallocated Common Current Previous Year Year

(` in crore) Total Current Previous Year Year

3.45 1,451.48 1,454.93

13.47 928.54 942.01

– – –

– – –

5,054.73 5,108.06 2,440.16 1,955.02 7,494.89 7,063.08 (2,440.16) (1,955.02) 5,054.73 5,108.06 803.20 2.28 353.94 340.64 814.22 1,560.58 3.96 370.54 654.89 1,272.27

371.08

58.24

(134.73)

(136.73)

1,818.22 936.54 567.03 61.38 23.06

902.49 662.95 83.83 59.20 11.49

6,278.02 430.36 (629.30) 1.84 4.87

6,884.21 13,267.50 12,324.40 545.83 2,211.33 1,933.24 414.54 549.97 1,418.99 1.74 319.39 272.44 3.83 90.70 60.10

A. Revenue External sales B. Other Information Segment assets Capital expenditure

5,108.06 12,324.40 1,418.99

In terms of our report of even date attached. For P.A. & Associates For C.K.Prusty & Associates Chartered Accountants Chartered Accountants (CA. S.S. Poddar) Partner (M.No.:51113 ) Place : New Delhi Dated : 6th August, 2010 (CA.C.K.Prusty) Partner(M.No. :57318) For and on behalf of Board of Directors (CS. K.N. Ravindra) Company Secretary (CA. B.L. Bagra) Director (Finance) (A.K.Srivastava) Chairman-Cum-Managing Director

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National Aluminium Company Limited

Schedule - Y ADDITIONAL INFORMATION forming part of accounts for the year ended March 31, 2010 (contd...) 12 Cash Flow Statement : Year ended March 31st, 2010 A. Cash flow from Operating Activities : Net Profit before tax and Extraordinary Income Adjustments for : Depreciation Interest and Financing charges & Dividends Provisions (Net) Claims/Recoverables written off Stores and spares written off Exchange Variation Gain/Dividend Income Loss/(Profit) on sale of assets (net) Operating Profit before working capital changes Adjustments for : Inventories Trade & other receivables Trade payables Cash generated from Operations Direct taxes paid Cash flow before Extraordinary Items Extraordinary Items Net cash from operating activities B. Cash Flow from Investing Activities: Purchase of Fixed Assets & Investments Dividend income from Mutual fund Net cash used in investing activities C. Cash Flow from Financing Activities: Interest and Financing charges Exchange Variation Gain Dividends including dividend tax paid 1,154.86 319.40 2.28 71.54 0.13 19.54 (84.46) (0.20) 272.96 3.96 55.10 0.14 6.72 (6.31) (0.04) (` in crore) Year ended March 31st, 2009 1,927.16

328.23 1,483.09

332.53 2,259.69

(94.83) (241.88) 317.20

(19.51) 1,463.58 (291.93) 1,171.65 — 1,171.65

(163.47) 65.09 459.13

360.75 2,620.44 (682.22) 1,938.22 — 1,938.22

(677.60) 84.46 (2.28) (301.53)

(593.14)

(2,211.08) 13.10 (3.96) (6.79) (376.91)

(2,197.98)

(303.81) (387.66) D. Net changes in Cash & Cash equivalents (A+B+C) 274.70 (647.42) 3,516.46 E. Cash & Cash equivalents - Opening balance 2,869.04 F. Bank overdraft 8.61 2,869.04 G. Cash & Cash equivalents - Closing balance 3,152.35 Note: a) Cash and Bank Balances under Current Assets, Loans and advances at schedule G are Cash and Cash equivalents for the purpose of drawing Cash Flow statement. Therefore reconciliation statement required under para-42 of the Accounting Standard 3 is not furnished separately. b) Balances with bank incudes ` 295.50 crore ( previous year ` 220.93 crore) not available for use by the Company. c) During the year the company availed working capital loan facility (fund based) of ` 650 crore (Previous year ` 300 crore), sanctioned by bankers. However the loan balance at the end of the year as per books of account is ` 8.61 crore on account of cheques issued but not presented. d) Working Capital Loan facility is mortgaged by hypothecation of raw materials, stock-in-process, finished goods, consumables, stores and spares, book debts, receivables and other current assets of the company. e) Figures in brackets are cash outflow/income, as the case may be.
In terms of our report of even date attached. For P.A. & Associates For C.K.Prusty & Associates Chartered Accountants Chartered Accountants (CA. S.S. Poddar) Partner (M.No.:51113 ) Place : New Delhi Dated : 6th August, 2010 (CA.C.K.Prusty) Partner(M.No. :57318) For and on behalf of Board of Directors (CS. K.N. Ravindra) (CA. B.L. Bagra) (A.K.Srivastava) Company Secretary Director (Finance) Chairman-Cum-Managing Director

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29th ANNUAL REPORT 2009-10
5 YEARS PERFORMANCE AT A GLANCE - PHYSICAL
Sl. Particulars 1 Production: Bauxite Alumina Hydrate Aluminium Power (net) 2 Export Sales: Alumina Aluminium 3 Domestic Sales: Alumina / Hydrate Aluminium Power Units MT MT MT MU MT MT MT MT MU 2009-10 4,787,888 1,591,500 431,488 6,293 702,554 146,947 26,045 289,032 15 2008-09 4,700,027 1,576,500 361,262 5,541 851,886 82,317 20,929 271,274 81 2007-08 4,684,684 1,575,500 360,457 5,609 859,943 101,723 11,307 251,612 129 2006-07 4,623,278 1,475,200 358,734 5,968 773,573 92,678 10,920 263,494 421 2005-06 4,854,253 1,590,000 358,954 5,679 862,616 95,747 12,994 258,094 322 (` in Crore) 2005-06 2,306 3,018 5,324 435 4,889 101 132 2,311 2,679 2,811 – 2,811 381 2,430 868 1,562 644 5,249 5,893 – 3,944 2,357 6,301 54.81 31.96 24.79 26.51 – 91.46 24.25 50

5 YEARS PERFORMANCE AT A GLANCE - FINANCIAL
Sl. Particulars A Income Statement : 1 Exports 2 Domestic Sales 3 Gross Sales (1+2) 4 Less : Excise Duty 5 Net Sales (3 - 4) 6 Other Income : 7 Operating 8 Non-operating 9 Operating expenses 10 Operating Profit (5+7-9) 11 Earning before interest, dep. & taxes (EBIDT)(10+8) 12 Interest & Financing charges 13 Earning before dep. & taxes (EBDT) (11-12) 14 Depreciation and Amortisation 15 Profit Before Tax (PBT) (13-14) 16 Provision for Tax 17 Net Profit (PAT) (15 - 16) B Balance Sheet : 18 Equity Capital 19 Reserves & Surplus 20 Networth (18+19) 21 Loans Outstanding 22 Net Fixed Assets 23 Net Current Assets 24 Capital Employed (22+23) C Ratios : 25 Operating Profit Margin (OPM) (%) (10 / 5*100) 26 Net Profit Margin (%) (17 / 5 *100 ) 27 Return on Capital Employed (ROCE) (%) (17/24*100) 28 Return on Networth (RONW)(%) (17/20*100) 29 Debt Equity ( 21 / 20 ) D Others : 30 Book value per share of ` 10 each(in ` ) 31 Earnings per share (in `) 32 Dividend declared ( % ) 2009-10 2,209 3,102 5,311 256 5,055 119 374 4,072 1,102 1,476 2 1,474 319 1,155 341 814 644 9,751 10,395 – 4,836 2,990 7,826 21.80 16.11 10.40 7.83 – 161.34 12.64 25 2008-09 2,085 3,446 5,531 423 5,108 123 400 3,428 1,803 2,203 4 2,199 272 1,927 655 1,272 644 9,126 9,770 – 4,032 2,596 6,628 35.32 24.90 19.19 13.02 – 151.64 19.75 50 2007-08 2,134 3,340 5,474 485 4,989 146 441 2,822 2,313 2,754 2 2,752 285 2,467 835 1,632 644 8,230 8,874 – 3,531 3,500 7,031 46.36 32.71 23.21 18.39 – 137.73 25.32 60 2006-07 2,586 3,929 6,515 575 5,940 103 311 2,412 3,631 3,942 – 3,942 322 3,620 1,239 2,381 644 7,051 7,695 – 3,711 3,755 7,466 61.12 40.09 31.89 30.95 – 119.43 36.96 75

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Reconciliation of Published Quarterly(Unaudited)Financial Results and Annual (Audited) Financial Results for the year 2009-2010
(` in Crore except Sl. No.10 and 11) 1st Quarter (Reviewed) 3 970.48 48.90 921.58 114.92 767.91 1.11 75.64 191.84 65.39 126.45 644.31 1.96 2.48 644.31 159.49 45.12 123.56 155.18 644.31 2.41 204.61 278.74 76.43 78.93 0.83 0.14 0.07 87.81 518.94 127.46 391.48 644.31 6.08 1,037.40 1,121.54 1,084.91 176.21 92.88 88.12 1,143.06 1,386.47 1,603.61 5,054.72 472.13 4,011.76 2.15 318.81 1,194.13 361.53 832.60 644.31 12.93 56.16 67.96 82.72 255.74 1,199.22 1,454.43 1,686.33 5,310.46 4 5 6 7 8 5,310.47 255.74 5,054.73 492.97 4,071.16 2.28 319.40 1,154.86 340.64 814.22 644.31 12.64 2nd Quarter (Reviewed) 3rd Quarter (Reviewed) 4th Quarter (Reviewed) Total of four Quarters Full Year (Audited)

Sl. No.

Particulars

1

2

1.

Gross Turnover

Less:Excise Duty

Net Sales

2.

Other Income

3.

Total Expenditure

4.

Interest & Financing Charges

5.

Depreciation & Provision

6.

Profit Before Taxation (PBT)

7.

Provision for Taxation

8.

Net Profit (PAT)

9.

Paid-up Equity Share Capital

10.

Earning per Share (`) (Not annualised)

11. 82,809,993 12.85

Aggregate of non-promotor Shareholding: 82,809,993 12.85 82,809,993 12.85 82,809,993 12.85 82,809,993 12.85 82,809,993 12.85

Number of Shares

National Aluminium Company Limited

Percentage of Shareholding

81

29th ANNUAL REPORT 2009-10
NALCO'S VARIOUS PRODUCTION UNITS, THEIR LOCATION & INSTALLED CAPACITIES
1. 2. 3. 4. 5. Bauxite Mines Alumina Refinery Smelter Plant Captive Power Plant Port Facilities Panchpatmalli Damanjodi Angul Angul Visakhapatnam 48,00,000 TPY 15,75,000 TPY 4,60,000 TPY 1,080 MW 10,00,000 TPY (Alumina Export) 1,46,000 TPY (Caustic Soda Lye Import)

BADDI NEW DELHI FARIDABAD JAIPUR

KOLKATA SILVASSA BHIWANDI MUMBAI RAJAHMUNDRY ANGUL BHUBANESWAR DAMANJODI VISAKHAPATNAM*

PARADIP

Registered Office Regional Office Production Centres

BANGALORE Port Facilities CHENNAI Branch Office Stock Yard *Company's own port facilities

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National Aluminium Company Limited
OFFICES AND CUSTOMER CONTACT CENTRES
REGD. & CORPORATE OFFICE NALCO Bhawan Plot No. - P/1, Nayapalli Bhubaneswar - 751 061 (Odisha) Phone : 0674-2301988 to 2301999 UNITS 1. Mines & Refinery Mines & Refinery Complex Damanjodi - 763 008 Dist. : Koraput (Odisha) Phone : 06853-254515/254550/ 254251 Fax : 06853-254361 2. Captive Power Plant Dist. PIN Phone Fax : : : : Angul (Odisha) 759 122 06764-220158 06764-220646 REGIONAL OFFICES 1. Eastern Region 1st Floor, J K Millenium Centre 46-D, Chowringhee Road, Kolkata - 700 071 Phone : 033-22870115/22877363 Fax : 033-22810393/22878936 E-mail : rmeast@nalcoindia.co.in 2. Western Region 215, T.V. Industrial Estate S.K. Ahire Marg, Worli, Mumbai - 400 030 Phone : 022-24939288/89/24961711 Fax : 022-24950500 E-mail : mldewangan@nalcoindia.co.in 3. Northern Region Core - 4, 5th Floor, South Tower, District Centre, Scope Minar, Laxmi Nagar, Delhi - 110 092 Phone : 011-22010793-94, 22010801 Fax : 011-22010800/22010790/792 E-mail : nsundaray@nalcoindia.co.in 4. Southern Region 3E, Century Plaza, 560, Anna Salai, Teynampet, Chennai-600 018 Phone : 044-24344162/24349157 Fax : 044-24343495 E-mail : rmsouth@nalcoindia.co.in BRANCH OFFICE 1. Bengaluru 3rd Floor, Reshma Complex, 50, M.G. Road, Bengaluru - 560 001 Phone : 080-25550390/25587298 25587086 Fax : 080-25586151 E-mail : mktblr@sify.com 2. Rajahmundry D. No. 80-17-18/1, 1st Floor, J.N. Road, Rajahmundry - 533103 Telefax : 0883-2460024 STOCK YARDS 1. Bhiwandi National Aluminium Company Limited C/o. NSIC Limited, Godown No. 42/57, Indian Corp. Compound Mankoli Naka, Mumbai Nasik Road, Bhiwandi Phone : 02522-277283/9820844526 2. Kolkata National Aluminium Company Limited C/o. Balmer Lawrie & Company Limited WH, 1-Sonapur Road, Kolkata - 700 088 Phone : 033-24495298 (Ext. 340 & 324) 3. Bengaluru National Aluminium Company Limited C/o. Container Corporation of India Limited Inland Container Depot. Warehouse No. 3, Whitefield Road, Benguluru - 560 066 Phone : 080-28451327/28 Fax : 080-28451329 4. Jaipur National Aluminium Company Limited C/o. Central Warehousing Corporation Central Warehouse SP-1296, Sitapura Industrial Area Tonk Road, Jaipur - 302 022 Phone : 0141-2770226/2770817 5. Silvasa National Aluminium Company Limited C/o. NSIC Limited Godown : Shalimar Enterprises Corporation 80/4, Dayat Falia Road, Amli (Piparia), Silvasa - 396 230 (U.T. of Dadra Nagar Haveli) Phone : 0260-2632883/2641436 6. Faridabad National Aluminium Company Limited C/o. NSIC Limited India Garage Equipment, Plot No. 51, Sec-6 Faridabad, Haryana - 121 003 Phone : 0129-4102430/4044098 7. Visakhapatnam National Aluminium Company Limited NALCO Port Facilities Port Area, Visakhapatnam - 530 035 Godown : Shalimar Enterprises Corporation Andhra Pradesh Phone : 0891-2721032 8. Baddi National Aluminium Company Limited C/o. NSIC Limited Opp. Surya Powder Company LImited Village : Dharampur, Thana Road, P.O. : Baddi, Tehsil : Nalagarh, Dist. : Solan (HP) Phone : 0179-5652114/5657114 9. Chennai National Aluminium Company Limited C/o. NSIC Limited, R.M. Depot. NIC Technical Service Centre Phase-I, B-24, Guindy Industrial Estate Chennai - 600 032 Phone : 044-22252338

3. Smelter Plant NALCO Nagar - 759 145 Dist. : Angul (Odisha) Phone : 06764-220110 Fax : 06764-220738/220206 PORT FACILITIES Visakhapatnam Opp. Ore Handling Complex Port Area Visakhapatnam - 530 035 Andhra Pradesh Phone : 0891-2561433/2561435 Fax : 0891-2561598 E-mail : gmport@nalcoindia.co.in Paradip (Port Office) ‘V’ Point Badapadia Paradip - 751 142 Phone : 06722-221286 Fax : 06722-221286 E-mail : nalco_paradeep@nalcoindia.co.in

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29th ANNUAL REPORT 2009-10
ELECTRONIC CLEARING SERVICE MANDATE FORM
(Please fill in the information in CAPITAL LETTERS. Please TICK wherever it is applicable) / DP ID : IN CLIENT ID / BEN.A/C No. 1. 2. Regd. Folio No. :

First Shareholder’s Name: Shri/Smt./Kum./M/s.

3.

First Shareholder’s Address:

Pin Code 4. Particulars of Bank: Bank Name Branch Address

Branch Code (9 Digits MICR Code appearing on the MICR Band of the cheque. Please attach a Xerox copy of a cheque or a blank cheque of your bank duly cancelled) Account Type SB 5. CA CC Account Number

Date from which the mandate should be effective : I hereby declare that the particulars given above are correct and complete. If any transaction is delayed or not effected for reasons of incomplete or incorrect information, I shall not hold National Aluminium Company Limited responsible. I also undertake to advise any change in the particulars of my account to facilitate updation of records for purpose of credit of the amount through ECS (Credit Clearing).

Place : Date : Signature of Shareholder(s)

NOTE : In case the shareholder is not in a position to enclose a photocopy of a blank cheque, a certificate from the Bank as under may be furnished. Certified that the particulars furnished above are correct as per our records. Bank’s Stamp : Date : Signature of the Authorised Official from the Bank

84