2006-07 2006-07 2005-06 2004-05*** 2003-04 2002-03** 2001-02 2000-01 1999-00 1998-99 1997-98 PROFITABILITY Mn US$*
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Mr. G. D. Birla and Mr. Aditya Birla, our founding fathers. We live by their values. Integrity, Commitment, Passion, Seamlessness and Speed M C M C Y K Y K Hindalco’s well-crafted growth and integration hinges on the three cornerstones of COST COMPETITIVENESS Reflected through its strong manufacturing base and operational efficiencies QUALITY Through its versatile range of products serving core applications for diverse industries; and Integrated Aluminium Complex Integrated Copper Complex Power Plant Aluminium Extrusions Plant GLOBAL REACH Bauxite Mines Coal Mines Aluminium Foil Plant Competing in markets across more Alumina Refineries Aluminium Wire Rod Aluminium Alloy Wheels Plant than 40 countries Aluminium Smelter Aluminium Rolled Products Plant R & D Centre Creating Superior Value The Hindalco story unfolds with the establishment of the Company in 1958, the commissioning of the aluminium facility at Renukoot in 1962 and the Renusagar Power Plant in 1967. Over the years, Hindalco has grown into the largest vertically integrated aluminium company in the country and among the largest primary producers of aluminium in Asia. Its copper smelter is today the world’s largest custom smelter at a single location. HINDALCO BUSINESS Share of Net Sales Value Rolled Products 14% Aluminium Extrusions Ingots & Billets 3% Conductor Redraw Rods Top Quartile of lowest cost 9% 5% Aluminium Foil, Alloy Aluminium producers globally Hydrate & Alumina Wheels & Others (Standard & Special) 5% 4% ALUMINIUM Primary Aluminium and Copper 40% registered on the London Metal SAP, DAP & Complexes, Precious Metals & Others Exchange 9% Concast Copper Rods COPPER 20% Star Trading House Status. 60% National Awards in Exports Copper Cathodes 31% M C M C Y K Y K HINDALCO – OUR VISION ALUMINIUM METAL PRODUCTION To be a premium metals major, global in size and reach, with a passionpassion forfor excellence.excellence. ALUMINIUM SHEET PRODUCTION Aluminium - the highly prized, new age metal, discovered just over a hundred years ago - has journeyed from being a precious metal of the 19th century to its wider and far versatile applications in the 20th and 21st centuries. From cutlery sets and ornaments to metal cans and aerospace. ALUMINIUM FOIL PRODUCTION Touching lives in a million myriad ways. Adding superior value to this versatility is Hindalco. BAUXITE MINING A flagship of the Aditya Birla Group and an industry leader in Aluminium and Copper. Hindalco today, has grown to be counted among the most cost efficient producers globally. With the acquisition of INDAL in ALUMINIUM EXTRUSIONS CONTENTS the year 2000, coupled with the perfect blend of technological leadership, dependable products and strong customer base, Hindalco operates across the Board of Directors ..................................................... 1 Social Report ............................................................. 49 country as the largest integrated primary aluminium ALUMINA REFINING producer and a leader in the downstream value-added Chairman’s Letter ..................................................... 2 Directors’ Report ....................................................... 52 segments. Vertically integrated, Hindalco operates across the value Financial Highlights .................................................. 8 Auditors’ Report ........................................................ 66 ALUMINIUM ALLOY WHEELS chain from Bauxite Mining, Alumina Refining, Management’s Discussion & Analysis ...................... 10 Balance Sheet ............................................................ 70 Aluminium Smelting to downstream Sheet and Foil Rolling, Extrusions and Alloy Wheels. Ensuring Report on Corporate Governance ............................ 25 Profit and Loss Account ........................................... 71 customised quality solutions at every stage. A nation- ALUMINA CHEMICALS wide network of production facilities and offices, led by Shareholder Information ........................................... 36 Schedules ................................................................... 72 a team of dynamic, committed professionals, constantly seeking to surpass records and scale. Environmental Report .............................................. 46 Consolidated Financial Statements .......................... 107 With the acquisition of Novelis, Hindalco has become a truly global corporation and ranks among the top 5 of the world’s aluminium major. COPPER Smelting Capacity 500,000 tpa Copper Cathodes 500,000 tpa Continuous Cast Copper Rods 97,200 tpa Sulphuric Acid 1.7 million tpa Phosphoric Acid 180,000 tpa DAP & Complexes 400,000 tpa Gold 15 tpa Silver 150 tpa Mines (Australia) Nifty Mt Gordon Birla Copper, Hindalco’s Copper division at Dahej, enjoys a leadership position in India. COPPER CATHODES CONTINUOUS CAST Hindalco’s Birla Copper Cathode, is a trusted brand. COPPER RODS Known for high purity (99.99%) and consistent Matching international quality standards, with quality, these are largely used in the manufacture excellent surface finish, make these rods suitable of copper rods for the wire and cable industry and for processing of enamelled, coated and plated wires copper tubes for consumer durable goods. They are used in power and communication cables, strips for also used for making alloys such as, brass bronze power and distribution for transformers, magnet and alloy steel. They find application in diverse wires and zari manufacturing. areas such as defence, mint, construction and the electrical industry. HINDALCO INDUSTRIES LIMITED BOARD OF DIRECTORS KEY EXECUTIVES Non Executive Directors ALUMINIUM BUSINESS Mr. Kumar Mangalam Birla Mr. Shashi K. Maudgal, Chief Marketing Officer Chairman Mr. Shankar Ray, President (Chemicals & International Trade) Mrs. Rajashree Birla Mr. S.M. Bhatia, President (Foil & Wheel) Mr. A.K. Agarwala Mr. S. Majumdar, Head Operations- Demerged Indal Units Mr. E.B. Desai Mr. Amit Basu, Joint President (HR)- Demerged Indal Units Mr. S.S. Kothari Mr. C.M. Maniar Renukoot Unit Mr. M.M. Bhagat Mr. P. Balakrishnan, Chief Officer - Operations Mr. K.N. Bhandari Mr. R.P. Shah, Chief Manufacturing Officer Mr. N.J. Jhaveri Mr. Rahul Mohnot, Joint Executive President (F&C) Executive Director Mr. Ajey Srivastava, Joint President (Fabrication) Mr. D. Bhattacharya Mr. J. Bhaumik, Joint President (Renusagar Power) Managing Director Aditya Aluminium Mr. S.N. Bontha, CEO CHIEF FINANCIAL OFFICER Mr. S.N. Jena, Chief Operating Officer Mr. S. Talukdar President Utkal Alumina Mr. H.R. Pattanayak, (MD & CEO) ADVISOR Mr. Debashish Ray, Joint President Mr. R.K. Kasliwal COPPER BUSINESS COMPANY SECRETARY Mr. V.S. Kasbekar, Executive President Mr. Anil Malik Mr. N.M. Patnaik, Senior Vice President Mr. Atulya Verma, Joint Executive President Mr. J.P. Paliwal, Joint Executive President (Commercial) AUDITORS Singhi & Co., Kolkata Mr. B.M. Sharma, Joint Executive President (Marketing) Mr. Sanjay Loyalka, MD & CEO, Aditya Birla Minerals Ltd. (Copper Mines – Australia) COST AUDITORS R. Nanabhoy & Co., Mumbai CORPORATE Mani & Co., Kolkata Mr. Pratik Roy, Chief People Officer (1) THE CHAIRMAN’S LETTER TO SHAREHOLDERS Dear Fellow Shareholders, India stands in the midst of an epochal transformation. Today, we are the fourth largest economy in the world in terms of purchasing power parity, the third largest in Asia, and the second largest among the emerging nations. Growing at a clip of over 9% annually, India is one of the few markets that has enormous potential for growth and earnings in practically all sectors. There is no let up from the Government on the reform process which has spurred the economy. These developments at the macro level will have a positive impact on your Company. Your Company has posted a sterling performance. Its net consolidated revenues at Rs.18,313 crores (US$ 4.47 billion) reflect a growth of 61%. The EBITA surpassed the US$ 1 billion mark creating a new record. Net profits have also been absolutely impressive at Rs.2564.3 crores (US$ 0.6 billion) up by 55%. I am indeed delighted to share with you that Hindalco today, with the acquisition of Novelis, (2) has become a truly global corporation. It ranks among Hindalco today, with the the top 5 of the world’s aluminium major. With a acquisition of Novelis, has become combined turnover of US$ 14 billion, your Company is a truly global corporation. already in the League of the Fortune 500. Collectively, It ranks among the top 5 of the your Company and its subsidiary Novelis boast of over world’s aluminium major. 33 plants spanning 13 countries and anchored by a With a combined turnover of 32,000 workforce belonging to over 15 nationalities. US$ 14 billion, your Company Let me take this opportunity to give you my perspective is already in the League of on this landmark acquisition. the Fortune 500. We look upon the aluminium business as a core business that has enormous growth potential in revenues and earning. Our vision is to be a premium metals major, global in size and reach, with a passion for excellence. The recent past has seen us evolve an even more aggressive dashboard for our growth aspirations. We have scaled up our ambitions exponentially. We have embarked on major capacity expansions. Our growth has been through the organic and inorganic route. We acquired Indal – an Alcan subsidiary in India, in 2000. Subsequently, we took over a few Indian Companies such as Annapoorna Foils and Pennar Alumimium in the downstream segment. Brownfield expansions and Greenfield ventures are on the anvil