Home  »  Company  »  National Alumini  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of National Aluminium Company Ltd.

Mar 31, 2016

Dear Members,

The Directors have great pleasure in presenting before you the 35th Annual Report of your Company together with the audited financial statements and Auditors'' Report for the financial year ended 31st March, 2016.

You will be happy to know that despite sluggish market conditions, your Company has achieved several milestones during the year under report, as detailed below:

PERFORMANCE HIGHLIGHTS

Physical Performance

Mines achieved the highest ever bauxite transportation of 63.4 lakh MT as against 57.42 lakh tonnes achieved during the previous year registering 10% growth.

Alumina Refinery achieved the highest ever alumina hydrate production of 19.53 lakh MT as against 18.51 lakh MT achieved in previous year registering 6% growth.

Steam Generation Plant (SGP) at Alumina Refinery achieved the highest ever net power generation of 438 Million Units (MU) surpassing previous best of 433 MU achieved last year.

Aluminium Smelter achieved cast metal production of 3.72 lakh MT against 3.27 lakh MT in previous year registering 14% growth. Smelter achieved the highest ever production of Wire Rod of 1.01 lakh MT surpassing previous best of 96,070 MT in previous year. Tee Ingot production of 48,636 MT has been the highest ever since inception surpassing previous best of 39,803 MT during 2014-15.

CPP achieved ''Net Power Generation'' of 5,841 MU as against 5,131 MU in previous year.

The wind power generation during the year was 156 MU as against 175 MU generated during the previous year. The lower generation was due to restrictions in power evacuation. Similarly the solar power generation was 0.19 MU during the year as against 0.17 MU generated during the previous year.

Sales Performance Chemicals

Your Company achieved total chemical sale of 12,19,926 MT in 2015-16 compared to 12,24,643 MT achieved during 2014-15. This includes Calcined Alumina Export of 11,74,224 MT made during 2015- 16 as compared to 11,84,595 MT export made during 2014-15.

Metal

The total metal sales during 2015-16 was 3,72,424 MT as compared to 3,26,079 MT during 2014-15. Total metal sale consists of domestic sale of 2,77,753 MT and export of 94,671 MT. The domestic sale includes Wire Rod sale of 1,01,444 MT which is the highest ever sale of Wire Rods made since inception, surpassing the previous best of 96,070 MT achieved during 2014-15.

Out of total Domestic metal sales of 2,77,753 MT, sale of 1,87,081 MT was effected from Smelter plant at Angul and 90,672 MT was effected from eleven stockyards located at Kolkata, Baddi, Jaipur, Faridabad, Bhiwandi, Silvassa, Bangalore, Chennai, Vizag, Vadodara and Delhi. Export orders are booked through e-tendering system to our registered customers. During the year under report, your Company exported Aluminium Metal and Calcined Alumina in the international market to various overseas destinations including Singapore, Malaysia, Korea, Taiwan, Bangladesh, Thailand, Bahrain, China, Egypt, Iran, Indonesia, UAE etc.

Initiatives were taken to register new customers on a continuous basis for sale of our products in the international market by promptly responding to prospective customer enquiries, periodically publishing notice(s) for Global Invitation for registration of International customers in various National & International journals/magazines/newspapers and proactive interactions with new customers during various International conferences/seminars/exhibitions. There is, thus, a constant drive to expand the customer base and explore new overseas destinations for export of the products of the Company.

Financial Performance

You will be pleased to know that despite severe sluggish market conditions, your Company achieved a Profit After Tax of Rs.731 crores during the year as compared to Rs.1,322 crores during the previous year.

The details of financial performance are given below: (Rs.in crore)

Summary of Financial Result

Particulars 2015-16 2014-15

Revenue from Operations(Net) 6,816 7,383

Other Income 537 672

Total Income 7,353 8,055

Cost of materials consumed 1,104 1,031

Power & Fuel 1,865 1,802

Employee benefits Expenses 1,361 1,378

Other Expenses 1,549 1,465

Depreciation & amortisation expenses 424 414

Total Expenses 6,303 6,090

Profit before Exceptional items 1,050 1,965

Add: Exceptional items (Income) 53 148

Profit Before Tax 1,103 2,113

Tax Expenses 372 791

Profit After Tax 731 1,322

Dividend and Appropriations

Your Board has recommended a final dividend of Rs.0.75 per share (15% on the equity shares of Rs.5/- each) for the financial year 2015-16 in addition to the interim dividend of Rs.1.25 per share (25% on equity share of Rs.5/- each), already paid in March, 2016. The total dividend payout for the financial year 2015-16 works out to Rs.515.45 crore as against Rs.451.02 crore for the previous year. The final dividend will be paid after approval in the Annual General Meeting.

It is proposed not to transfer any amount to the General Reserve. The Balance of Rs.114.50 crores in the Profit & Loss Account after appropriations is proposed to be retained in the Profit & Loss Account. The dividend for the year 2015-16 was declared in line with the DPE Guidelines.

MoU Performance

Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated "Excellent" as per the Memorandum of Understanding (MoU), signed by your Company with the Government of India for the financial year 2015-16.

Raw Material Securitisation

- Both South Block & Central & North Mining Leases were extended upto March, 2020 by State Government which were operating under deemed extension condition & IBM Guideline on cutoff grade of bauxite was implemented during the year.

- Your Company could achieve better securitization of mining assets due to allocation of Pottangi Bauxite Mine having reserves of about 80 Million Tonnes and Utkal-D & Utkal-E Coal Blocks having about 200 Million Tonnes of coal reserves.

NEW INITIATIVES

Business Development

- Orders have been placed in Jan, 2016 for wind power projects of 50 MW and 50.4 MW in Rajasthan & Maharashtra respectively.

- A JV Company was formed with GACL on 04. 12. 2015 to set up 2.7 lakh TPA caustic soda plant along with 100 MW captive power plant at Dahej in Gujarat.

- Company has plans to set up 20 MW solar power plant in Madhya Pradesh and 50 MW each solar and wind power plants at suitable locations in India.

- Company has signed an MoU with Iranian Mines & Mining Industries Development & Renovation Organization (IMIDRO), a State owned Company of Iran on 23.05.2016 for business co-operation and collaboration.

Research & Development

- R&D Co-operation Agreement was entered into with Aluminium Pechiney (Rio Tinto Alcan) in July, 2015 and development of AP2XN technology to reduce the electricity consumption in pots has been taken up as the first project.

- R&D agreement was signed with Chalieco, China in December, 2015 for separation of iron concentrate from Red Mud and extraction of Gallium from Bayer Liquor.

- An MoU was signed with Bhabha Atomic Research Centre (BARC), Mumbai on 10.05.2016 for various R&D projects for gallium recovery from Bayer''s liquor, extraction of rare earths from red mud and other areas of mutual interest.

- A nano based Defluoridation plant is being set up in collaboration with M/s Eesavyasa Technology Pvt. Ltd., Hyderabad at Smelter plant, Angul.

- During the year under report, 1 patent has been granted and

1 patent filed. Till now your Company has filed 27 patents, 9 patents granted and 5 R&D processes commercialized.

HUMAN RESOURCES MANAGEMENT

Presidential Directives on SC/ST reservation

The Company has scrupulously complied with the Presidential Directives and other Government instructions and statutory provisions in the matter of reservation and concessions for different categories.

As on 31/03/2016, out of 7100 employees (including Trainees) on the Company''s roll, there were 1162 (16.37%) SCs, 1286 (18.11%) STs, 783 (11.03%) OBCs and 83 (1.17%) Persons with Disabilities. The total number of lady employees in the organization stands at 355. Every third employee in the Company belongs either to SC or ST category.

Industrial Relations

The year saw continuation of the excellent overall industrial relation situation in the Company which helped in achieving major milestones in performance during the year under report. Work culture and discipline improved remarkably during the year. The policy of participative management starting from shop floor level to Apex level continued to be the main stay of the IR policy of the Company.

SA 8000:2008

As a step towards creating and maintaining decent work place, your Company continues to implement SA 8000:2008 Standard. Further, Company is in the process to upgrade and implement the SA standard from 2008 version to 2014 (New) Version.

All Units including Corporate Office have been re-certified to SA 8000 Standard as on date and the certificates will be renewed whenever they fall due.

HR Audit

For evaluating the effectiveness and performance of Human Resource Department regarding HR Policies, Systems and Procedures, your Company conducted HR Audit at Corporate Office in first phase and will be continued in other Units also.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

You will be pleased to know that your Company has spent an amount of Rs.27.17 crores during the year under report against stipulation of Rs.26.24 crores as per applicable provisions of the Companies Act, 2013.

The CSR projects are identified based on recommendation of District Administration, internal assessment in periphery areas directly by the Company or through Nalco Foundation as well as feedbacks received from stakeholders.

The focus of the projects are mainly towards Education, Skill development, Health care and Sanitation, providing safe drinking water, Pollution control, environmental measures and Rural development. Notable initiatives taken during the year under CSR activities are;

- Continued sponsoring of 655 children from tribal dominated areas for their education.

- Continued the operation of 4 Mobile Medical Vans at M&R Complex, Damanjodi through Wockhardt Foundation and 3 Mobile Medical Vans at S&P Complex, Angul through Lions Club apart from one van is being used exclusively for OPD purpose.

- To encourage poor and meritorious girl students under BPL category to continue their study, financial assistance @ Rs.6000/- per annum was provided to meet the expenses on account of uniform and study materials under "Nalcora Aliali Jhia" (Nalco Ki Ladli) scheme to 82 nos. of girl students (50 from M&R Complex, Damanjodi and 32 from S&P Complex, Angul) starting from class-VIII to class-X.

- Provided 10 lakh drinking water pouches and 250 nos. temporary toilets during Nabakalebar-2015 at Puri.

- Joined the National movement of Swachh Bharat and is fully committed for its success.

- Under Swachh Vidyalaya Abhiyan, your Company has successfully completed construction of 354 toilets in 202 MHRD allotted schools within the stipulated time period. Apart from MHRD allotted 354 nos of toilets, NALCO has also constructed 79 more toilets in periphery village schools of Damanjodi and Angul in Odisha and Visakhapatnam of Andhra Pradesh.

A detailed report on CSR activities prepared in line with various applicable provisions of the Companies Act, 2013 is attached at Annexure-I.

You will be pleased to know that on the occasion of Independence Day on 15th August, 2016, your Company organised an Organ Donation Awareness Programme at Corporate Office and unit offices.

VISIT OF PARLIAMENTARY COMMITTEES

The following Parliamentary Committees visited your Company during the year under report:

- Parliamentary Committee on Welfare of SCs/STs between 7th to 10th June, 2015.

- Committee on Sub-Ordination Legislation, Rajya Sabha on 25th October, 2015.

- Standing Committee on Coal & Steel visited Kolkata on 20th January, 2016.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis report in line with Regulation 34(3) readwith Schedule-V of the SEBI (LODR) Regulations, 2015 is placed at Annexure-II to this report.

The report also contains:

(a) various initiatives undertaken to further business development.

(b) the details of risk management initiatives, the details in respect of adequacy of internal financial controls with reference to the financial statements.

(c) various initiatives taken up in the field of Environment Management at different units of your Company.

COMPUTERIZATION ACTIVITIES

Your Company continued its efforts in taking advantage of latest developments in the Information Technology by suitably using them in the day to day functioning of the Company. In that direction, the Company has taken various steps as detailed below:

After centralizing almost all its data and applications viz Procurement, Inventory Management, Finance and Accounting, Marketing and Sales and Human Resource Management on the SAP platform, the Company has now centralized the remaining applications primarily in the area of employee establishment in the legacy environment. This ensures uniformity in business logics followed across the enterprise. Further, plans have been initiated to implement analytics as decision support tools.

Digitization of documents and records has been taken up at various Offices and Units as a preparatory step for implementing digital document management system.

The network which is the backbone of IT has been revamped to a large extent with 10 Gbps backbone and 1 Gbps access technology and advanced routing, sequestering and queuing technologies, resulting in efficient and fast throughput across the network. For computing infrastructure that is nearing completion of life cycle, action is underway for replacing with current and scalable technology. Focus is towards use of standard platforms in lieu of proprietary platforms, and use of virtualization in servers to leverage the flexibility of virtualized server provisioning. Disaster recovery coverage is now being extended to all the applications and services. Plans are afoot for providing wider coverage of Wireless connectivity to provide higher flexibility in working.

The Company has taken steps to reinforce and secure its IT infrastructure and ecosystem by appointing a Consultant to assess the IT ecosystem and formulate appropriate IT Security Policy and framework to implement an effective Information Security Management System leading to ISO 27001 certification. This will be an assurance to all stake holders transacting digitally with the Company.

Current roadmap of activities includes digital office for document storage and retrieval as well as work flow automation, social platforms for in- house as well as for public. Knowledge Management will also be a key area of activity. The e-governance processes cover in-house services to employees and services like online application systems for recruitments to the general public. Providing bill tracking facilities for vendors and material tracking for customers is also on the anvil.

TOTAL QUALITY MANAGEMENT

Your Company has taken following major initiatives during the year under report:

Business Excellence Initiative

The Business Excellence (BE) initiative aligned with European Foundation of Quality Management (EFQM) Business Excellence Model 2013, was launched in the organisation and based on the approach plan approved at Corporate Office, implementation process was rolled out in the Alumina Refinery from July, 2015 onwards.

External assessment by independent assessors deputed by CII was successfully conducted on 14th & 15th Oct.''15. Based on the recommendations of the external assessors and review by the award committee, Alumina Refinery was conferred with the award "BE Star Recognition as Leader in Process Industry category for Excellence in Operations Management".

Integrated Management System

Recertification audits and periodic Surveillance Audits were conducted successfully at all the units and offices for the three international Management Systems Standards i.e. ISO 9001, ISO 14001 & OHSAS 18001. As on 31.03.2016, all the units and offices covered in the above three Management Systems under the Integrated Management System, are operating with valid Certification status.

Energy Management System

During the year, all the three units i.e. CPP, Smelter & Alumina Refinery, covered under Perform, Achieve & Target (PAT) successfully went through the scheduled Recertification and periodic Surveillance Audits for ISO 50001. In the process, CPP was recertified to ISO 50001. As a consequence, as on 31.03.2016, all the three units are operating with valid ISO 50001 certificates.

Perform, Achieve & Target (PAT) Cycle-I

During this year, for both the Designated Consumers (DCs) i.e. S&P Complex and M&R Complex have achieved target set. S&P Complex, achieved normalisation factor of 5.109 TOE/T against the Specific Energy Consumption (SEC) target of 5.199 TOE/T. M&R Complex achieved normalisation factor of 0.306 TOE/T against a SEC target of 0.307 TOE/T.

Quality Circles and Kaizens

Improvements in the scheme for motivating Quality Circles & Kaizens were introduced during the year, which resulted in enhancement of Quality Circle and Kaizen activities as reflected below:

1. 38 Quality Circles from different units of the organisation, completed total 50 QC projects during the year.

ii. 14 Quality Circles from different units of Nalco were nominated to National Quality Circle Convention organised by QCFI at Chennai. Five QCs were placed in the top category i.e. "Par-Excellence".

iii. The All Odisha Quality Circle Convention was organised by Nalco for the twentieth time in sequence, on 22nd & 23rd April''15 at Bhubaneswar.

iv. 145 Kaizens were completed during the year.

5S implementation

Workplace Management System i.e. the widely-acclaimed 5S system, was introduced in Alumina Refinery, Mines, Smelter & CPP, to develop a few model areas. Smelter and Alumina Refinery have achieved substantial progress in the 1S and 2S steps, in the model areas identified by them, while CPP and Mines have initiated 1S and 2S through hand- holding sessions by the consultants.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

Your Company continued its efforts in promoting and implementing Official Language Act, 1963 and Official Language Rule, 1976. Various initiatives taken during the year are;

- Hindi Fortnight/Hindi Weak/Hindi Day were observed at Corporate Office, Bhubaneswar, M&R Complex, Damanjodi and S&P Complex, Angul. On these occasions, many Hindi Competitions were organized separately for Hindi speaking employees and non Hindi speaking employees.

- Town Official Language Implementation Committee meetings were conducted at Angul and Bhubaneswar.

- Hindi workshop was organised during November, 2015 at S&P Complex with faculty Assistance of Dy. Director (Implementation), East Zone, Deptt. of Official Languages, Govt. of India, where 38 Nos. of employees and officers participated from member offices of TOLIC, Angul.

- Hindi Teaching Program was implemented at Corporate Office, S&P Complex and M&R Complex and the employees who do not have working knowledge of Hindi, were nominated for Praveen & Pragya courses under Hindi Teaching Scheme of Government of India and after passing the examinations, incentives and cash awards were given as per rules.

- Website of Company www.nalcoindia.com is made Bilingual and being regularly updated both in Hindi and English.

- Faculty Assistance was provided by the Company on the subject "Unicode and Technical Facilities in Computer and Mobile Phones in Hindi" in the Hindi Workshop organised by National Insurance Company Ltd., Dhenkanal, Prasar Bharati, Doordarshan Kendra, Bhubaneswar, East Coast Railway, Bhubaneswar, Oriental Insurance Co. Ltd., Cuttack and BSNL, Bhubaneswar.

SPORTS

Your Company continued its efforts to promote sports in the region apart from encouraging sports talent who participated in the National and International events by felicitating them on the occasion of Utkal Divas celebration.

As a part of the promotion of sports, your Company sponsored Nalco Cup State Hockey Championship and Nalco Cup State Open Tennis Tournament.

Your Company also provided financial assistance for participating Wako World Kick Boxing Championship held at Dublin and for organizing Blind Womens Cricket Tournament etc.

Your Company organized 5 Km India Mini Marathon on 24th January, 2016 with ''I for India'' slogan from Janata Maidan to Kalinga Stadium which was a huge success as more than 16 thousand participants and 100 organizations and institutions participated which is considered to be biggest among the Mini Marathons organized throughout the country on that date.

VIGILANCE

Vigilance Department, in your Company acts as an aid and co-operate with management in various functions to pull down corruption and gear up transparency in the system. With advice of Central Vigilance Commission, your Company has implemented IT for e-tendering, e-payments, e-auction etc. Preventive vigilance activities of the department such as surprise checks, sample tests, regular inspections, CTE type intensive examinations etc., were given utmost importance and short comings were brought to the notice of management for remedial action. Broad details of the Vigil Mechanism established in the Company are given below:

- NALCO has a well established vigilance organization in the Company headed by a Chief Vigilance Officer (CVO) who is appointed on deputation from Govt. of India. Other vigilance officers who assist the CVO are selected on deputation basis in consultation with and concurrence of CVO. NALCO has its vigilance set up at three locations, i.e. Corporate Office, Bhubaneswar, S&P Complex, Angul and M&R Complex, Damanjodi.

- The vigilance functions are generally in the nature of preventive, punitive, surveillance and detection.

The Vigilance Department functions in brief are;

- Investigating complaints

- Surprise Checks in sensitive areas

- Study of contract/purchase/sales files and Internal Audit Reports which are good source of information for vigilance cases

- Suggesting system improvements

- Circulation of CVC Circular / guidelines

- Giving vigilance clearances to various employees for various purposes, viz. NOC for issue of Passport, Promotion, Resignation/ Superannuation/Voluntary Retirement, Conferment of Award, Foreign Assignment, Deputation and appointment of officers to Board level etc.

- Scrutiny of Property Returns

- Advising on rotation of officials in sensitive posts

- Advising CMD on vigilance matters and matters relating to disciplinary procedures

- Liasoning with CBI etc.

- Implementation of Integrity Pact

- Conducting training programmes for awareness among employees and general public as a part of preventive vigilance mechanism

- Functions of CVO include:

- Maintaining a good link with CVC & CBI besides organizing structured review meetings with CMD

- Furnishing of various returns/reports to Ministry/CVC/CBI

- Assisting CVC in selection of Independent External Monitors (IEMs) for I.P (Integrity Pact)

- Assisting management in formulation/updation of various anticorruption policies/measures

Whistle Blower Policy

The purpose of Whistle Blower Policy is to provide a framework to promote responsible and secure whistle blowers to prohibit managerial personnel action. It protects employees wishing to raise a concern about serious irregularities within the company. Nalco, being a public sector, it is governed by the Whistle Blower Policy formulated by Govt. of India. Details of the Policy are available in Nalco website.

Fraud Reporting

No fraud has been reported by the Auditors under Section 143(12) of Companies Act, 2013 during the year under report. The Company has a Board approved Fraud Prevention Policy and the same is placed in the website www.nalcoindia.com.

RIGHT TO INFORMATION

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act, 2005. Your Company has nominated CPIO/APIO/ Appellate Authorities at its Corporate Office, Units and Branch Offices to provide required information to the citizens under the provisions of the Act.

LISTING IN STOCK EXCHANGES & PAYMENT OF LISTING FEES

The equity shares of your Company continued to be listed on BSE Limited and National Stock Exchange of India Ltd., the premier stock exchanges of the country, having nationwide trading terminals. The listing fee for the year 2015-16 was paid to these stock exchanges on time. Your Company has executed fresh Listing Agreements with both the stock exchanges within the stipulated time as required under SEBI (LODR) Regulations, 2015 which came into force on 01-12-2015.

Buyback of Shares

As you are aware, the Board of Directors had recommended buyback of 64,43,09,628 equity shares of Rs.5/- each representing 25% of the total number of equity shares in the paid-up equity share capital of the Company, subject to approval of shareholders of the Company. The shareholders of the Company had approved the proposal by passing a special resolution through postal ballot on 14-07-2016. The buyback offer at a price of Rs.44/- per share for an aggregate consideration of Rs.2834.96 crores which would not exceed 25% of the aggregate of fully paid-up share capital and free reserves as per the audited accounts of the Company for the financial year ended 31-03-2015 being the latest audited financial statement on the date of Board decision, i.e. 25-05-2016. SEBI has sent its clearance for the draft Letter of Offer with some observations on 22-08-2016. The whole exercise is expected to be completed by the end of September, 2016.

Services to Shareholders

The Company had its In-house Share Registry. Your Company appointed M/s Karvy Computershare Pvt. Ltd., Hyderabad as its Registrar and Share Transfer Agent (RTA) and accordingly, the In-house Share Registry operations of the Company have been shifted to the RTA w.e.f. 08-02-2016.

Payment of Annual Custody/Issuer Fees to Depositories

Annual connectivity fees and custody fees/issuer fees for the year 2015- 16 were paid to both M/s National Securities Depository Ltd. and M/s Central Depository Services (India) Ltd. on time.

BUSINESS RESPONSIBILITY REPORT

In line with Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report for 2015-16 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-III which forms part of this Annual Report.

Report on Sustainable Development

The fourth edition of Sustainable Development Report highlighting the sustainability aspects and the final MoU evaluation status was prepared as per the Global Reporting Initiative latest guidelines i.e. GRI G4 framework. The same was assessed by GRI Amsterdam and the GRI G4 Content Index verification was successfully completed.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under the Companies Act, 2013 are given in the Annexure-IV to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your Directors'' pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, hereby confirm that;

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

A report on Corporate Governance in line with Regulation 34 read with Schedule-V of SEBI (LODR) Regulations, 2015 and DPE guidelines is prepared and placed at Annexure-V to this report.

The Statutory Auditors of the Company have issued a certificate on Corporate Governance which is appended to the Corporate Governance Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Policy on Related Party Transactions has been approved by the Board and placed in the Company''s website which can be accessed at www.nalcoindia.com.

Your Directors draw the attention of the members to Note No. 53 of the financial statements which sets out related party disclosures.

The details of contracts entered with Related Parties at arm''s length basis during the year under report are detailed in form AOC-2 which is attached at Annexure-VI to this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance of the provisions of the Act, the Board of Directors have appointed the following as Key Managerial Personnel:

- Dr. T.K. Chand, Chairman-cum-Managing Director (w.e.f. 27.07.2015)

- Shri N.R. Mohanty, Director (P&T)

- Shri K.C.Samal, Director (Finance)

- Ms. Soma Mondal, Director (Commercial)

- Shri VBalasubramanyam,Director (Production)

- Shri Basant Kumar Thakur, Director (HR) w.e.f. 04.07.2016

- Shri K.N.Ravindra, Executive Director - Company Secretary

- Shri Ansuman Das, former CMD till 30-04-2015

- Shri S.C. Padhy, Director (HR) (till 30-06-2016)

Declaration of Independence by Independent Directors

The Company has received declaration from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

Meetings of the Board

During the year, nine Board meetings were held. For further details, please refer to report on Corporate Governance (Annexure-V) placed in this Annual Report.

Various Sub-committees of the Board

The details of various Sub-committees of the Board including Audit Committee, their composition, terms of reference, details of meetings held are given in the Corporate Governance Report attached to this report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company in the prescribed Form MGT-9 is annexed herewith as Annexure-VII to this Report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

- Details relating to deposits covered under Chapter V of the Act.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares, sweat equity shares and ESOS to employees of the Company.

- Neither CMD nor the Whole-time Directors of the Company receive any commission from the Company.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Your Directors also state that no disclosure or reporting is required in respect of the following areas as they are exempted for Government Companies by Ministry of Corporate Affairs vide notification dated 5th June, 2015.

- Company''s policy on Director''s appointment and remuneration including criteria for determining Qualification, Attributes, Independence, etc. as per Section 134 (3) (e) and Section 178(2), (3) & (4).

- Manner in which formal Annual Evaluation of performance of Board, its Committees and individual Directors has been carried out as per Section 134(p) read with Rule 8 (4) of Companies (Accounts) Rules.

- Ratio of remuneration of each Director to the median remuneration of the employee and other prescribed details as per Section 197(12) read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules.

Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Directors further state that during the year, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Particulars of loans, guarantees and investments

Particulars of loans, guarantees and investments form part of Note No. 11, 12,13, 14, 18 and 19 respectively to the financial statements provided in the Annual Report.

Particulars of Joint Venture Companies and Associated Companies

Particulars regarding joint venture companies and associated companies form part of Note 36 of the Financial Statements provided in the Annual Report.

Salient features of JV/Associate companies in Form AOC-1 forms integral part of the consolidated financial statement of the Company.

Awards & Recognitions

Various awards & recognitions detailed below stand ample testimony for the overall good work done by the Company during the year under report:

1. Engineering Export Promotion Council, Eastern Region (EEPC)''s Gold Trophy, as top exporter in the Large Enterprise category, for its outstanding export performance during the year 2013-14.

2. Highest Export Award of Chemical & Allied Products Export Promotion Council (CAPEXIL), sponsored by Ministry of Commerce & Industry, Govt of India, for its outstanding export performance in Processed Mineral Category in succession since 1988.

3. M&R Complex, Damanjodi was conferred with the National Energy Conservation Award by Ministry of Power, in recognition to its efforts in Energy Conservation in the Aluminum Sector for the year 2015.

4. Panchpatmali Bauxite Mines bagged the Pollution Control Excellence Award-2015 instituted by Orissa State Pollution Control Board (OSPCB) for effective pollution control measures and sound environment practices.

5. The Alumina Refinery of NALCO received the Kalinga Safety Award in the ''Gold'' category, at the Odisha State Safety Conclave - 2015.

6. For its initiative towards bringing 655 tribal children of Koraput district to the mainstream education, NALCO bagged OTV CSR Award 2015, under primary education category.

7. Performance Excellence Award, instituted by the Indian Institution of Industrial Engineering (IIIE).

8. The Alumina Refinery of NALCO bagged the prestigious Business Excellence Star Recognition Award of CII as the "Leader in Process Industries, for Excellence in Operations Management".

9. The Captive Power Plant of NALCO was awarded for ''proactive climate change'' from State Pollution Control Board, Odisha.

10. Best Mother Plant Award, at the concluding ceremony of Odisha MSME International Trade Fair, organized at Bhubaneswar.

11. Panchaptmali Bauxite Mine bagged the 1st Prize in Afforestation and 2nd Prize in Top Soil Management in the concluding function of 18th Mine Environment & Mineral Conservation (ME&MC) Week 2015-16 under the aegis of Indian Bureau of Mines, Bhubaneswar Region.

12. Panchpatmali Bauxite Mine bagged First prizes in Health and Welfare, Second prizes in training and overall performance during Odisha Metalliferrous Mines Week organised by DGMS.

13. Green Corporate Award in the Odisha Environment Congress.

COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE FINANCIAL STATEMENT OF THE COMPANY

You will be pleased to know that your Company has received ''Nil'' comments from C&AG on the standalone financial statements of the Company. Further, C&AG has also given ''Nil'' comment on the supplementary audit conducted by them on the consolidated financial statements of the Company. Their comments are placed elsewhere in this Annual Report.

AUDITORS

Statutory Auditors

M/s. ABP & Associates and M/s Guha, Nandi & Co. were appointed as Joint Statutory Auditors of your Company by the Comptroller and Auditor General of India for the financial year 2015-16.

The report of the Statutory Auditors is enclosed to this report. The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

Cost Auditors

As per Cost Audit Orders, Cost Audit is applicable to the Company for the financial year 2015-16. In terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Tanmaya S Pradhan & Co., Sambalpur have been appointed as Cost Auditors for the year 2015-16.

Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.

M/s Tanmay S. Pradhan & Co. has also been appointed as Cost Auditors for the financial year 2016-17.

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under, M/s Saroj Ray & Associates, Practicing Company Secretaries have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors together with the explanations of the management on the qualifying remarks of Secretarial Auditors is enclosed as Annexure-VIII to this report.

Internal Auditors

Your Company appointed the following auditing firms for carrying out internal audit functions of your Company for the financial year 2015-16:

M/s Tej Raj & Pal for Corporate Office, Bhubaneswar

M/s SCM & Associates for S&P Complex, AngulM/s G.R. Kumar & Co. for M&R Complex, Damanjodi & Port Facilities, Visakhapatnam M/s P. Agarwal & Associates for Northen Regional Office, New Delhi M/s DPSV & Associates for Eastern Regional Office, Kolkata M/s Kumbhat & Co. for Southern Regional Office, Chennai M/s D S Sukla & Co. for Western Regional Office, Mumbai

DIRECTORS

The following changes took place in the Board of Directors of your Company since the last report:

Appointment

- S/Shri Dipankar Mahanta, S Sankararaman, Pravat Keshari Nayak, Prof. Damodar Acharya and Maheswar Sahu were appointed as part-time non-official (Independent) Directors w.e.f. 21.11.2015.

- Shri Nikunja Bihari Dhal, Joint Secretary, Ministry of Mines was appointed as Part-time Official Director w.e.f. 23.12.2015.

- Shri B. K. Thakur was appointed as Director (HR) of the Company w.e.f. 04.07.2016. Cessation

- Dr. Niranjan Kumar Singh, Joint Secretary, Ministry of Mines ceased to be Part-time Official Director on the Board of your Company w.e.f. 23.12.2015.

- Shri S. C. Padhy, Director (HR), superannuated on 30.06.2016. Your directors wish to place on record their appreciation for the valuable services rendered by Dr. Niranjan Kumar Singh and Shri S. C. Padhy during their tenure on the Board of your Company.

ACKNOWLEDGEMENT

The Board of Directors acknowledges with deep sense of gratitude for the guidance and co-operation received from Government of India particularly from Ministry of Mines and other Ministries / Departments of the Government of India, Government of Odisha, Mahanadi Coalfields Ltd., Indian Railways, other Government agencies and CPSEs.

The Board also expresses their sincere thanks to the Comptroller and Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Kolkata, Statutory Auditors, Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers and JV Partners, business associates for the co-operation rendered by them.

Your Directors also acknowledge the support extended by the valued and esteemed domestic and international customers, vendors, solicitors and also look forward for maintaining such mutually supportive business relationship in the coming years too.

The success of your Company is due to commitment, hard work and dedicated efforts made by all the employees at various levels and due to the active support and co-operation received from the Trade Unions & Officers’ Associations during the year under report.

For and on behalf of Board of Directors

Place : Bhubaneswar (Dr.Tapan Kumar Chand)

Date : 27.08.2016 Chairman-cum-Managing Director


Mar 31, 2015

Dear Members,

The Directors have great pleasure in presenting before you the 34th Annual Report of your Company together with the audited fnancial statements and Auditors'' Report for the financial year ended 31st March, 2015.

Performance Highlights:

Physical Performance

During the year under report, your Company''s Alumina Refinery plant at Damanjodi produced 18.51 lakh MT of alumina hydrate against previous best of 19.25 lakh MT. Steam Generation Plant (SGP) achieved the highest ever net power generation of 433 MU surpassing previous best of 423 MU.

The Aluminium Smelter produced 3.27 lakh MT of metal against previous best of 4.44 lakh MT and compared to 3.16 lakh MT produced during last year. Your Company continued to restrict metal production in line with the availability of linkage coal due to low LME price of Aluminium, hence lower production of cast metal. Smelter achieved the highest ever production of Wire Rod of 96,070 MT surpassing previous best of 87,991 MT produced during 2013-14. Tee Ingot production of 39,803 MT was the highest ever since inception surpassing previous best of 14,461 MT achieved during 2011-12.

The Captive Power Plant generated 5,131 MU of Net Power against previous best of 6,608 MU and compared to 4,989 MU generated during previous year.

The 50.4 MW Wind Power Plant-I of your Company at Gandikota, Andhra Pradesh generated 115 MU of wind energy compared to 116 MU generated during the last financial year and the 47.6 MW Wind Power plant-II at Jaisalmer, Rajasthan generated 66 MU of wind energy compared to 34 MU during 2013-14.

Your Company has successfully commissioned 260 KWp roof top solar power system at its Corporate Office and township I buildings at Bhubaneswar. During the year 167 kilo units of solar energy was generated.

Sales Performance:

Chemicals

Chemical sale during 2014-15 was 12,24,643 MT compared to 13,42,761 MT achieved during 2013-14. This includes Calcined Alumina export of 11,84,595 MT during 2014-15 as compared to 13,09,473 MT exports made during 2013-14.

Metal

The total metal sales during 2014-15 were 3,26,080 MT compared to 3,19,663 MT during 2013-14. Total metal sale consists of domestic sale of 2,65,328 MT and export of 60,752 MT. The domestic sale includes Wre Rod sale of 96,070 MT which is the highest ever sales made since inception, surpassing the previous best of 87,969 MT achieved during 2013-14.

You will be pleased to know that your Company achieved highest ever Tee Ingot sale of 36,716 MT surpassing previous best of 14,460 MT achieved during 2013-14 and exported 1,529 MT of Tee Ingots for the first time during the year under report.

Financial Performance:

You will be pleased to know that your Company achieved a Profit After Tax of Rs.1,322 crores during the year as compared to Rs. 642 crores during the previous year with an increase of 106% over previous year.

The details of financial performance are given below:

(Rs. in crore)

Particulars 2014-15 2013-14

Revenue from Operations(Net) 7,383 6,781

Other Income 672 558

Total Income 8,055 7,339

Cost of materials consumed 1,031 1,063

Power & Fuel 1,802 2,018

Employee benefits Expenses 1,378 1,245

Other Expenses 1,465 1,521

Depreciation & amortisation expenses 414 525

Total Expenses 6,090 6,372

Profit before Exceptional items 1,965 967

Less : Exceptional items (-148) 49

Profit before Tax 2,113 918

Tax Expenses 791 276

Profit After Tax 1,322 642

Dividend and Appropriations:

Your Board has recommended a final dividend of Rs. 0.50 per share (10% on the equity shares of Rs. 5/- each) for the financial year 2014-15 in addition to the interim dividend ofRs. 1.25 per share (25% on equity share ofRs. 5/- each), already paid in March, 2015. The total dividend payout for the financial year 2014-15 works out to Rs. 451.02 crore as against Rs. 386.59 crore for the

previous year. The final dividend will be paid after approval in the Annual General Meeting.

Your Directors propose to transfer Rs. 780 crore to General Reserve Account from the profits of the year 2014-15 as against Rs.190 crore transferred in 2013-14.

MoU Performance:

Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated ''Excellent'' as per the Memorandum of Understanding (MoU), signed by the Company with the Government of India for the Financial Year 2014-15.

Human Resources Management:

Presidential Directives on SC/ST reservation

As per Presidential Directives, efforts have been made for recruitment/promotion of SC/ST/OBC candidates. The Company is also complying with the provisions of the Persons with the Disabilities Act, 1995. In order to have a control over the implementation of Presidential Directives as well as Government instructions, Liaison Officers for SC/ST/OBC have been appointed to look after the reservation matters for SCs/ STs/OBCs as well as Persons with Disabilities (PWD).

As on 31.03.2015, out of 7,320 employees (including Trainees) on the Company''s roll, there were 1,194(16.31%) SCs, 1,324 (18.09%) STs, 789 (10.78%) OBCs and 84 (1.15%) PWDs. As can be seen from the above, every third employee in the Company belongs either to SC or ST category. The total number of lady employees in the organization stands at 355.

Industrial Relations:

The general industrial relation climate in the Company remained cordial throughout the year, which helped the organization to achieve excellent results.

The Recognized Unions as well as Officers'' Associations of the Company played a very vital role in helping the management in effective decision making process leading to cost control and sustainability. In order to enhance the motivation level among the employees, revised Productivity Linked Incentive Scheme was implemented. Security as well as productivity of the Company was addressed by successful implementation of bio-metric attendance system throughout the Company.

SA 8000:2008

As a step towards creating and maintaining decent work place, your Company continued to implement SA 8000:2008 Standard. All Units including Corporate Office have been re- certified to SA 8000 Standard as on date and the certificates will be renewed whenever they fall due.

HR Audit

For evaluating the effectiveness and performance of Human Resource Department regarding HR Policies, Systems and Procedures, your Company conducted HR Audit at Corporate Office in first phase and will be continued in others Units also.

Succession Planning Policy

In order to effectively fill the key senior positions in the organization, your Company has framed a Succession Planning Policy for DGM and above posts and to identify a talent pool from which it can develop potential successors.

Employee Satisfaction Survey

A satisfied employee is an asset for any organization. It is only when a person is free from any grievances or conflict with the organization or satisfied with the work assigned to him that he or she will be able to put in his best efforts in the performance of his organizational role. To find out the satisfaction index of the same, your Company conducted Employee Satisfaction Survey throughout the organization, which indicates job satisfaction level of 73.73% among non-executive employees and 64.33% among executives.

Corporate Social Responsibility (CSR):

You will be pleased to know that while the Company has been taking up peripheral development activities and CSR activities since inception, a detailed CSR policy in line with the Section 135 of the Companies Act, 2013 was approved by the Board and has been placed in the Company''s website, i.e. www. nalcoindia.com. The Company has adopted all the thrust areas identified in the Schedule-VII of the Companies Act, 2013 relating to CSR. During the year, the Company has spent Rs. 19.09 crore as against the mandated spending of Rs. 20.14 crore. The Company has earmarked the unspent amount for CSR activities to be taken up during the subsequent years.

A detailed report on CSR activities prepared in line with various applicabale provisions of the Companies Act, 2013 is attached at Annexure-I.

Visit of Parliamentary Committees:

During the year under review, the following Parliamentary Standing Committees reviewed relevant areas:

- Standing Committee on Coal & Steel on 12.02.2015

- Standing Committee on Labour during 14.02.2015 and 15.02.2015

Management Discussion & Analysis Report:

Management Discussion & Analysis report in line with Clause- 49 of the Listing Agreement is placed at Annexure-II to this report.

The report also contains:

(a) various initiatives undertaken to further business development.

(b) the details of risk management initiatives, the details in respect of adequacy of internal financial controls with reference to the financial statements.

(c) various initiatives taken up in the field of Environment Management at different units of your Company.

Computerization Activities:

Information and Communication Technologies are a strong enabler for the Company''s business processes and also support the production and manufacturing systems. The basic business processes like Procurement, Inventory management, Finance and Accounting, Marketing and Sales, Human Resource Management are implemented in SAP ERP and provide instant enterprise wide data at necessary levels in the management. Legacy applications outside of SAP are also being centralized to obtain similar benefit.

The in-house Data Centre at Corporate Office, Bhubaneswar, hosts all the centralized applications and enterprise services, and is backed by a Disaster Recovery site located at Damanjodi, and redundant fault tolerant wide area network. Network infrastructure at Corporate Office has been upgraded to 10 Gbps fault tolerant state of the art solution, and work is in progress for similar implementation at all Plants. The bandwidth to internet, as well as data links to Plants have been widened suitably to allow higher throughput in the circuit.

Biometric attendance solution was rolled out at all Units for the employees, and has been fully stabilized. Video conferencing infrastructure has been enhanced resulting in day-to-day use of this facility. New initiatives like collaboration, intranet socials and mobility are being explored to provide enhanced value to individuals and groups. Company e-mail is already available on smart phones. There is a concerted move to reduce paper consumption by control on printers, and proposals are underway for digitization of documents and establishing Knowledge Management solutions.

The e-governance progress continued with stabilization of Material procurement by e-tendering on SRM7 of SAP, and Service procurement by e-tendering on CPP Portal of NIC. Strengthening of employee services is on the anvil to provide online application and approval of leave, loans and employee bills. On-line performance appraisal for executives and recruitment through online applications are well established.

Total Quality Management: Integrated Management System

Recertification audits of all the five units i.e. Smelter, CPP, Alumina Refinery, Mines & Port Facilities to OHSAS 18001 was successfully completed. These audits were conducted along with scheduled surveillance audits of Integrated Management Systems (IMS) in respect of ISO 9001 and ISO 14001 at the above units. Successful completion of all the above audits, enables continuation of IMS comprising of ISO 9001, ISO 14001 & OHSAS 18001 systems at all the five units during the fnancial year.

Energy Management

During this year, Energy Management Systems (EMS) conforming to ISO 50001 was successfully implemented at Smelter and the unit was certified in August, 2014. With this all the three energy intensive units of NALCO i.e. Alumina Refinery, Smelter & CPP are certified to ISO 50001.

Quality Circle:

You will be pleased to know that the All Odisha Quality Circle Convention, a premier event in the Quality movement of the state, was organised by your Company for the 19th year in succession, during April, 2014. The convention witnessed, participation of 34 Quality Circles, TPM Circles from twenty units of different organisations in the state.

Eleven Quality Circles (QCs) from the Company participated in National Convention on quality organised by QCFI at Pune in December, 2014. Seven QCs qualified for the highest category i.e. Par-Excellence award.

Three QCs of the Company participated in state level competition organised by CII at Bhubaneswar during November, 2014 from which two QCs qualified & participated in the regional convention at Kolkata during December, 2014.

Implementation of Official Language Policy:

Your Company is continuing its efforts in implementation of Official Language Act, 1963 and Official Language Rules,1976. In that direction the following actions were taken during the year:

- All the papers coming under Section 3(3) of Official language Act have been issued in bilingual form.

- Incentives & cash awards were given to the employees who passed Praveen and Pragya Exam in Hindi under Hindi Teaching Scheme, Govt. of India.

- 12 Official Language Implementation Committee Meetings were held at Corporate Office, S&P Complex and M&R Complex.

- 4 Hindi workshops were organized, training 91 employees.

- Observed Hindi fortnight at Corporate Office and S&P Complex. Hindi week was observed in M&R Complex. Hindi divas was observed at Corporate Office and M&R Complex.

- Organised many competitions for Hindi speaking, Non- Hindi speaking employees and students and prizes were distributed.

Sports:

Your Company is playing a vital role in the region in development of various sports. As a part of promotion of sports, your Company sponsored Champions Trophy Hockey tournament in which 8 countries participated. Your Company also sponsored Nalco Cup State Hockey Championship, Nalco Cup State Open Tennis Tournament, Nalco Cup Basketball Championship, Nalco Cup Golf Invitation Tournament of Eastern Zone and Nalco Cup Volleyball Championship, etc. Your Company also organized All India Public Sector Volleyball Tournament-2014 at S&P Complex, Angul.

To encourage sports talent, various athletes of Odisha who participated in National and International events were felicitated during the year.

Vigilance:

Vigilance department, in your Company acts as an aid and assistance to the management in various functions to prevent corruption and brings transparency in the system. Your Company has implemented IT in the form of e-tendering, e-payments, e-auctioning etc. Preventive vigilance activities of the department such as surprise checks, sample tests, regular inspections, CTE type intensive examinations etc., were given priority and lapses were brought to the notice of management.

For creating awareness among employees, Vigilance Awareness Week was celebrated from 27.10.2014 to 01.11.2014 at all the units of your Company including Corporate Office and Regional Offices. Apart from the seminars, various competitions like elocution competition were organized among the employees, spouses, school and college students in different languages and prizes were distributed to the winners.

During the year, 12 vigilance awareness training programs were organized at different locations of the organization for sensitizing employees about various rules, CVC guidelines to bring about transparency in the system.

The Company has established ''Whistle Blower Policy'' and ''Fraud Prevention Policy'' which are placed in the Company''s website www.nalcoindia.com for easy accessibility. Your Company is also covered under the Whistle Blower Policy of Government of India.

Right to Information :

In order to promote transparency and accountability, an appropriate mechanism has been set up across your Company in line with ''Right to Information Act,2005''.Your Company has nominated CPIO/APIO/Appellate Authorities at its Corporate Office, Units and Branch Offices to provide required information to the citizens under the provisions of the Act.

Listing in Stock Exchanges & Payment of Listing Fees:

The equity shares of your Company continued to be listed on BSE Limited and NSE Ltd, the premier stock exchanges of the country, having nationwide trading terminals. The listing fee for the year 2014-15 was paid to these stock exchanges on time.

Payment of Annual Custody/Issuer Fees to Depositories:

The in-house Share Registry of your Company is providing services of both physical and electronic segments of share transfer and allied activities under one roof as per SEBI guidelines. For the purpose of holding shares in electronic mode, your Company has established direct electronic connectivity with both the Depositories (NSDL & CDSL) since the Depository services started in India. Annual connectivity fees and custody fees/issuer fees for the year 2014-15 were paid to both NSDL and CDSL on time.

Business Responsibility Report:

In line with clause 55 of the Listing Agreement, a Business Responsibility Report for 2014-15 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached at Annexure-III which forms part of this Annual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under the Companies Act, 2013 are given in the Annexure-IV to this report.

Directors'' Responsibility Statement:

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors hereby confirm that;

- in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

- the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

- the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the Directors had prepared the annual accounts on a going concern basis; and

- the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

- the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance:

A report on Corporate Governance in line with Clause 49 of the Listing Agreement and DPE guidelines is prepared and placed at Annexure-V to this report.

Contracts and Arrangements with Related Parties

The Company has not entered into any contracts or arrangements with Related Parties during the year under report. Any transactions by a Government Company in respect of contracts and arrangements entered into with any other Government Company is exempted under Section 188 of the Companies Act, 2013 as notified by Ministry of Corporate Affairs vide notification dated 5.6.2015. Accordingly, the disclosure of Related Party transactions in form AOC-2 is not applicable.

The Policy on Related Party Transactions has been approved by the Board and placed in the Company''s website, i.e. www. nalcoindia.com which can be accessed to.

Your Directors draw the attention of the members to Note No. 48 of the financial statements which sets out related party disclosures.

Directors and Key Managerial Personnel

In accordance with the provisions of the Act, the Board of Directors have appointed the following as Key Managerial Personnel:

- Shri T.K. Chand, Chairman-cum-Managing Director (w.e.f.27.07.2015)

Shri Ansuman Das, Chairman-cum-Managing Director (Upto 30th April, 2015)

- Shri S S Mahapatra, Director (Production) upto 31.12.2014.

- Shri N.R. Mohanty, Director (P&T)

- Shri S.C. Padhy, Director (HR)

- Shri K.C.Samal, Director (Finance)

- Ms. Soma Mondal, Director (Commercial)

- Shri V. Balasubramanyam, Director (Production) w.e.f 01.01.2015

- Shri K.N. Ravindra, Executive Director - Company Secretary

The Company has received declaration from the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Listing Agreement with Stock Exchanges. However, both the Independent Directors tenure ended on 9.7.2015.

Meetings of the Board

During the year, nine Board meetings were held. For further details, please refer to report on Corporate Governance placed in this Annual Report.

Various Sub-committees of the Board

The details of various Sub-committees of the Board including Audit Committee, their composition, terms of reference, details of meetings held are given in the Corporate Governance Report attached to this report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure -VI to this Report.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under report:

- Details relating to deposits covered under Chapter V of the Act.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Issue of shares, sweat equity shares and ESOS to employees of the Company.

- Neither CMD nor the Whole-time Directors of the Company receive any commission from the Company.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Your Directors also state that no disclosure or reporting is required in respect of the following areas as they are exempted for Government Companies by Ministry of Corporate Affairs vide notification dated 5th June, 2015.

Company''s policy on Directors, appointment and remuneration including criteria for determining qualification, attributes, independence, etc. as per Section 134(3)(e) and Section 178(1) & (3).

- Manner in which formal Annual Evaluation of performance of Board, its Committees and individual Directors as per Section 134(p) read with Rule 8 (4) of Companies (Accounts) Rules.

- Ratio of remuneration of each Director to the median employee''s remuneration and other prescribed details as per Section 197(12) read with Rule 5 of Companies (Appointment & Remuneration of Managerial Personnel) Rules.

Your Directors further state that during the year, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Particulars of loans, guarantees and investments

Particulars of loans, guarantees and investments form part of Note No.11,12,13,14,18 and 19 respectively to the financial statements provided in the Annual Report.

Particulars of Joint Venture Companies and Associated Companies

Particulars regarding joint venture companies and associated companies form part of Note 35 of the Financial Statements provided in the Annual Report.

Awards & Recognitions:

Your Company continued to receive accolades from different organizations for its performance in various fields. The following awards received during the year 2014-15, stand ample testimony for the same:

- Performance Excellence Award-2013, in Golden Category from Indian Institution of Industrial Engineering.

- Eastern Region Export Excellence Gold Trophy from Federation of Indian Export Organizations (FIEO) for the year 2012-13, in Premier Trading House category.

- "Sita Ram Rungta Social Awareness Award 2013-14", instituted by Federation of Indian Mineral Industries (FIMI) for Panchpatmali Bauxite Mines.

- National Energy Conservation Award of Central Electricity Authority (CEA), Ministry of Power, for Energy Conservation in the Aluminium Sector for the year 2012 for M&R Complex.

- Kalinga Safety Award in Aluminium sector for the year 2013 for Refinery by Odisha State Safety Conclave.

- EEPC (Engineering Export Promotion Council, Eastern Region)''s Gold Trophy, as Top Exporter in the Large

Enterprise Category, for its outstanding export performance during the year 2012-13.

- First prizes for Panchpatmali Bauxite Mine in Electrical Installations, Welfare Amenities, First Aid, OHC Facilities, Second prizes in Storage, Transport & use of explosives, maintenance of HEMM & workshop, overall performance and third prize in First Aid Competition categories during Odisha Metalliferrous Mines Week.

Comments of Comptroller and Auditor General of India on the financial statements of the Company:

You will be pleased to know that your Company has received ''Nil'' comments on the financial statements for the year.Their comments are placed elsewhere in this Annual Report.

Auditors:

Statutory Auditors

M/s. Agasti & Associates and M/s. ABP & Associates were appointed as Joint Statutory Auditors of your Company by the Comptroller and Auditor General of India for the financial year 2014-15. The report of the Statutory Auditors is enclosed to this report. The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments.

M/s. Guha, Nandi & Co., Chartered Accountants, Kolkata have been appointed as Statutory Auditors for the year 2015-16 by C&AG in place of M/s. Agasti & Associates.

Cost Auditors

As per Cost Audit Orders, Cost Audit is applicable to the Company for the financial year 2014-15. In terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Dhal & Co. were appointed as Cost Auditors to conduct the audit of cost records of your Company for the financial year 2014-15. Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.

M/s. Tanmaya S Pradhan & Co., Sambalpur have been appointed as Cost Auditors for the year 2015-16.

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under, M/s Saroj Ray & Associates, Practicing Company Secretaries have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditors together with the explanations of the management on the qualifying remarks of Secretarial Auditors is enclosed as Annexure--VII to this report.

Internal Auditors

Your Company appointed the following auditing firms for carrying out internal audit functions of your Company for the fnancial year 2014-15:

M/s Tej Raj & Pal (for Corporate Office, Bhubaneswar)

M/s SCM & Associates. (for Smelter Plant, Angul)

M/s GNS & Associates (for CPP, Angul)

M/s G.R Kumar & Co. (for M&R Complex, Damanjodi & Port Facilities, Visakhapatnam)

M/s P. Agarwal & Associates (for Northen Regional Office, New Delhi)

M/s DPSV & Associates (for Eastern Regional Office, Kolkata)

M/s Kumbhat & Co. (for Southern Regional Office, Chennai)

M/s D S Sukla & Co. (for Western Regional Office, Mumbai)

Directors

The following changes took place in the Board of Directors of your Company since the last report:

Appointment:

- Shri T K Chand, was appointed as Chairman-cum-Managing Director w.e.f 27.07.2015

- Dr. N K Singh, Joint Secretary was appointed as Part time Official Director w.e.f 12.11.2014.

- Shri V Balasubramanyam was appointed as Director (Production) w.e.f 01.01.2015.

- Consequent upon superannuation of Shri Ansuman Das on 30.04.2015, Shri N R Mohanty, D(P&T) was given additional charge of the post of CMD w.e.f. 01.05.2015 to 26.07.2015.

Cessation:

- Shri D S Mishra, Joint Secretary ceased to be part-time official Director on the Board of your Company w.e.f. 11.07.2014.

- Shri S S Mahapatra, Director (Production), superannuated on 31.12.2014. Consequently, he ceased to be Director on the Board of your Company w.e.f 01.01.2015.

- Shri G P Joshi and Shri S S Khurana, Independent Directors ceased to be Directors on the Board of your Company w.e.f 15.09.2014.

- Shri Madhukar Gupta and Shri G H Amin, Independent Directors ceased to be Directors on the Board of your Company w.e.f 27.12.2014.

- Shri Ansuman Das, CMD of your Company superannuated on 30.04.2015. Consequently, he ceased to be a Director on the Board of your Company w.e.f 01.05.2015.

- Shri Qaiser Shamim and Shri Sanjiv Batra, Independent Directors ceased to be Directors on the Board of your Company w.e.f. 10.07.2015.

Your Directors wish to place on record their appreciation for the valuable services rendered by S/Shri D S Mishra, S S Mahapatra, G P Joshi, S S Khurana, Madhukar Gupta,G H Amin, Ansuman Das, Qaiser Shamim and Sanjiv Batra during their tenure on the Board of your Company.

Acknowledgement

The Board of Directors, with deep sense of appreciation, acknowledges the guidance and co-operation received from Government of India particularly from Ministry of Mines and other Ministries/Departments of the Government of India, Government of Odisha, Mahanadi Coalfields Ltd., Indian Railways, CISF, other Government agencies and CPSEs.

The Board also expresses their sincere thanks to the Comptroller and Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Kolkata, Statutory Auditors, Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers and JV Partners, business associates for the co-operation rendered by them.

Your Directors also acknowledge the support extended by the valued and esteemed domestic and international customers, vendors, solicitors and also look forward for maintaining such mutually supportive business relationship in the coming years too.

The success of your Company is due to commitment, hard work and dedicated efforts made by all the employees at various levels and due to the active support and co-operation received from the Trade Unions & Officers'' Associations during the year under report.

For and on behalf of Board of Directors

Place: Bhubaneswar (T K Chand)

Date: 24.08.2015 Chairman-cum-Managing Director


Mar 31, 2014

Dear Members,

The Directors have great pleasure in presenting before you the 33rd Annual Report of your Company together with the audited financial statements and Auditors'' Report for the financial year ended 31st March, 2014.

Performance Highlights

Physical Performance

You will be pleased to know that Bauxite Mines achieved the highest ever production since inception with transportation of 62.93 lakh MT against previous best of 54.19 lakh MT achieved last year.

Similarly, your Company''s Alumina Refinery plant at Damanjodi also achieved the highest ever production since inception with alumina hydrate production of 19.25 lakh MT against previous best of 18.02 lakh MT achieved last year.

The Aluminium Smelter plant at Angul produced 3.16 lakh MT of cast metal against previous best of 4.44 lakh MT achieved in 2010-11 and 4.03 lakh MT produced during last year. Considering low aluminium prices prevailing for a longer time than expected, your Company took a strategic decision to use mostly linkage coal for generation of power in the Captive Power Plant and curtailed power generation to operate only 625 pots outof 960 pots during the yearto control cost of production.

The Captive Power Plant (CPP) at Angul generated ''Net Power'' of 4,989 MU against previous best of 6,608 MU achieved in 2010-11 and 6,076 MU generated during previous year. CPP has achieved highest ever ash utilisation of 71% during the yearcomparedto 66% during previous year.

You will be happy to know that with its endeavour for green energy, your Company also commissioned the 2nd Wind Power Plant of 47.6 MW in Jaisalmer, Rajasthan in Jan''14. 1st Wind Power Plant of 50.4 MW in Andhra Pradesh was commissioned in 2012-13. About 150 million units of electricity was generated from these two plants, during the year under report.

Chemicals

You will be pleased to know that your Company sold highest ever quantity of 13.43 lakh MT of chemicals in 2013-14 as compared to 9.85 lakh MT sold during 2012-13. This includes highest ever Calcined Alumina Export of 13.09 lakh MT made during 2013-14 as compared to 9.44 lakh MT export made during 2012-13.

Metal

The total metal sale during 2013-14 was 3.20 lakh MT compared to 4.03 lakh MT sold during 2012-13. Total metal sales consists of domestic sale of 2.19 lakh MT and export sale of 1.01 lakh MT during 2013-14. The domestic sale includes 87,969 MT of wire rod which is the highest ever sale made since inception, surpassing the previous best of 79,752 MT achieved during 2012-13.

The total metal sales during the year was lower due to production curtailment at Smelter plant. However, the metal inventory for 2013-14 was brought down to 2,149 MT from a level of 5,594 MT in 2012-13.

Your Company has achieved the highest ever export sales at Rs.3719 crore during the year against earlier highest ever sale of Rs.3410 crore during the previous year and also generated revenue of Rs.46.81 crore during the year under report from renewable energy against Rs.2.64 crore revenue generated during previous year.

The domestic metal sales were effected from the Smelter plant at Angul and nine stockyards at Kolkata, Baddi, Jaipur, Faridabad, Bhiwandi, Silvassa, Bengaluru, Chennai & Vizag.

Your Company has been exporting aluminium metal and calcined alumina to various overseas destinations like Singapore, Malaysia, Korea, Japan, Turkey, Vietnam, Bangladesh, Bahrain, China, Egypt, Iran, UAE etc. Export orders are booked through e-tendering system to the Company''s registered customers.

Initiatives are taken to register new customers for sale of its products in export market by publishing notice for Global Invitation for registration of International customers in various National & International journals/magazines/newspapers and interactions with new customers during various International conferences/seminars/exhibitions. Increasing the customer base and exploring new overseas destinations for exports is a continuous process.

Financial Performance

The details of financial information is given below:

(Rs. in crore)

Particulars 2013-14 2012-13

Revenue from operations (Net) 6,781 6,916

Other income 558 511

Total income 7,339 7,427

Cost of materials consumed 1,063 1,168

Power and Fuel 2,018 2,432

Employee benefits expenses 1,245 1,154

Other expenses 1,521 1,256

Finance costs - 7

Depreciation and amortization expenses 525 505

Total expenses 6,372 6,522

Profit before exceptional items 967 905

Exceptional items 49 - Profit Before Tax 918 905

Tax expense 276 312

Profit After Tax 642 593

Revenue from operations was lower compared to previous year primarily on account of a strategic decision to limit metal production by using electricity generated through linkage coal only, as use of high priced imported coal will not be cost effective at the current level of LME. Your Company still could achieve a higher profit due to certain management interventions like complete stoppage of power purchase from the Grid, improved efficiency in consumption of fuel oil, reduced use of imported coal, reduction in metal production etc. and higher volume of alumina production and sale.

Dividend and Appropriations

Your Board has recommended a final dividend of Rs.0.40 per share (8% on the equity shares of Rs.5/- each) for the financial year 2013-14 in addition to the interim dividend of Rs.1.10 per share (22% on equity share of Rs.5/- each), already paid in March, 2014. The total dividend payout for the financial year 2013-14 works out to Rs.386.59 crore as against Rs.322.15 crore for the previous year. Total dividend for the year including tax is Rs.452.29 crore which works out to about 70% of net profit. The final dividend will be paid after approval in the ensuing Annual General Meeting.

Your Directors propose to transfer Rs.190 crore to General Reserve Account from the profits of the year 2013-14 as against Rs.220 crore transferred in 2012-13.

Offer of Shares to employees by the Govt. of India

As you are aware, Govt. of India had divested 6.09% shares of its holding in secondary market through Offer for Sale (OFS) in March, 2013. Subsequent to the OFS, Govt. of India had offered 1,56,56,730 equity shares of Rs.5 each to the eligible and willing employees @ Rs.38 per share i.e 5% discount to the OFS price of Rs.40. The offer was kept open from 15.05.2014 to 22.05.2014 and eligible employees subscribed for 32,77,000 shares during the offer period. Subsequent to employees offer, the shareholding of the Govt. of India has come down from 81.06% to 80.93%.

Presidential Directives on SC/ST reservation

As per Presidential Directives, efforts have been made for recruitment/ promotion of SC/ST candidates. The Company is also complying with the provisions of the Persons with Disabilities Act, 1995. In order to have a control over the implementation of Presidential Directives as well as Government instructions/ guidelines, Liaison Officers for SCs/STs have been appointed to look after the reservation matters for SCs/STs as well as Persons with Disabilities.

As on 31.03.2014, out of 7,425 employees (including Trainees) on the Company''s roll, there were 1,199 SCs, 1,341 STs, 769 OBCs and 79 Persons with Disabilities. The total number of lady employees in the organization stands at 350. Thus, 16.15% of total employees are SCs, 18.06% are STs, 10.36% are OBCs and 1.06% are Persons with Disabilities. Every third employee in the Company belongs either to SC or ST category.

Industrial Relations

The general industrial relation climate in your Company remained cordial throughout the year, which helped the organisation to achieve excellent physical performance. Some important cost control and operational decisions were taken in the participative management forum leading to effective implementation of these decisions. A new culture of energy consciousness was introduced through meter based domestic electricity consumption. Compliance of various statutory provisions and grievance handling remained two important focal points of industrial relation activities of the Company during the year.

SA 8000:2008

Your Company continues to implement and maintain the international standard SA 8000:2008 with the objective of creating a decent work place which aids in talent acquisition and talent retention in addition to promotion of an ethical image of the Company.

All units including Corporate Office have been re-certified to SA 8000 standard as on date and the certificate is renewed wheneveritfallsdue.

Corporate Social Responsibility (CSR)

As a responsible corporate citizen, your Company pays utmost attention to the local area development around operating units of the Company. Your Company is allocating 2% of its net profit for CSR out of which 1% for Periphery Development Programme is spent, primarily through the Rehabilitation and Periphery Development Advisory Committees (RPDACs), set up by the Government of Odisha and 1% through NALCO Foundation, set up based on the Guidelines on CSR for CPSEs, issued by the Department of Public Enterprises (DPE), Govt. of India. In addition, your Company extended financial support of "13.30 crore to Delhi Public Schools (English Medium) and Saraswati

Vidya Mandirs (Oriya Medium) at Angul and Damanjodi for providing educational facilities to the children from peripheral areas as a part of Corporate Social Responsibility.

During the year, your Company has spent Rs.29 crore on CSR constituting 4.5% of net profit of the Company which is way beyond the requirement of 2% to be spent on CSR activities under DPE guidelines.

Highlights on Peripheral DevelopmentActivities

Contributed "10 crore to the Chief Minister''s Relief Fund, Odisha to assist the Odisha Govt. in meeting the challenges of the Rehabilitation and Construction works following the severe cyclone ''Phailin''. Also distributed relief materials in the affected areas of Balasore, Puri and Ganjam Disricts by incurring an expenditure of" 19 lakh.

Opened an OPD Centre at its Periphery Development Office in S&P Complex, Angul for the benefit of villagers

living in the contiguous villages. After check-up, patients have been given medicines free of cost at the Centre.

- Provided logistic support to Ministry of Textiles at its M&R Complex, Damanjodi for training 238 persons in apparel stitching, out of which 95% are female candidates.

- Contributed Rs.27 lakhs for PARAB, 2013, a State level Tribal Festival of Koraput organised by District Administration at Koraput.

- Organised farmers training programme among the progressive farmers of the surrounding villages for better farming at its M&R Complex, Damanjodi.

- Planted 5,000 nos. of trees with an expenditure of Rs. 25.00 lakhs in the City of Visakhapatanam (AP) under the Green Visakha Project on the request of District Administration of Visakhapatanam.

Highlights on CSR activities by NALCO Foundation

NALCO Foundation is focused on development of villages located within 15 kms radius of your Company''s Mines & Refinery Complex at Damanjodi, Smelter & Power Complex at Angul and also the proposed mining areas at Pottangi in Odisha and Gudem & KR Konda inAP.

Some of the major CSR initiatives undertaken by NALCO Foundation are as follows:

1. Mobile Health Units

Considering the good response, your Company increased the number of Mobile Health Units (MHUs) to 8 from 6, operated during previous year in the periphery villages of its Smelter & Power Complex, Angul (43 villages) and Mining & Refinery Complex, Damanjodi (142 villages) (each unit has four MHUs). The Mobile Health Units of Damanjodi are being operated through Wockhardt Foundation and that of Angul through Lions Club, Angul. These MHUs provide primary health service at the villagers'' doorsteps, comprising diagnostics, free medicines and awareness building through Information, Education and Communication (IEC) activities. During the year under report, total 2,463 camps were conducted and total 1,09,166 number of patients from periphery villages of Damanjodi and Angul were treated free of cost.

2. Sponsoring formal education of children living in periphery villages of Damanjodi Keeping in view that imparting education is the best investment in CSR, your Company continued the unique scheme of sponsoring children to residential schools bearing the entire cost. During the year, 254 more children were sponsored. Total number of students sponsored so far was 655 at a cost of Rs.1.31 crore. The children are from 16 periphery villages of its Mines & Refinery Complex at Damanjodi, in the tribal dominated and Maoist- infested district of Koraput. The Foundation''s funding covers all the costs related to study, lodging and boarding of the students across 3 residential schools in Bhubaneswar (Kalinga Institute of Social Sciences) and Koraput (Koraput Development Foundation and Bikash Vidyalaya). The funding for residential education for the enrolled students is planned till they complete schooling.

Employees contribution to Govt. of Uttarakhand for flood victims

Employees of your Company have contributed by way of one day salary amounting to Rs.1.58 crore to the Chief Minister''s Relief Fund, Govt. of Uttarakhand for redressal of sufferings of affected people due to devastating floods.

Visit of Parliamentary Committees:

During the year under review, the following Parliamentary Standing Committees visited your Company and reviewed relevant areas:

- Parliamentary Standing Committee on Science, Technology & Environment and Forests visited Bhubaneswar on 28.06.2013.

- Committee on Estimate visited Bhubaneswar on 25.09.2013.

- Departmental Related Standing Committee on Commerce and Industries visited Bhubanswar from 06.10.2013 to 09.10. 2013.

Awards & Recognitions:

Your Company continued to receive accolades from various organizations for its performance in various fields. The following awards received during the year 2013-14, stand ample testimony for the same:

i) ''Golden Performance Excellence Award 2011-12'' instituted by Indian Institution of Industrial Engineering (IIIE), Mumbai.

ii) ''Best Corporate Social Responsibility Practices–2013'' award for NALCO Foundation, the CSR arm of your Company at the Responsible Business Summit & Awards.

iii) Gem Granites Environment Award for the year 2012- 13, by Federation of Indian Mineral Industries (FIMI), for its contributions towards environment management at the Panchpatmali Bauxite Mines, in Koraput, Odisha.

iv) EEPC (Eastern Region) Gold Trophy, as Top Exporter in the Large Enterprise Category, for its outstanding export performance during the year 2011-12.

v) IIM Non-ferrous Best Performance Award for FY 2012- 13 amongst the large integrated plants category, instituted by the Indian Institute of Metals.

vi) Award for best practices in safety, health and environment among the industries in Odisha from Govt. of Odisha

vii) Best Export Award for the year 2010-11 of Govt of Odisha.

viii) 45th EEPC India National Award for outstanding export performance during 2012-13 ix) Think Odisha Leadership Award for adopting the best environment practices from the Times of India Group & Te fla .

x) Panchapatmali Bauxite Mines bagged 4 awards in various categories during 16th Mines Environment & Mineral Conservation Week (MEMC): 2013-14, held under the aegis of Indian Bureau of Mines (Bhubaneswar Region).

xi) Alumina Refinery was awarded with Best Practices on Safety, Health & Environment by Directorate of Factories & Boilers, Odisha.

xii) Alumina Refinery was awarded Kalinga Safety Award–2013 for Best Safety Practice in Aluminium Industry Category.

xiii) Panchpatmali Bauxite Mines was awarded 1st Prize for Top Soil Management, 1st Prize for afforestation, 2nd Prize in the reclamation and rehabilitation and 2nd prize in overall environmental performance in the fully mechanized mines (except Keonjhar & Sundergarh) category from Indian Bureau of Mines.

xiv) NALCO has bagged Performance Excellence Award- 2013, in Golden Category from Indian Institution of Industrial Engineering, during the 18th CEOs Conference at Mumbai.

xv) NALCO has bagged the Eastern Region Export Excellence Gold Trophy from Federation of Indian Export Organizations (FIEO) for the year 2012-13, in Premier Trading House – Non-MSME category.

xvi) Panchpatmali Bauxite Mines of NALCO has bagged the "Sita Ram Rungta Social Awareness Award 2013-14", instituted by Federation of Indian Mineral Industries (FIMI) at New Delhi.

Projects Under Implementation

Progress made in the various projects under implementations is given below:

Alumina Refinery- Upgradation Project:

Commissioning activities for capacity up-gradation of 4th Stream of Alumina Refinery from 5.25 lakh TPY to 7.0 lakh TPY and that of Bauxite Mines from 6.3 Million TPY to 6.825 Million TPY at an estimated project cost of Rs. 409 crore has been completed.

Utkal – E Coal Block:

Utkal-E Coal Mine Project with total mineable reserve of 67.49 million tons is under implementation at a cost of Rs. 337.61 crore (at May, 2011 price level).

Major milestones like Environmental Clearance from MoEF, approval of Mining Lease by Ministry of Coal, Govt. of India and Consent to Establish from Odisha State Pollution Control Board (OSPCB), approval for drawal of water from Govt. of Odisha, DGPS survey of mines lease area, approval of R&R Colony Master plan and submission of revised mining and mine closure plan, etc. have been achieved.

Activities for acquisition of Govt. as well as private land, forest clearance are in progress.

47.6 MW Wind Power Project-II in Rajasthan:

Commissioning of 47.6 MW wind power project II at Jaisalmer, Rajasthan at an investment of Rs. 283 crore was completed on 29.01.2014. During the year the plant generated 34 MU. The plant is registered with IREDA for availing Generation Based Incentive and also registered with NLDC for availing REC benefits, which would offset your Company''s Renewable Power Obligation.

Roof Top Solar Power Project:

As a part of green initiative, your Company has commissioned roof top solar system at Corporate Office building (160 kwp) in May, 2014 and taken up installation of roof top solar system in township buildings (100 kwp) at Bhubaneswar in March, 2014.

MoUPerformance

Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated ''Excellent'' as per the Memorandum of Understanding (MoU), signed by the Company with the Government of India for the

Financial Year 2013-14.

Implementation of Official Language Policy

In accordance with the policy of the Govt. of India, all out efforts were continuously made for progressive improvement in use of Hindi in all its units and Head Office. All the documents falling under Section 3 (3) of Official Language Act were issued in bilingual form. Hindi workshops were organized for employees to make them efficient to use Official Language in their day-to-day official work. To bring awareness among the employees, Hindi fortnight and Hindi day were observed wherein many competitions were organized for Hindi speaking, Non-hindi speaking employees and students and prizes were given. In order to encourage employees to do official work in Hindi, incentives & cash awards were given to 78 employees who passed Praveen and Pragya examinations in Hindi under Hindi Teaching Scheme, Govt. of India.

The Official Language Implementation Committee meetings were also organized to encourage the employees to implement Official Language Hindi.

Sports

Your Company continues to promote sports and sports persons in the country. In that direction, your Company sponsored different State level and National level sports like Hockey, Basketball, Golf and Volleyball tournaments. As a matter of policy, the Company facilitates sports persons of the State participating and excelling in the field of sports on Utkal Divas to encourage upcoming talents.

Vigilance

Vigilance department in your Company acts as an aid and assistance to the management in various functions to prevent corruption and to bring transparency in the system. As a part of preventive vigilance drive, the following actions were taken during the year:

- 11 vigilance awareness training programs were organized at different locations of the organization for sensitizing employees about various rules, CVC Guidelines to bring about transparency in the system.

- Vigilance Awareness Week was celebrated from 28.10.2013 to 02.11.2013 at all the units of your Company including Corporate Office and Regional Offices. Apart from conducting seminars, various competitions like, elocution competition among the employees, school and college students were organized in different languages and prizes were distributed to the winners.

- surprise checks, sample tests, regular inspections, CTE type intensive examination etc. were given priority.

During the year, Vigilance department had given various systemic improvement suggestions such as:

- Modification in the Recruitment rules of the Company – Recruitment of Graduate Engineers through GATE.

- To have a check on unauthorised occupation of NALCO''s land and quarter.

- Uniform House allotment policy for the Company.

- Bring about transparency in the vehicle hiring contracts.

- Systems to have a check on fraudulent tour bills.

- Transparency in the moderation of ACRs and Departmental Promotions.

- Periodic review of standardised items.

- Rotation of employees in sensitive posts and uploading of the record of sensitive posts in the HR Modules.

- Proper use of discretionary powers of Executive Directors.

Implementation of Right to InformationAct

Your Company as a responsible corporate citizen has adopted a fairly transparent mechanism of information sharing with all stakeholders including the public even before the RTI Act, 2005 came into existence. The statutory responsibility under the RTI Act is diligently implemented by nominating senior officials as Appellate Authority, PIO & APIOs in addition to sharing the relevant information in the Company''s website. Your Company has an excellent track record in implementation of the RTIAct.

Sustainable Development Report/ Business Responsibility Report.

Business Responsibility Report

As per clause 55 of the Listing Agreement, all listed Companies are required to submit a Business Responsibility Report describing various initiatives taken by the Company on social, environmental and governance perspective. Accordingly, Business Responsibility Report for 2013-14 is attached at Annexure-I which forms part of thisAnnual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo.

As a pioneer, your Company started adopting International Standard like ISO-50001 Energy Management System in its production units. Captive Power Plant, Angul got certified to ISO-50001 Energy Management System in February''2013 and have successfully completed the two surveillance audits during 2013-14. The Alumina Refinery Plant, Damanjodi Unit got certified to ISO-50001, Energy Management System in March''2014. Implementation of ISO-50001 Energy Management System in Smelter Plant,Angul is in progress. 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 given in the Annexure-II to this report. Particulars of Employees

As per Notification No. GSR 289(E) dated 31st March, 2011 issued by the Ministry of Corporate Affairs, Govt. of India, amending the provisions of the Companies (Particulars of

Employees) Rules, 1975 issued in terms of Section 217(2A) of the Companies Act, 1956, Government companies are not required to include the statement of particulars of employees drawing remuneration of Rs.60 lakhs or more per annum, if employed throughout the financial year or Rs.5 lakhs per month, if employed for part of the financial year. The information has not been included as part of the Directors'' Report as per the said Notification as NALCO is a Government Company.

Listing in Stock Exchanges & Payment of Listing Fees

The equity shares of your Company continued to be listed on BSE Limited and NSE Limited, the premier stock exchanges of the country, having nationwide trading terminals. The listing fee for the year 2013-14 was paid to these stock exchanges on time.

Payment ofAnnual Custodial Fees to Depositories

The in-house Share Registry of your Company is providing services of both physical and electronic segments of share transfer and allied activities under one roof as per SEBI guidelines. For the purpose of holding shares in electronic mode, your Company has established direct electronic connectivity with both the Depositories (NSDL & CDSL) since the Depository services started in India. Annual connectivity fees and custody fees/issuer fees for the year 2013-14 were paid to both NSDL and CDSLon time.

Directors'' Responsibility Statement

In pursuance of Section 217(2AA) of the Companies Act, 1956 which requires inclusion of Directors'' Responsibility Statement, the Directors hereby confirm:- Your Directors, pursuant to the provisions of Section 217(2AA) of the CompaniesAct, 1956, hereby confirm:

(i) that in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

(ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fare view of the state of affairs of the Company at the end of the financial year and of the Profit of the Company for that period;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors have prepared the annual accounts on a going concern basis.

Corporate Governance

A report on Corporate Governance in line with Clause 49 of the Listing Agreement and DPE guidelines is prepared and placed at Annexure-III to this report. As a part of good Corporate Governance practice, your Company, like previous years, got the Secretarial Audit carried out voluntarily by a practicing Company Secretary for the year 2013-14. The Secretarial Audit Report is placed at Annexure-IV to this report.

Management Discussion & Analysis Report

Management Discussion & Analysis report is placed at Annexure-V to this report.

Review of accounts by Comptroller and Auditor General of India

You will be pleased to know that your Company has received ''Nil'' comments on the accounts for the financial year 2013-14 from the Comptroller andAuditor General of India.

Their comments are being placed elsewhere in thisAnnual Report.

Public Deposits

During the year under report, your Company neither accepted nor renewed any public deposits.

Auditors

Statutory Auditors

M/s. Agasti & Associates and M/s. ABP & Associates were appointed as Joint Statutory Auditors of your Company by the Comptroller and Auditor General of India for the financial year 2013-14. The Joint Statutory Auditors have given unqualified report on the accounts of the company for the financial year 2013-14.

Cost Auditors

In pursuance of section 233(B)(2), M/s. Dhal & Co. have been appointed as Cost Auditors of your Company for the financial year 2013-14. The due date for filing the Cost Auditors report for the year is 27th September, 2014 and same shall be filed within prescribed due date.

Secretarial Auditors

M/s. D S Mishra & Associates have been appointed as SecretarialAuditors for the year 2013-14.

Internal Auditors

Your Company appointed the following auditing firms for carrying out internal audit functions of your Company for the financial year 2013-14:

M/s Tej Raj & Pal (for Corporate Office,Bhubaneswar)

M/s B. N. Mishra & Co. (for Smelter Plant,Angul)

M/s GNS &Associates (for CPP,Angul)

M/s G.R Kumar & Co. (for M&R Complex, Damanjodi & Port Facilities, Visakhapatnam)

M/s P. Agarwal & Associates (for Northen Regional Office, New Delhi)

M/s DPSV & Associates (for Eastern Regional Office, Kolkata)

M/s Kumbhat & Co. (for Southern Regional Office, Chennai)

M/s Thingna & Contractor (for Western Regional Office, Mumbai )

Directors

The following changes took place in the Board of Directors of your Company since the last report:

Appointment:

- Shri K C Samal was appointed as Director (Finance) w.e.f 03.01.2014.

- Ms. Soma Mondal was appointed as Director (Commercial) w.e.f. 11.03.2014.

Cessation:

Shri V K Jain and Shri PC Sharma, ceased to be Directors on the Board of yourCompany w.e.f 21.03.2014.

Shri D S Mishra, IAS, Joint Secretary, Ministry of Mines ceased to be a Director on the Board of yourCompany w.e.f 11.07.2014.

Your Directors wish to place on record their appreciation for the valuable services rendered by Shri V K Jain, Shri P C Sharma and Shri D S Mishra during their tenure on the Board of your Company.

Acknowledgement

Your Directors gratefully acknowledge and place on record for the support, co-operation and valuable guidance received from the Shareholders, the Ministry of Mines and other Ministries/Departments of the Government of India, Government of Odisha, Mahanadi Coalfields Ltd., Indian Railways, other Government agencies and CPSEs and also express their sincere thanks to the Comptroller and Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, Kolkata, Statutory Auditors, Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers and JV Partners, business associates for the co-operation rendered by them. Your Directors also acknowledge the support extended by the valued and esteemed domestic and international customers, vendors, solicitors and also look forward for maintaining such mutually supportive business relationship in the coming years too. The success of your Company is due to commitment, hard work and dedicated efforts made by all the employees at various levels and due to the active support and co-operation received from the Trade Unions & Officers''Associations during the year under report.

For and on behalf of Board of Directors

Place: Bhubaneswar (Ansuman Das)

Date : 20.08.2014 Chairman-cum-Managing Director


Mar 31, 2013

Dear Members,

The Directors have great pleasure in presenting the 32nd Annual Report of your Company together with the audited statement of accounts and Auditors'' Report thereon for the financial year 2012-13.

Performance Highlights

You will be pleased to know that Bauxite Mines of your Company achieved the highest ever production since inception with transportation of 54.19 lakh MT against previous best of 50.03 lakh MT (2011-12), despite production loss of about one month on account of non-operation of Mines on expiry of mining lease and suspension of night-shift operation for 3 months due to law and order issues.

Similarly, your Company''s Alumina Refinery plant at Damanjodi also achieved the highest ever production since inception with alumina hydrate production of 18.02 lakh MT against previous best of 16.87 lakh MT (2011-12).

The Aluminium Smelter plant at Angul achieved the cast metal production of 4.03 lakh MT against the previous best of 4.44 lakh MT achieved in 2010-11 and 4.13 lakh MT achieved in 2011 -12. In view of prevailing low LME prices, your Company took a conscious decision to further reduce metal production by stopping about 100 pots during the year under report. Your Company has further decided to operate around 625 pots, out of 960 pots, based on power generated mostly from linkage coal. This is in line with the international practice followed by smelters around the world. This has helped the Company to reduce the cost of production of metal.

The Captive Power Plant (CPP) at Angul achieved ''Net Power Generation'' of 6,076 MU against the previous best of 6,608 MU achieved in 2010-11 and 6,200 MU achieved in the previous year 2011 -12. Lower power generation was due to coal constraints and due to conscious decision taken, not to use expensive imported coal to curtail cost of production. However, you will be happy to note that CPP achieved the highest ever ash utilisation at 66% during the year 2012-13 compared to 61% in the previous year 2011-12.

You will be pleased to know that in pursuit of harnessing renewable energy sources, your Company has entered into new business of wind power generation with the establishment of 50.4 MW Wind Power Plant at Gandikota in Andhra Pradesh at an investment of Rs. 274 crore. This was synchronized in December, 2012 and started wind power generation. A total of 14 MU wind power was sold during the year 2012-13.

Production achieved during the year under report vis-a-vis the previous year is given below:

Unit 2012-13 2011-12

Bauxite MT 54,19,391 50,02,626

Alumina Hydrate MT 18,02,000 16,87,000

Aluminium MT 4,03,384 4,13,089

Electricity (Net) MU 6,076 6,200

Wind Power MU 14 Nil

Sales Performance

You will be pleased to know that your Company achieved the highest ever sales turnover of Rs. 7247 crore and export earnings of Rs. 3410 crore in the year 2012-13 as against Rs. 6927 crore and Rs. 2569 crore respectively achieved in 2011-12.

Your Company achieved total chemical sale of 9,84,722 MT in 2012-13 compared to 8,42,805 MT achieved during 2011-12. This includes Calcined Alumina export of 9,44,117 MT made during 2012-13 compared to 7,92,552 MT export made during 2011-12.

The total metal sale during 2012-13 was 4,03,102 MT compared to 4,15,916 MT during 2011-12. Total metal sale consists of domestic sale of 2,58,941 MTandexportsaleof1,44,161 MT. The domestic sales include sale of 79,752 MT Wire Rod, which is the highest ever sale made since inception surpassing the previous bestof76,849 MT achieved during 2009-10.

The total metal sales during the year under report was lower due to production curtailment at Smelter plant in view of high power cost. The metal inventory as on 31st March, 2013 was brought down to 5,542 MT from a level of 5,620 MT.

The sales break-up is given below:

Unit 2012-13 2011-12

Export

Alumina MT 944,117 792,552

Aluminium including MT 144,161 98,399 Rolled Products

Domestic

Alumina & Hydrate MT 39,074 49,844

Zeolite -A MT 1,531 409

Aluminium MT 258,941 317,517

Total Metal Sale MT 403,102 415,916

Total Chemical Sale MT 984,722 842,805

The domestic metal sales were continued to be effected from the smelter plant atAngul and nine stockyards at Kolkata, Baddi, Jaipur, Faridabad, Bhiwandi, Silvassa, Bangalore, Chennai & Vizag.

Finance

Despite increase in turnover from Rs. 6927 crore during 2011-12 to Rs. 7247 crore during 2012-13, the net profit has gone down due to higher input costs.

The details of financial information is given below:

(Rs. in crore)

2012-13 2011-12

Turnover 7,247 6,927

Total Expenses 6,522 5,957

Profit Before Tax (PBT) 905 1,198

Tax 312 348

Profit After Tax (PAT) 593 850

The Company has achieved highest ever sales turnover of Rs. 7,247 crore which was higher by 4.62% as compared to the previous year. Higher turnover was mainly due to increase in alumina volume and higher net realization. The profit of the Company for the year 2012-13 has affected adversely, mainly due to increase in prices of inputs, coal, fuel oil and increase in employee costs. The profit after tax atRs. 593 crore was lower by Rs. 257 crore over last year.

Dividend and Appropriations

Your Directors believe that shareholders'' value in the Company can be enhanced by capacity expansion, backward & forward integration and undertaking various growth projects. Keeping this in mind and in accordance with your Company''s policy of balancing dividend pay-out with funds requirement to deploy internal accruals for its growth projects and also keeping in view the falling profit margins due to slowdown of global economy, your Directors have recommended payment of a final dividend @ Rs. 0.50 per share (10%) in addition to the interim dividend of Rs. 0.75 per share (15%) paid on 30.03.2013. The total dividend pay-out for the financial year 2012-13 thus works out to Rs. 1.25 per share (25%) as against Rs. 1.00 per share (20%) paid for the previous year 2011-12. The final dividend will be paid after approval in the Annual General Meeting.

Your Directors propose to transferRs. 220 crore to General Reserve Account from the profits of the year 2012-13 as against Rs. 550 crore transferred in 2011-12.

Offer For Sale (OFS)

On 15th March, 2013, the Govt. of India divested 15,69,38,918 shares constituting 6.09% of total paid-up capital at a total consideration of Rs. 628.53 crores. With this divestment, the shares held by the President of India have come down to 81.06% from 87.15% of total paid-up capital of Rs. 1288.62 crores.

Presidential Directives on SC/ST reservation

In line with Presidential Directives, measures to improve the representation of the SC/ST Communities in employment of the Company continued. The provisions of the Persons with Disabilities Act, 1995 were complied with by your Company during the year under report.

Out of 7,555 employees (including Trainees) on the Company''s roll as on 31.03.2013, there were 1,220 SCs, 1,361 STs, 763 OBCs and 79 Persons with Disabilities. The total number of lady employees in your Company stood at 353. Thus, 16.15% of the total employees are SCs, 18.01% are STs, 10.10% are OBCs and 1.05% are Persons with Disabilities and every third employee in your Company belongs either to SC orST category.

Industrial Relations

Your Company maintained its tradition of resolving employee issues during the year through participative management, which resulted in a peaceful, healthy and conducive industrial relations climate for optimal utilization of human resources. The recognized Trade Unions at all the major locations of your Company played a very constructive and dynamic role in helping the Management to tide over many critical issues relating to cost control and sustainability. Your Company has an established system of workers participation at different levels starting from the shop level to the Chief Executive level to address various issues concerning with productivity, quality including quality of work life and employee related issues. Employee safety, welfare and grievance handling, both formal as well as informal remained the prime focus of the various joint committees formed with equal participation of representatives of workmen and the management.

As a recognition of your Company''s continuous efforts to have decent work place and environment, all units of your Company continue to be certified under SA 8000 (Social Accountability 8000) certification.

During the year, secret ballot elections were held for ascertaining majority status of unions and recognition status was accorded to the unions having majority of votes during the year.

During the year, modified scheme was formulated for career growth/ conversion of semi-skilled employees to skilled posts in operation/ maintenance, based on weightage for different criteria ofselection.

To improve discipline in the organization, biometric attendance recording system for employees has been started at the Corporate Office and regional offices. The same will be adopted at all units once the system is technically stabilized at Corporate Office. The biometric access control system for contract labourers at all the sites has also been introduced.

Corporate Social Responsibility

The Company is allocating 2% of net profit on CSR Fund, of which 1 % is spent for peripheral development activities through Rehabilitation and Peripheral DevelopmentAdvisory Committees (RPDACs), setup by State Govt. and another 1% is spent through Nalco Foundation (NF).

The main peripheral development activities undertaken through RPDACs were organizing health camps, imparting livelihood programmes, assisting in creation of infrastructure facilities in the peripheral villages, propagating green initiatives, providing reliefto calamity affected people etc.

Some of the major CSR initiatives undertaken are as follows: Mobile Health Units

You will be pleased to know that your Company is operating six Mobile Health Units (MHUs) in the periphery villages of its Smelter & Power Complex, Angul (43 villages) and Mining & Refinery Complex, Damanjodi (142 villages) (each unit has three MHUs). The Mobile Health Units at Damanjodi are being operated through Wockhardt Foundation. These MHUs provide primary health service at the villagers'' doorsteps, comprising free medicine, diagnostics and awareness building through Information Education and Communication (IEC) activities. In the financial year 2012-13, 1,517 camps were conducted and over 67,000 patients from periphery villages of Damanjodi and Angul were treated free of cost.

Sponsoring formal education of children living in periphery villages of Damanjodi

You will be happy to note that your Company has sponsored residential education for 401 children from 16 periphery villages of Nalco''s Mines & Refinery Complex at Damanjodi, in the tribal dominated and Maoist-infested district of Koraput. The Foundation''s funding covers all the costs related to study, lodging and boarding of the students across 3 residential schools in Bhubaneswar (Kalinga Institute of Social Sciences) and Koraput (Koraput Development Foundation and Bikash Vidyalaya). The funding for residential education for the enrolled students is planned till they complete schooling.

Water and Energy study in 142 periphery villages of Damanjodi

To take up projects which will have long term impact, NALCO Foundation, CSR arm of your Company has engaged Centre for Rural Energy and Water Access (CREWA) in Damanjodi. They have completed the study in the periphery villages of M&R Complex spread over 5 blocks of Koraput i.e. Laxmipur, Narayanpatna, Koraput, Dasmantpur and Semiliguda (including Sunabeda NAC) and also submitted draft report of the study. It is a comprehensive baseline survey capturing basic socio-economic dimensions along with the possibility of undertaking interventions related to water and energy solutions. This information will be helpful in planning of short term and long term interventions by Nalco Foundation.

In addition to the above, various CSR initiatives through NALCO Foundation include;

- Creating awareness about Malaria and distribution of Mosquito Nets.

- Propagation of safe drinking water by distributing water filters.

- Assisting establishments of remedial schools for drop-out children in the 5 peripheral villages of Damanjodi.

- Funding Rs. 4.08 Crfor setting up an ITI at Marichamal.

- Distribution of sports kits and educational kits in 16 periphery villages.

- Provision of drinking water through community-managed Gravity Fed Water Supply Systems in 7 villages of Gudem Kotha Veedhi Mandal (Visakhapatnam).

- Renovation of existing community water structures at Bodapadu village (Pottangi).

- Drinking water provision in Eklavya Model Residential School at Punger (Pottangi).

- Economic development through goat rearing in Bhitargarh and Kapsiput (Damanjodi).

- Promotion of solar energy in rural households by distribution of solar lanterns in periphery villages of Damanjodi.

In recognition of the CSR activities, NALCO received the following awards during 2012-13;

- Think Odisha Leadership award for the Education Initiatives in Tribal Beltof Koraput.

- I PE CSR Corporate Governance Award.

- ''Caring Company Award'' at World CSR Congress.

- Best Corporate Social Responsibility Practices 2013 Award at the Responsible Summit andAwardsheld in Mumbai.

Visit of Parliamentary Committee

During the year 2012-13, Departmental Related Parliamentary Committee on Personnel, Public Grievances, Law and Justice visited Bhubaneswar from 15.02.2013 to 17.02.2013 and had interactions with the senior officials of your Company.

Awards & Recognitions

Your Company received the following awards during the year 2012-13, which stands ample testimony for the excellent performance of your Company in various fields:

i) Dun & Bradstreet''s Best PSU Award in Non-Ferrous Metal Category.

ii) Performance Excellence Award for the year 2010-11 instituted by Indian Institute of Industrial Engineering (IIIE), Mumbai.

iii) Best Mother Plant award for the year 2012 in appreciation of its dedicated efforts to promote Micro, Small and Medium Enterprises in Odisha.

iv) Think Odisha Leadership Award instituted by the Times of India Group for the Education Initiative in Tribal Belt of Koraput.

v) The prestigious "Non-ferrous Best Performance Award:2011 - 12" instituted by the Indian Institute of Metals, in the category of large integrated plants.

vi) IPE-CSR Corporate GovernanceAward.

vii) Global HR ExcellenceAward at World HR Congress.

viii) The Caring CompanyAward at World CSR Congress.

ix) EEPC INDIA (Eastern Region)''s Gold Trophy as Top Exporter from Eastern Region in Large Enterprise category fortheyear2010-11.

x) The Star Performer Award for the highest export in the category ofAluminium and Articles for 2011-12.

xi) Gem Granites Environment Award - 2012-13, instituted by FIMI.

Projects Under Implementation Alumina Refinery-Upgradation Project

Capacity upgradation of 4th Stream of Alumina Refinery from 5.25 lakh TPY to 7.0 lakh TPY and that of Bauxite Mines from 6.3 Million TPY to 6.825 Million TPY at an estimated project cost of Rs. 409 crore is in progress since August, 2008. Commissioning activities have commenced in December, 2012. The plant is in the process of stabilization.

Utkal-ECoal Block

Your Company has taken up the Utkal-E Coal Block at an estimated cost of Rs. 337.61 crore at May, 2011 price level.As per the Feasibility Report, the total mineable reserve is 67.49 mln tons. The mine life works out to over 30 years at the target production of 2.0 mln tons per year.

Activities for acquisition of Govt. as well as private land, forest clearance, construction of R&R colony and appointment of MDO are at hand. The project is likely to become operational by December, 2014.

47.6 MW Wind Power Project-II in Rajasthan

You will be pleased to know that your Company has placed order on M/s. Gamesa Wind Turbines Pvt. Ltd. for setting up of 2nd wind power project of 47.6 MW at Jaisalmer, Rajasthan at an investment of Rs. 283 Crore. 36 turbines out of 56 have already been commissioned and generating power and the balance are under commissioning.

Amperage increase at Smelter

Smelter pot lines are operating with AP''s 180 KA technology for last two and half decades. Globally, most of the AP-18 Smelters have migrated from 180 KAto 220 KA technologies for enhancing pot productivity without major changes in the pot shell.

Your Company has undertaken a comprehensive study for higher amperage i.e 400 KAor above after dismantling the existing setup partially or fully vis-a-vis raising amperage to 195 / 220 KA, to improve productivity.

MoU Performance

Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated ''Excellent''with rating score of 1.45 as per the Memorandum of Understanding (MoU), signed by the Company with the Government of India forthe Financial Year 2012-13.

Implementation of Official Language Policy

Your Company continued its efforts for implementation of the Official Language Policy in compliance with the Official Language Act,1963 and the Official Language Rules,1976 and accordingly, took steps for progressive improvement in use of Hindi in all its offices. Major steps taken during the year under report are;

- All the documents falling under Section 3(3) of Official LanguageActwere issued in bilingual form.

- Incentives & cash awards were given to 89 employees who passed Praveen and Pragya examinations in Hindi under Hindi Teaching Scheme, Govt. of India.

- The Official Language Implementation Committee Meetings were held at Corporate Office, S&P Complex and M&R Complex.

- Four Hindi Workshops were organized and 97 employees were trained in the said Hindi workshops.

- Hindi week and Hindi Day were observed from 07.09.2012 to 14.09.2012 at Corporate Office. Many competitions were organized for Hindi speaking, Non-Hindi speaking employees and students and prizes were given. Likewise Hindi Fortnight was observed from 10.09.2012 to 28.09.2012 at S&P Complex, Angul and Hindi Week was observed from 03. 09.2012 to 10.09.2012 at M&R Complex, Damanjodi.

Vigilance

The Vigilance setup of the Company is an extended wing of CVC and works under direct supervision of Chief Vigilance Officer. The department has three wings, at Corporate Office, Bhubaneswar, at Smelter & Power Complex, Angul and at Mines & Refinery Complex, Damanjodi. In line with CVC guidelines, vigilance department carries out various preventive vigilance checks and inspections including CTE type intensive examination of works. Vigilance Department acts as an aid and assistance to the management in detecting and preventing corruption, which may creep in innocuously, during various operations of the organization. With the advice of Central Vigilance Commission and persistent efforts by the Vigilance department, the Company has implemented IT for various functions, including e-payment, which has reached about 99% of the total payments. During this year, e-tendering in some more functions have been done successfully.

For creating awareness and sensitizing the employees, Vigilance Awareness Week was celebrated from 29.10.2012 to 03.11.2012 at all the units including Corporate Office and regional offices. Various programs like seminars, quiz and elocution competitions were organized in Hindi, Odia and English among employees and schoolchildren.

10 Vigilance Awareness training programmes were conducted at different locations of the Company to create awareness on various vigilance functions.

Sustainable Development Report/Business Responsibility Report

The first Sustainable Development report of your Company was brought out for the financial year 2011-12. This report is based on the National Voluntary Guidelines of Ministry of Corporate Affairs, Govt. of India and SEBI guidelines. The Business Responsibility Report for the year 2012-13 is placed at Annexure-I.

Conservation of Energy, TechnologyAbsorption and Foreign Exchange Earning and Outgo

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 given in the Annexure-II to this report.

Particulars of Employees

A statement giving details of employees in receipt of remuneration of Rs. 5 lakh per month or Rs. 60 lakh per annum as prescribed under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, during the year2012-13 is placed at Annexure-III to this report. Listing in Stock Exchanges & Paymentof Listing Fees The equity shares of your Company continued to be listed on BSE Limited and NSE Ltd, the premier stock exchanges of the country having nation wide terminals. The listing fee for the year 2012-13 was paid to these stock exchanges on time.

Payment ofAnnual Custodial Fees to Depositories The in-house Share Registry of your Company is providing services for both physical and electronic segments of share transfer and allied activities under one roof as per SEBI guidelines. For the purpose of holding shares in electronic mode your Company has established direct electronic connectivity with both the Depositories (NSDL & CDSL) since the Depository services started in India. Annual connectivity fees and custody charges for the year 2012-13 were paid to both NSDL and CDSLon time. Directors'' Responsibility Statement

Your Directors, pursuant to the provisions of Section 217(2AA) of the CompaniesAct, 1956, hereby confirm:

- That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

- That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company forthat period.

- That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and;

- That the directors have prepared the annual accounts on a going concern basis.

Corporate Governance

As per Stock Exchange listing requirements and DPE Guidelines, a report on Corporate Governance is prepared and placed at Annexure-IV to this report. Your Company, like previous years, got the Secretarial Audit carried out voluntarily by a practicing Company Secretary for the year 2012-13 as a part of good Corporate Governance practice and the Secretarial Audit Report is placed at Annexure-V to this report.

Management Discussion &Analysis Report

Management Discussion & Analysis report is placed at Annexure-VI to this report.

C&AG Comments

Comments of the Comptroller and Auditor General of India (C &AG) under Section 619(4) of the Companies Act, 1956 on the Accounts of your Company for the year ended March 31, 2013 are enclosed.

Public Deposits

During the year under report, your Company neither accepted nor renewed any public deposits.

Auditors

Your Company appointed the following auditing firms for carrying out various audit functions of your Company for the financial year 2012-13:

a) StatutoryAuditors : M/s C.K. Prusty & Associates and M/sAgasti &Associates.

b) CostAuditors : M/s S. Dhal & Co.

c) SecretarialAuditors: M/s D.S. Mishra &Associates.

d) InternalAuditors :

M/sTej Raj & Pal (for Corporate Office, Bhubaneswar)

M/sB. N. Mishra &Co. (forSmelterPlant,Angul) M/sGNS&Associates (forCPP, Angul)

M/s G.R Kumar & Co. (for M&R Complex, Damanjodi & Port Facilities, Visakhapatnam)

M/s P. Agarwal & Associates (for Northen Regional Office, New Delhi)

M/s DPSV &Associates (for Eastern Regional Office, Kolkata)

M/s Kumbhat & Co. (for Southern Regional Office, Chennai)

M/s Thingna & Contractor (for Western Regional Office, Mumbai)

Directors

The changes that took place in the Board of Directors of your Company since the last report are given below:

Appointment

- Shri Ansuman Das was appointed as Chairman-cum- Managing Director of the Company w.e.f. 19.07.2013. He is also holding additional charge of the post of Director (Finance) w.e.f. 10.05.2013 and the additional charge of the post of Director (Commercial) w.e.f30.7.2013.

- Ms.Gauri Kumar, IAS, Special Secretary, Ministry of Mines, Govt. of India was appointed as a Part-time Official Director for the period from 24.09.2012 to 30.06.2013.

- Shri S.C. Padhy was appointed as Director (HR) w.e.f. 20.12.2012.

- Shri Durga Shanker Mishra, IAS, Joint Secretary, Ministry of Mines, Govt. of India was appointed as a Part-time Official Director for the period from 26.02.2013 to 21.04.2013. He was again appointed as a Part-time Official Director w.e.f. 04.7.2013.

Cessation

- Shri Joy Varghese, Director (P&A), ceased to be a Director on the Board of your Company w.e.f. 31.08.2012 on attaining the age of superannuation.

- Shri A. K. Srivastava, Chairman-cum-Managing Director, who was under suspension w.e.f. 26.02.2011, was terminated from the services by the Govt. of India w.e.f. 11.12.2012.

- Shri Arun Kumar, IAS,Joint Secretary, Ministry of Mines, Govt, of India ceased to be a Part-time Official Director on the Board of your Company w.e.f. 26.02.2013.

- Shri B. L. Bagra, Director (Finance), ceased to be a Director on the Board of your Company w.e.f. 01.05.2013 on completion of his term of appointment.

- Ms.Gauri Kumar IAS ceased to be a Part-time official Director on the Board of your Company w.e.f. 01.07.2013.

Your Directors wish to place on record their appreciation for the valuable services rendered by Shri Joy Varghese, Shri A. K. Srivastava, Shri Arun Kumar, Shri B. L. Bagra and Ms. Gauri Kumar during their tenure on the Board of your Company.

Acknowledgement

Your Directors wish to acknowledge and express their gratitude for the co-operation and valuable guidance received from the Ministry of Mines and other Ministries/Departments of the Government of India and the support received from the Government of Odisha, Mahanadi Coalfields, Indian Railways, other Government agenciesand CPSEs.

Your Directors express their sincere thanks to the Comptroller and Auditor General of India, the Principal Director of Commercial Audit & Ex-officio Member, Audit Board, StatutoryAuditors, Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers and JV Partners forthe co-operation rendered by them.

Your Directors also wish to express their gratitude to the shareholders of the Company for the confidence reposed by them in the managementofthe Company.

Your Directors acknowledge and place on record their appreciation for the continued support and co-operation received from various domestic and international customers, vendors, solicitors, business associates and also look forward for maintaining such mutually supportive business relationship in the coming years too.

Your Directors also wish to put on record their deep sense of appreciation forthe hard work and dedicated contribution made by all the employees at their levels of work and forthe active support and co-operation received from the Trade Unions & Officers'' Associations during the year under report.

For and on behalf of Board of Directors

(Ansuman Das)

Chairman-cum-Managing Director

Place : Bhubaneswar

Date : 20.08.2013


Mar 31, 2012

The Directors have great pleasure in presenting the 31st Annual Report of your Company together with the audited statement of accounts and Auditor's Report thereon for the financial year 2011-12.

PERFORMANCE HIGHLIGHTS

You will be pleased to know that your Company has achieved the highest ever performance in Bauxite transportation of 50.03 lakh MT (against Previous best of 48.79 lakh MT achieved in 2009-2010). alumina hydrate production of 16.87 lakh MT, ( against the previous best of 15.92 lakh MT achieved in 2009-10) and Special Grade Hydrate(SGH) production of 9.851 MT(surpassing the previous best of B,649 MT achieved in FY 2009-10). Smelter achieved capacity utilisation of 90% with cast metal production of 4.13 lakh MT against the previous best of 4.441 lakh MT achieved in the year 2010-11. The production of metal was lower mainly due to coal constraints and low metal price in later part of the year. CPP achieved 'Net Power Generation' of 6,200 MU(at 66.25% PLF) against the previous best of 6.608 MU achieved in 2010-11. Power generation was reduced due to coal constraints.

Production achieved during the year under report vis-a-vis the previous year is given below:

Unit 2011-12 2010-11

Bauxite MT 50,02,626 48,23,908

Alumina Hydrate MT 16,87,000 15,56,000

Aluminium MT 4,13,089 4,43,597

Electricity(Net) MU 6,200 6,608

You will be Pleased to know that your Company could save an operating cost of about RS. 95 crore during the year under report by getting a favourable order from OERC to register Steam and Power Plant at Domanjodi as a co-generation unit there by complying the requirements as an obligated entity under the OERC(Renewable and co-generation purchase obligation and its compliance)regulation 2010. Under the regulation your Company has to consume 5% power from renewable and co-generation sources, out of its total consumption from captive sources. The 5% consumption from renewable and co-generation sources comprises of 3.7% from co- generation sources, 1.2% from Non-Solar sources and 0.1% from Solar sources. The reference to co-generation RPO compliance for coming years will be met from our own co-generation plant. However, despite above, full RPO could not be met and Rs. 9.01 crore had to the spent on purchase of RECs. With commissioning of Wind Power Plant in current year, such expenditure is expected to the reduced.

Sales Performance

You will be Pleased to know that as a proactive approach for providing customized products to our customers, your Company has introduced Chequered Sheets, a new product in its sales mix during the year Your Company achieved total sale of 4,15,916 MT Aluminium metal during the year as against sale of 4,38,952 MT metal achieved in preceding year. This included sales of 21,552 MT of Rolled Products.which was the highest ever surpassing the previous best of 20,152 MT achieved during the Previous year.

The Domestic sale of Chemicals(Alumina/Hydrate/Special Alumina/Special Hydrate)was 49,844 Mt, the highest ever surpassing the previous best of 42,062 MT achieved in 2010-11.The Domestic Chemicals sale included 10,052 MT of specially alumina, the highest ever surpassing the previous best of B,376 MT achieved during 2009-10 and 13,725 MT of alumina hydrate, also the highest ever surpassing the previous best of 12,623 MT achieved during 2009-10.

The sales break-up is as follows:

Unit 2011-12 2010-11 Export Alumina MT 792,552 639,855

Aluminium MT 98,399 98,200 including

Rolled Products

Domestic Alumina & Hydrate MT 49,844 42,082

Zeolite-A MT 409 3,854

Aluminium MT 317,517 340,752

Total Metal Sale MT 415,916 438,952

Total Chemical Sales MT 842,396 681,919

Finance

Despite increase in the income from RS. 6,410 crore during 2010-11 to Rs.7,154 crore during 2011-12, the pr0fit after tax has gone down from RS. 1,069 crore (2010-11) to Rs 850 crore (2011-12) due to increase in operating cost. The operating expenses were higher by about RS. 1,003 crore during the year over the previous year mainly due to increase in prices of various input materials, impact of non-executive pay revision and increase in volume of production in Refinery. The details of financial performance is given below: (Rs. in crore)

2011-12 2010-11

Income 7,154 6,410

Expenses 5,958 4,888

Profit Before Tax(PBT) 1,198 1,524

Tax 348 455

Profit After Tax 850 1,069

Dividend and Appropriations

You will be happy to know that your Company paid an Interim Divided for the year 2011-12 @ Rs. 0.90 per share(18%) in March, 2012. The Board of Directors of your Company have recommended payment of final dividend @ Rs. 0.10 per share (2%) making aggregate of RS. 1.00 per share(20%)for the year 2011-12 as against Rs. 2.50 per share (RS.2 per pre-split and bonus share of RS. 10 each (10%) as interim dividend and Rs.o.50 per post split and bonus share of Rs. 5 each (10%) as final dividend) paid for the previous year 2010-11. Year Directors have recommended a lower rate of dividend keeping in view the falling profit margins due to slow down of global economy affecting industrial growth and also keeping in view the requirement of funds for the growth projects under consideration by your Company. The final dividend will be paid after your approval in the Annual General Meeting.

Your Directors propose to transfer RS. 550 crore to General Reserve Account from the profit of the year 2011-12 as against Rs. 770 crore transferred in the previous year.

Presidential Directives

As per Presidential Directives, steps were taken for recruitment of SC/ST candidates. Your Company also complied with the provisions of the Persons with Disabilities Act,1995. As on 31.03.2012, out of the total 7,705 employees (including trainees) on the rolls of the your Company, there were 1,240 (16.09%) SCs. 1.378(18.88%) STs, 776(10.07%)OBCS and 77 (1.00%) Persons with Disabilities. Every third employee in your Company either belongs to SC or ST category. The total number of lady employees in the organization as on that date was 355.

Industrial Relations

Human excellence and cordial industrial relations continued to remain the crore strengths of your Company during the year under report. The strong ethos of collective excellence was balstered during the year with the signing of 5th Long Term Wage Settlement (LTWS) for non-executive employees of your Company covering a period of 10 years effective from 01.01.2007, in a peaceful and cordial atmosphere. Several measures have been included in the 5th LTWS for controlling labour costs in your Company in the long run, results of which are expected to be realized in due course. The healthy industrial relations climate during the year helped your Company in sailing through tough times on production front.

CORPORATE SOCIAL RESPONSIBILITY

As a responsible corporate citizen, NALCO has been allocating 2% of its net profit for social sector activities - 1% through periphery Development(PD) Programme regulated by the State Government and 15 through the company's CSR arm NALCO Foundation,which was set up in July 2010, following the CSR Guidelines for CPSEs issued by the Department of Public Enterprises, Govt. of India. For the 2011-2012 financial year, altogether Rs. 21.38 crore was allotted for the purpose. As per policy, the unspent amount is not losable at the end of the year.

During the fiscal, 1,109 camps were organized through four Mobile Health Units (MHUs) under the PD Programme, treating 50,938 patients with free medicines. NALCO Foundation also started a new MHU, in collaboration with Wockhardt Foundation in Damanjodi sector from mid-February 2012.

Altogether 76 projects were completed at Angul during 2011-12 at a total cost of Rs. 2.88 crore. out of these, 42 projects were executed directly by the Company and rest 34 through district administration.

NALCO Foundation started 27 projects, mostly in the tribal dominated Darnarjodi sector, at a financial contribution of Rs 8.24 crore. During the fiscal, 10 projects have been completed.

The emphasis was on providing drinking water through dug wells as well tube wells, providing medical facilities through operation of Mobile Health Units, imparting livelihood trainings, providing appliances to physically challenged persons, renovation of infrastructure facilities etc.

Visit of Parliamentary Committees:

The following Parliamentary Committees visited your Company and held discussions with Company management during the year under report:

- Department Related Parliamentary Committee on Industries on 30th June,2011

- Third Sud-Committee of the Committee of Parliament on Official Language on 30th September,2011.

- Hindi Salahkar Samiti of Ministry of Mines visited Bengaluru Office on 17th October,2011.

- Parliamentary Consultative Committee of Ministry of Mines discussed matters related to your Company on 18th November, 2011.

- Parliamentary Committee on Welfare of Scheduled Castes & Scheduled Tribes on 20th January,2012.

- Parliamentary standing Committee on Coal & Steel on 25th February,2012.

Awards & Recognitions:

Your Director are pleased to inform you that your Company received the following awards in various field during the year 2011-12:

- PSE Excellence Award 2011, in the Maharatna and Navratna category, for instituted by the Department of Public Enterprises, Govt,. of India and India Chamber of Commerce.

- Top Export Award of CAPEXIL, for outstanding export performance during 2010-11.

- Best Exporters' Award from Directorate of Export Promotion and Marketing, Govt. of Odisha for outstanding export of Alumina and Aluminium for the year 2009-10.

- Prestigious National Energy Conservation Award for the year 2011 from Ministry of Power for smelter plant at Angul.

- Three prestigious awards: "CEO with HR Orientation", "HR Leadership Award" and "Organization with Innovative HR Practices" at the Global HR Excellence Awards ceremony during World HRD congress-2012.

EXPANDED CAPACITIES 2nd Phase Expansion Project

You will be pleased to know that with the commissioning of 4th Stream of Alumina Refinery during the year, the 2nd Phase Expansion Project of your Company syands completed. The details of earlier capacity and present capacity after 2nd Phase expansion of your Company are as under:

Sl. Project Segment Capacity before2nd Capacity after 2nd No.

1 Bauxite Mine 48 Lakh TPY 63 Lakh TPY

2 Alumina Refinery 15.75 Lakh TPY 21 Lakh TPY

3 Aluminium smelter 3.45 Lakh TPY 4.6 Lakh TPY

4 Captive Power 960 MW 1,200MW Plant

ONGOING EXPANSION PROJECTS

1. Alumina Refinery- Upgradation Project

Capacity Upgradation of 4th Stream of Alumina Refinery from 5.25 lakh TPY to 7.0 lakh TPY and that of Bauxite Mines from 6.3 Million TPY to 6.825 Million TPY at an estimated project cost of Rs. 409 crore is in Progress. Overall physical progress upto 81% has been achieved. The project is scheduled to be commissioned during the course of current year.

2.Utkal- E Coal Block

Utkal- E Coal Block project at an estimated cost of Rs. 337.61 crore (at May,2011 price level) is in progress. it has a mine-able reserve of around 67.49 mln tons.

Almost all statutory clearances have been received. Activities for acquisition of Govt. as well private land and construction of rehabilitation colony are at hand.

3.3rd Phase Expansion Project

The Company has initiated activities for 3rd Phase brown field expansion at existing facilities at Angul and Damanjodi, in Odisha at an estimated investment Rs. 7.500 crore.

The status of projects is as under:

a) Amperage increase at Smelter

Smelter pot lines operating at 180 KA for the last two and half decades, have been taken to enhance current to 220 KA, at an outlay of RS 900 crore and the capacity of plant will be enhanced by 1.07 lakh MT, to 5.67 lakh MTPA. preparation of Detailed Project Report and Environmental Impact Assessment (EIA) study is in Progress.

b) 500MW power plant at CPP

The proposed 500MW power plant at CPP will meet the Power requirement for the technology up gradation of Smelter Pot line besides export of surplus power to State grid. Project cost is estimated at Rs. 2,522 crore(August 2009 price level).

c) 5th stream at Alumina Refinery

Your Company has plans to add one more stream to existing four streams in Alumina Refinery. The capacity of the stream will be in million tones per annum and investment will be Rs. 4,000 crore approximately. Activities for preparation or DPR are in hand.

4.50 MW Wind Power Plant

In line with the vision of the Company and in pursuit of endeavor to harness the potential in renewable energy sources,your Board has approved the investment of RS. 274 crore for setting up 50 MW Wind Power Plant in Andhra Pradesh. Manufacturing of all equipments has been completed. have reached the site. Stage-II Forest Clearance for the Project is being pursued with Ministry of Environment & Forests for commissioning of the plant.

5. Nuclear Power Plant in Joint Venture

Your Company has entered into joint venture with Nuclear Power Corporation of India Ltd. for setting up of 1400MW nuclear power plant in Gujarat at an estimated cost of Rs. 11.459 crore. Your Company's present equity share is 26% and the same would be increased to 49% after approval of the Govt. of India.

MoU PERFORMANCE

Your Company is likely to be rated 'Very Good' under Memorandum of Understanding (MoU), signed by the Company with the Government of India for the Financial Year 2011-12, based on achievement of financial results as well other parameters laid down by the evaluation of performance of the Company.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

Your Company continued to pay special attention for propagation of Hindi in the Company you will be pleased to know that 27 Employees of your Company passed 'Praveen' Examination and 49 employees passed 'Pragya' Examination held in the month of may and November, 2011 under Hindi Teaching Scheme of Govt, of India. Your Company observed Hindi Day, Hindi week and Hindi fortnight and organised Hindi Kavi Sammelan. Several competitions were organised amongst Hindi speaking and Non-Hindi speaking employees during Hindi Week celebrations at all the units of the Company. There Hindi Workshops were organised during the year for those employees who have acquired working knowledge in Hindi after passing Praveen and Pragya Examinations. The Hindi version of NALCO Website has been launched as A PART OF YOUR Company's efforts for promoting Rajbhasha. Official correspondences were also made in Hindi during the year under report as per the norms of the Official Language Implementation Policy of Govt. of India ."THE PARICHAYA". Quarterly House Joumal of your Company was published in Hindi regularly

VIGILANCE

The Vigilance set up exists in the Company at its three sites namely Smelter & Power Complex , Mines & Refinery Complex and Corporate Office. Broadly, vigilance department activities in the Company consist of carrying out various checks/insections such as surprise checks, sample tests, regular insections, CTE type intensive examination of works / contracts etc. under preventive vigilance drive. Vigilance Department often acts as an aid and assistance to the management in detecting corruption that may creep in innocuously during various transactions in the organization.To reduce chances of corruption, the Company has been using technology in the vigilance advice, the Purchase Manual of the Company was revised during the year under report.

For creating awareness amidst employees, Vigilance Awareness Week was celebrated from 31.10.2011 to 05.11.2011 at all the units and regional offices of your Company and Programmes like seminars, elocution competitions among school and college students were organized in Hindi Oriya and English languages. 14 training programmes were organized at different locations of the organization for sensitizing employees on the evil effects of corruption.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO.

The particular relating to Conservation of energy, Technology Absorption, Foreign Exchange Earnings and out go, as required to be disclosed under Section 217(1Xe) of the Companies Act, 1956 read with the Companies(Disclosure of Particulars in the Report of Board of Directors)Rules, 1988 are given in the Annexure-1 to this report.

PARTICULAR OF EMPLOYEES

None of the employees of your Company was in receipt of remuneration of RS. 5 lakh per month or Rs. 60 lakh per annum as prescribed under Section 217(2A) of the Companies Act, 1956, read with the Companies( Particulars of employees)Rules, 1975 as amended, during the year under report.

LISTING IN STOCK EXCHANGE & PAYMENT OF LISTING FEES

The equity shares of your Company contained to be listed on Bombay Stock Exchange Limited, Mumbai (BSE) and National Stock Exchange of India Limited(NSE). The listing fee the year 2011-12 was paid to these Stock Exchanges on time.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, Directors of your Company hereby confirm:

- that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure

- that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as give a true and fair view of the state of affairs of the Company at the end the financial year and of the profit of the Company for that period;

- that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act , 1956 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities and

- that the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A report on Corporate Governance as per SEBI guidelines. Stock Exchange listing requirements and DPE guidelines is placed at Annexure -II to this report. Like previous years, as Company voluntarily got the Secretarial Audit carried out for the year 2011-12 also and report of the Secretarial Auditors is placed at Annexure-III to this report.

MANAGEMENT DISCUSSION & ANAYSIS REPORT

Management Discussion & Analysis report is placed at Annexure-IV to this report.

C & AG COMMENTS

Comments of the Comptroller and Auditor General of India (C & AG) under Section 619(4) of the Companies Act, 1956 on the Accounts of your Company for the year ended March 31, 2012 are enclosed.

PUBLIC DEPOSITS

Your company neither accepted nor renewed any public deposits during the year 2011-12.

AUDITORS

The following auditing firms were appointed to be the auditors of your Company for the financial year 2011-12:

a) Statutory Auditors : M/s C.K.Prustry & Associations and M/s Agasti & Associates.

b) Cost Auditors : M/s Dhal & Co.

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

d) Internal Auditor : M/s B.N. Mishra & Co., M/s MKPS & Associates and M/s Patra & Co.

DIRECTORS

The following changes took place in the Board of Directors of your Company since the last report:

Appointment:

- Shri B L Bagra, Director(Finance) continued to held the addition change of the post of CMD of your Company in addition to his present assignment w.e.f 27.02.2011.

- Shri G P Joshi and Shri S S Khurana were appointed as Independent Directors with effect from 15.09.2011.

- Shri S S Mahapatra was appointed as Director (Production) With effect from 01.10.2011.

- Shri Madhukar Gupta and Shri G H Amin were appointed as Independent Directors with effect from 27.12.2011.

- Shri N R Mohanty was appointed as Director(Projects & Technical) with effect from 01.02.2012.

_ Shri Arun Kumar, Joint Secretary, Ministry of Mines, Govt. of India was appointed as a Part Time Official Director w.e.f 30.04.2012.

- Shri Qaiser Shamim and Shri Sanjiv Batra were appointed as Independent Directors with effect from 10.07.2012.

Cessation:

- Shri S K Nayak, Joint Secretary, Ministry of Mines, Govt. of India ceased to be a Part-time Official Director on the Board of our Company w.e.f.05.09.2011

- Shri A K Sharma,Director(Projects & Technical)ceased to be a Director of the Company w.e.f.31.01.2012 on attaining the age of superannuation. - Shri S K Srivastava, Spl. Secretary, Ministry of Mines, Govt. of India ceased to be a part -time Official Director on the Board of your Company w.e.f.31.05.2012.

your Directors wish to place record their appreciation for the valuable services rendered by Shri S K Nayak, Shri A K Sharma, Shri P K Padhi and Shri S K Srivastava during their tenure on the Board of your Company.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the valuable guidance and co-Operation received from the Ministry of Mines and other Ministries / Departments of the Government of Odisha, Mahanadi Coal fields. Indian Railways and other Government agencies.

Your Directors express their sincere thanks to the Comptroller and

Auditor General of India, the Principal Director of Commercial audit & Ex-Officio Member, Audit Board, Statutory Auditors. Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers and JV Partners for the co-operation extended and services provided by them.

Your Directors also place on record their gratitude to the shareholders of the Company for the confidence reposed by them in the Management of the Company.

Your Directors place on record their appreciation for the continued support and co-operation received from various domestic and international customers, vendors, solicitors, business associates, Trade Unions and the Officers' Associations during the year under report and also look forward for continuance of such mutually supportive relationship in future as well.

Last but not the least, year Directors express their appreciation to the nurturing effects put in by all the officers and employees at various levels and their support over the years which has enabled your Company to achieve the present position and hope that with such continued support, your Company will grow from strength to strength and would be able to expand its area of activities, scale greater heights of success and contribute positively for better stakeholders' delight.

For and on behalf of Board of Directors

(B.L.Bagra)

Chairman-cum-Managing Director


Mar 31, 2011

Dear Members,

The Directors have the pleasure in presenting the 30th Annual Report of your Company together with the audited Statement of Accounts and Auditors' Report thereon for the financial year 2010-11.

Performance Highlights

Production

You will be pleased to know that during the year, the Aluminium Smelter and Captive Power Plant of your Company recorded the highest-ever production since inception. The level of capacity utilization at Mines (100.5%), Refinery (98.8%), Smelter (96.4%) and CPP (91.7%) respectively was achieved at a satisfactory level for the year under review, as can be seen from the following:

Product Unit Capacity 2010-11 2009-10

Bauxite MT in lakh 48.00 48.24 48.79

Alumina Hydrate MT in lakh 15.75 15.56 15.92

Aluminium MT in lakh 4.60 4.44 4.31

Electricity (Net) MU 1,200 MW 6,608 6,293

Drop in Alumina Hydrate production, during the year, was due to shut down of plant for pending maintenance jobs and attending hook-up jobs under expansion project . Bauxite transportation was in line with the demand of Alumina Refinery.

Sales

You will be pleased to know that your Company achieved the highest-ever domestic metal sale of 340,752 MT which was 17.9% higher than the last year, surpassing the previous record of 289,032 MT achieved in 2009-10 . Total metal sale of your Company during the year under report was 438,952 MT, which is the highest-ever surpassing the previous best of 435,979 MT achieved during the previous year. This has been possible due to rise in demand for aluminium and improvement in Company's share in the domestic market. Besides, your Company also widened its international customer base for metal by adding new overseas clients during the year.

In the value-added segment, the Company sold 20,126 MT of Rolled Products, which was the highest ever surpassing the previous highest sale of 15,092 MT achieved in 2009-10. During the year, your Company exported 4,614 MT of billets, after a gap of almost a decade.

Higher production and sale of rolled products and billets resulted in increased share of value-added products in your Company's operations.

The Alumina/Hydrate sale of 681,917 MT during the year under report was 8.4% less than the previous year's sale of 744,069 MT, due to higher consumption in Smelter Plant for producing more aluminium metal, thereby resulting in less availability of alumina for sale compared to last year.

The domestic sale of Alumina and Special Grade Alumina at 16,411 MT and 7,635 MT respectively was the highest-ever recorded. In addition, domestic sale of total Chemicals (Alumina/Hydrate/Special Grade Alumina/Special Grade Hydrate/Zeolite) of 45,916 MT achieved during the year was the highest-ever surpassing the previous highest of 44,420 MT achieved in 2009-10.

Finance

You will be pleased to know that your Company has earned a net profit (after tax) of Rs.1,069 crore for the year, as compared to Rs.814 crore for the previous year, recording an increase of 31%. Sales revenue during the year at Rs.5,959 crore was 18% higher as compared to the previous year. The operating cost was higher by Rs.399 crore, an increase of 10% over the previous year, due to increase in prices of coal, fuel oil and provisioning for wage revision. The profit before tax for the year was higher because of higher sales realization as compared to the previous production and sale of metal. The results would have been still better, but for the adverse impact of exchange rate of rupee on sales, which made a dent of Rs.159 crore during the year. The depreciation was higher by Rs.103 crore due to commissioning of one more captive power unit during the year and provision for impairment.

The summarized financial results as compared to previous year are furnished below:

(Rs. in crore)

31.03.2011 31.03.2010

Net Sales 5,959 5,055

Other Income 459 493

Total Income 6,418 5,548

Expenses/Operating Cost 4,471 4,072

Gross Margin 1,947 1,476

Less: Interests Depreciation 422 321

Profit Before Tax (PBT) 1,525 1,155

Provision for Taxes 456 341

Profit After Tax (PAT) 1,069 814

Appropriation:

a) General Reserve 770 630

b) Dividend including Dividend Tax 300 188

Basic and Diluted EPS-

Notannualised(in Rs.) 4.15 3.16

Split / Sub-division of Shares and Issue of Bonus Shares

Your Directors are happy to inform you that your Company has successfully implemented (a) Splitting / Sub-division of face value of equity share of Rs.10 each fully paid-up into 2 (two) equity shares of f5 each fully paid-up and (b) issue of Bonus shares to the existing shareholders of the Company in the proportion of l(one) Bonus share for every l(one) existing fully paid-up equity share held (post Split / Sub-division) as approved by the shareholders in the Extra-ordinary General Meeting held on 05.03.2011.

Dividend and Appropriations

You will be happy to know that the Board of Directors of your Company have recommended payment of final dividend @ TO.50 per share on the revised/post-split and bonus issue equity share capital of Rs.1288.62 crore which is 10% on the face value of each equity share of Rs.5, in addition to interim dividend of Rs.2.00 per share already paid on 01.03.2011 on pre-revised/pre-split and bonus issue equity share capital of Rs.644.31 crore, which was 20% on the face value of each equity share of Rs.10. The final dividend so recommended will be paid after approval in the ensuing 30th Annua| General Meeting. A higher amount of Rs.300 crore has been appropriated towards dividend and dividend tax for the year 2010-11 as against Rs.188 crore for the previous year 2009-10.

Your Directors propose to transfer Rs.770 crore to General Reserve Account from the profits of the year under report as against Rs.630 crore transferred in the previous year.

Presidential Directives

Your Company continued to make efforts for recruitment/ promotion of SC/ST candidates in line with the Presidential Directives. The provisions of the Persons with Disabilities Act, 1995 were complied with during the year under review.

As on 31/03/2011, out of total 7,714 employees (including Trainees) on your Company's rolls, there were 1,246 (16.15%) SCs, 1,394 (18.07%) STs, 522(6.77%) OBCs and 77(1.00%) Persons with Disabilities. The total number of lady employees in your Company stood at 354 as on that date. Every third employee in your Company either belongs to SC or ST category.

Industrial Relations

Your Company continued to maintain healthy human relationships and the industrial relations situation remained cordial. HR interventions like participative management across various levels in the organization, openness and transparency in dealing with employees in general and Unions in particular have helped in sustaining harmonious work environment. The recognized Unions have played constructive role as partners in the growth of production, productivity and all-round performance of your Company. The collective bargaining process with the Recognized Unions on the issue of wage revision of non-executive employees remained very constructive and joint efforts are being made to further boost the morale of your Company's employees through an early wage settlement.

Visit of Parliamentary Committees

Parliamentary Committee on Rajbhasha (3rd Sub-Committee) visited and inspected your Company's Western Regional Office at Mumbai on 24.09.2010. Standing Committee on Labour visited S&P Complex, Angul on 22.12.2010. Parliamentary Standing Committee on Industry visited and interacted with Directors and Senior Officials of your Company on 29.06.2011.

Awards & Recognitions

Your Company received the following awards during the year, which stands ample testimony for the good work being done by your Company in various fields.

1. EEPC (All India) Star Performer Award for Outstanding Contribution to Engineering Exports in Large Enterprise Group.

2. 2010 MM- non-ferrous best performance award in category of large integrated production organisation.

3. 1st prize in aluminium sector at the National Energy Conservation Awards - 2010, instituted by the Ministry of Power, Govt, of India.

4. DPE Best Listed CPSE Award for its excellent performance in significant value addition to its shareholders.

5. CSR Award for Best Practices under the 'Global HR Excellence' category at the World HR Congress.

6. 1st prize for Reclamation and Rehabilitation award under the aegis of IBM, Bhubaneswar Region was bagged by Nalco'sPanchpatmali Bauxite Mines.

7. EEPC (Eastern Region's Gold Trophy, as Top Exporter in the Large Enterprise Category.

Ongoing Expansion Projects

You will be pleased to know that all the segments of the 2"d Phase Expansion have been commissioned. The facilities commissioned as part of 2nd Phase Expansion at the Alumina Refinery are under stabilization.

The present capacity of the various project segments of your Company and the capacity after completion of ongoing 2"d phase expansion are given below:

Project Capacity Capacity after Status Segment Prior to 2nd Phase Expansion Expansion

(a) Bauxite 4.8 Mln. 6.3 Mln. Expansion works Mine TPY TPY completed

(b) Alumina 1.575 2.1 Commissioned Refinery Mln. TPY Mln. TPY in June/July 2011

(c) Aluminium 0.345 0.46 Commissioned Smelter Mln. TPY Mln. TPY in December 2009

(d) Captive Power 960 1,200 Full capacity Plant MW MW achieved in August 2010

Upgradation Project: 4th Stream of Alumina Refinery

The upgradation of 4th stream of Alumina Refinery from 0.525 Mln. TPY to 0.70 Mln. TPY and that of Bauxite Mines from 6.3 Mln. TPY to 6.825 Mln. TPY, at an estimated project cost of Rs.409 crore, is scheduled to be commissioned by June 2012. Cumulatively 56.4% of overall physical progress has been achieved.

Extension of Mining Lease

You will be pleased to know that with vigorous efforts, your Company could successfully comply with various requirements for getting the Panchpatmali Bauxite Mining Lease (South Block) extended for further period of 20 years i.e. upto 19.07.2029.

Wind Energy

You will be pleased to know that as a part of diversification plans, your Company is setting up a Rs.274 crore Wind Power Project in Andhra Pradesh with a capacity of 50.4 MW. Under the project, 24 wind turbine generators, each of 2.1 MW capacity are being set up.

Utkal-E Coal Block

You will be pleased to know that Union Coal Ministry has granted its prior approval for mining lease of Utkal-E Coal Block in Angul. It has estimated reserves of around 70 million tonnes and shall cater to the requirement of 9th t0 12th Unit of CPP. The project is estimated to cost Rs.280 crore. The project cost may undergo a change due to revision in cost of rehabilitation and re-settlement colony and cost of acquisition of private land based on recommendation of RPDAC, Angul. The coal block is likely to become operational by June, 2012.

Upgradation of Smelter Potline

The upgradation of Smelter Potline from 180 KA to 220 KA at an estimated investment of Rs.1500 crore for both Smelter and Captive Power Plant is under implementation. On completion of the project, expected during 2017, the capacity of the Smelter Plant would go up by 1 lakh MT per year.

MoU Performance

Your Company is likely to be rated 'Very Good' under Memorandum of Understanding (MoU), signed by the Company with the Government of India for the Financial Year 2010-11 based on achievement of financial results and other parameters laid down by the Department of Public Enterprises (DPE), Govt, of India for evaluation of your Company.

Implementation of Official Language Policy

Your Company continued its efforts to further propagate use of Hindi in the Company. In that direction, activities undertaken during the year are as follows:

- Hindi Day and Hindi Week were observed at Corporate Office, Bhubaneswar from 14.09.2010 to 20.09.2010. Likewise, Hindi Week was celebrated both at S&P Complex, Angul and M&R Complex, Damanjodi.

- Many competitions were organised amongst Hindi speaking and Non-Hindi speaking employees during Hindi Week.

- Three Hindi Workshops were organised during the year for the employees who have acquired working knowledge in Hindi after passing Praveen and Pragya examinations.

- Correspondences in Hindi were also made as per the norms of the Official Language Implementation Policy of Govt, of India.

- 'The Parichaya', quarterly newsletter of your Company was also published in Hindi regularly, besides in English andOdia.

Your Company organised Hindi Salahakar Samiti meeting of Ministry of Mines, Govt, of India at Gangtok from 8th t0 10th September, 2010. Members of Parliament and other officials nominated by the Ministry of Mines participated in this meeting. Deputy Director (Implementation), Eastern Region, Kolkata inspected your Company's Eastern Regional Office at Kolkata on 28.12.2010.

Two meetings of Town Official Language Implementation Committee, Angul were held in June and December, 2010. Similarly, quarterly Official Language Implementation Committee meetings were held in Corporate as well as site offices of your Company.

Vigilance

The vigilance set-up of the Company has three wings: Mines & Refinery Complex, Damanjodi, Smelter & Power Complex, Angul and Corporate Office, Bhubaneswar headed by Chief Vigilance Officer. Due importance was given to preventive vigilance. The Purchase and Contract Manuals of your Company are being continuously revised, duly incorporating CVC guidelines and other systemic improvement/suggestions. To improve transparency, your Company has implemented ERP and IT in the form of e-tendering, e-payments etc. For creating awareness amongst the employees, Vigilance Awareness Period-2010 was observed from 25th October to 1st November 2010 in all the units of your Company. Six training programmes on vigilance awareness were conducted 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

The particulars relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, as required to be disclosed under Section 217(l)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure-I to this report.

Particulars of Employees

During the year under review, no employee of your Company was in receipt of remuneration of Rs.5 lakh per month or Rs.60 lakh per annum prescribed under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975.

Listing in Stock Exchanges & Payment of Listing Fees

Your Company's equity shares of face value of Rs.10 each continued to be listed on Bombay Stock Exchange Limited, Mumbai (BSE) and National Stock Exchange of India Limited (NSE)till 16.03.2011.Consequent upon split/sub-division of face value of each equity share of Rs.10 into 2 equity shares of Rs. 5 each and issue of 1:1 bonus shares of Rs. 5 each as on the Record Date 16.03.2011, 128,86,19,256 bonus shares of« each were also listed and trading permission was given by both BSE and NSE w.e.f. 25.03.2011. The listing fees for listing of both pre-bonus and post-bonus equity shares have been paid to these Stock Exchanges.

Payment of Annual Custodial Fees to Depositories

Your Company has established direct electronic connectivity with the Depositories, NSDL and CDSL, for providing the facility of holding the Company's shares in electronic mode. Annual custodial fees for the year 2010-11 have been paid to both the Depositories.

Directors'Responsibility Statement

Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, Directors of your Company hereby confirm:

- that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

- that the directors have prepared the annual accounts on a going concern basis.

Corporate Governance

A report on Corporate Governance is placed at Annexure-ll to this report. As in previous years, as part of good Corporate Governance practice, Secretarial Audit was voluntarily carried out by your Company for the year 2010-11 and the report of the Secretarial Auditors is placed at Annexure-lll to this report.

Management Discussion & Analysis Report

Management Discussion & Analysis report is placed at Annexure-IV to this report.

C& AG Comments

Comments of the Comptroller and Auditor General of India (C & AG) on the Accounts of your Company for the year ended March 31, 2011 are enclosed.

Public Deposits

Your Company has not accepted or renewed any public deposits during the year 2010-11.

Auditors

The following auditing firms were continued/appointed to be the auditors of your Company for the financial year 2010-11:

a) Statutory Auditors : M/s P.A & Associates and

M/sC.K.Prusty& Associates

b) Cost Auditors : M/s S. C. Mohanty & Associates

Directors

Following were the changes that took place in the Board of Directors of your Company since the last report:

Appointment:

- Shri B L Bagra, Director(Finance) assumed the additional charge of the post of CMD of your Company in addition to his present assignment of Director (Finance) w.e.f. 27.02.2011, consequent upon placement of Shri A K Srivastava,CMD under suspension.

- Shri S K Srivastava, IAS, Addl. Secretary, Ministry of Mines, Govt, of India was appointed as Government Nominee Director with effect from 30.08.2010.

- Shri Ved Kumar Jain was appointed as an Independent Director with effect from 21.03.2011.

- Shri P C Sharma, former Chief Secretary, Govt, of Assam was appointed as an Independent Director with effect from 21.03.2011.

Cessation:

- The tenure of 3 Independent Directors viz. Dr. A Sahay, Shri S S Sohoni and Shri K S Raju ended on 26.09.2010 on completion of their term of appointment.

- The tenure of 5 Independent Directors viz. Shri S B Mishra, Shri N R Mohanty, Dr. Jyoti Mukhopadhyaya, Shri R K Sharma and Maj.Gen.(Retd.) Samay Ram ended on 23.04.2011 on completion of their term of appointment.

Your Directors wish to place on record their appreciation for the valuable services rendered by Dr. A Sahay, Shri S S Sohoni, Shri K S Raju, Shri S B Mishra, Shri N R Mohanty, Dr. jyoti Mukhopadhyaya, Shri R K Sharma and Maj. Gen. (Retd.) Samay Ram during their tenure on the Board of your Company.

Acknowledgement

Your Directors gratefully acknowledge the support, co- operation, and guidance received from various Ministries of the Government of India, particularly Ministries of Mines, Coal and Environment & Forest. Your Directors also express their sincere thanks to the Government of Odisha, Indian Railways, Mahanadi Coalfields 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. Your Directors also place on record their appreciation for the continued co- operation and support received from various customers in India and abroad, vendors, solicitors and business associates during the year and look forward to continuance of this mutually supportive relationship in future as well. Your Directors also acknowledge the constructive suggestions received from the Government and the Statutory and Cost Auditors from time to time.

Your Directors also wish to place on record their appreciation for the hard work and dedicated contribution made by the employees of your Company at all levels to ensure that the Company continues to grow and excel year after year.

For and on behalf of Board of Directors

(B.L.Bagra)

Place: Bhubaneswar Chairman-cum-

Date: 25th August, 2011 Managing Director l/c.












Mar 31, 2010

The Directors have pleasure in presenting the 29th Annual Report of your Company together with the audited statement of accounts and Auditors Report thereon for the financial year 2009-10.

PERFORMANCE HIGHLIGHTS

You will be happy to know that all the production Units of your Company have recorded the highest ever production since inception with respect to Bauxite, Alumina Hydrate, Cast Metal and Power. Mines, Refinery, Smelter and CPP have achieved 101.64%, 101.05%, 99.88% and 88.33% capacity utilization respectively. Production achieved during the year under review vis-a-vis the previous year is given below:

PRODUCTION UNIT 2009-10 2008-09

Bauxite MT 48,78,888 47,00,027

Alumina Hydrate MT 15,91,500 15,76,500

Aluminium MT 4,31,488 3,61,262

(includes Rolled Products) MT (15,277) (13,795)

Electricity (Net) MU 6,293 5,541

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 2004- 05. 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 7,51,41 0 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 sale of 7,094 MT Special Grade Alumina was the highest surpassing the previous high of 4,769 MT achieved in 2008- 09. The sale of Special Grade Hydrate at 1 2,815 MT was the highest ever sale surpassing the previous best of 1 1,670 MT achieved during 2007-08.

FINANCE

Your Company posted a lower total income of Rs. 5,548 crore in the year under report, as against Rs. 5,631 crore during the previous year. Profit After Tax for the year stands at Rs.814 crore, as against Rs. 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 Rs. 2,209 crore during the year as against Rs. 2,071 crore achieved during the previous year.

The summarized financial results for the year under report vis- a-vis previous year are furnished below:

(Rs. in crore)

2009-10 2008-09

Net Sales 5,055 5,108

Other Income 493 523

Total Income 5,548 5,631

Expenses 4,072 3,428

Gross Margin 1,476 2,203

Less: Interest & depreciation 321 276

Profit Before Tax (PBT) 1,155 1,927

Provision for Taxes 341 655

Profit After Tax (PAT) 814 1,272

Appropriation:

a) General Reserve 630 900

b) Dividend including Dividend Tax 188 377 Earning per Share (InRs.) 12.64 19.75

DIVIDEND AND APPROPRIATIONS

Your Company had paid an interim dividend of Rs. 1.50 per share (1 5%) in March, 201 0. The Board of Directors of your Company have recommended a final dividend of Rs. 1.00 per share (1 0%) making aggregate of Rs. 2.50 per share (25%) for the year under report as against Rs. 5.00 per share (50%) paid

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 Rs. 630 crore to General Reserve Account from the profits of the year under review as against Rs. 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 candidate, Your Company is also complying with the provisions of the Persons with Disabilities Act, 1995.

Out of 7,467 employees (including Trainees) on your Companys 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 director, 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

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 Mine, The time tested policy of participative management helped and saw the culmination of several nagging issues through bipartite discussion,

VISIT OF NATIONAL COMMISSION FOR SCHEDULED CASTES

Honble 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 Honble Committee on Public Undertakings (COPU) examined the working of your Company during the year. The Honble Committee has presented its report inter-alia consisting of 1 8 recommendations to the Parliament during April, 201 0. Your Company is taking necessary action on the recommendations of the Honble 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:

- EEPC Gold Trophy, as Top Exporter 2006-07 in the Large Enterprise Category, for outstanding export performance.

- All India Export Award of EEPC as the Star Performer in large enterprise category, for the year 2007-08.

- Best Environment Care and Best Workplace Practices at Think Odisha Leadership Awards function, organized by The Times of India & Teflas.

- Status of Premier Trading House as per Foreign Trade Policy 2009-1 0 by Ministry of Commerce, Govt, of India for the period 2009-1 4.

-Organisation with innovative HR Practices Award at World HRD Congress at Mumbai.

- Alumina Refinery bagged the first Runner-up award from Cll, Orissa State Centre for best Safety, Health & Environment practices and also the Pollution Control Excellence Award 2009 from Orissa State Pollution Control Board.

- Bauxite Mines bagged 1st prize in Reclamation & Rehabilitation from Indian Bureau of Mines (IBM) at Mine Environment and Mineral Conservation Week.

- 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.

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 1 0th 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 Urit Present Capacity

after

Segment Capacity 2nd Phase

Expansion

Bauxite Mine Million Tonnes 4.8 6.3 per year

Alumina Refinery -do- 1.575 2.1

Aluminium Smelter -do- 0.345 0.46

Captive Power Plant MW 960 1,200

Of the approved project cost of Rs. 4,402 crore, financial commitments of Rs. 4,173 crore had been made upto 31.07.201 0.

UP-GRADATION OF 4TH STREAM OF REFINERY

You will be happy to know that your Companys 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, 201 2.

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 1 80 KA to 220 KA at an estimated investment of Rs. 1,500 crore for both Smelter and Captive Power Plant. On completion of the project, the metal production will increase by about

UTKAL-E COAL BLOCK

Your Company has been allotted UTKAL-E Coal Block, having

Mining of coal from the Utkal-E Block is scheduled to commence from June, 201 2, at a capital outlay of Rs. 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 Office, In that direction the following steps were taken during the year under report:

- 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.

- 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 rule,

- Six Hindi workshops were organized during the year under report to enhance the working capabilities of employees who had acquired working knowledge in Hindi.

- 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.

- 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

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 Companys 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 21 7(1 )(e) of the Companies Act, 1 956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1 988 are provided in the Annexure-1 to this report.

PARTICULARS OF EMPLOYEES

Having regard to the provisions of Section 21 9(1 )(b)(iv) of the Companies Act, 1 956, read with the Companies (Particulars of Employees) Rules, 1 975 as amended, the Annual Report of your Company excluding the information on employees in receipt of remuneration of ? 2,00,000 per month or Rs. 24,00,000 per

annum is being sent to all the members of your Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of your Company.

LISTING IN STOCK EXCHANGES

The equity shares of your Company continued to be listed on Bombay Stock Exchange Limited, Mumbai (BSE) and National Stock Exchange of India Limited (NSE). The listing fee has been paid to these Stock Exchanges.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to provisions of Section 217(2AA) of the Companies Act, 1956, Directors of your Company hereby confirm:

. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

. that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

. that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities and

. that the directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company believes that to be a successful company, it must maintain global standards of corporate conduct towards all its stakeholders. Your Company believes that the principles of fairness, transparency and accountability are the cornerstones for good governance. It is the Companys endeavour to continue to achieve the highest levels of governance and to benchmark itself with the best governed companies in the similar trade.

A report on Corporate Governance is placed at Annexure-ll to this report. Like previous years, as a part of good Corporate Governance practice, your Company has voluntarily got the Secretarial Audit carried out for the year 2009-10 and the report of the Secretarial Auditors is placed at Annexure-lll to this report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis report is placed at Annexure- IV to this report.

C&AG COMMENTS

Comments of the Comptroller and Auditor General of India on the Accounts for the year ended March 31, 2010, are enclosed.

C&AG COMMENTS

Comments of the Comptroller and Auditor General of India on the Accounts for the year ended March 31, 201 0, 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 : M/s. P.A & Associates

and M/sCK.Prusty& Associates

b) Cost Auditors : M/s. S C Mohanty & Associates

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

d) Internal Auditors : 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:

- Shri P K Padhi was appointed as Director (Projects technical) with effect from 03.09.2009.

- Shri A K Srivastava was appointed as Chairman-cum- Managing Director with effect from 01.1 0.2009.

- Shri Ansuman Das was appointed as Director (Commercial) with effect from 28.1 0.2009.

- Shri Sundeep Kumar Nayak, IAS, Joint Secretary, Ministry of Mines was appointed as Director with effect from 07.01.2010.

Cessation:

- The tenure of Shri C R Pradhan as Chairman-cum-Managing Director and Shri K K Mallick as Director (Commercial) ended on 30.09.2009 on attaining the age of superannuation.

- Shri V K Thakral, IAS ceased to be a Director with effect from 07. 01.2010.

- 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, VK 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 Auditor,

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

Place :Bhubaneswar (A K Srivastava)

Date : 25.08.2010 Chairman-cum-Managing Director

 
Subscribe now to get personal finance updates in your inbox!