Mar 31, 2023
Your Directors have great pleasure in presenting before you the 42nd Annual Report of your Company together with the audited financial statements (standalone and consolidated) and Auditors'' Report for the financial year ended 31st March, 2023.
1.1 Physical Performance: |
|||
Production |
Unit |
2022-23 |
2021-22 |
Bauxite |
MT |
74,56,776 |
75,11,075 |
Alumina Hydrate |
MT |
21,23,000 |
21,22,000 |
Aluminium |
MT |
4,60,000 |
4,60,000 |
Electricity (Net)-CPP |
MU |
5,788 |
5,712 |
Wind Energy (Net) |
MU |
280 |
320 |
(a) Alumina Refinery achieved Alumina Hydrate production of 21.23 lakh MT against normative capacity of 21.0 lakh MT, which is 101.1% capacity utilization.
(b) Aluminium Smelter achieved full capacity production of 4.6 lakh MT, with all 960 pots in operation for the 2nd consecutive year.
The details of financial performance are given below:
A summary of sales achieved during 2022-23 is tabulated hereunder:
Description |
Unit |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Export |
|||
Alumina |
MT |
1,1,82,054 |
1,154,691 |
Aluminium |
MT |
25,214 |
133,085 |
Domestic |
|||
Alumina and Hydrate1 |
MT |
64,583 |
77,995 |
Aluminium |
MT |
438,876 |
323,809 |
Total Metal Sale |
MT |
464,090 |
456,893 |
Total Chemical Sale |
MT |
1,246,637 |
1,232,686 |
* Including Special Grade Hydrate.
Your Company achieved all time high total sales of metal, a growth of 1.58% compared to previous year and domestic sales of metal after experiencing sluggish domestic demand for Aluminium metal during the financial year 2021-22, recovered and registered a 35.54% jump since its inception during financial year 2022-23.
R in crore |
||
Particulars |
2022-23 |
2021-22 |
Revenue from Operations |
14,255 |
14,215 |
Other Income |
236 264 |
|
Total Income |
14,491 |
14,479 |
Cost of raw materials consumed |
3,172 |
1,971 |
Power & Fuel |
4,694 |
3,388 |
Employee benefits expenses |
1,832 |
2,356 |
Other expenses1 |
2,122 |
1,972 |
Depreciation & amortization expenses |
716 |
837 |
Total expenses |
12,536 10,524 |
|
Profit Before Exceptional items |
1,955 |
3,955 |
Profit Before Tax |
1,955 |
3,955 |
Tax expenses |
411 |
1,003 |
Profit After Tax |
1,544 |
2,952 |
* Includes changes in inventories of finished goods and work-in-progress and finance costs.
Market outlook for Alumina and Aluminium Industry is tabulated as under:
Particulars Calendar Year 2021 |
Calendar Year 2022 |
Calendar Year 2023 (Projected) |
Alumina |
||
Global Demand 130.77 (Million MT) |
134.01 |
133.461 |
Global Supply 131.5 (Million MT) |
134.36 |
133.471 |
Balance 0.73 [Surplus/(Deficit)] |
0.35 |
0.011 |
Aluminium Metal |
||
Global Demand 68.97 (Million MT) |
69.14 |
68.881 |
Global Supply 67.41 (Million MT) |
68.94 |
69.531 |
Balance -1.56 [Surplus/(Deficit)] |
-0.200 |
0.6501 |
Price Trend ; FY i 2021-22 |
FY 2022-23 |
FY 2023-24 (till May, 2023) |
LME Price 2,769 (USD per MT) |
2,490 |
2,304 |
Alumina Price Index 12.90% (as % of LME Price) |
13.90% |
15.10% |
5.0 DIVIDEND AND APPROPRIATIONS:
Your Company being a Govt. of India CPSE, pays dividend in compliance with DIPAMâs guidelines.
During the year the Company has paid final dividend for the FY 2021-22 @ ''1.50 per equity share amounting to '' 275.49 crore and interim dividend @ '' 3.50 per equity share amounting to '' 642.82 crore in two tranches for the FY 2022-23. The total dividend payout for the financial year 2022-23 is '' 918.32 crore as against ''1,101.98 crore during the previous year. Dividend payout is 59.48% of the PAT of current financial year against 37.33% of the previous financial year.
The Board of Directors have recommended final dividend @ 20% i.e. '' 1.00 per equity share subject to approval of the shareholders in the ensuing Annual General Meeting.
Based on financial performance and achievement of other parameters, your Company is rated âExcellentâ as per the Memorandum of Understanding (MoU), signed by your Company with the Government of India for the financial year 2021-22.
MOU score for financial year 2022-23 is not yet finalized by DPE.
7.0 RAW MATERIAL SECURITISATION:
Panchapatmali Bauxite Mines (Central & North Block) and South Block have all statutory clearances with lease validity up to 16.11.2032 and 19.07.2029 respectively. Both the Mines are in operation.
Alumina Refinery Plant is having a captive Steam and Power Plant (SPP). For sustainable supply of coal to SPP, your Company is having 1.141 million MT Fuel Supply Agreement with CIL Subsidiaries. Shortfall quantity, if any, are sourced through coal auction (Spot/Exclusive) route.
Aluminium Smelter Plant is having Captive Power Plant (CPP) for sustainable power supply. The CPP is a thermal power plant and requires around 6.8 million MT coal per annum to meet the power generation, as demanded by Smelter plant. For CPP, coal is sourced from the nearby coal mines of M/s. Mahanadi Coalfields Limited (MCL). Your Company is having Fuel Supply Agreement with MCL for 4.716 Million MT Coal, and 0.90 million MT Bridge Linkage coal MoU with MCL. Balance shortfall quantity are sourced through coal auction (Spot/ Exclusive) route.
Utkal-D Coal block has been operationalized in financial year 2022-23.
8.0 PROJECTS UNDER IMPLEMENTATION:
Your Company is in the process of setting up of 5th Stream in its existing Alumina Refinery which shall add 1.0 MTPY to its existing installed capacity of 2.1 MTPY, at a projected expenditure of '' 6,435.90 crore at December, 2018 price level, based on improved Medium Pressure Digestion technology of M/s. Rio Tinto Alcan Limited (RTAL). Presently the projected cost of the project is being revised to March, 2023 price level.
Your Company has obtained major statutory clearances like Environmental Clearance from MoEF & CC and Consent to Establish (CTE) from Odisha State Pollution Control Board. M/s. Thyssenkrupp Industrial Solutions (India) Private Ltd. has been appointed as EPCM consultant for Alumina Refinery. M/s. M. N. Dasturco, has been appointed as EPCM consultant for Steam and
Power Plant of Alumina Refinery. Basic engineering for the project has been completed by M/s. RTAL and overall project completion as on July, 2023 is 57.83%. Site activity comprising of Survey and Soil Investigation and Site Grading work has been completed. Contractors for most of the packages have been mobilized at the site for commencement of construction work. The project is targeted to be commissioned by May, 2025.
Sourcing of bauxite for 5th Stream expansion of Alumina Refinery has been envisaged from Pottangi
Mines. However, availability of bauxite from Pottangi Mines is expected beyond the scheduled commissioning of 5th Stream expansion. Hence, sourcing of bauxite from existing Panchpatmali Mines South Block has been planned through setting up of a crushing & conveying system for which a capital expenditure of '' 483 crore has been approved.
M/s. DCPL has been engaged as the EPCM consultant for the project. Order for major packages such as Over Land Conveyor, Crusher Plant, Water System, Electrical System and Site & Infrastructure packages are finalized. Site construction activities are under progress. The project is targeted to be completed by January, 2025.
8.3 25.5 MW Wind Power Project:
In pursuit of being a harbinger for harnessing green & clean energy, your Company has established 198.40 MW Wind Power Plants in various states of India. In this noble endeavour, your Company is in the process of augmenting its wind power generation capacity to 223.90 MW by adding another wind power project of capacity 25.5 MW
at Kayathar, Tamil Nadu at a capital expenditure of '' 163 crore through M/s. REGen Powertech Pvt. Limited. Substantial progress (65%) has been made on supply and erection of the equipment. However, the job is not completed yet due to fragile financial situation of the executing agency. The executing agency, M/s. REGen has subsequently been referred to NCLT. The final resolution order has been issued by NCLT in February, 2022. As the terms of the approved resolution plan are not favorable in the interest of project execution, your Company has filed a petition at NCLAT for review of approved resolution plan. The decision of NCLAT is awaited.
Pottangi Bauxite Mines (75 Million Tonnes) has been reserved by Government of India in favour of your Company for meeting the bauxite requirement of 1 Million Tonne Alumina Refinery under expansion. The Mining Plan has already been approved. Important statutory clearances like Forest Clearance, Environment Clearance and Consent to Establish have been obtained. Grant Order for Mining Lease has also been obtained from Government of Odisha. Consultant for preparation of DPR for Pottangi Mines has been engaged. The Mines is likely to be operational in the 1st quarter of financial year 2025-26.
Utkal-D and Utkal-E Coal Blocks (175 Million Tonnes) have been allocated by Government of India as a part of raw material security to the existing operational Units at Captive Power Plant (CPP) and future expansion of your Company. Your Company executed the Mining Lease deed of Utkal-D after obtaining requisite regulatory clearances and completing land acquisition in the Mining Lease area. Appointment of Mine Developer and Operator (MDO) including signing of Coal Mining Agreement has been completed for Utkal-D & Utkal-E Coal Mines.
R&R benefits and PDF list for Utkal-D & Utkal-E Coal Mines have been finalized in RPDAC meeting. 1st tranche of '' 80 crore and 2nd tranche of '' 100
crore has been released by NALCO towards R&R Funds for Utkal-D & E. Disbursement of R&R benefits by District Authorities is under way.
The activities for development of railway siding are under progress.
All Statutory clearances has been obtained for Utkal-D Coal mines and Mining operations in Utkal-D Coal Mines commenced from 09.11.2022. Coal dispatch started from Utkal-D Coal Mines to Captive power plant (CPP) w.e.f. 18.04.2023.
Forest Clearance, Environment Clearance, Consent to Establish and Consent to Operate have been obtained for Utkal-E Coal mines and Mining Lease deed of Utkal-E has been executed with District Administration in January, 2023. All efforts are being made to operationalize Utkal-D & E Combined Coal mines as per the approved Mining plan.
9.0 CAPITAL EXPENDITURE (CAPEX):
On a standalone basis the Company has achieved a CAPEX of '' 1,816.78 crore (excluding investment in joint venture companies). Considering the capitalization done by joint venture companies, on a consolidated basis the CAPEX of the Company stands at '' 1,876.16 crore.
A Risk Management Policy has been formulated and approved by the Board of Directors and the same is available in the Companyâs website www.nalcoindia.com.
11.0 HUMAN RESOURCES MANAGEMENT:
Your Company complies with all applicable presidential directives and other guidelines in the matter of reservations of SC/ST/OBC/EWS and other categories like PWD and Ex-servicemen.
Your Companyâs manpower strength is 5,190 as on 31st March, 2023 compared to 5,520 manpower as on 31st March, 2022. Out of these employees, 323 were women employees. As on 31.03.2023, there were 815 SC employees (15.70%), 999 ST employees (19.25%), 805 OBC employees (15.51%), 90 PWD employees (1.73%), 10 EWS employees (0.19%) and 08 Ex-servicemen employees on roll of the Company.
Your Company continued to maintain a conducive and cordial Industrial Relation climate during the year 2022-23. The healthy practice of sorting
out and settling issues through discussions with trade unions/workersâ representatives enabled the Company in ensuring workersâ participation at different levels and establishing a peaceful industrial relations climate. Employees are the driving force behind the sustained stellar performance of your Company and they contributed significantly in achieving highest ever production of the Company during 2022-23. As a commitment towards your Companyâs core values, employeesâ participation in management was made effective based on mutual respect and trust. Compliance of applicable Labour Laws, adherence to Government Guidelines and consultative decision making, continued to be the core strengths in dealing with employee benefits and welfare issues. Zero tolerance to indiscipline continued to remain the hallmark of the Companyâs IR philosophy.
For developing and maintaining a decent workplace, your Company has adopted the International Standard, Social Accountability 8000 (SA-8000) since 2009-10. The Certification helped the Company in becoming more transparent in the areas of child labour, forced labour, safe and healthy work environment, working hours, remuneration, freedom of association, collective bargaining process, discrimination and disciplinary practices
to all the stakeholders of the Company including employees, customers, suppliers and other interested parties.
All the units of your Company are certified to the latest version of SA 8000 i.e. SA 8000:2014. All the Production Units including Corporate Office are certified to SA 8000:2014 standard since 2017 (New Version). Certification of all production units and Corporate Office are being renewed every 3 years.
12.0 CORPORATE SOCIAL RESPONSIBILITY (CSR):
With a legacy of over four decades, NALCO always aims towards achieving sustainable development across the economic, social and environmental dimensions addressing the five Pâs of sustainability namely people, planet, prosperity, partnership and peace. Inclusive growth by means of comprehensive interventions has always been the thrust of NALCO.
Your Company has been following the mandates of the Companies Act, 2013 while considering CSR project. All the ideas and intended developmental actions have been evaluated against the Schedule-VII of the Act.
The initiatives are also taken up by consulting a wide range of stakeholders, including local people and
local administration. The projects are prioritized as per needs of the community and continuous monitoring is done to improve their impacts.
Your Company has spent ''39.54 crore in the financial year 2022-23 on various CSR projects against the mandated CSR obligation of''36.64 crore complying with the requirements of its CSR policy in line with Companies Act, 2013. The Company has undertaken theme based CSR activities on âHealth and Nutritionâ as per Department of Public Enterprises, Government of India OM dated 5th April, 2022.
The thrust areas of implementation are Healthcare, Education, Drinking Water, Rural Development, Environmental Sustainability and Development of Iconic city, Puri.
NALCO primarily focuses on identifying gaps in the existing system of delivery to society and intervening meaningfully with them, so as to create a long-term, sustainable impact rather than creating parallel system.
a) Contribution to Prime Minister CARES Fund.
b) Door step primary medical facility with free medicine through Mobile Health Units equipped with doctor and paramedical staff
in periphery villages of S&P Complex, Angul, M&R Complex, Damanjodi, Pottangi Bauxite Mines Area and Utkal-D & E Coal Blocks Area.
c) Development of Community Health Centre (CHC) at Mathalput in Koraput district.
d) Residential education to poor backward and tribal children from periphery villages of M&R Complex, Damanjodi and Pottangi Bauxite Mines Area.
e) Supporting poor and meritorious girl students under Nalco-Ki-Ladli Scheme.
f) Drinking water through pipe in periphery villages of S&P Complex, Angul.
g) Various activities to promote violence free lives among women in the state of Odisha.
h) Infrastructural activities such as construction of roads, culverts, drains and community halls in different rural areas.
i) Various developmental and renovation activities in Iconic City, Puri.
j) Support for construction of pilgrim accommodation blocks in Badrinath.
A detailed report on CSR activities prepared in line with various applicable provisions of the Companies Act, 2013 is attached at Annexure-I.
13.0 VISIT OF PARLIAMENTARY COMMITTEES:
During the year 2022-23, study visit of the Department related Parliamentary Standing Committee on Industry on the subject âImplementation of 25% prescribed procurement from MSME by NALCO under the Pubic Procurement Policy and Review of release of payment to MSMEsâ, Parliamentary Standing Committee on Coal, Mines and Steel on the subject âSelf-reliance in Minerals and Metalsâ, Standing Committee on Coal, Mines and Steel on the subject âJoint Venture Projects of the Companyâ and Study Visit of the Committee on Public Undertakings on the subject âCorporate Governance in CPSUsâ were undertaken.
14.0 MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Management Discussion & Analysis Report in line with Regulation 34(3) read with 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 in respect of adequacy of internal financial controls with reference to the financial statements and risk management practices.
(c) Various initiatives taken up in the field of environment management at different units of the Company.
15.0 INFORMATION TECHNOLOGY FOR DIGITAL TRANSFORMATION:
The global aluminium market is set to grow at a CAGR of over 6%. Aligning with business, Information Technology (IT) is set to play a central role in the business functions at NALCO. Your Company understands that, IT would play a very crucial role for a sustainable growth. Leveraging technology for better business process management has always been the prime focus area at your Company. Your Companyâs digital initiatives are aimed at seamlessly supporting the business objectives & be the key business driver. Your Companyâs business processes are continuously modified, automated and digitized to provide tangible benefits and add immense value to the business.
The IT Framework is built on 5 strategic pillars:
a) Integrated decision support system.
b) IT infrastructure: DC, DR, cloud, network, services.
c) ERP and centralised packages.
d) Dashboard & Analytics.
e) IT-OT integration and historian.
Since 2010, your Company has implemented Enterprise Resource Planning (ERP) integrating all the business functions such as sales & distribution, finance & controlling, materials management, human resource, plant maintenance and production planning to ensure uniformity in process, improved information availability and transparency for information based decision making. Your
Company is in the process of implementing payroll in ERP. For improved transparency, speed and accountability, your Company has implemented electronic file handling system (e-Office) across all plants and offices. This has contributed immensely in reduction in use of paper and making offices greener. For secure and ready access to digitized documents, the e-Office Knowledge Management System has been implemented. This system enables a secure and controlled environment for sharing of documents in a central instance across the Company.
Your Company has digitally enabled employee centric services such as payroll, attendance, and income tax including work flow based self-service applications like appraisal, leave, loans, perquisites, tour, medical reimbursements and probation confirmation. Computerized Hospital management
system has been deployed at Company owned hospitals at Angul and Damanjodi to ensure timely medical care for employees and associates.
Your Company has introduced online vendor bill tracking system, Contract labour management system, Recruitment portal, e-Tender for export sales and a series of mobile apps for the benefit of stakeholders. The introduction of e-Bills and e-Measurement Book (e-MBS) and an on-line platform for service vendors will enable faster and transparent bill processing.
E-procurement of goods & services are carried out through GeM Portal, Supplier Relationship Management (SAP SRM) and Central Public Procurement Portal (CPPP). The Company has hosted its website from cloud.
For governance and monitoring, online web-based applications such as capital expenditure monitoring, fund monitoring, compliance management system, bill tracking system, vigilance complaint management system, etc. are in place. These have resulted in timely monitoring and efficient management of capital expenditure, cash flow, statutory compliances and capital proposals.
To harness the power of data, analytics and visualization, dashboards have been deployed for monitoring Production, Sales & Distribution and Human Resource Management. Your Company has developed and implemented a centralized MIS system as a âSingle source of Truthâ for all production related information across all plants & offices. This is a precursor to production analytics
to facilitate decision making at various levels of management.
To increase productivity and reduce costs, your plants are taking up initiatives leveraging the power of next generation technologies viz. AI, Robotics, AR/VR:
a) Despatch Automation: Implementation of a fully integrated and automated system for aluminium dispatch. The project purpose is to bring in efficiencies and visibility in dispatch management.
b) Smart Mines: A strategy is being put in place to move towards a connected Mines with visibility and integration of the complete mining value chain.
The role of IT is critical in facilitating the business functions. Recognizing this, your Company has an elaborate IT infrastructure in place to address the needs and also ensure uninterrupted service:
a) The Primary Data Center is located at Corporate Office, Bhubaneswar. Data Center uses server virtualization technologies and hosts all centralized applications including ERP and e-Office. As part of the Business Continuity Plan, a Disaster Recovery Data
Center is located in a separate seismic zone with a strong and regularly tested business continuity plan in place.
b) Plants and Offices are interconnected with dual MPLS circuits from different service providers for uninterrupted access to applications and services hosted at Corporate Data Center. The WAN bandwidth has been enhanced to cater to the increased load triggered mainly by COVID-19 practices. For increased network availability across locations, a state of the art SDWAN technology is being introduced.
c) Each plant location and Corporate Office have Gigabit Ethernet LAN with Firewall. The Corporate Data Center has gateway protection solutions additionally.
d) Multichannel video conferencing solution for effective communications between all business units.
The Data Centre and the Disaster Recovery sites are ISO 27001:2013 certified for security compliance. The replication between the Disaster Recovery Site and Primary Data Centre is asynchronous with an RPO of 30 minutes. IT infrastructure and application security is ensured with network
gateway and endpoint security solutions. Implementation effectiveness is further assured with application and security audits and mock drills wherein observations are well documented for improvements. Your Company has undertaken an extensive IT security audit encompassing its network devices, Infrastructure devices and applications. For increasing Cyber awareness, every 1st Wednesday of the month was celebrated as Cyber Jagrookta Diwas (CJD). Experts and practitioners from the cyber security domain engage with the employees on the subject.
16.0 TOTAL QUALITY MANAGEMENT:
In all units i.e. Mines, Alumina Refinery, CPP, Smelter and Port Facilities, Integrated Management System based on ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 continued to be effectively implemented with regular external audits, internal audits and management review meetings. Recertification of ISO 9001:2015, ISO 14001:2015 of smelter, ISO 9001:2015 of Port Facilities, Mines and CPP were done during this time period. At the closure of financial year, certification status of all the Units w.r.t. ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 remained intact.
The EnMS continued to be effectively implemented with regular external audits, internal audits and management review meetings in CPP, Smelter which are included in the Perform, Achieve & Trade (PAT) scheme of BEE. During the financial year, recertification of ISO 50001:2018 of Alumina Refinery was done successfully. At the closure of financial year, certification status of the units w.r.t. ISO 50001:2018 remained intact.
In the financial year, total 35 quality circle projects were completed, whereas several more were in-progress. Further, 15 Quality Circle Teams participated in the National Convention NCQC 2022 of QCFI, out of which 7 numbers received Par-Excellence award. Also, 7 Quality Circle teams participated in the CII State Industry carnival out of which 2 teams were selected and participated in CII East Zone Finals.
As per the Kaizen by SGA scheme, total 3,187 Kaizens were completed during the reporting year, the highest so far.
20 numbers of Lean Six Sigma Green Belt projects have been successfully completed in the financial year with due verification of benefits and savings.
a) Alumina Refinery Unit bagged the prestigious CII-EXIM Bank Business Excellence award for the year 2022 in the âPlatinumâ Category during the CII-IQ National Quality Summit and also conferred with consistent progressive organization award.
b) Panchpatmali Bauxite Mines and Captive Power Plant Units secured the prestigious âGold Plusâ category recognition on in the CII EXIM Bank Award for Business Excellence 2022.
Panchpatmali Bauxite Mines was successfully recertified and received QCFI-JUSE 5S Excellence award by Union of Japanese Scientists & Engineers (JUSE) for 5 S work place management system during 8th National conclave on 5 S.
At Smelter and CPP, 5 S work place management system continued to be effectively implemented with regular internal assessments and review meetings by Unit management whereas for Refinery in addition to regular internal assessments and review meetings, external audits have also been done.
17.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY:
(a) Progressive use of Hindi is being implemented as per provision of the Official Language Act, 1963 and Official Language Rules, 1976.
(b) Your Company also holds the Chairmanship position of TOLIC, Bhubaneswar and Angul. Scheduled meetings have been organized at both the locations involving all local PSUs Offices. In this
regard, Companyâs efforts have been appreciated in the meetings by the representatives of RIO, Government of India.
(c) Hindi workshops were organised on 27.04.2022 and 23.09.2022 with faculty support of Shri Nirmal Kumar Dubey, Office In-charge of Regional Implementation Office (East), MHA, Kolkata.
(d) The website of the Company is being regularly updated in bilingual i.e. Hindi and English.
(e) General Knowledge and Hindi quiz competitions were organized on 22.06.2022, in order to encourage the member offices for implementation of the official language, while ensuring the participation of the member offices. Necessary arrangements were also made to telecast the same on Doordarshan.
(f) Hindi Fortnight 2022 was observed at Corporate Office, Production Units and Regional Offices of the Company to encourage the use of Hindi in official work and various competitions were organised among employees and students.
(g) During the Hindi Day celebrations held on 14th September, 2022, âKavi Sammelanâ was organised at Mines and Refinery Complex, Damanjodi.
(h) On the occasion of Hindi Fortnight 2022, the official language knowledge and picture expression competitions were organized on 23.09.2022 under the banner of TOLIC(U).
(i) On the occasion of Hindi Fortnight - 2022, employees were rewarded with Shankar Dayal Singh Smriti Puraskar.
(j) On the occasion of âWorld Hindi Dayâ, a Travel Memoir Competition was organised for the members of TOLIC(U), Bhubaneswar under the banner of TOLIC(U).
(k) A technical workshop and quiz competition were organised for the members of TOLIC(U), Bhubaneswar under the banner of TOLIC(U) on 15th March, 2023.
(l) Faculty assistance on unicode and tools and techniques of Hindi computing was provided to the member offices of TOLIC, Bhubaneswar.
18.1 NALCO: Empowering Sports and Fostering Excellence:
As a distinguished Navratna PSU, your Company has been a steadfast proponent of sports development since its inception. Your Company takes great pride in recruiting sports personalities from various disciplines, including athletes, cricketers, chess players, and women footballers. These former international players have made significant contributions to the promotion of sports as coaches and selectors for state and national teams.
18.2 These are the highlights of some of the remarkable achievements and journeys of the sporting personnel, who continue to inspire and elevate the world of sports:
a) Shri Debasis Mohan ty - An Esteemed Cricketing Icon:
Shri Debasis Mohanty, a former pace bowler of the Indian National Cricket Team, has served as a member of the All-India Senior Selection Committee Panel appointed by the BCCI until October, 2022. His invaluable expertise and experience have played a crucial role in shaping the future of Indian cricket.
Your Company is grateful for his outstanding contributions to the sport.
b) Shri Shiv Sundar Das - A Catalyst for Batting Excellence:
Shri Shiv Sundar Das, a former opening batsman of the Indian National Cricket Team, has made significant contributions as a batting coach and national selector. His expertise and dedication have been instrumental in the development of young cricketers. Throughout the year, Shri Das served as the head coach of the NCA Under-19 camp, head coach of NCA Team-D for NCA INTER Matches, and the batting coach for the Punjab Cricket Association for the 2022-23 season. His guidance has undoubtedly strengthened the batting prowess of aspiring cricketers.
c) Ms. Anuradha Biswal - Inspiring Track and Field Athlete:
Ms. Anuradha Biswal, a former track and field athlete specializing in the 100 meter hurdles, has brought glory to the nation. With a Bronze in the 2000 Asian Championship
and a Gold in the 2006 South Asian Games, she has made a mark in the sporting arena. Currently, Ms. Biswal represents as the National Coordinator in Athletics for the All India Public Sector Sports Control Board (AIPSSCB). Additionally, she imparts fitness training to aspiring young sports talents at the Kalinga Stadium in Bhubaneswar.
d) Ms. Sradhanjali Samantaray - A Trailblazer in Womenâs Football:
Ms. Sradhanjali Samantaray, former captain of the Indian National Womenâs Football Team, has made significant contributions to womenâs football. Her appointment as the head coach of the Odisha Police Team in the Indian Womenâs League and as a National selector for the Hero U-17 Womenâs National Football Championship showcases her leadership and expertise. Her coaching roles and achievements have significantly elevated the standard of womenâs football in India.
e) Ms. Ranjita Mohanty - Goalkeeping Coach Extraordinaire:
Ms. Ranjita Mohanty, a former national goalkeeper, has embraced the role of a goalkeeping coach for the U-17 Indian Womenâs Team. Her coaching expertise and experience have contributed to the development of promising young goalkeepers. Through her guidance and mentorship, she plays a crucial role in shaping the future of womenâs football in India.
f) Ms. Aparajita Gochhikar - An Inspiring Chess Mentor:
Ms. Aparajita Gochhikar, an international chess player, has been an exemplary representative of your Company. Her recent achievements as coach of the Indian team in the World Cadets Chess Championship 2022, where India secured two gold medals and one bronze medal, are a testament to her exceptional coaching abilities. We are also proud of Ms. Gochhikarâs appointment by the World Chess Federation to the Fair Play Panel in the 44th FIDE Chess Olympiad 2022, where she received the prestigious IA title. Her dedication to the game and commitment to fair play have brought honor to NALCO and the Indian chess community.
g) Ms. Sunita Lakra - A Hockey Champion:
Ms. Sunita Lakra, a former captain of the Indian Womenâs Hockey Team, continues to excel in her sporting endeavors. She represented Odisha in various national championships including the 12th Senior Women National Championship 2022, where she won a gold medal. Her consistent performance and dedication have made her a valuable asset to Indian hockey.
h) Ms. Namita Kabata - Assisting Promising Athletes:
Ms. Namita Kabata, a former sprinter, has made significant contributions as an Assistant Coach, assisting promising athlete Ms. Srabani Nanda in training camps in Jamaica. Her mentorship and expertise have helped nurture talent and enhance performance.
8.3 Your Company always remains committed to empowering sports and fostering excellence in athletics. Your association with renowned sports personalities like Shri Debasis Mohanty, Shri Shiv Sundar Das, Ms. Anuradha Biswal, Ms. Sradhanjali Samantaray, Ms. Ranjita Mohanty, Ms. Namita Kabata, Ms. Aprajita Gochhikar, and Ms. Sunita Lakra has been a source of immense
pride and inspiration. NALCO continues to support and nurture young talents, preparing them for national and international competitions through dedication to sports and aims for contributing towards growth and development of sports in the country.
Broad details of the vigil mechanism, established in your
Company are given below:
i) Your Company has a well-established Vigilance Department headed by a Chief Vigilance Officer (CVO) who is appointed on deputation from Government of India. Other vigilance officers who assist the CVO are selected on deputation basis in consultation with and concurrence of CVO. Your Company has its vigilance set up at three locations, i.e. Corporate Office at Bhubaneswar, S&P Complex at Angul and M&R Complex at Damanjodi.
(ii) The vigilance functions are generally, in the nature of preventive, punitive, surveillance & detection.
The functions of CVO are as follows:
(i) Overall Vigilance Administration of the Company.
(ii) Maintaining a good link with CVC and CBI besides organizing structured review meetings with CMD, assisting & advising CMD on the matter of vigilance.
(iii) Furnishing of various returns/reports to Ministry/CVC/CBI.
(iv) Assisting CVC in selection of Independent External Monitors (IEMs) for I.P (Integrity Pact).
(v) Assisting management in formulation/ updation of anti-corruption policies/ measure.
(vi) Assisting management in development of Integrity Index & ascertaining the fairness, transparency & equity in various domain functions and overall management.
(vii) Organizing training on Vigilance Awareness, Vigilance Administration, case studies etc.
Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour.
The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing culture. It protects employees wishing to raise a concern about serious irregularities within the Company. Details of the policy are available in the Companyâs website www.nalcoindia.com.
Corruption is a special category of risk. Corruption Risk Management policy of your Company has been implemented to determine the key principles and requirement aimed at preventing corruption and compliance of anti-corruption law of India.
The policy reflects commitment of your Company and management to high ethical standards at carrying on business in an open, transparent and honest manner, aimed at improving corporate culture, compliance with the best practices in corporate governance and maintaining the business reputation in your Company.
During the year, no fraud by the Company or any material fraud on the Company by its officers or employees has been reported by the Auditors in their report under section 143(12) of the Companies Act, 2013.
Your Company has a Board approved Fraud Prevention Policy and the same is placed in the Companyâs website www.nalcoindia.com.
In line with CVC and DoPT directives, your Company responded actively in regularly updating the data of the executives at DGM (E-6) and above, on the web portal âhttps://doptapp.nic.in/solve/â.
Your Company has conducted Outreach Activity and Integrity Pledge Drive at various schools and colleges in and around the Companyâs head office
(at Bhubaneswar) and plant complexes (at Angul and Damanjodi) wherein approx. 2,500 citizens have been undertaken online/offline Integrity Pledge and awareness.
This portal has been developed to provide information about vigilance structure at NALCO, its different activities, practices or initiatives undertaken by the Vigilance Department and also to provide scope to lodge the complaint and to check status of the complaint in online mode.
In order to address the provisions of Right to Information Act (RTI), one Appellate Authority, one Public Information Officer and nine Assistant public information officers responsible for providing information sought by stakeholders, have been nominated.
The following are the details of the RTI applications and appeals during 2022-23:
Under |
Received |
No. of cases |
Decisions |
Decisions |
Under |
|
Process |
during |
transferred |
where |
where |
Process |
|
as on |
the year |
to other Public requests/ |
requests/ |
as on |
||
01.04.2022 (including |
Authorities |
appeals |
appeals |
31.03.2023 |
||
cases |
rejected |
accepted |
||||
transferred |
and |
|||||
from other Public Authority) |
settled |
|||||
Requests |
7 |
424 |
2 |
81 |
333 |
15 |
First Appeals |
0 |
62 |
0 |
1 |
58 |
3 |
Third party Transparency Audit for the year 2021-22 of your Company has been carried out by M/s. National productivity Council, New Delhi with satisfactory remarks.
The RTI requests and appeals are received and replied through both physical and online mode. Your Company is aligned with online RTI portal of Department of Personal and Training (www.rtionline.gov.in) with effect from January, 2017.
21.0 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 fees for the financial year 2023-24 have been paid on time to the Stock Exchanges.
22.0 PAYMENT OF ANNUAL CUSTODY/ ISSUER FEES TO DEPOSITORIES:
Annual connectivity fees and custody fees/issuer fees for the financial year 2023-24 have been paid on time to both M/s. National Securities Depository Ltd. and M/s. Central Depository Services (India) Ltd.
All matters relating to transmission of shares, issue of duplicate share certificates, payment of dividend, de-materialization and re-materialization of shares and redressal of investors grievances are carried out by the Companyâs RTA i.e. M/s. KFin Technologies Limited (Formerly KFin Technologies Private Limited), Hyderabad.
24.0 BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
In line with SEBI circular no. SEBI/HO/CFD/CMD-2/P/CIR/2021/562 dated 10.05.2021, a Business Responsibility & Sustainability Report (BRSR) for 202223 describing various initiatives taken by the Company on social, environmental and governance perspective, is attached as Annexure-III which forms part of this Annual Report.
(a) The mandatory report on sustainability i.e. the Business Responsibility & Sustainability Report (BRSR) addressing the environmental, social & governance aspects as required by SEBI, is completed and published.
(b) In addition to above report, a standalone report is prepared on voluntary basis, in accordance with Global Reporting Initiative (GRI) Universal Standards.
25.0 CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
(a) 42 patents have been filed since inception, out of which 28 have been granted, 8 have been commercialized and 05 patents were granted in financial 2022-23. Three technical papers were published in international conference proceedings during the year.
(b) Research Advisory Committee (RAC) meetings are being held periodically to review the R&D activities of the Company.
(c) MOU renewed with BARC & NALCO on âDevelopment of Chemical Methods and Technologies for Value Added Processes and Products in Aluminium Industryâ. Project on âDevelopment of sacrificial bricks from red mud for core catcher of nuclear thermal power plantsâ has been started.
(d) Under the umbrella MOU with BARC, Bauxite certified reference material, CRM BARC -B1201 has been developed successfully and the same was officially released on 24th March, 2023 at NRTC, Bhubaneswar.
(e) Twenty numbers of collaborative projects are in progress with various reputed institutes like IIT Bhubaneswar, IIT Kharagpur, CSIR-IMMT, JNARDDC, CSIR-CECRI etc. Seven collaborative projects awarded during the year.
(f) Project on âDevelopment of process and suitable medium for selective extraction of Gallium from Plant liquor and setting up a demonstration plant in Refineryâ with BARC is in progress.
(g) Project activity is in progress on âTechnology development for holistic utilization of red mud among three companies viz. NALCO, HINDALCO and VEDANTA and three research institutes NML, IMMT and JNARDDC. Demonstration trials were
conducted at all three institutes and project is being monitored and reviewed on a regular basis.
(h) Development of a process for Spent Pot line Carbon (hazardous waste) treatment and recovery of valuables is in progress with JNARDDC and IMMT.
(i) A project on aluminium air battery development is in progress with CSIR-CECRI.
(j) Investment decision for setting up of Pilot Aluminium Alloy Casting plant at NRTC has been obtained.
(k) Total 3,500 no of samples of bauxite, aluminium metal, alumina, coal etc. were tested in NRTC Laboratory.
(l) Research Development & Innovation RDI road map 2022-2027 has been approved.
(m) In-house R&D trial taken up for production of grain refined EC grade Al wire rods and production of high thermal conductivity Al-Si alloy at Cast House of Smelter.
(n) MoU signed with Bhubaneswar City Knowledge Innovation Cluster Foundation
(BCKICF) to create a strong Science and Technology ecosystem using industry-academia partnership.
(o) Benefits Derived as a result of the R&D projects (In-House & Collaborative completed in 2022-23):
i) Certified Reference Material (CRM) of Bauxite, first of its kind developed indigenously, which can be made available to Indian users at a much lower price compared to imported materials.
ii) A new process developed in laboratory scale for production of high purity aluminium metal by low temperature electrolysis.
iii) A new process developed for light weight Al-Mg-Si automotive components using additive manufacturing and powder metallurgy processes.
25.2 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.
26.0 DIRECTORSâ RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors 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;
(e) 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; and
(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.
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.
28.0 CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
The Policy on Related Party Transactions has been approved by the Board and placed in your Companyâs website which can be accessed at www.nalcoindia.com.
Your Directors draw the attention of the members to note number 40 of the financial statements which sets out related party disclosures.
A related party transaction was entered with M/s. GACL-NALCO Alkalies and Chemicals Private Limited (A JV Company of National Aluminium Company Limited and Gujarat Alkalies and Chemicals Limited) at armâs length basis for procurement of Caustic soda lye as per Caustic soda supply agreement during the year under report. A report in Form AOC-2 is attached at Annexure-VI to this report.
29.0 DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The following changes took place in the Board of Directors of your Company since the last report:
Shri Pankaj Kumar Sharma was appointed as Director (Production) w.e.f. 01.02.2023.
(a) Tenure of Shri Bijay Kumar Das as Director (Production) ended on 31.01.2023.
(b) Tenure of Shri Manasa Prasad Mishra as Director (P&T) ended on 31.07.2023.
In accordance of the provisions of the Act, the following are the Key Managerial Personnel of your Company:
(a) Shri S. Patra, Chairman-cum-Managing Director
(b) Shri R. S. Mahapatro, Director (HR)
(c) Shri R. C. Joshi, Director (Finance)
(d) Shri S. Samantaray, Director (Commercial)
(e) Shri P. K. Sharma, Director (Production) & Director (P&T) - Addl. Charge
(f) Shri N. K. Mohanty, Group General Manager and Company Secretary
Your 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.
During the year, 8 (Eight) Board meetings were held. Details of the meetings are available in the report on Corporate Governance (Annexure-V) placed in this Annual Report.
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 (Annexure-V) placed in this report.
Shareholders of your Company have approved appointment of Shri S. Samantaray, Director (Commercial) and Shri S. R. Patel, Part-time Nonofficial (Independent) Director through Postal Ballot process dated 28.04.2022 in compliance with the amended Regulations 17(1C) and 25(2A) of the SEBI (LODR) Regulations, 2015 with required ordinary/special resolutions.
In accordance with the Companies Act, 2013, the Annual Return for the financial year 2022-23 in the prescribed format is available in your Companyâs website at https://d2ah634u9nypif.cloudfront.net/wp-content/ uploads/2023/08/Draft-Annual-Return_2022-23.pdf
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:
(a) Details relating to deposits covered under Chapter-V of the Act.
(b) Issue of equity shares with differential rights as to dividend, voting or otherwise.
(c) Issue of shares, sweat equity shares and ESOS to employees of the Company.
(d) Neither Chairman-cum-Managing Director nor the Whole-time Directors of the Company received any commission from the Company.
(e) No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the going concern status and Companyâs 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 and notification dated 5th July, 2017.
(i) Companyâs policy on Directorâs appointment and remuneration including criteria for determining qualification, attributes, independence, etc. as per Section 134(3)(e) and Section 178(2), (3) & (4) of the Companies Act, 2013 (âActâ).
(ii) 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 of the Act.
(iii) 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 of the Act.
32.0 SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
Your Company is a model employer to provide equal opportunity and consciously strives to build a healthy work culture that promotes dignity to all employees. In pursuance of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, Internal Complaints Committee have been constituted at the production units and the corporate office of the Company to redress complaints relating to sexual harassment.
Awareness programmes were conducted across the Company to sensitize employees and uphold the dignity of their colleagues at the workplace, particularly with respect to prevention of sexual harassment.
33.0 PARTICULARS OF LOANS,
GUARANTEES AND INVESTMENTS:
Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the note numbers 9 and 11 to Standalone Financial Statements 2022-23.
34.0 SUBSIDIARIES, JOINT VENTURE COMPANIES AND ASSOCIATED COMPANIES:
In accordance with the provisions of Section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the joint venture and associates and their salient features are given in the note no. 42 and 43 of the Consolidated Financial Statements for the year ended 31.03.2023 respectively. Salient features of JV/Associate companies in Form AOC-1 (Note number 43) forms integral part of the consolidated financial statement of the Company.
a) CII Exim Bank Award for Business Excellence 2022 to your Companyâs Alumina Refinery in Platinum category for the 4th consecutive year. Refinery was also accorded special jury award as consistent progressive performer.
b) Your Companyâs Panchapatmali Bauxite Mines and Captive Power Plant have also been conferred with the prestigious Gold Plus award in recognition to
the initiative taken for Business Excellence at the CII Excellence summit 2022 at Bengaluru.
c) Your Companyâs Panchpatmali Bauxite Mines has received the Greentech Quality & Innovation Awards 2022 for outstanding achievements in Quality Improvement in Processes.
d) Your Companyâs Alumina Refinery was honored with 5S - Work Place Management Certificate by acclaimed certification agency - Union of Japanese Scientists and Engineers (JUSE) on 30th June, 2022.
e) Your Companyâs Panchpatmali Bauxite Mine received the prestigious QCFI-JUSE Award in the Par Excellence category along with certificate for the 5S workplace management system on 7th July, 2022.
f) Your Companyâs Panchpatmali Central & North Bauxite Mines received âFive Star Ratingâ Award at 6th National Conclave of Mines & Minerals held at New Delhi on 12th July, 2022. The award was presented by Shri Pralhad Joshi, Honâble Union Minister of Coal, Mines & Parliamentary Affairs in the presence of Shri Raosaheb Patil Danve, Honâble Minister of State of Mines, Coal and Railways, Govt. of India.
36.0 COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE FINANCIAL STATEMENT OF THE COMPANY:
Annual Financial Statements both standalone and consolidated as approved by Board were submitted to the office of Director General of Commercial Audit for their comments. The Comptroller and Auditor General of India has issued âNilâ comments on both the standalone and consolidated financial statements for the year ended 31.03.2023 vide their letter nos. 377/Co-ordn./01-10 (NALCO)/2023-24 and 375/Co-ordn./01-10 (NALCO-CFS)/2023-24 respectively, both dated 28.07.2023, issued by Office of Director General of Audit (Mines), Kolkata.
37.0 AUDITORS:
M/s. GNS & Associates, Chartered Accountants and M/s. A.K. Sabat & Co., Chartered Accountants are appointed as joint statutory auditors of the company by the Comptroller and Auditor General of India for the financial year 2022-23.
The Statutory Auditors report on the Standalone and Consolidated financial statements have already been placed before the Board in its meeting held on 24.05.2023.
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Cost Audit is applicable to the Company for the financial year 2022-23.
In compliance with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company have on the recommendation of the Audit Committee, appointed M/s. Niran & Co., Cost Accountants as the Cost Auditors for the year 2022-23.
Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.
M/s. SKM & Associates, Practicing Company Secretaries were appointed for undertaking Secretarial Audit job of your Company for 202223 in terms of Section 204 of the Companies Act, 2013 and Rules made there under. The report of the Secretarial Auditors is enclosed as Annexure-VII to this report.
Your Company has appointed the following Chartered Accountant firms for carrying out Internal Audit functions of the Company for the financial year 2022-23:
Unit |
Name of Internal Auditors |
Corporate Office, Bhubaneswar |
M/s. Agasti & Associates |
M&R Complex, Damanjodi and Port Facility, Visakhapatnam |
M/s. B V Rao & Co LLP |
CPP, Angul |
M/s. Tej Raj & Pal (01.04.2022 to 30.06.2022) |
M/s. J. B. M. T. Associates (01.07.2022 to 31.03.2023) |
|
Smelter, Angul |
M/s. B. N. Mishra & Co. (01.04.2022 to 30.06.2022) |
M/s. C. K. Prusty & Associates (01.07.2022 to 31.03.2023) |
|
Regional Office - East (Kolkata) |
M/s. J. F. Dastoor & Co. |
Regional Office - West (Mumbai) |
M/s. A. N. P. J. & Co. |
Regional Office - North (Delhi) |
M/s. Pradeep Gopal & Co. |
Regional Office - South (Chennai) |
M/s. Manohar Choudhry & Associates |
38.0 ACKNOWLEDGEMENT:
Your Directors acknowledge the excellent support extended by the Government of India particularly Ministry of Mines, DIPAM, DPE and other Ministries/ Departments of the Government of India, various Ministries/Departments of the Government of Odisha, various PSUs in Companyâs value-added chain, all stakeholders and investors and look forward for maintaining such mutually supportive business relationship in the coming years too.
Last but not the least, your Directors also place on record their deep sense of appreciation for the dedication and commitment shown by all employees, contractors, contract workers, trade unions and officers associations during the financial year. The Companyâs consistent growth was made possible due to belongingness, solidarity, co-operation and support received from all fronts.
Projected figures published by CRUfor the period January - June, 2023for Alumina and January - September, 2023for aluminium metal have been extrapolated to arrive at 2023 figures (Source: June, 2023 CRU).
Mar 31, 2022
Your Directors have '' great pleasure in presenting before you the 41st Annual Report of your Company together with the audited financial statements (standalone and consolidated) and Auditors''
Report for the financial year ended 31st March, 2022.
Production |
Unit |
2021-22 |
2020-21 |
Bauxite |
MT |
75,11,075 |
73,65,001 |
Alumina Hydrate |
MT |
21,22,000 |
20,85,500 |
Aluminium |
MT |
4,60,000 |
4,18,522 |
Electricity (Net)-CPP |
MU |
5,711 |
6,440 |
Wind Energy (Net) |
MU |
320 |
285 |
(a) Your Companyâs Panchpatmali Bauxite Mines has achieved 75,11,075 tonnes of bauxite production, which is highest ever production since inception, surpassing the previous âHighest ever Annual Productionâ of 73,65,001 tonnes achieved in FY 2020-21.
(b) Your Company operationalized all its 960 nos. of pots at its Smelter Plant on 12.01.2022, a milestone of achieving 100% capacity utilisation for the first time in the history of your Company.
(c) Your Companyâs Smelter has achieved full capacity 4,60,000 tonnes of Aluminium cast metal production, which is highest ever since inception surpassing the previous âHighest ever Annual Productionâ of 4,43,597 tonnes achieved in FY 2010-11.
The details of financial performance are given below:
A summary of sales achieved during 2021-22 is tabulated hereunder:
Description |
Unit |
Year ended 31.03.2022 |
Year ended 31.03.2021 |
Export |
|||
Alumina |
MT |
11,54,691 |
11,84,680 |
Aluminium |
MT |
1,33,085 |
1,92,174 |
Domestic |
|||
Alumina and Hydrate1 |
MT |
77,995 |
42,992 |
Aluminium |
MT |
3,23,809 |
2,30,643 |
Total Metal Sale |
MT |
4,56,893 |
4,22,817 |
Total Chemical Sale |
MT |
12,32,686 |
12,27,672 |
R in crore |
||
Particulars |
2021-22 |
2020-21 |
Revenue from Operations |
14,181 |
8,956 |
Other Income |
297 |
147 |
Total Income |
14,478 |
9,103 |
Cost of raw materials consumed |
1,971 |
1,315 |
Power & Fuel |
3,388 |
2,638 |
Employee benefits expenses |
2,356 |
1,930 |
Other expenses1 |
1,971 |
1,296 |
Depreciation & amortization expenses |
837 |
606 |
Total expenses |
10,523 |
7,786 |
Profit Before Exceptional items |
3,955 |
1,317 |
Profit Before Tax |
3,955 |
1,317 |
Tax expenses |
1,003 |
17 |
Profit After Tax |
2,952 |
1,300 |
* Includes changes in inventories of finished goods and work-in-progress and finance costs.
Market outlook for Alumina and Aluminium Industry is tabulated as under:
Particulars |
Calendar Year 2020 |
Calendar Year 2021 |
Calendar Year 2022 (Projected) |
Alumina |
|||
Global Demand (Million MT) |
126.36 |
130.99 |
129.792 |
Global Supply (Million MT) |
126.84 |
131.30 |
129.702 |
Balance [Surplus/(Deficit)] |
0.48 |
0.31 |
(0.09)2 |
Aluminium Metal |
|||
Global Demand (Million MT) |
62.92 |
68.95 |
69.042 |
Global Supply (Million MT) |
64.74 |
67.46 |
66.912 |
Balance [Surplus/(Deficit)] |
1.83 |
(1.49) |
(2.13)2 |
Price Trend |
FY 2020-21 |
FY 2021-22 |
FY 2022-23 (till June 2022) |
LME Price (USD per MT) |
1,802 |
2,769 |
2,882 |
Alumina Price Index (as % of LME Price) |
15.68% |
13.25% |
12.88% |
5.0 DIVIDEND AND APPROPRIATIONS:
Your Company being a Govt. of India CPSE, pays dividend in compliance with DIPAMâs guidelines.
During the year the Company has paid interim dividend @ R 5.00 per equity share amounting in total R 918.32 crore in two tranches and final dividend for the FY 202021 @ R 1.00 per equity share amounting to R 183.66 crore. The total dividend payout for the financial year 2021-22 is R 1,101.98 crore as against R 460.61 crore during the previous year. Dividend payout of 37.33% of the PAT against 35.44% of the previous financial year.
The Board of Directors have recommended final dividend @ 30% i.e. R 1.50 per equity for FY 2021-22 share subject to approval of the shareholders in the ensuing Annual General Meeting.
Your Company is rated âExcellentâ as per the Memorandum of Understanding (MoU), signed with the Government of India for the financial year 2020-21.
Based on financial performance and achievement of other parameters, your Company is likely to be rated âExcellentâ for the financial year 2021-22.
7.0 RAW MATERIAL SECURITISATION:
Panchpatmali Bauxite Mines (Central & North Block) and South Block have all statutory clearances with lease validity upto 16.11.2032 and 19.07.2029 respectively. Both the Mines are in operation.
Alumina Refinery Plant is having a Captive Steam and Power Plant (SPP). For sustainable supply of coal to SPP, your Company is having 1.341 Million MT Fuel Supply Agreement with CIL Subsidiaries. Shortfall quantity, if any, are sourced through coal Auction (Spot/Exclusive) route.
Aluminium Smelter Plant is having Captive Power Plant for sustainable power supply. The Captive Power Plant is a thermal power plant and requires around 6.8 Million MT coal per annum to meet the power generation as demanded by Smelter plant. For CPP, coal is sourced from the nearby coal mines of M/s. Mahanadi Coalfields Limited (MCL). Your Company is having Fuel Supply Agreement with MCL for 4.716 Million MT Coal, and
0.90 Million MT Bridge Linkage coal MoU with MCL. Balance shortfall quantity are sourced through Coal auction (Spot/Exclusive) route.
Your Company has been allotted Utkal-D & E Coal Blocks and actions are in progress to make Utkal-D Coal Block operational, followed by Utkal-E Coal Block.
8.0 PROJECTS UNDER IMPLEMENTATION:8.1 5th Stream of Alumina Refinery:
Your Company is in the process of setting up of 5th Stream in its existing Alumina Refinery which shall add 1.0 MTPY to its existing installed capacity of 2.1 MTPY (total capacity 3.1 MTPY), at a projected expenditure of R 6,435.90 crore at December, 2018 price level, based on improved Medium Pressure
Digestion technology of M/s. Rio Tinto Alcan International Limited (RTAIL).
Your Company has obtained major statutory clearances like Environmental Clearance from MoEF & CC and Consent to Establish (CTE) from Odisha State Pollution Control Board. M/s. Thyssenkrupp Industrial Solutions (India) Private Ltd. has been appointed as EPCM consultant for the project. M/s. M. N. Dasturco, has been appointed as EPCM consultant for Steam and Power Plant of Alumina Refinery. Basic engineering for the project has been completed by M/s. RTAIL and detailed engineering has progressed to the tune
of 88%. Site activity comprising of Survey and Soil Investigation & Site Grading work has been completed. Contractors for most of the packages have mobilized at the site for commencement of construction work. The project is targeted to be commissioned by January, 2024.
8.2 Alternate sourcing of Bauxite for 5th Stream:
Sourcing of bauxite for 5th Stream expansion of Alumina Refinery has been envisaged from Pottangi Mines. However, availability of bauxite from Pottangi Mines is expected beyond the scheduled commissioning of 5th Stream expansion. Hence, sourcing of bauxite from existing Panchpatmali Mines South Block has been planned through setting up of a crushing & conveying system for which a capital expenditure of R 483 crore has been approved.
M/s. DCPL has been engaged as the EPCM consultant for the project. Order for major packages such as Over Land Conveyor, Crusher Plant, Water System, Electrical System and Site & infrastructure packages are finalized. Site construction activities are under progress. The project is targeted to be completed by December, 2023.
8.3 25.5 MW Wind Power Project:
In pursuit of being a harbinger for harnessing green & clean energy, your Company has established 198.40 MW Wind Power Plants in various states of India.
In this noble endeavour, your Company is in process of augmenting its wind power generation capacity to 223.90 MW by adding another wind power project of capacity 25.5 MW at Kayathar, Tamil Nadu at a capital expenditure of R 163 crore through M/s. REGen Powertech Pvt. Limited. Substantial progress (65%) has been made on supply and erection of the equipments. However, the job is not completed as yet due to fragile financial situation of the executing agency. The executing agency, M/s. REGen has subsequently been referred to NCLT. The final resolution order, has been issued by NCLT in February, 2022. As the terms of the approved resolution plan are not favorable in the interest of project execution, your Company has filed a petition at NCLAT for review of approved resolution plan. The decision of NCLAT is awaited.
8.4 Pottangi Bauxite Mines:
Pottangi Bauxite Mines (75 Million Tonnes) has been reserved by Government of India in favour of your Company for meeting the bauxite
requirement of 1 Million Tonne Alumina Refinery under expansion. The Mining Plan has already been approved. The Pre-project activities like obtaining Environmental Clearance and Forest Clearance for execution of Mining Lease and construction of 18 KM long Over Land Conveyor are underway. Important milestones like preparation of EIA and EMP report, conduction of Public Hearing, obtaining Forest Right Act certificate from the District Administration, preparation of Compensatory Afforestation scheme for diversion of forest land including authentication of maps by ORSAC and engagement of consultant for selection of Technology of Over Land Conveyor has already been completed. The Mine is likely to be operational in the 3rd quarter of FY 2024-25.
8.5 Utkal-D & E Coal Block:
Utkal-D and Utkal-E Coal Blocks (175 Million Tonnes) have been allocated by Government of India as a part of raw material security to the existing operational Units at Captive Power Plant (CPP) and future expansion of your Company. Your Company executed the Mining Lease of Utkal-D after obtaining requisite regulatory clearances and completing land acquisition in the Mining Lease area. The Coal Controller has granted the Mine Opening Permission in May, 2021. Appointment of Mine Developer and Operator (MDO) including signing of Coal Mining Agreement has been completed. Project Level Rehabilitation and Resettlement Committee (PLRRC) meeting was successfully conducted. Rehabilitation and Periphery Development Advisory Committee (RPDAC) Sub-committee meeting has also been conducted with the villagers of Utkal-D along with District administration to finalise the R & R benefits. The activities for development of railway siding construction are under progress. The Preproject activities for execution of Mining Lease of Utkal-E are in full swing. Stage-I Forest Clearance (FC) has already been obtained and compliance to Stage-I FC has been submitted to obtain Stage-II Forest Clearance from MoEF & CC, GoI. Action for acquisition of balance private land and Government land are being taken up through State Nodal
agency, M/s. IDCO. All out efforts are being made for operationalisation of Utkal-D Coal Block in FY 2023-24 and Utkal-E will be operationalized after obtaining all the statutory clearances thereafter.
9.0 CAPITAL EXPENDITURE (CAPEX):
On a standalone basis the Company has achieved a CAPEX of R 1,488.16 crore. Considering the capitalization done by joint venture companies, on a consolidated basis the CAPEX of the Company stands at R 1,944.65 crore.
10.0 RISK MANAGEMENT POLICY:
A Risk Management Policy has been formulated and approved by the Board of Directors and the same is available in the Companyâs website www.nalcoindia.com.
11.0 HUMAN RESOURCES MANAGEMENT:
Your Company complies with all applicable Presidential Directives and other guidelines in the matters of reservations of SC/ ST/ OBC/ EWS and other categories like PWD and Ex-servicemen. Your Company has published an Equal Opportunity Policy for the PWD category in compliance with the RPWD Act, 2016.
As on 31.03.2022, out of total manpower strength of 5,520, there were 878 SCs (15.91%), 1,066 STs (19.31%), 813 OBCs (14.73%), 101 PWDs (1.83%)
and 9 ESMs (0.16%) on roll. Besides, there were 333 (6.03%) women employees.
Your Company continued to maintain a conducive and cordial Industrial relation climate during the year 2021-22. Not only there was zero man-days loss on account of labour disputes but also the manpower contributed strongly in achieving highest ever profit for the Company during 2021-22. Compliance of applicable Labour Laws, adherence to Government Guidelines and consultative decision making, continued to remain the core strengths in dealing with employee benefits and welfare issues. As always, zero tolerance to indiscipline continued to remain the hallmark of the Companyâs IR philosophy.
For developing and maintaining a decent workplace, your Company has adopted the International Standard, Social Accountability 8000 (SA-8000) since 2009-10. The Certification helped
the Company in becoming more transparent in the areas of child labour, forced labour, safe and healthy work environment, working hours, remuneration, freedom of association, collective bargaining process, discrimination and disciplinary practices
to all our stake holders including employees, owner, customer, supplier and other interested parties.
All the units of your Company are certified to the latest version of SA 8000 i.e. SA 8000:2014. All the Production Units including Corporate Office are certified to SA 8000:2014 Standard since 2017 (New Version). Certification of all Production Units and Corporate Office are being renewed every 3 years
12.0 CORPORATE SOCIAL RESPONSIBILITY (CSR):
With a legacy of over four decades, your Company has proved that âCorporate Social Responsibilityâ is strongly embedded in its DNA. Your Company continues to nurture the core value of âgiving back to the societyâ by contributing to the nationâs economic development on the one hand, and improving the quality of life of its employees, local community and society at large on the other.
Your Company has been following the mandates of the Companies Act, 2013 while considering CSR project. All the ideas and intended developmental actions have been evaluated against Schedule-VII of the Companies Act, 2013.
The initiatives are also taken up by consulting a wide range of stakeholders including local people and local administration. The projects are prioritized as per the needs of the community and continuous monitoring is done to improve their impacts.
Your company has spent R 36.91 crore in the FY 2021-22 on various CSR projects against the mandated CSR obligation of R 28.60 crore complying with the requirements of its CSR policy in line with the Companies Act, 2013. The Company has undertaken theme based CSR activities on Health & Nutrition with special focus on COVID related measures as per Department of Public Enterprises, Government of India OM dated 12.05.2021.
The thrust areas of implementation are Healthcare, Education, Drinking Water, Rural Development, Environmental Sustainability and Development of Iconic City, Puri. The Company has taken exemplary initiatives to fight the COVID-19 pandemic in the state of Odisha and other parts of the country by strengthening the health care system/facility to meet the increased demand in this critical juncture and also spreading awareness about the preventive
measures among the vulnerable communities to combat the spread of the disease.
Your Company primarily focuses on identifying gaps in the existing system of delivery to society and intervening meaningfully with them, so as to create a long-term, sustainable impact rather than creating parallel system.
a) For COVID management, your company has taken the following measures:
(i) Your Company in collaboration with Government of Odisha has set up a 200 bedded exclusive COVID hospital at Nabarangpur district head quarter for treatment of the patients from the Aspirational Districts of Koraput, Nabarangapur, Malkanagiri, Rayagada & Kalahandi.
(ii) Your Company in convergence with Government of Odisha, has set up a 150 bedded District COVID Hospital (DCH) at Banarpal in Angul district.
(iii) Financial support for 70 bedded COVID Hospital at Saheed Laxman Nayak Medical College & Hospital at Koraput.
(iv) COVID assistance to contractual workmen working in the Company.
(v) Financial support to Government of Odisha for supplying DG Sets to medical oxygen filling stations as an emergency measure.
b) Various activities to promote violence free lives among women in the state of Odisha.
c) Clean drinking water projects in operational areas.
d) Infrastructural activities such as construction of roads, culverts, drains and community halls in different rural areas.
e) Support to poor and meritorious girl students under the project âNalco Ki Ladliâ.
f) Residential Education to poor backward and tribal children from periphery villages of M&R Complex, Damanjodi.
g) Operation of Medical Health Units and OPD centers in the peripheral villages of Angul and Damanjodi.
h) Various developmental and renovation activities in Iconic City, Puri.
A detailed report on CSR activities prepared in line with various applicable provisions of the Companies Act, 2013 is attached at Annexure-I.
13.0 IMPACT OF COVID-19 PANDEMIC ON ITS BUSINESS:
(a) Your Company abided to all Government guidelines and directives issued to prevent the spread of COVID-19 in all its operating units.
(b) Despite the restricted working mechanism and logistic challenges in movement of raw materials and finished goods, your Company put its best efforts to maximize its production and sales. All the production Units of your Company operated abiding to COVID-19 appropriate protocol/procedure in the work front and all the Units achieved targeted production in FY 2021-22.
As a responsible corporate citizen, your Company has been extending helping hand to fight against COVID-19. Major initiatives taken by the Company in FY 2021-22 are furnished as under:
a) Your Company supported the State Health Department by two Ventilator Ambulances to provide emergency care to critical COVID-19 patients.
b) To strengthen the Cold Chain Equipmentâs (CCE) & Logistic infrastructure, one Refrigerated Truck has been procured and handed over to State Immunization Cell for COVID-19 Vaccination program. The refrigerated truck has a capacity of transporting 25,70,000 COVID vaccines (in doses).
a) Your Company handed over dry ration, cotton face masks, sanitizers to District Administrations for distribution in peripheral villages of your Company at Angul and Koraput District.
b) Massive sanitization drive was carried out by your Company in peripheral villages.
14.0 VISIT OF PARLIAMENTARY COMMITTEE:
During the year 2021-22, study visits of the Parliamentary Committee on Public Undertaking (COPU) and Parliamentary Standing Committee on Labour was organized at Bhubaneswar as the nodal organization.
15.0 MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Management Discussion & Analysis Report in line with Regulation 34(3) read with 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 in respect of adequacy of internal financial controls with reference to the financial statements and risk management practices.
(c) Various initiatives taken up in the field of environment management at different units of your Company.
16.0 INFORMATION TECHNOLOGY FOR DIGITAL TRANSFORMATION:
Your Company has truly embarked on a digital journey as a strategic imperative with key focus on re-defining business processes and models for operational excellence and to enhance agility, speed, and data-driven decision making.
As an underlying strong and robust transactional layer, your company has adopted SAP Enterprise Resource Planning (ERP) application which integrates business functions such as Sales & Distribution, Finance & Controlling, Materials, Human Resource and Production Planning to ensure uniform process and to improve information availability as single version of truth. SAP plant maintenance module has been introduced for enhanced servicing of operations and maintenance at all the plants. Invoice Reference Number (IRN), generated from the GST Invoice Register Portal was integrated in the existing ERP Application along with e-Waybill,
GST QR code for B2C and new provisions of TDS/TCS. E-procurement of goods and services are performed through GeM portal, Central Public Procurement Portal and SAP SRM. Vendor Purchase order, Invoice and payment effected in GeM Portal has also been integrated with the ERP. Centralized employee applications and employee self-service applications are part of the digital application ecosystem. Computerised Hospital Management System is operational at the Company hospitals in Angul and Damanjodi.
Your company has introduced a new and improved Online Recruitment Portal to facilitate the recruitment process. As a precursor to Smart Factory and in an integrated approach, a centralized MIS system has been introduced to adhere to âsingle source of truthâ and connecting âshop floor to board roomâ.
Your company has been adding features and facilities to the array of existing Mobile Apps for stakeholders.
e-Office has been implemented in your organization ushering in an era of transparency, accountability and speed in management of files. This system also enables authorized users to act on files within and beyond office premises. For secure and ready access to digitized documents, the e-Office Knowledge Management System has been implemented and the same is a giant step
towards a paperless transaction.
Online web-based applications such as Capital Expenditure monitoring, Fund monitoring, Compliance Management System, Vendor Bill Tracking System & Contract Labour Management System are in use for the purpose of regular tracking and monitoring. As a measure of enhanced transparency Online Vigilance portal and Complaint System has been operationalized.
To tide over the crisis of Covid-19 while ensuring office productivity and individual wellbeing, your company adopted a slew of digital measures such as e-Office, Cloud based desktop video conferencing, enhanced secure connectivity for Work from Home, email access from internet and enhancement of internet bandwidth.
Your Company has undertaken an ambitious project of âSmart Bauxite Mineâ. The project shall leverage the power of next generation technologies viz. Artificial Intelligence, Robotics, Automation, Cloud, Data Analytics, AR/VR across the value chain of bauxite mining for improved productivity, Cost, Asset Utilization, Safety, Health and Environmental impact.
Your Company has the following IT infrastructures:
(a) On-premise Data Center at Corporate Office, Bhubaneswar. Data Center uses server virtualization
technologies and hosts all Centralized Applications including ERP. To ensure business continuity, a Disaster Recovery Data Center is located in a separate seismic zone. The Data Center and Disaster Recovery Center have been successfully certified for Information System Management System as per the requirements of ISO 27001:2013 standard. IT infrastructure and application security is ensured with network gateway and endpoint security solutions.
(b) Plants and Offices are interconnected with dual MPLS circuits from different service providers for uninterrupted access to applications and services hosted at Corporate Data Center. The WAN bandwidth has been enhanced to cater to the increased load triggered mainly by Covid-19 practices.
(c) Each location has Gigabit Ethernet LAN with Firewall and the Corporate Data Center has gateway protection solutions additionally. Multichannel video conferencing solution for seamless communications between all business units has been established.
In all units i.e. Mines, Alumina Refinery, CPP, Smelter and Port Facilities, Integrated Management System based on ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 continued to be effectively implemented with regular external audits in remote mode, internal audits and management
review meetings. At the closure of financial year, certification status of all the Units w.r.t. ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 remained valid.
The EnMS continued to be effectively implemented with regular external audits in remote mode, internal audits and management review meetings in three units CPP, Smelter and Alumina Refinery, which are included in the Perform, Achieve & Trade (PAT) scheme of Bureau of Energy Efficiency (BEE). At the closure of financial year certification status of all the three Units w.r.t. ISO 50001:2018 remained valid.
Quality Circle activity continued to be encouraging during the year, in spite of the pandemic & restrictions. Number of active QCs in the Organisation stood at 98. In the current financial year, total 25 quality circle projects were completed whereas several more were in-progress. 8 Quality Circle Teams participated in the National Convention NCQC 2021 of QCFI out of which, 4 nos. were awarded the highest Par-Excellence award. Also, 3 Quality Circle teams participated in the CII State Industry carnival in August, 2021 and the QC from Smelter was awarded the Runner-up trophy.
Propagation of Kaizen culture continued to be highly encouraging during the year. As per the Kaizen by SGA scheme, total 1,401 Kaizens were completed in Smelter, 838 Kaizens were completed in Alumina Refinery, 451 Kaizens were completed in CPP and 187 Kaizens were completed in Mines Unit during the reporting year
At Alumina Refinery, 1 out of 2 and at Mines, 4 out of 7 Lean Six Sigma Green-belt projects were successfully completed during the financial year. Also, at Smelter and CPP units, 12 and 6 new Six-Sigma projects were taken up during the year.
(a) At Alumina Refinery, assessment for CII-EXIM Bank Award, 2021 was carried out by independent assessors during October, 2021 and the Unit bagged the prestigious CII-EXIM Bank Business Excellence award for the year 2021 in the âPlatinumâ Category during the CII-IQ National Quality Summit held in November, 2021.
(b) At Panchpatmali Bauxite Mines, assessment was completed during November, 2021 and the Unit secured the prestigious âGold Plusâ category recognition in the CII-EXIM Bank Award for Business Excellence, 2021.
(c) At Smelter, preparations for next assessment on holistic Business Excellence continued during the year with a âpeople perception surveyâ.
At both Mines and Alumina Refinery, recertification audits of 5S-Work Place Management
System were successfully conducted by M/s. QCFI, in addition to regular internal assessments and review meetings by Unit Management.
At both Smelter & CPP, Plant-wide 5S Workplace Management System continued to be effectively implemented with regular internal assessments.
18.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY:
(a) Your Company continues to comply with the provisions of the Official language and other guidelines issued by the Government agencies and statutory bodies from time to time.
(b) Your Company also holds the Chairmanship position of TOLIC, Bhubaneswar and Angul. Scheduled meetings have been organized at both the locations involving all local PSUs Offices. In this regard, your Companyâs efforts have been appreciated in the meetings by the representatives of RIO, Government of India.
(c) Your Company took several initiatives for the progressive use of Hindi in the day-to-day official work and implementation of Official Language policy of the Union of India. Quarterly meetings of Corporate Level Official Language Implementation Committee were held under the chairmanship of Chairman-cum-Managing Director, in which extensive discussions took place on progressive use of Hindi and the ways and means to bring about further improvements.
(d) Hindi Fortnight, 2021 was observed in all the Production Units, Corporate Office and Regional Offices to propagate linguistic harmony and to motivate the employees for the progressive usage of Hindi in their day-to-day work. Several competitions were organized for the employees, employeeâs dependents and students during the Hindi Fortnight.
(e) Hindi workshops/trainings were organized on regular basis at Corporate Office and all production units including regional offices. Apart from this, several training-cum-motivation programs were also conducted for the member offices of TOLIC(U), Bhubaneswar.
(f) Your Company also publishes its quarterly magazine âSangineeâ and Six monthly Hindi magazine âAksharâ to promote Hindi language.
(g) Vishwa Hindi Divas was celebrated across your Company on 10th January, 2022. To mark the occasion, a week-long series of activities were organized at corporate offices and all the production units.
(a) Since inception your company, as a leading PSU of the country has been contributed to the field of promotion of sports at state/national and international level.
(b) Your company is pioneer in recruiting ace sport personalities of international stature who have made your country and your company pride.
(c) Your company has been supporting as well as facilitating and nurturing the budding young sports talents of the state and country to make them ready for national and international events.
(d) Your Company has encouraged various young players as well as sports persons of the Company to participate in different state level, national level
as well as international level tournaments & sports activities.
(e) The following eminent sports personalities of your company have been entrusted with various responsibilities by the sports apex bodies of the Country and State:
(i) Shri Debasis Mohanty, a former pace bowler of Indian National Cricket Team has been continuing as a member of All-India Senior Selection Committee Panel, as appointed by BCCI.
(ii) Shri Shiv Sundar Das, a former Opening Batsman of Indian National Cricket Team has been appointed as batting coach for the women cricket team for New Zealand tour and ICC Women World Cup, 2022 by BCCI.
(iii) Ms. Anuradha Biswal, an Indian former track and field athlete who specialized in 100-meter hurdles having Bronze in 2000 Asian Championship & Gold in 2006 South Asian Games in her credit is now representing as a National Co-ordinator in Athletics of All India Public Sector Sports Control Board (AIPSSCB) and also imparting fitness training to the aspirant young sports talents of the country at Kalinga Stadium, Bhubaneswar.
(iv) Ms. Sradhanjali Samantaray, is a former skipper
of Indian National Women Football Team was appointed as Head Coach for Odisha State Women football team during the Hero Senior Women National Championship 2021-22 held at Kerala.
(v) Ms. Aparajita Gochhikar, a Chess Candidate master and three time medallist in Commonwealth Championship (once Gold & two times Silver) recently awarded with International Arbiter (IA) Norm in 47th National Women Chess Championship held at Bhubaneswar from 24th February, 2022 to 2nd March, 2022.
20.0 VIGILANCE ADMINISTRATION:
Vigilance Administration and Systems established in your Company are furnished below:
(i) Your Company has a well-established Vigilance Department headed by a Chief Vigilance Officer (CVO) who is appointed by Government of India from officers of Central Civil Services or Officers from other Services of Government of India. Other supporting Vigilance Officers who assist the CVO are selected on deputation basis in consultation with and concurrence of CVO. Your Company has its vigilance set up at three locations, i.e. Corporate Office at Bhubaneswar, S&P Complex at Angul and M&R Complex at Damanjodi.
(ii) The Chief Vigilance Officer (CVO) acts as an advisor to the chief executive in all matters pertaining to vigilance. He also provides a link between organisation and the Central Vigilance Commission on one hand and the organisation and the Central Bureau of Investigation on the other. Vigilance functions to be performed by the CVO are of wide sweep and include collecting intelligence about the corrupt practices committed or likely to be committed by the employees of the organisation; investigating or causing an investigation to be made into verifiable allegations reported to him; processing investigation reports for further consideration of the disciplinary authority concerned; referring the matters to the Commission for advice wherever necessary; taking steps to prevent improper practices or commission of misconducts; examining audit, inspection and other reports from the point of vigilance angle, etc. The vigilance functions are in the nature of preventive, punitive, surveillance & detection.
The functions of CVO are as follows:
(i) Overall Vigilance Administration of the Company.
(ii) Maintaining coordination with CVC and CBI, Police etc. besides organizing structured review meeting with CMD.
(iii) Furnishing of various return/report to Ministry/ CVC/CBI.
(iv) Assisting CVC in coordination with Independent External Monitors (IEMs) for implementation of I.P (Integrity Pact) in the Organisation.
(v) Assisting management in formulation/updation of anti-corruption policies/measures.
(vi) Assisting management in development of Integrity/ transparency Index for ascertaining the fairness, transparency & equity in various domain functions & overall management.
(vii) Organizing training on Vigilance Awareness, Vigilance Administration, case studies etc.
(viii) Conducting Periodical Systemic study in the Organisation & offering systemic suggestions for implementation to help the Company to effectively manage its affairs in more transparent & fair manner.
(ix) Inculcating culture of Overall Integrity at the Company Level.
Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour.
The purpose of this policy is to provide a framework
to promote responsible and secure whistle blower culture for reporting wrong doings and complaints with protection to the informer by concealing the identity of the complainant. It protects employees wishing to raise a concern about serious irregularities within the Company. Details of the policy are available in the Companyâs website www.nalcoindia.com.
Wide circulation and campaign was carried out during the financial year for popularising the Whistle Blower Policy in your Company, so that reporting of the irregularities, wrongdoings and complaints can be reported without hesitation which would help prompt recourse by Vigilance Department in particular and by the management in general.
Corruption is a serious category of risk. Corruption Risk Management policy of your Company has been implemented to determine the key principles and requirement aimed at preventing corruption and compliance of anti-corruption law of India.
The policy reflects commitment of your Company and its management to high ethical standards at carrying on business in an open, transparent and honest ways aimed at improving corporate culture, compliance with the best practices in corporate governance and
maintaining the business reputation in your Company. Well elaborated systems of checks and balance are in place.
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 during the year under report.
Your Company has a Board approved Fraud Prevention Policy and the same is placed in the Companyâs website www.nalcoindia.com
In line with CVC and DoPT directives, your company responded actively in regularly updating the data of the executives at DGM (E-6) and above, on the web portal https://doptapp.nic.in/solve/
Your Company has conducted Outreach Activity or Integrity Pledge Drive at various schools and colleges in and around the Companyâs head office (at Bhubaneswar) and plant complexes (at Angul and Damanjodi) wherein approx. 1,350 citizens (general public, employees of the Company, students and others) have been undertaken Online/offline Integrity Pledge.
This portal has been developed to provide information about vigilance structure in your Company, its different activities, practices or initiatives undertaken by the Vigilance dept. and to provide scope to lodge the complaint in paperless mode promptly by anyone including general public and all stake holders of the company & to check the status of the complaint in online mode. The complainant can log-in by providing their e-mail and mobile number & authenticated by OTP, which is sent to them. This portal is easy and simple to operate and lodge complaints including viewing updated status of the complaints lodged. It may be accessed through the Companyâs website at www.nalcoindia.com.
In order to address the provisions of Right to Information Act (RTI), one Appellate Authority, one Public Information Officer and nine Assistant Public Information Officers responsible for providing information sought by stakeholders, have been appointed.
The following are the details of the RTI applications and appeals during 2021-22:
Particulars |
Requests |
First Appeals |
Under Process as on 01.04.2021 |
26 |
0 |
Received during the year (including cases transferred from other Public Authority) |
508 |
46 |
No. of cases transferred to other Public Authorities |
1 |
0 |
Decisions where requests/ appeals rejected |
97 |
4 |
Decisions where requests/ appeals accepted and settled |
429 |
42 |
Under Process as on 31.03.2022 |
7 |
0 |
Third party Transparency Audit for the year 2020-21 of your Company has been carried out by M/s. National Productivity Council, New Delhi with satisfactory remarks.
The RTI requests and appeals are received and replied through both physical and online mode. Your Company is aligned with online RTI portal of Department of Personnel and Training (www. rtionline.gov.in ) with effect from January, 2017.
22.0 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 fees for the financial year 2022-23 have been paid on time to the Stock Exchanges.
All matters relating to transmission of shares, issue of duplicate share certificates, payment of dividend, de-materialization and re-materialization of shares and redressal of investors grievances are carried out by the Companyâs RTA i.e. M/s. KFin Technologies Limited (Formerly KFin Technologies Private Limited), Hyderabad.
24.0 PAYMENT OF ANNUAL CUSTODY/ ISSUER FEES TO DEPOSITORIES:
Annual connectivity fees and custody fees/issuer fees for the financial year 2022-23 have been paid on time to both M/s. National Securities Depository Ltd. and M/s. Central Depository Services (India) Ltd.
25.0 BUSINESS RESPONSIBILITY REPORT:
In line with Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report for 2021-22 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.
(a) The mandatory report on sustainability i.e. the Business Responsibility Report addressing the
economic, environmental, social & governance aspects as required by SEBI, is completed and published.
(b) In addition to above report, a standalone report is prepared on voluntary basis, aligned with Global Reporting Initiative (GRI) Standards Core option.
26.0 CONSERVATION OF ENERGY, I TECHNOLOGY ABSORPTION AND i FOREIGN EXCHANGE EARNINGS AND i OUTGO:
(a) Since inception, 42 patents have been filed out of which 23 have been granted and 7 have been commercialized. 03 patent applications were filed and 02 patents were granted in financial 2021-22. Research & Scientific Advisory Committee (RSAC) meetings are being held periodically to review the R&D activities of the Company.
(b) Under the Development Cooperation Agreement signed with RTA/AP, development of low energy cell technology for smelter plant (AP2XN0) successfully implemented in financial year 2020-21 in trial pots, yielding an energy saving of 150 KWH/T, is being implemented in balance pots in phases.
(c) Renewal of recognition by Department of Scientific & Industrial Research (DSIR), Govt
of India for all 3 R&D units of your Company i.e. NRTC, Bhubaneswar; Smelter Plant, Angul and Refinery Plant, Damanjodi obtained for a period of 3 years i.e. up to March, 2024.
(d) R&D Trials with new generation grain refiner in Billet Casting Facility (BCF) completed in Smelter Plant.
(e) R&D Project on âExtraction of Alumina from Indian PLK ore using nitric acid process route: Phase 3 Activities at laboratory scale-Optimization of process parameterâ completed with CSIRO, Australia, that did not yield desired result.
(f) A bench scale study, jointly by 3 R&D institutes (JNARDDC, CSIR-NML and CSIR-IMMT) and 3 industries (NALCO, HINDALCO and VEDANTA) for âTechnology development for
holistic utilization of red mud for extraction of metallic values & residue utilizationâ is in progress.
(g) Bauxite Certified Reference Material (CRM) through inter laboratory comparison exercise in collaboration with NCCCM, BARC Hyderabad successfully developed.
(h) Process for making Zeolite 13X trial in collaboration with CSMCRI, Bhavnagar successfully developed.
(i) A novel process successfully developed in bench scale for recovery of Al metal from dross using nano technology, hereby reducing energy consumption.
(j) Three in-house R&D proj ects titled âPreliminary studies on the suitability of NALCO alumina tri-hydrate for de-fluoridation purposeâ; âHeat treatment/ annealing combined with medium boron treatment helps increase in electrical conductivityâ and âHomogenization Time-Temperature study of 6000 series DC cast Aluminium billetâ are in progress at NALCO Research & Technology Centre (NRTC), Bhubaneswar.
(k) Benefits Derived as a Result of The R&D (InHouse & Collaborative): Based on a completed R&D projects in 2021-22:
(i) AP2XNO pot technology trials in smelter plant show a reduction of DC Energy of 150 KWH / Ton of metal.
(ii) New process developed for making Zeolite 13 X at Refinery Plant.
(iii) Certified Reference Material (CRM) of Bauxite, 1st of its kind developed indigenously.
(iv) A new process for recovery of Al metal from Al dross developed in bench scale which has a commercialization potential.
(l) As on 31st March, 2022, 06 in-house projects and 20 collaborative projects are in progress.
(m) Three technical papers were presented and published in ICSOBA 2021 conference.
26.2 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.
27.0 DIRECTORSâ RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3)(c) and
134(5) of the Companies Act, 2013, your Directors 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;
(e) 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; and
(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.
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.
29.0 CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
The Policy on Related Party Transactions has been approved by the Board and placed in your Companyâs website which can be accessed at www.nalcoindia.com.
Your Directors draw the attention of the members to note no. 39 of the financial statements which sets out related party disclosures.
No contract has been entered with any related party during the year under report. However, a report in Form AOC-2 is attached at Annexure-VI to this report.
30.0 DIRECTORS AND KEY MANAGERIAL ! PERSONNEL:
The following changes took place in the Board of
Directors of your Company since the last report:
(a) Ministry of Mines, Govt. of India vide Order No. 2/8/2020-Met-I dated 10.11.2021 appointed 7 (Seven) Part-time Non-official (Independent) Directors (Shri Ravi Nath Jha, Dr. B. R. Ramakrishna, Adv. George Kurian, Dr. Ajay Narang, Shri Y. P. Chillio, Ms. (Dr.) Shatorupa and Adv. Dushyant Upadhyay) for a period of three years and further, vide Order No. 2/8/2020-Met-I dated 22.03.2022 appointed Shri Sanjay Ramanlal Patel as a Part-time Non-official (Independent) Director for a period of three years.
(b) Dr. Veena Kumari Dermal, IPoS, was appointed as a Part-time Official Director w.e.f. 20.01.2022.
(c) Shri Ramesh Chandra Joshi was appointed as Director (Finance) w.e.f. 04.02.2022.
(d) Shri Sadashiv Samantaray was appointed as Director (Commercial) w.e.f. 22.03.2022.
Tenure of Shri Satendra Singh, IAS as Part-time Official Director ended on 20.01.2022.
In accordance of the provisions of the Act, the following are the Key Managerial Personnel of your Company:
(a) Shri S. Patra, Chairman-cum-Managing Director.
(b) Shri R. S. Mahapatro, Director (HR).
(c) Shri M. P. Mishra, Director (P&T).
(d) Shri B. K. Das, Director (Production).
(e) Shri Ramesh Chandra Joshi, Director (Finance).
(f) Shri Sadashiv Samantaray, Director (Commercial).
(g) Shri N. K. Mohanty, Group General Manager and Company Secretary.
Your 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.
During the year, 6 (Six) Board meetings were held. Details of the meetings are available in the report on Corporate Governance (Annexure-V) placed in this Annual Report.
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 (Annexure-V) placed in this report.
Shareholders of your Company have approved appointment of new Directors through Postal Ballot process dated 11.03.2022 and 28.04.2022 in compliance with the amended Regulations 17(1C) and 25(2A) of the SEBI (LODR) Regulations, 2015 with required ordinary/special resolutions.
31.0 ANNUAL RETURN:
In accordance with the Companies Act, 2013, the Annual Return for the financial year 2021-22 in the prescribed format is available in your Companyâs website at https:// nalcoindia.com/wp-content/uploads/2022/08/Annual-Return-2021-22-Draft.pdf
32.0 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:
(a) Details relating to deposits covered under Chapter-V of the Act.
(b) Issue of equity shares with differential rights as to dividend, voting or otherwise.
(c) Issue of shares, sweat equity shares and ESOS to employees of the Company.
(d) Neither Chairman-cum-Managing Director nor the Whole-time Directors of the Company received any commission from the Company.
(e) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs 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 and notification dated 5th July, 2017.
(i) Companyâs policy on Directorâs appointment and remuneration including criteria for determining qualification, attributes, independence, etc. as per Section 134(3)(e) and Section 178(2), (3) & (4) of the Companies Act, 2013 (âActâ).
(ii) 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 of the Act.
(iii) 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 of the Act.
33.0 SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
Your Company has a policy on prevention, prohibition and redressal of sexual harassment of women at workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, prohibition & Redressal) Act, 2013. Internal Complaints Committees have been formed at the production Units and Corporate Office of the Company to redress complaints received regarding sexual harassment. All the Committees in place have been formed as per the guidelines of the Act. One case was reported under the Sexual Harassment of Women at Workplace (Prevention, prohibition & Redressal) Act, 2013 during 2021-22.
Regular training programs are conducted for employees to sensitize them on the issue of sexual harassment at workplace and its prevention, prohibition and redressal.
34.0 PARTICULARS OF LOANS,GUARANTEES AND INVESTMENTS:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the note nos. 9 and 11 to Standalone Financial Statements 2021-22.
35.0 SUBSIDIARIES, JOINT VENTURE COMPANIES AND ASSOCIATED COMPANIES:
In accordance with the provisions of Section 129 (3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the Joint Venture and Associates and their salient features are given in the note nos. 41 and 42 of the Consolidated Financial Statements for the year ended 31.03.2022 respectively. Salient features of JV/Associate companies in Form AoC-1 (Note 42) forms integral part of the consolidated financial statement of the Company.
(a) Your Companyâs Panchpatmali Bauxite Mines was awarded 5 Star Rating by Ministry of Mines for sustainable Mining.
(b) Your Companyâs Panchpatmali Bauxite Mines has been awarded in the 17th CII Odisha State ESH Awards 2021 competition, for sustainable mining practices.
(c) Your Companyâs Panchpatmali Bauxite Mines has also been awarded the prestigious Pollution Control Excellence Award 2021 by the State Pollution Control Board, Odisha, for effective pollution control measures and sound environment management practices.
(d) Your Companyâs Alumina Refinery Plant at Damanjodi, Odisha bagged the prestigious Kalinga Environment Excellence Award for adopting outstanding practices in environmental management and pollution control.
(e) Your Company has been conferred with the Best CSR Award by Public Relation Council of India (PRCI) Vizag, Andhra Pradesh Chapter for its
commitment towards downtrodden through CSR & HR activities.
(f) Your Companyâs Panchpatmali Bauxite Mines has won the prestigious 21st Annual Greentech Environment & Sustainability Awards, 2021 for outstanding achievements in the field of environment protection.
(g) Your Companyâs Alumina Refinery bagged the CII EXIM Bank Business Excellence Platinum award & Panchpatmali Bauxite Mines received the award in Gold plus category at CII National Quality Summit.
(h) Your Companyâs Panchpatmali Bauxite Mines bagged Kalinga Safety Excellence Platinum Award for its safe mining practices and Alumina Refinery bagged Gold Award at the Odisha State Safety Conclave.
(i) Your Companyâs unwavering commitment towards an energy efficient India, received due recognition as Smelter & Power Plant, Angul bagged the prestigious Energy Conservation Award, 2021 with highest rating in Large Scale Category, conferred by CII.
(j) Your Company received the Kalinga HR Excellence Award organized by Institute of Quality & Environment Management Services (IQEMS) in collaboration with Institute of Public Enterprises, Hyderabad and Odisha State Productivity Council, Bhubaneswar.
(k) Your Company bagged the Non-Ferrous Best Performance Award, 2020-21 instituted by the Indian Institute of Metals (IIM), under the large scale manufacturing unit category.
(l) Your Company received prestigious Golden Peacock Award, 2021 for Sustainability in the Mining & Metal sector. The Award recognizes our focus on environmentally-sustainable practices.
37.0 COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE FINANCIAL STATEMENT OF THE COMPANY:
Annual Financial Statements both standalone and consolidated as approved by Board were submitted to the office of Director General of Commercial Audit for their comments. The Comptroller and Auditor General of India has issued âNilâ comments on both the standalone and consolidated financial statements for the year ended 31.03.2022 vide letters dated 28.07.2022, issued by Office of Director General of Audit (Mines), Kolkata.
38.0 AUDITORS:
M/s. GNS & Associates, Chartered Accountant and M/s. A. K. Sabat & Co., Chartered Accountant are appointed as joint statutory auditors of the company by the Comptroller and Auditor General of India for the financial year 2021-22.
The Statutory Auditors report on the Standalone and Consolidated Financial Statements have already been placed before the Board in its meeting held on 25.05.2022.
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Cost Audit is applicable to the Company for the financial year 2021-22.
In compliance with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company have on the recommendation of the Audit Committee, appointed M/s. Niran & Co., Cost Accountants as the Cost Auditors for the year 2021-22.
Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.
M/s. Deba Mohapatra & Co., Practicing Company Secretaries were re-appointed for undertaking Secretarial Audit job of your Company for 202122 in terms of Section 204 of the Companies Act, 2013 and Rules made there under. The report of the Secretarial Auditors along with managementsâ explanation on observations of the Secretarial Auditors are enclosed as Annexure VII to this report.
Further, the tenure of M/s. Deba Mohapatra & Co., Practicing Company Secretaries as Secretarial Auditors of the Company completed on 31.03.2022 and the Board of Directors approved the appointment of M/s. SKM & Associates, Practicing Company Secretaries as Secretarial Auditors of the Company for a period of two financial years i.e. 2022-23 and 2023-24.
Your Company has appointed the following Chartered Accountant firms for carrying out Internal Audit functions of the Company for the financial year 2021-22:
Unit |
01.04.2021 to 30.09.2021 |
01.10.2021 to 31.03.2022 |
Corporate Office, Bhubaneswar |
M/s. SRB & Associates |
M/s. Agasti & Associates |
M&R Complex, Damanjodi Port Facility, Visakhapatnam |
M/s. Rao & Kumar |
M/s. B V Rao & Co LLP |
CPP, Angul |
M/s. Tej Raj & Pal |
|
Smelter, Angul |
M/s. B.N. Mishra & Co. |
|
Regional Office -East (Kolkata) |
M/s. Roy & Bagchi |
M/s. J. F. Dastoor & Co. |
Regional Office -West (Mumbai) |
M/s. MKPS & Associates |
M/s. ANPJ & Co. |
Regional Office -North (Delhi) |
M/s. Bhatia & Bhatia |
M/s. Pradeep Gopal & Co. |
Regional Office -South (Chennai) |
M/s. Raghavan & Muralidharan |
M/s. Manohar Choudhry & Associates |
Your Directors acknowledge the excellent support extended by the Government of India particularly Ministry of Mines, DIPAM, DPE and other Ministries/ Departments of the Government of India, various Ministries/Departments of the Government of Odisha, various PSUs in Companyâs value-added chain, all stakeholders and investors and look forward for maintaining such mutually supportive business relationship in the coming years too.
Last but not the least, your Directors also place on record their deep sense of appreciation for the dedication and commitment shown by all employees/contractors and contract workers. The Board of Directors also endorse and appreciate the hard work demonstrated by the employees of all levels, trade unions and officers associations to keep the Plant/Units operational during COVID-19 pandemic situation. The Companyâs consistent growth was made possible due to belongingness, solidarity, co-operation and support received from all fronts.
For and on behalf of Board of Directors (Sridhar Patra)
Place : Bhubaneswar Chairman-cum-Managing Director Date : 16.08.2022 DIN : 06500954
Including Special Grade Hydrate
Your Company achieved highest ever Aluminium Metal sales and highest ever domestic sales of Alumina chemicals since inception during 2021-22. After experiencing COVID-induced sluggish domestic demand for Aluminium metal during the FY 2020-21, which resulted in large volumes of metal being exported, your Company registered a 40% jump in domestic metal sales and 8% increase in overall metal sales in 2021-22, which was in sync with the highest ever metal production achieved during the FY 2021-22.
Projected figures published by CRU for the period Jan.-June, 2022 have been extrapolated to arrive at 2022 figures (Source: CRU).
Mar 31, 2018
Dear Members,
The Directors have great pleasure in presenting before you the 37th Annual Report of your Company together with the audited financial statements (standalone and consolidated) and Auditorsâ Report for the financial year ended 31st March, 2018.
PERFORMANCE HIGHLIGHTS
Physical Performance
Production |
Unit |
2017-18 |
2016-17 |
Bauxite |
MT |
70,25,109 |
68,25,000 |
Alumina Hydrate |
MT |
21,05,500 |
21,00,100 |
Aluminium |
MT |
4,25,515 |
3,87,422 |
Electricity (Net)-CPP |
MU |
6,547 |
6,066 |
Wind Energy (Gross) |
MU |
252 |
206 |
- Bauxite Mines (North-Central Block of Panchpatmali Mines) achieved 100% capacity utilization with transportation of 68.25 lakh MT for second successive year.
The operation of new mine i.e. South Block of Panchpatmali Bauxite Mines started w.e.f. 22.05.2017. Bauxite transportation from the new mine started in the 4th quarter of financial year 2017-18. Transportation from South Block is 2 lakh MT and combined transportation of both the Mines is 70.25 lakh MT, highest ever since inception.
Total Bauxite excavation of 70.84 lakh MT during the year is also highest ever since inception registering a growth of 3.8% over last year.
- Alumina Refinery achieved 100% normative capacity (i.e. 21 lakh MT) with production of 21.06 lakh MT Alumina Hydrate. Calcined Alumina of 21.11 lakh MT during the year is also highest ever since inception registering a growth of 3.9% over last year.
- Steam Generation Plant (SGP) of Alumina Refinery achieved highest ever net power generation of 484 MU registering a growth of 6.9 % over last year. The plant also achieved record ash utilization of 103.5% against 100% achieved last year.
- Aluminium Smelter achieved highest cast metal production of 4.26 lakh MT in last 7 years, registering a growth of 9.8 % over last year.
- CPP achieved âNet Power Generationâ of 6,547 MU, registering a growth of 7.9 % over previous year.
- Wind Power: 4 wind power units at different locations of the Country have generated 252 MU against 206 MU generated last year, registering a growth of 22%.
SALES PERFORMANCE
Chemicals
During the financial year 2017-18, your Company registered total Alumina sale of 13,37,416 MT, including export of 12,76,775 MT. This betters the corresponding figures of 12,94,900 MT and 12,43,103 MT respectively achieved during 2016-17.
Metal
The company achieved Aluminium metal sales of 4,26,316 MT during 2017-18, which is significantly higher than the sales figures of 3,85,518 MT achieved during 2016-17. This comprises of sales of 3,50,469 MT (an all-time record) in the domestic market and 75,847 MT in the overseas market. This resulted in an all-time low inventory of 1,502 MT at the end of Financial Year 2017-18.
A summary of sales achieved during 2017-18 is tabulated hereunder:
Description |
Unit |
Year ending 31.03.2018 |
Year ending 31.03.2017 |
Export |
|||
Alumina |
MT |
12,76,775 |
12,43,103 |
Aluminium |
MT |
75,847 |
1,00,591 |
Domestic Alumina and Hydrate |
MT |
60,641 |
51,797 |
Aluminium |
MT |
3,50,469 |
2,84,926 |
Total Metal Sale |
MT |
4,26,316 |
3,85,518 |
Total Chemical Sale |
MT |
13,37,416 |
12,94,900 |
Total domestic metal sales of 3,50,469 MT comprises of 2,73,502 MT effected from Smelter Plant, Angul and 76,967 MT effected from 10 stockyards situated in Baddi, Bangalore, Bhiwandi, Chennai, Delhi, Faridabad, Jaipur, Kolkata, Vadodara and Vizag.
FINANCIAL PERFORMANCE
The details of financial performance are given below:
Rs. in crores
Particulars |
2017-18 |
2016-17 |
Revenue from Operations (Gross) |
9,618 |
8,050 |
Other Income |
300 |
408 |
Total Income |
9,918 |
8,458 |
Raw materials consumed |
1,465 |
1,182 |
Power & Fuel including Coal |
2,748 |
2,213 |
Employee benefits expenses |
2,261 |
1,537 |
Other expenses |
1,749 |
2,041 |
Depreciation & amortization expenses |
480 |
480 |
Total expenses |
8,703 |
7,453 |
Profit Before Exceptional items |
1,215 |
1,005 |
Add/(Less):Exceptional items [Income/(Exp enditure)] |
824 |
(40) |
Profit Before Tax |
2,039 |
965 |
Tax expenses |
697 |
296 |
Profit After Tax |
1,342 |
669 |
FUTURE OUTLOOK
Global Aluminium industry is entering a new era as major economies of the world are looking to impose trade restrictions/ barriers on imports to their respective nations, which is likely to result in a surge in regional Aluminium premiums. Global Aluminium consumption has increased by 25% over the last 4 years and the trend is likely to continue in the near future. Measures taken for pollution control in China seem to have cut down some of its production and the prices of Aluminium have surged over the last year. The prices in the near term are likely to be supported, as the overall market is expected to be in deficit in 2018.
In the Indian context, the demand for Aluminium remains strong in line with the increased economic activity witnessed in various aluminium consuming sectors like automobiles, construction, power etc. As the overall economy registers robust growth, and infrastructure projects across the country gain momentum, prospects of the Aluminium industry remain positive. Support from the Government in countering the threat of Aluminium imports can help the domestic Aluminium industry in consolidating its position and competitiveness in the market.
Dividend and Appropriations
During the year the Company has paid interim dividend @ Rs.4.70 per equity share amounting in total Rs.908.48 crores. The Board has also recommended a final dividend of Re.1.00 per equity share amounting to Rs.193.29 crores. The total dividend payout for the financial year 2017-18 works out to Rs.1101.77 crores as against Rs.541.22 crores during the previous year. Dividend including the applicable dividend distribution tax works out to a payout of 98.78% of the PAT against 97.44% of previous financial year.
MoU Performance
Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated âExcellentâ as per the Memorandum of Understanding (MoU), signed with the Government of India for the financial year 2017-18.
Raw Material Securitisation
- Mining Lease of Panchapatmali Bauxite Mine (Central & North Block) has been extended up to 16.11.2032 from existing 31.03.2020 by Government of Odisha.
- All regulatory clearances for opening of South Block, Panchapatmali Bauxite Mines has been obtained and the South Block Mine opened & operated w.e.f 22.05.2017. Mining lease is valid upto 19.07.2029.
- G-8 grade coal linkage (2 lakh MTPA) was booked through Linkage Auction route in the Trench-III auction from M/s. NCL for Refinery Plant, which is valid for a period of 5 years equivalent to 2.73 lakhs MTA of G-12 & G-13 grade coal and can be further extended to another 5 years. Fuel Supply Agreement for the same was signed on 21st July, 2017.
- The Fuel Supply Agreements for Unit 1 to 8, CPP, Angul (47.16 LMT), Alumina Plant, Damanjodi (5.47 LMT), TG-I to III of SPP, Damanjodi (3.26 LMT) were renewed for another 5 years w.e.f 1st May, 2018. The FSA amendments for renewal were signed on 27th April, 2018 with M/s. MCL. This ensures coal security for another 5 years for 55.89 LMT linkage coal from M/s. MCL.
- The existing Fuel Supply Agreement for TG-IV (1.01 LMT) was renewed for another 5 years w.e.f 23rd Dec., 2016. The FSA amendment was signed with M/s. MCL on 17th Dec., 2016 with M/s. MCL.
- Your Company is also going to participate for additional 2 LMT, G12 grade linkage coal in the Linkage Auction of Trench-IV scheduled in July/August, 2018 for SPP, Damanjodi.
- In addition to above, your Company is participating in the e-auction coal notified by the subsidiaries of CIL and SCCL for the shortfall quantity against the requirements.
- Further, your Company got allocation of Coal mines Utkal D & E from Govt. of India in the year 2016, with a permission to mine 4 million MT per annum to feed existing 2 units of CPP (Unit - 9 & 10) and 2 new proposed units (Unit - 11 & 12) for brownfield expansion. The reserve of Utkal D & E Coal mines will sustain 40 - 45 years at the rate of 4 million MT per annum.
- Your Company is also planning to participate in the Coal block allotment process of Govt. of India, notified in the month of July, 2018 for expansion of Smelter and Power plant.
- Your Company has been issued terms and conditions for grant of Mining Lease by Govt. of Odisha for Pottangi Bauxite Mines and the same have been accepted.
- For part securitisation of Caustic Soda, your Company has formed a JV Company âGACL-NALCO Alkalies & Chemicals Pvt. Ltd" with Gujarat Alkalies and Chemicals Ltd. (GACL) to set up a Caustic Soda plant and to get assured supply of 50,000 MT of Caustic Soda per annum.
- Your Company had also signed an MoU to form a JV Company with Neelachal Ispat Nigam Ltd. for production of CT Pitch and to supply to NALCO Smelter. Finalisation of the JV agreement is in process.
PROJECTS UNDER IMPLEMENTATION
5th Stream of Alumina Refinery
Your Company is in the process of setting up of 5th Stream in its existing Alumina Refinery which shall add 1.0 MTPY to its existing installed capacity of 2.275 MTPY (total capacity 3.275 MTPY), at a projected expenditure of Rs.5,540 crores, based on improved Medium Pressure Digestion technology of M/s. Rio Tinto Alcan International Limited (RTAIL).
Your Company has obtained major statutory clearances like Environmental Clearance from MoEF & CC and Consent to Establish (CTE) from Odisha State Pollution Control Board. M/s. Thyssenkrupp Industrial Solutions (India) Private Ltd. has been appointed as EPCM consultant for the project. M/s. M.N. Dasturco, has been appointed as EPCM consultant for Steam and Power Plant of Alumina Refinery. Basic engineering for the project by M/s. RTAIL has been completed and detailed engineering has progressed to the tune of 12%. Process of awarding of long delivery contracts has started. Site activity comprising of survey and soil investigation started since December, 2017.
Alternate sourcing of Bauxite for 5th Stream
Sourcing of Bauxite for 5th Stream Expansion of Alumina Refinery has been envisaged from Pottangi Mines. However, availability of bauxite from Pottangi Mines is expected beyond the scheduled commissioning of 5th Stream expansion.
Hence, sourcing of bauxite from South Block of your Companyâs existing Panchpatmali Mines has been planned through setting up of a crushing & conveying system for which a capital expenditure of Rs.483 crores has been projected.
Process for engagement of EPCM consultant for above proj ect has been initiated.
Pottangi Bauxite Mines
Pottangi Bauxite Mines (75 Million Tones) has been reserved by Govt. of India in favour of your Company. The status is as follows:
- Ministry of Mines issued Gazette notification on reduced mining lease area (from earlier 1738.04 Ha to 697.979 Ha) on 21.03.2018.
- Govt. of Odisha issued terms and conditions for grant of Mining lease over the reduced area of 697.979 Ha on 14.05.2018 and your Company conveyed acceptance on 15.05.2018.
- EAC considered NALCOâs proposal for issue of ToR for conducting EIA studies for Environmental Clearance in its meeting held on 30.05.2018.
- Authorities are being followed up for conducting the Gramsabha at the earliest for obtaining FRA certificate and compensatory afforestation land for the forest land to be diverted for Pottangi Bauxite mines for issue of Forest Clearance.
- Mining Plan submitted to IBM on 28.05.2018.
Utkal D & E Coal Blocks
Utkal-D&E Coal Blocks (200 Million Tones) have been allotted by Govt. of India in favour of your Company in the year 2016. Following activities were undertaken for complying with various conditions to obtain the Mining Lease of Utkal-D & Utkal-E Coal Block combined and mine opening of Utkal-D in 1st Phase.
- Terms of Reference (TOR) for mining lease of Utkal-D was issued by Govt. of Odisha on 30.10.2017.
- The process of transfer of land by execution of land deed of Utkal-D has been completed on 04.05.2017.
- Transfer of statutory clearances for Utkal-D from prior allottee in favour of your Company is in process.
- Action are already taken up by M/s. CMPDI for compliance of observation of standing committee of MoC for approval of Mining Plan for Utkal-D&E.
- MECON has been appointed as Transaction Advisor (TA) to engage Mine Developer (MDO), as mining activities of Utkal-D Coal Block is planned in 2019.
- Mining activities for Utkal - D is expected to start in 2nd half of 2019-20.
25.5 MW Wind Power Projects
Your Company is in process of augmenting its wind power generation capacity from 198.40 MW to 223.90 MW by adding another wind farm of capacity 25.5 MW at Kayathar, Tamil Nadu at a capital expenditure of Rs.163 crores. Plant is expected to be commissioned by October, 2018.
Retrofit Conversion of Flat Bottom Tank to HRD-DCW in Streams #1, 2 & 3 at Alumina Refinery
To improve operational efficiency, your Company is going for retrofit conversion of Flat Bottom settler-washer Tanks to HRD-DCW (High Rate Decanter and Deep Cone washers) in Streams #1, 2 & 3 of its existing Alumina Refinery at an estimated cost of Rs.355 crores. Following orders have been placed for the project:
- Process Licensing and Basic Engineering Package on M/s. RTAIL.
- Rake Mechanism (Proprietary item) for HRD DCW on M/s. RTAIL.
- EPCM consultancy on M/s. EIL
NIT (Indigenous) has been floated for execution of the project on turnkey basis for balance supply, erection, testing and commissioning of the project.
BPTG #5 Project
To reduce dependency on power supply from the grid at Refinery, BPTG-5 project was envisaged. The project was commissioned in October, 2017.
Brownfield Expansion of Smelter and Captive Power Plant
Your Company is planning the brownfield expansion of Smelter at Angul by adding a 5th Potline (5 lakh MTPY) and upgradation of pot amperage of existing 4 Potlines from 180 KA to 220 KA (1 lakh MTPY) along with expansion of CPP by addition of 2 units of 660 MW each. M/s. EIL and M/s. DCPL have been engaged for preparation of DPR for Smelter expansion and TEFR for CPP expansion.
BUSINESS DEVELOPMENT
- Caustic Soda Project in JV with Gujarat Alkalies and Chemicals Ltd. (GACL):
Your Company has formed a JV Company âGACL-NALCO Alkalies & Chemicals Pvt. Ltd" with GACL in December, 2015 to set up 2.7 lakh TPA caustic soda plant along with 130 MW (2x65 MW) captive power plant at Dahej in Gujarat.
- 50 (2X25) MW Wind Power Project:
Your Company placed order for setting up of first block of 25.5 MW Wind Energy Project at Kayathar in Tuticorin dist., Tamil Nadu in September, 2017. The Company further placed order for setting up of second block of 25.2 MW Wind Energy Project at Viliseri in Tuticorin dist., Tamil Nadu in May, 2018.
- Coal Tar Pitch Plant in JV with NINL:
Your Company has signed an MoU with Neelachal Ispat Nigam Ltd. (NINL) to set up a Coal Tar Distillation plant of 20,000 TPA capacity based on the Coal Tar generated in NINLâs Coke Oven Plant for production of liquid CT Pitch and supply to Smelter plant for own consumption.
- Strategic minerals in overseas:
NALCO, HCL and MECL, the three CPSEs under the Ministry of Mines, Government of India have signed an MoU in Sept, 2017 to set up a JV Company to identify, acquire, develop, process and make commercial use of strategic minerals in overseas locations for supply in India and thus boost âMake in Indiaâ initiative of Government of India.
- Greenfield Aluminium Smelter in Odisha:
The Company is preparing a Pre-feasibility Report (PFR) for proposed Greenfield Aluminium smelter at Kamakhyanagar or any other suitable location in the State of Odisha along with site selection for proposed Aluminium downstream projects.
- High End Aluminium Alloy Plant:
Your Company has signed an MoU with Mishra Dhatu Nigam Ltd. (MIDHANI) in April, 2017 for establishment of High End Aluminium Alloy Plant in JV mode for Defence, Aerospace & Automobile Sectors.
- Aluminium Downstream Projects:
Your Company is preparing Detailed Project Report (DPR) for establishment of Aluminium Downstream Projects like Alloy Wheel Plant, Extrusion Plant, Value added rolled products Plant and Foil Plant in a suitable location in Odisha.
CAPITAL EXPENDITURE (CAPEX)
The achievement in CAPEX is Rs.1080.26 crores in the year 2017-18.
RISK MANAGEMENT POLICY
A Risk Management Policy has been formulated and approved by the Board of Directors and the same is available in the Companyâs website www.nalcoindia.com.
HUMAN RESOURCES MANAGEMENT
Presidential Directives on SC/ST reservation
Your Company fully complies with all applicable Presidential Directives and other guidelines in matters of reservation for SC/ ST/OBC and other categories like the PWD, Ex-servicemen etc. Out of total manpower strength of 6,776 as on 31.03.2018, there were 1,104 SCs (16.29%), 1,248 STs (18.42%), 828 OBCs (12.22%), 89 PWDs (1.31%) and 14 ESMs (0.21%) on roll. There were a total of 366 lady employees in the Company as on 31.03.2018.
Industrial Relations
The year 2017-18 witnessed many milestones left behind by outstanding performance by your Company on all fronts in a most conducive industrial relation climate ever. Zero tolerance to indiscipline was the hallmark of IR management. The secret ballot election process for recognition of trade unions was conducted peacefully in all production units of your Company. Issues like poor work culture and work place indiscipline, which used to dampen the work force spirit earlier, were marked by their absence during the year due to various HR interventions. The year was also marked by efforts to enhance employee well-being through providing career growth opportunities to a good number of executives stagnating for long years, resolving long pending employee issues like rationalization of pension contribution for executives, revision of Special Financial Package for nonexecutive employees of Mines, payment of revised bonus and enhanced wages to contract labour, improvement in quality of health care facilities at your Companyâs hospitals etc. Pay revision for executives of your Company was implemented in terms of the guidelines issued by the Government. HR interventions like HR Audit, Talent Management and Succession Planning etc. were taken up keeping in view the strategic HR needs of your Company.
Social Accountability 8000
For creating and maintaining a decent work place, your Company has adopted the international standard, Social Accountability 8000 (SA-8000) since 2009-10. The certification helped the Company in becoming more transparent in the areas of child labour, forced labour, safe and healthy work environment, working hours, remuneration, freedom of association, collective bargaining process, discrimination and disciplinary practices to all stakeholders including employees, owner, customers, suppliers and other interested parties.
Your Company has successfully completed the transition process from SA 8000:2008 version to SA 8000:2014 version. All the Units including Corporate Office are certified to SA 8000:2014 Standard as on date.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A detailed report on CSR activities prepared in line with various applicable provisions of the Companies Act, 2013 is attached at Annexure-I.
VISIT OF PARLIAMENTARY COMMITTEES
The following Parliamentary Committees visited the Company during the year 2017-18:
- Study visit of Parliamentary Committee on Subordinate Legislation, Rajya Sabha between 15.04.2017 to 22.04.2017 at Bhubaneswar.
- Study visit of Parliamentary Committee on Papers Laid on the Table, Rajya Sabha between 17.04.2017 to 19.04.2017 at Puri & Bhubaneswar.
- Study visit of Department related Parliamentary Standing Committee on Commerce between 19.04.2017 to 21.04.2017 at Vijayawada.
- Study visit of Parliamentary Committee on Petitions, Lok Sabha between 21.08.2017 to 25.08.2017 at Thiruvananthapuram, Kerala.
- Study visit of Department related Parliamentary Standing Committee on Science & Technology, Environment & Forests between 22.08.2017 to 24.08.2017 at Bhubaneswar.
- Study visit of Parliamentary Standing Committee on Agriculture on 8th & 9th November, 2017 at Bhubaneswar.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion & Analysis Report in line with Regulation 34(3) read with 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 in respect of adequacy of internal financial controls with reference to the financial statements and risk management practices.
(c) various initiatives taken up in the field of environment management at different units of your Company.
INFORMATION TECHNOLOGY FOR DIGITAL TRANSFORMATION
Your company is leveraging Information Technology (IT) to augment the organizationâs quest for sustainable growth and continuous improvement in processes and business practices. Enterprise Resource Planning (ERP) application has been implemented to integrate all the business functions such as Sales and Distribution, Finance & controlling, Materials, Human Resource and Production planning to ensure uniform process, to improve information availability, transparency and decision making. The ERP application was upgraded to implement GST. E-procurement of goods are carried out through SAP SRM and Central Public Procurement Portal. Centralized Non-ERP Applications such as Payroll, Attendance, Perquisites, Advances and Leave systems have been implemented. A centralized Hospital Management System has been implemented for the Company hospitals at Angul and Damanjodi.
For governance and monitoring, online web-based application such as Capital Expenditure, Fund monitoring, Monitoring and Compliance Management systems, Monitoring of Internal Audit observations etc. have been implemented.
Adding a new dimension to the digital initiatives, your Company has launched Mobile Apps and Web-based applications for its stakeholders.
âNISARGâ - NALCO Initiatives for Social Awareness and Responsible Growth. A vibrant App for Citizens at large on Nalco CSR activities.
âNAGINAAâ - NALCO Grahak Information and Networking App for All - A feature rich App for Domestic Customers providing information such as Account Status, Despatch Plan, history, MOU calculator and product pricing information.
True to its adage âOnce a Nalconian always a Nalconianâ, your Company has launched an App for its Retired Employees-âHamesha Nalconianâ. The App provides features like Medical Reimbursement information, In-house e-magazine, important circulars & policies.
A Portal for contract labour has been deployed to facilitate contractors to manage contract workers attendance, payments and statutory returns.
On the Infrastructure front, fault tolerant and redundant MPLS based WAN connects all the offices and units. The in-house state-of-the-art Data Center to host the Business critical Applications with Disaster Recovery center are in place. In an effort towards better communication and collaboration, multichannel video conferencing has been implemented. Virtualized computing facility has been implemented for the ERP landscape resulting in better utilization of computing resources.
The IT roadmap is aligned to partner in your Companyâs growth. Emphasis is being placed on Analytics and Decision Support system to aid decision making process at various levels of management. Thrust is also being laid on Mobile solutions for stakeholders. In pursuit of an efficient, transparent and secure file processing system, e-office is being implemented.
The IT practices are being aligned to meet the ISO 27001 standards covering the full arena of IT Security for IT infrastructure, Applications and Users. IT infrastructure and application security is ensured with network gateway and endpoint security solutions.
TOTAL QUALITY MANAGEMENT
- Integrated Management System(IMS):
Transition Audits of the existing Quality Management Systems and Environment Management Systems operating in all the production units i.e. Smelter, Refinery, Mines and CPP including the Corporate Marketing function were successfully completed during the year. This was necessary in order to comply with the mandatory requirements of the latest 2015 edition of ISO 9001 and ISO 14001 standards. As on 31.03.2018, all the units are operating with valid ISO 9001, ISO 14001 and OHSAS 18001 certificates having international accreditation from UKAS, U.K. & RvA, Netherlands.
- Energy Management:
i) All the three production units CPP, Smelter and Alumina Refinery, included in the Perform, Achieve & Trade (PAT) scheme, are operating with valid ISO 50001 certificates, having accreditation from RvA, Netherlands.
ii) Comprehensive Energy Audits of the above three units are also completed as per statutory requirements of BEE Regulations, 2010.
iii) Total 36,119 Energy Saving Certificates issued to your Company by Ministry of Power, Govt. of India for exceeding the PAT Cycle1 targets are banked and incorporated in financial accounting.
- QCs & Kaizen:
- 54 active Quality Circles have completed in total 57 projects during the year. In addition to the above 54 QCs, 30 new QCs are also formed during the year, taking the total number of QCs to 84.
- 14 Quality Circles from different units of your Company participated in the National QC Convention, organised by QCFI at Mysuru and out of this, 7 QCs were placed in the highest category of recognition i.e. âPar-Excellenceâ.
- The NALCO Utkal Gaurav Madhu Sudan Das (NUGMSD) Quality Award was instituted and administered during the year. Out of the total 15 manufacturing units from Odisha who had submitted application documents for the award, the best unit from each category i.e. Large, Medium and Small category, were conferred with the prestigious state level awards.
- The All Odisha QC Convention was also organised for the 22nd successive year by your Company during April, 2017 to encourage and recognise top performing Quality Circles & TPM Circles in the state.
- Business Excellence Initiative:
Business Excellence initiative, in line with the EFQM framework of Business Excellence, for Operational Excellence was implemented at Smelter. Based on external assessment of the unit the Smelter unit was conferred with âEmerging Leader in Operational Excellenceâ award in the premier National level Quality Summit organised by CII during November, 2017.
- 5S System Implementation:
Workplace Management System based on the 5S system pioneered by Japan, is implemented in total 181 zones at Alumina Refinery, Smelter, CPP and Mines.
IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
As per the Official Language Act, 1963 and Official Language Rule, 1976, implementation of Hindi has been done in your Company.
- A Special function in Hindi organised on the Occasion of Pandit Deendayal Upadhyaya Birth Centenary on 25th September, 2017. Hindi Essay, Poster and Quiz competitions on his âPersonality and Contributionsâ were organised among the member offices of Town Official Language Implementation Committee (Undertakings), Bhubaneswar operating under chairmanship of your Company and prizes were distributed to the winners in the function. A Hindi exhibition was also organised on the Life and Times of Pandit Deendayal Upadhyaya. One Hindi souvenir was also published on his âVyaktitwa and Krititwaâ in which the special articles written by dignitaries of India was published with the consultancy assistance of Pandit Sudhakar Sharma, Member of Hindi Advisory Committee of Ministry of Mines, GOI, and a reputed Hindi scholar.
- To promote use of Hindi in official work, Hindi fortnight was observed from 01.09.2017 to 14.09.2017 at Corporate Office, Bhubaneswar, at S & P Complex, Angul and M & R Complex, Damanjodi. Several Hindi competitions were organised separately for Hindi speaking and Non-Hindi speaking employees and students. On concluding day function at Damanjodi, Hindi âGeet-Sangeetâ program was organised by a troupe of Jagdalpur.
- 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 Hindi Training, Hindi Typing and Hindi Computer training. Hindi Workshops were organised to impart the training for employees in practical sessions for working in Hindi.
- Two Meetings of Town Official Language Implementation Committee (Undertaking) Bhubaneswar and Town Official Language Implementation Committee, Angul, each was held under the chairmanship of your Company.
- Website of Company www.nalcoindia.com is being regularly updated both in Hindi and English languages.
- During the year, your Company has provided faculty assistance on the subject âUnicode and Technical Facilities in Computer and Mobile phones in Hindi & Regional Languagesâ in the workshops organised by different CPSUs and at Rajbhasha Sammelans.
- Bilingual notings, Help-files for self-learning of Inscript Keyboard for working in Hindi are also uploaded in the Intranet of the Company.
SPORTS
- Your Company continues to promote sports and sports person in the country. As a part of promotion of sports events, your Company sponsored NALCO Cup State Hockey Championship, NALCO Cup State Open Tennis Tournament, NALCO Cup Golf Tournament, NALCO Cup Basketball Championship, Biju Pattanaik State Cricket Championship, State Badminton Championship and also organised awareness camp for under-17 FIFA World Cup.
- As a matter of policy to encourage young sports persons, your Company felicitates young and aspiring sports persons of the State who are participating and excelling in their field of sports. Ms. Aparajita Gochikar, an eminent International Chess player and Ms. Geeta Bhuyan, an eminent international Baseball player were felicitated by your Company.
- Your Company also offered job to four Indian women hockey players from the state who participated in the Rio Olympics, as a policy to encourage young sports persons. Among them Ms. Sunita Lakra, has already joined the Company. Various activities are also organised at Unit level to promote Sports activities.
VIGILANCE
Broad details of the vigil mechanism, established in your Company are given below:-
- Your Company has a well-established vigilance department headed by a Chief Vigilance Officer (CVO) who is appointed on deputation from Government of India. Other vigilance officers who assist the CVO are selected on deputation basis in consultation with and concurrence of CVO. Your Company 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 Circulars/ 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
The functions of CVO are as follows:
- Maintaining a good link with CVC and CBI besides organizing structured review meeting with CBI.
- Furnishing of various return/ report to Ministry/CVC/CBI.
- Assisting CVC in selection of Independent External Monitors (IEMs) for I.P (Integrity Pact).
- Assisting management in formulation/updation of anticorruption policies/ measure.
Whistle Blower Policy
Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.
The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing to prohibit managerial personnel action. It protects employees wishing to raise a concern about serious irregularities within the Company.
Details of the policy are available in the Companyâs website www.nalcoindia.com.
Corruption Risk Management Policy
Corruption is a special category of risk. Corruption Risk Management policy of your Company has been implemented to determine the key principles and requirement aimed at preventing corruption and compliance of anti-corruption law of India.
The policy reflects commitment of your Company and its management to high ethical standards at carrying on business in an open, transparent and honest ways aimed at improving corporate culture, compliance with the best practices in corporate governance and maintaining the business reputation in your Company.
Fraud Reporting
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 during the year under report.
The company has a Board approved Fraud Prevention Policy and the same is placed in the Companyâs website www.nalcoindia.com
Integrity Index Development
Integrity has been recognised as the integral part of a Company ensuring accountability, enhancing competency and boosting the ethical values of the personnel resulting in a corruption free environment. Integrity index is the image of a company other than financial parameters. In this regard, a framework }was envisaged by CVC in 2017-18 to measure integrity index in Public Organizations for ensuring probity. 25 PSUs, State organizations and Ministry including your Company were selected by CVC for supporting IIM-Ahmedabad in developing the framework.
Performance, integrity perception, enabling systems, process management, compliance are the broad parameters with detail questionnaire to bring out the level of probity, integrity, efficiency, transparency and compliance in the Organizations. The integrity index is to be computed based on these parameters including perceptions of the internal and external stakeholders.
Your Company responded actively by participating in the process in a time bound manner and bridging in the gaps in the processes in many areas during the course of submission in the IID portal, which was finally submitted in February, 2018.
RIGHT TO INFORMATION
In order to address the provisions of Right to Information Act (RTI), one Appellate Authority, one Public Information Officer and nine Assistant Public Information Officers responsible for providing information sought by stakeholders have been appointed.
The following are the details of the RTI applications and appeals during 2017-18:
Under |
Received during |
No. of cases |
Decisions |
Decisions |
Under |
|
Process |
the year (including |
transferred |
where |
where requests/ |
Process |
|
as on |
cases transferred |
to other |
requests/ |
appeals accepted |
as on |
|
01.04.2017 |
from other |
Public |
appeals |
and settled |
31.03.2018 |
|
Public Authority) |
Authorities |
rejected |
||||
Requests |
26 |
219 |
Nil |
74 |
153 |
18 |
First Appeals |
03 |
46 |
Nil |
Nil |
49 |
Nil |
Your Company has been aligned with the Online RTI portal of Department of Personnel and Training (www.rtionline.gov.in) with effect from 18.01.2017. The RTI requests are received and replied through this online portal also.
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 fees for the years 2017-18 and 2018-19 have been paid on time to the stock exchanges.
DISINVESTMENT Bharat 22 ETF:
During 16th November, 2017 to 21st November, 2017, 9,20,78,399 number of equity Shares (4.76% of the paid-up capital) of your Company were transferred to Bharat 22 ETF scheme (a part of Government of Indiaâs disinvestment programme) by Govt. of India in two tranches (1st tranche between 16th November, 2017 & 17th November, 2017 for 8,49,74,665 shares and 2nd tranche between 20th November, 2017 & 21st November, 2017 for 71,03,734 shares).
Further, Govt. of India has divested 6,98,88,827 shares (3.61% of the paid-up capital) of your Company under Bharat 22 ETF scheme during 19th to 22nd June, 2018.
Employee Offer - Post offer for Sale:
Govt. of India transferred 76,17,057 numbers of equity shares (0.39% of the paid-up capital) of your Company on 21st November, 2017 to the eligible employees as a part of employee offer subsequent to Offer for Sale which took place on 18th and 19th April, 2017.
After the transfer of shares to Bharat 22 ETF and eligible employees, the shares held by President of India has come down from 65.36% to 56.59% of the total paid-up capital of the Company.
SERVICES TO SHAREHOLDERS
All matters relating to transfer/transmission of shares, issue of duplicate share certificates, payment of dividend, de-materialization and re-materialization of shares and redressal of investors grievances are carried out by the Companyâs RTA i.e. M/s. Karvy Computershare Pvt. Ltd., Hyderabad.
PAYMENT OF ANNUAL CUSTODY/ISSUER FEES TO DEPOSITORIES
Annual connectivity fees and custody fees/issuer fees for the years 2017-18 and 2018-19 have been paid on time to both M/s. National Securities Depository Ltd. and M/s. Central Depository Services (India) Ltd.
BUSINESS RESPONSIBILITY REPORT
In line with Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, a Business Responsibility Report for 2017-18 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.
Reports on Sustainable Development
- The mandatory report on sustainability i.e. the Business Responsibility Report addressing the economic, environmental, social & governance aspects as required by SEBI, was completed and published & web-hosted.
- In addition to above report, a standalone report is prepared on voluntary basis, aligned with GRI G4 guidelines.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Research & Development
- 150 m3 per batch Defluoridation Plant with Emrion Nano Technology of ETPL first of its kind in the world is running successfully, meeting the environments norm stipulated by OSPCB at Smelter Plant. Performance Guarantee (PG) test of the Emrion plant has been completed successfully on 19th March, 2018. One MoU was signed with M/s. ETPL, Hyderabad for royalty sharing on the technology commercialized by your Company.
- Filtration trials of Red mud carried out in pilot setups with M/s. Unitop Multitech India Pvt. Ltd. and M/s. FL Smith to establish the efficiency of pressure filtration for Red mud filtration. The data generated will be used for plant scale implementation.
- R&D has developed a process for improvement of oxidation behaviour of anode which has been successfully implemented in the Smelter plant.
- âExtraction of Alumina from Partially Lateritized Khondalite (PLK) at laboratory scaleâ has been completed and the basic flow sheet for the process has been developed by CSIRO, Australia.
- NALCO & IIT, Bhubaneswar have jointly developed a process for âSynthesis, Characterization and Development of Red mud-Fly ash based Geopolymer concreteâ which has a potential for application in civil activities.
- Two patent applications:
i) A process for beneficiation of bauxite ore to obtain an upgraded alumina.
ii) Partially Lateritized Khondalite based Ceramic Proppants and its preparation were filed.
- Six patent applications, filed earlier have been granted during the year 2017-18.
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.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directorsâ pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, 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;
- 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; and
- 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 Companyâs website which can be accessed at www.nalcoindia.com.
Your Directors draw the attention of the members to Note No. 38 of the financial statements which sets out related party disclosures. No contract has been entered with any related party during the year under report. However, a report in Form AOC-2 is attached at Annexure-VI to this report.
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:
- Dr. T. K. Chand, Chairman-cum-Managing Director
- Shri K. C. Samal, Director (Finance)
- Shri V. Balasubramanyam, Director (Production)
- Shri Basant Kumar Thakur, Director (HR)
- Shri S. K. Roy, Director (P&T)
- Shri P. K. Mishra, Director (Commercial) w.e.f. 23.04.2018.
- Shri N. K. Mohanty, Company Secretary w.e.f. 01.06.2017.
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, 7 (Seven) Board meetings were held. Details of the meetings are available in the 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 (Annexure-V) placed 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 Companyâs 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, as amended and notification dated 5th July, 2017.
- Companyâs policy on Directorâs 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
During the year, no case was reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Particulars of loans, guarantees and investments
Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the note no. 9 and 11 to Financial Statements 2017-18.
Subsidiaries, Joint Venture Companies and Associated Companies
In accordance with the provisions of Section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the joint venture and associates and their salient features are given in the note no. 40 and 41 of the Consolidated Financial Statements 2017-18 respectively.
Salient features of JV/Associate companies in Form AOC-1 (Note 41) forms integral part of the consolidated financial statement of the Company.
AWARDS & ACHIEVEMENTS
a) Prestigious SCOPE Award for Excellence and Outstanding Contribution to Public Sector Management - Institutional Category I (Maharatna & Navratna PSEs). Also received another award for meritorious performance in CSR. Your Company is one of the top two Navratna/Maharatna companies receiving double prestigious awards.
b) Appreciation Award in large mines category at CII Eastern Region Safety Health & Environment Excellence Awards 2016-17 to Panchpatmali bauxite mine.
c) EEPC Silver Trophy, in the Large Enterprise category, for its outstanding export performance during the year 2014-15.
d) Smelter Plant of your Company has bagged the National Energy Conservation Award in Aluminium Sector for the year 2017.
e) Four prizes to Panchpatmali bauxite mine in inter-mines competitions held during the Half-yearly Safety Week Celebration of âOdisha Metalliferous Mines Safety Week Celebration Committee 2017-18â
f) Best Exporter Award for the year 2015-16, under metallurgical products category at the State Export Award Ceremony.
g) Kalinga Safety Award (Silver) for the year 2016 to Alumina Refinery during Odisha State Safety Conclave-2017.
h) Five Star Rated Mines to Panchpatmali Bauxite Mines for exemplary performance in implementation of Sustainable Development Framework during 2016-17.
i) Best PSU Award in the âBrands of Odisha: Pride of Indiaâ, the Corporate Excellence Awards, instituted by leading Odia daily âThe Sambadâ.
j) State Safety Award for âLowest Weighted Frequency Rate of Accidents for the performance Year 2016â to NALCOâs Alumina Refinery.
k) Award to Alumina Refinery for âEfficient Use of Fly Ashâ by Mission Energy Foundation in the 7th edition of âFly Ash Utilization Conference Expo Award - 2018â.
l) Kalinga CSR Award for the year 2016 during the 2nd National Seminar on âCSR Initiativesâ.
m) National Business Leadership Award for CPSE in recognition of the outstanding achievements in Business and Social Service.
n) Best CEO Award to Dr. Tapan Kumar Chand, CMD for promoting probity, integrity, transparency and inclusive growth during the two-day 17th Annual Geominetech Conference.
o) Corporate Governance Award to Dr. Tapan Kumar Chand, CMD at 21st International Conference on Non-ferrous Minerals & Metals.
IMPLEMENTATION OF GOODS AND SERVICES TAX (GST)
As per the Govt. of India notification on GST law, the Company has migrated to Goods and Services Tax with effect from 1st July, 2017.
With required modification/ developments in ERP, related business solutions in SAP (Materials Management, Sales and Distributions, Finance & Control etc.) have been made GST compliant.
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 âNilâ comments from C&AG on the standalone financial statements of the Company. Further, C&AG has also given âNilâ 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. Guha Nandi & Co., Chartered Accountant and M/s. Patro & Co. Chartered Accountant were appointed as joint auditors of the Company by the Comptroller and Auditor General of India for the financial year 2017-18.
The Statutory Auditorsâ reports on the Standalone and Consolidated Financial Statements are enclosed to this report. The observations made in the Auditorsâ reports are self-explanatory and therefore do not call for any further comments.
Cost Auditors
In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, Cost Audit is applicable to the Company for the financial year 2017-18.
In compliance with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company have on the recommendation of the Audit Committee, appointed M/s. Tanmaya S Pradhan & Co, as the Cost Auditors for the year 2017-18.
Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.
Secretarial Auditors
The tenure of M/s. Saroj Ray & Associates, Practicing Company Secretaries was extended for undertaking Secretarial Audit job of your Company for 2017-18 in terms of Section 204 of the Companies Act, 2013 and Rules made there under. 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 has appointed the following CA firms for carrying out Internal Audit functions of the Company for the financial year 2017-18:
- M/s. SRB & Associates for Corporate Office, Bhubaneswar.
- M/s. SCM & Associates for Smelter & Power Complex, Angul.
- M/s. Rao & Kumar for Mines & Refinery Complex, Damanjodi & Port Facilities, Visakhapatnam.
- M/s. Bhatia & Bhatia for Northern Regional Office, New Delhi.
- M/s. Prabir Ranjan Datta & Co for Eastern Regional Office, Kolkata.
- M/s. Raghavan & Muralidharan for Southern Regional Office, Chennai.
- M/s. MKPS & Associates 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 Nagendra Nath Sharma was appointed as Part-time Non-official (Independent) Director w.e.f 06.09.2017.
- Smt. Achla Sinha was appointed as Part-time Non-official (Independent) Director w.e.f 08.09.2017.
- Dr. K. Rajeswara Rao, Additional Secretary, Ministry of Mines was appointed as Part-time Official Director w.e.f. 19.02.2018.
- Shri Anil Kumar Nayak, Joint Secretary, Ministry of Mines was appointed as Part-time Official Director w.e.f. 27.03.2018.
- Shri Pradip Kumar Mishra was appointed as Director (Commercial) of the Company w.e.f. 23.04.2018.
Cessation
- Shri Subhash Chandra, Joint Secretary, Ministry of Mines ceased to be Part-time Official Director on the Board of your Company w.e.f 16.02.2018.
- 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 26.03.2018.
Your directors wish to place on record their appreciation for the valuable services rendered by Shri Subhash Chandra and Dr. Niranjan Kumar Singh during their tenure on the Board of your Company.
ACKNOWLEDGEMENT
Your Directors wholeheartedly express their appreciation for the continued and unstinted support of 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, Comptroller and Auditor General of India, the Director General of Commercial Audit & Ex-officio Member, Audit Board, Kolkata, Statutory Auditors, Cost Auditors, Secretarial Auditors, Internal Auditors, Bankers, Solicitors, JV Partners, Business Associates, other Government agencies and CPSEs for the co-operation rendered by them during the year.
Your Directors also acknowledge the excellent support extended by the valued and esteemed domestic and international customers, vendors and also look forward for maintaining such mutually supportive business relationship in the coming years too.
Last but not the least, your Directors also place on record their deep sense of appreciation for the dedication, commitment, enthusiasm, unstinting efforts and sincere services rendered by the employees at various levels and due to the active support and co-operation received from the Trade Unions & Officersâ Associations for sustained improvements. The Companyâs consistent growth was made possible due to their hard work, solidarity, co-operation and support.
For and on behalf of Board of Directors
Place: Bhubaneswar (Dr. Tapan Kumar Chand)
Date: 25.07.2018 Chairman-cum-Managing Director
Mar 31, 2017
Dear Members,
The Directors have great pleasure in presenting before you the 36,h Annual Report of your Company together with the audited financial statements and Auditors'' Report for the financial year ended 31st March, 2017.
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
Production |
Unit |
2016-17 |
2015-16 |
Bauxite |
MT |
68,25,000 |
63,40,142 |
Alumina Hydrate |
MT |
21,00,100 |
19,53,000 |
Aluminum |
MT |
3,87,422 |
3,72,183 |
Electricity (Net)-CPP |
MU |
6,066 |
5,841 |
Wind Energy |
MU |
206 |
156 |
- Bauxite Mines has achieved highest ever production with Bauxite transportation of 68.25 lakh MT (achieving 100% capacity utilization) and has surpassed previous best of 63.40 lakh MT achieved in last financial year registering a growth of 7.65%. Bauxite excavation of 68.25 lakh MT during the year is also highest ever since inception surpassing the previous best of 62.89 lakh MT achieved in 2015-16.
- Alumina Refinery has achieved highest ever production with alumina hydrate production of 21.00 lakh MT (10C% of normative capacity) and has surpassed previous best of 19.53 lakh MT achieved in last financial year registering a growth of 7.53%. Steam Generation Plant (SGP) achieved highest ever net power generation of 453 MU surpassing previous best of 438 MU achieved last year
- Aluminum Smelter achieved cast metal production of 3.87 lakh MT registering a growth of 4.03 % over previous year.
- CPP achieved âNet Power Generation'' of 6,066 MU, registering a growth of 3.85% over previous year.
- Wind Power: 3 wind power units at Gandikota, Andhra Pradesh, Devikot, Rajasthan & Jaisalmer, Rajasthan have generated 206 MU against 156 MU achieved last year, registering a growth of 32.05%.
Sales Performance
Chemicals
The Company achieved total chemical sale of 12,94,900 MT in 2016-17 compared to 12,19,926 MT achieved during 2015-16. This includes Calcined Alumina Export of 12,43,103 MT made during 2016-17 as compared to 11,74,224 MT export made during 2015-16.
Metal
The total metal sales during 2016-17 was 3,85,518 MT as compared to 3,72,424 MT during 2015-16. Total metal sale consists of domestic sale of 2,84,926 MT and metal export of about 1,00,591 MT The total metal inventory at the end of financial year 2016-17 was about 3,092 MT.
The detailed sales break-up is as follows:
Particulars |
Unit |
Year Ending 31.03.2017 |
Year Ending 31.03.2016 |
Export |
|||
Alumina |
MT |
12,43,103 |
11,74,224 |
Aluminum |
MT |
1,00,591 |
94,671 |
Domestic |
|||
Alumina & Hydrate |
MT |
51,797 |
45,702 |
Aluminum |
MT |
2,84,926 |
2,77,753 |
Total Metal Sale |
MT |
3,85,518 |
3,72,424 |
Total Chemical Sale |
MT |
12,94,900 |
12,19,926 |
Out of total domestic metal sales of 2,84,926 MT, sale of 1,89,416 MT was effected from Smelter plant at Angul and sale of 95,510 MT was effected from eleven stockyards located at Kolkata, Baddi, Jaipur, Faridabad, Bhiwandi, Silvassa, Bangalore, Chennai, Vizag, Vadodara and Delhi.
Financial Performance
The details of financial performance are given below: Rs, in crore
Particulars |
2016-17 |
2015-16 |
Revenue from Operations(Gross) |
8,050 |
7,269 |
Other Income |
408 |
605 |
Total Income |
8,458 |
7,874 |
Cost of materials consumed |
1,182 |
1,104 |
Power & Fuel |
2,213 |
1,865 |
Employee benefits expenses |
1,537 |
1,398 |
Other Expenses |
2,041 |
1,946 |
Depreciation & amortization expenses |
480 |
426 |
Total Expenses |
7,453 |
6,739 |
Profit Before Exceptional items |
1,005 |
1,135 |
Add/(Less):Exceptional items |
(40) |
54 |
Profit before Tax |
965 |
1,189 |
Tax Expenses |
296 |
402 |
Profit After Tax |
669 |
787 |
Note: Previous year''s figures has been re-casted in compliance with Ind AS.
FUTURE OUTLOOK
Metal and mining industry has borne the brunt of China slow down (2013 to 2016). Capacity overhang globally as a result of China slow down has pushed production slow down and low price regime. In case of Aluminum, factors such as continuous supply overhang, increasing export barriers on Chinese Aluminum and increasing pollution control restrictions in China could result in capacity shut down in China some of which has already taken place. This could result in demand supply deficit in global markets.
However, India is likely to benefit from emerging global mega trends as technology adoption, climate and regulatory changes, infrastructure built up, shift in economic power, demographic shifts and urbanization will create domestic demand. Increased use of metal in automobiles, building and construction sector, railways, white goods and solar power etc. would spur the demand in domestic market. It is expected that both Aluminum and Alumina price to remain range bound over next five to seven years, as few producers, especially in USA and EU may resume production.
Dividend and Appropriations
A Dividend Distribution Policy has been formulated and approved by the Board of Directors and the same is available in the Company''s website
Dividend Pay-out
Your Company has paid dividend of Rs,2.80 per share for the financial year 2016-17. The total dividend payout for the financial year 2016-17 works out to Rs,541.22 crores as against Rs,467.13 crores (Rs,2.00 per share) for the previous year. Dividend including dividend distribution tax works out to a payout of 97.44% of PAT.
It is proposed not to transfer any amount to the General Reserve for the financial year 2016-17.
The dividend for the year 2016-17 was declared in line with the DIPAM guidelines.
MoU Performance
Based on financial performance and achievement of other parameters laid down, your Company is likely to be rated "Excellentâ as per the Memorandum of Understanding (MoU), signed with the Government of India for the financial year 2016-17.
Signing of MoU with Ministry foi 2017-13
Raw Material Securitisation
- Utkal D and E Coal blocks have been allotted to NALCO in May, 2016 by Ministry of Coal.
- Terms of Reference for grant of Mining Lease of Pottangi bauxite mine was received from Government of Odisha in July, 2016. NALCO has submitted the acceptance of conditions in August, 2016.
- Bridge Linkage of Coal was sanctioned upto 8.9 lakh MTPA, valid from 2016-17 till 2018-19.
- G-8 grade coal linkage (2 lakh MTA) was booked from M/s. NCL for Refinery for a period of 5 years equivalent to 2.73 Lakh MTA G-12 & G-13 grade coal through linkage auction.
- Mining lease of Panchpatmali Bauxite Mines (Central & North Block) has been extended upto 16.1 1.2032 from existing 31.03.2020 by Government of Odisha.
- All regulatory clearances for opening of South Block, Panchpatmali bauxite mines have been obtained.
PROJECTS UNDER IMPLEMENTATION
5th Stream of Alumina Refinery
Your Company is in the process of setting up 5th Stream in its existing
Alumina Refinery which shall add 1.0 MTPY to its existing capacity of 2.275
MTPY, at a Capital expenditure of Rs, 5,540 crores, based on improved Medium Pressure Digestion technology of M/s. RTAIL (Rio Tinto Alcan International Limited).
Your Company has obtained major statutory clearances like Environmental Clearance by MoEF & CC and Consent to Establish (CTE) from Odisha State Pollution Control Board. Thyssenkrupp Industrial Solutions (India) Private Ltd. has been appointed as EPCM consultant for the project. Pottangi Bauxite Mines
Pottangi Bauxite mines (75 Million Tons) has been reserved by Government of India in favour of Your Company. Government of Odisha issued the terms and conditions for issuance of mining lease in favour of NALCO in July, 2016 and Your Company conveyed its acceptance to Government of Odisha in August, 2016. Activities are undertaken for complying with various conditions to obtain the mining lease.
Utkal D & E Coal Blocks
Utkal D & E Coal blocks (200 Million Tons) have been allotted by Government of India in favour of Your Company in May, 2016. Your Company is in process of transfer of land & other statutory clearances for Utkal D from prior allottee in its favour. Terms of Reference (TOR) has been issued by MoEF & CC against Environmental Clearance application for Utkal D & E Coal blocks. Mining Plan for Utkal-D & E submitted to MoC for approval. 100 MW Wind Power projects
Your Company has commissioned its Wind Power Plant of capacity 50 MW & 50.4 MW in the state of Rajasthan & Maharastra respectively at a Capital Expenditure of Rs, 669 crores.
Retrofit Conversion of Flat Bottom Tank to HRD-DCW in Streams #
1, 2 & 3 at Alumina Refinery
Your Company is going for retrofit Conversion of Flat Bottom Tank to HRD-DCW in Streams # 1, 2 & 3 of its existing Alumina Refinery, to improve operational efficiency, at an estimated cost of Rs, 355 crores. Order has been placed on M/s. RTAIL as a Technolo^ Licenser. M/s. EIL has been appointed as PMC (Project Management Consultant) for the project.
Roof Top Solar Power project
Your Company commissioned 50 KWp Rooftop Solar Power plant at NRTC (NALCO Research and Technology Centre), Bhubaneswar, in November, 2016, with a total project cost of Rs, 37.30 Lakhs.
BPTG #5 Project
To reduce dependency on power supply from the grid, BPTG-5 project was envisaged. The project has achieved mechanical completion during the year and expected to be commissioned shortly.
BUSINESS DEVELOPMENT
- Your Company has formed a JV Company named Angul Aluminium Park Pvt. Ltd. (AAPPL)'' in association with Odisha Industrial Infrastructure Development Corporation (IDCO) in 2010 to promote downstream and ancillary industries in Odisha. The project has been approved by Dept. of Industrial Policy & Promotion (DIPP), Ministry of Commerce, Government of India under Modified Industrial Infrastructure Up gradation Scheme (MIIUS). NALCO and IDCO hold 49% and 51% equity in the JV Company. Your Company''s equity contribution to AAPPL till March, 2017 is Rs, 14.70 crores.
- Caustic Soda Project in JV with Gujarat Alkalies and Chemicals Ltd. (GACL): Your Company has formed a JV Company "GNALâ with GACL in Dec, 2015 to set up 2.7 lakh TPA caustic soda plant along with 130 MW captive power plant at Dahej in Gujarat. Pre-project activities like land acquisition, bidding for Boiler Turbine Generator (BTG) package & Balance of Plant (BOP) package and Technology selection for the caustic soda plant is underway.
- Your Company plans to setup a 20 MW Solar Power Plant in Madhya Pradesh. The project is registered with MPNRED (Madhya Pradesh New & Renewable Energy Dept.) and 55.62 Ha land has been transferred to MPNRED in November, 2016. Application for grid connectivity permission was submitted to MPPKVVCL (Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd.) in November 2016.
- Company plans to set up another Wind Power Plant of 50 MW capacity at any suitable location in India. Techno-commercial bids for selection of wind power developer were opened in December 2016 and price bid is in the process of being opened.
- Company has issued NIT for selection of developer for EPC for 50 MW Solar Power Project at any suitable location in India.
- Establishment of Gajamara Power Project: Company has signed an MoU with NTPC to form a JV Company for establishment of 3X800 MW coal based Power Plant at Gajamara, Dhenkanal, Odisha for supplying power to Smelter expansion projects.
- Establishment of Coal Tar distillation plant: Your Company has signed an MoU with Neelachal Ispat Nigam Ltd. (NINL) for setting up a Coal Tar distillation plant in JV mode for production of Coal Tar pitch.
- Establishment of Aluminium Alloy manufacturing plant: Your Company has signed an MoU with Mishra Dhatu Nigam Ltd. (MIDHANI) for establishment of Aluminium Alloy manufacturing plant for meeting the requirement of defence, aerospace, automotive and transport sector under the "Make in Indiaâ initiative of Government of India.
CAPITAL EXPENDITURE (CAPEX)
During the year, the capital expenditure of the Company was Rs, 876.09 crores which includes Rs,38.47 crores towards equity contribution to Joint Venture Companies.
RISK MANAGEMENT POLICY
A Risk Management Policy has been formulated and approved by the Board of Directors and the same is available in the Company''s website www.nalcoindia.com.
HUMAN RESOURCES MANAGEMENT
Presidential Directives on SC/ST reservation
Your Company fully complies with all applicable Presidential Directives and other guidelines in matters of reservation for SC/ST/OBC and other categories like the PWD, Ex servicemen etc. Out of total manpower strength of 6,938 as on 31.03.2017, there were 1,129 SCs (16.27%), 1,278 STs (18.42%), 803 OBCs (11.57%), 86 PWDs (1.24%) and 18 ESMs (0.26%) on roll. There were a total of 354 lady employees in the Company as on 31.03.2017.
Industrial Relations
The positive Industrial Relations climate of the Company throughout the year helped in achieving excellent all-round performance during 2016-17. The Workers'' Participation in Management continued to remain a fulcrum of the Industrial Relations practice of the Company. Creation of a culture conducive to sustainable development on all fronts including a focus on improving happiness index through various employee friendly actions remained the highlight of the year. Long pending issues like Special Financial Package for non-executive employees of Mines, medical related issues and the issue of rationalization of NPS contribution of executives were settled amicably.
Social Accountability 8000
For creating and maintaining a decent work place, your Company continues to implement SA 8000 Standard successfully.
All the units including Corporate Office have been certified to SA 8000-2008 Standard. Your Company is in the process of transition to SA 8000:2014 (revised) Standard from SA 8000-2008 Standard.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility has been core to the philosophy of the Company. Accordingly, the Company has been taking up different Peripheral Developmental activities, CSR Projects and Programmes since its inception. The CSR Projects/Programmes are identified based on the internal assessment in periphery area directly by your Company and the recommendation of Rehabilitation and Peripheral Development Advisory Committee (RPDAC) and through its CSR arm, Nalco Foundation as well as feedbacks received from different stakeholders.
For achieving the Corporate Social Responsibility (CSR) objectives through the implementation of meaningful and sustainable CSR Programmes, your Company has spent Rs, 3,000.80 Lakh in FY 2016-17 towards CSR activities against the mandated spending of Rs, 2,756.55 Lakh as per the CSR policy and Section 135 of the Companies Act, 2013.
The CSR policy is developed in line with the Companies Act, 2013 which aims to support the disadvantaged/marginalized cross section of the society by providing opportunities to improve the quality of life, demonstrating care for the community through its focus on education, Health care and Sanitation, measures for environmental sustainability, providing safe drinking water, protection of National heritage, art and culture skill development of local youth to enhance their employment capability, etc.
Some of the unique CSR initiatives taken during the year besides the rural infrastructure development;
- Under protection of environment, your Company has ventured for massive avenue plantation and joined green energy revolution by installing 50 Kw Roof top Solar System installed at Nalco Research and Training Center (NRTC), Bhubaneswar and installed solar street light in eight remote periphery villages of M&R complex, Damanjodi.
- Under the Government of India call for Swachh Iconic Shrine development, your Company joined hands as a multi stake partner for Development of Iconic Shrine, Puri and transform it to a Swachh Pilgrimage Place.
- Under efforts to promote education, your Company continued to sponsor 755 students from tribal dominated area of Koraput for their education at three (03) residential Schools, extended financial support to 181 poor and meritorious girl students from periphery villages of Angul & Damanjodi to continue their study under the Scheme of "Nalcora Aliali Jhiaâ (Nalco Ki Ladli), in line with Government of India "Beti Bachao & Beti Padhaoâ. Your Company also provided education to 4,129 periphery students at Company aided School "Saraswati Vidya Mandirâ both at Angul and Damanjodi.
- Your Company continued to provide better health-care services to inhabitants of 163 periphery villages at Mines & Refinery Complex, Damanjodi, who are mostly tribal people, by operating 4 Mobile Health Units (MHUs). Similarly, 3 Mobile Health Units (MHUs) and one Specialist OPD is operating since November, 2017 in Smelter & Power Complex, Angul, covering 39 periphery villages. In the year 2016-17, around 1,12,809 patients have availed free healthcare services at their door-steps in the periphery villages of both the production units.
- Action has been initiated to make eleven (1 1) villages Open Defecation Free (ODF). Construction of Indian House Hold Toilets (IHHT) have been started in two mines periphery Villages of M&R Complex, Damanjodi.
A detailed report on CSR activities prepared in line with various applicable provisions of the Companies Act, 2013 is attached at Annexure-I.
VISIT OF PARLIAMENTARY COMMITTEES
The following Parliamentary Committees visited the Company during the year 2016-17, as under:
- Visit of the Department related Parliamentary Standing Committee on Industries between 25.06.2016 to 27.06.2016.
- Study visit of the Committee on Subordinate Legislation, Rajya Sabha between 16.07.2016 to 17.07.2016.
SCOPE Excellence Award in Institutional Category form Honâble President of India
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Management Discussion & Analysis report in line with Regulation 34(3) read with 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:
SAP ERP has been implemented for Procurement, Inventory Management, Finance & Controlling, Sales & Distribution, Production and Human Resource Management. Your Company has centralized Payroll, Attendance, Perquisites and Leave System on legacy platform. A centralized Hospital Management System is being implemented for the Company hospitals at Angul and Damanjodi.
For close monitoring of various initiatives, an online Capital Expenditure Monitoring System, Departmental Action Plan & Dashboard Monitoring System, Fund Monitoring System, Audit ATR Monitoring System have been implemented. Implementation of Revenue Expenditure Monitoring System is in progress.
To enable transparent and efficient procurement practice, procurement of goods is done through SAP SRM7 and services are sourced through Central Public Procurement portal. Further a Bill Tracking System is being developed to enable vendors to track invoices and know the payment details. To facilitate monitoring of all contracts across the company, an online Contract Labour Management System is being implemented. 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. It is planned to introduce the e-Office Document Management System. Knowledge Management will also be a key area of activity.
The network which is the backbone of IT has been revamped 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. The Wide Area Network connecting plants and offices has been completely migrated to MPLS technology Critical locations have been provided with dual circuits for fault tolerance.
For computing infrastructure that is nearing completion of life cycle, action is underway for replacing with current and scalable technology, also building a central cloud infrastructure that caters to the server requirements organization wide. Focus is towards use of virtualization in servers to leverage the flexibility of virtualized server provisioning. Disaster recovery coverage is now being extended to all the legacy applications and services. Your Company has taken steps to reinforce and secure its IT infrastructure and ecosystem by formulating an 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 regarding the Confidentiality, Integrity and availability of our IT infrastructure, including parties who are transacting digitally with the Company. In security implementation, sensitization has been carried out against threat of Ransom ware and preventive and corrective action required thereof. 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. The e-governance processes cover in-house services to employees and services like online application systems for recruitments to the general public. Implementation of employee self service modules such as centralized Loans and Reimbursement is in the pipeline. This provides an online platform for employee participation, quicker service and uniformity in business logics followed across the enterprise.
IT Audit by C&AG
Comptroller & Auditor General of India (C&AG) has selected your Company to undertake IT audit of ERP system (SAP) during 2016-17. The audit coverage includes examination of the system development process and the procedures followed at various stages involved therein, review of the security of the IT systems, data integrity along with evaluation of general and application controls of the IT systems to gain assurance about their adequacy and effectiveness, evaluation of the main process involved in different modules of the system and evaluation of performance of the system.
The observations by C&AG on access controls, master data maintenance has already been addressed by the management through appropriate control mechanism and guidelines on maintenance of master data.
TOTAL QUALITY MANAGEMENT
Your Company has taken following major initiatives during the year under
Business Excellence
Business excellence is a concept that believes in "outstanding practices in managing the organization and achieving resultsâ, through a systematic and structured actions those lead to increased performance. With active involvement of top Management, your Company implemented the BE programs at Smelter & Alumina Refinery units.
- Smelter Plant: Business Excellence initiative was launched at Smelter during the year. The BE Star Recognition on Operation Excellence Model was taken up for implementation. A 3-day training and assessment session was conducted on the Operational Excellence Framework during 3rd to 5th January, 2017 with faculty support from CM Institute of Quality,
* Alumina Refinery: Business Excellence (BE) initiative that launched earlier at Alumina Refinery was further enhanced with introduction of the comprehensive Cll- Exim Bank Business Excellence Model. This model is based on the latest EFQM (European Foundation of Quality Management) Excellence Framework i.e. EFQM 2013. This comprehensive model was launched at Alumina Refinery during August, 2016. Subsequently, top level Councils were formed and training of core team members was taken up. Drafting of position report for Cll Exim-Bank Business Excellence assessment, is in progress.
integrated Management System
Recertification Audits and Surveillance Audits were conducted at all the units within scheduled time and the units i.e. Alumina Refinery, Mines, Smelter, CPIRs, Vizag Port Facilities are operating with valid ISO 9001 : 2008, ISO 14001 : 2004 &OHSAS 18001:2007 Certificates, which are issued with international accreditation from RVA, Netherlands/ UKAS, U.K.
Energy Management System
Recertification Audit of Alumina Refinery for ISO 50001 System was successfully completed and the unit is recertified to ISO 50001, with the certificate issued with international accreditation from RVA, Nether and. The other two energy intensive units i.e. Smelter & CPP covered in PAT are also operating with similar valid certificates.
Perform, Achieve & Target (PAT) Scheme
Mines & Refinery Complex and Smelter & Power Complex were notified as Designated Consumers by M/s. Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India, in the PAT scheme. During the year a total of 36,119 Energy Savings Certificates (EScerts) were issued by M/s. BEE to the organization in recognition of performing better than the assigned targets during the completed PAT Cyde-1. The certificates were issued based on independent audit report submitted by accredited Energy Auditors of M/s. BEE and subsequent verification by the administrative body.
Quality Circles and Kaizens
- 53 Quality Circles across the organization have completed 51 projects during the year. 557 Kaizens were also completed during the year.
- 14 Quality Circles from different units of the Company participated in the National Quality Circle Convention organized by QCFI at Raipur. Out of these, eight QCs achieved recognition as "Par-Excellenceâ performers, the top-category award in the national level competition.
- The 21st All Odisha Quality Circle Convention was organized by the Company on 20th & 21st April, 2016. This premier State level convention had participation of 25 units i.e. industries, mines operating in Odisha.
- The Inter-Unit Quality Circle Competition was held on 10th November, 2016 at M&R Complex, where ten Quality Circles from different units participated. The winners of Essay, Slogan & Poster competition and the Inter-Unit QC competition were felicitated in the function.
5S implementation
5S system was introduced at Alumina Refinery, Mines, Smelter & CPP in total seven identified areas. Subsequently, the implementation was also assessed by the external assessors from QCFI, Hyderabad. Based on their assessment, six of these areas were rated as "Excellent Implementationâ. Alumina Refinery has further rolled out this initiative in additional areas in the unit.
IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY
As per the Official Language Act, 1963 and Official Language Rule, 1976, implementation of Hindi has been done in your Company.
- To promote use of Hindi in official work, Hindi Fortnight was observed from 01-09-2016 to 14-09-2016 at Corporate Office and at
S & P Complex, Angul. Several Hindi Competitions were organized separately for Hindi speaking and Non-Hindi speaking employees and students. Likewise Hindi Week was observed at M & R Complex, Damanjodi where various competitions were held among employees and students.
- 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.
- Two Meetings of Town Official Language Implementation Committee (Undertaking) Bhubaneswarand Town Official Language Implementation Committee, Angul each was held during the chairmanship of NALCO. Joint Hindi Workshops organized for employees of all the member
- One Special Hindi Workshop was organized with the faculty assistance of Dr.(Smt.) Vinay Sarangi Rajaram, Member of Hindi Advisory Committee of Ministry of Mines, Government of India and reputed Hindi scholar.
- Website of Company www.nalcoindia.com is made Bilingual and
being regularly updated both in Hindi and English.
- During the year, your Company has provided Faculty Assistance on the subject "Unicode and Technical Facilities in Computer and Mobile phones in Hindi & Regional Languagesâ in the workshops organized by different CPSUs and at Rajbhasha Sammelans.
- Bilingualisation of online applications like Payroll, Leave application, Employees rolls in SAP are being implemented under Digital India Movement.
SPORTS
Your Company continues to promote sports and sports person in the country. As the part of promotion of sports, your Company sponsored Hockey India League (HIL). Your Company also sponsored NALCO Cup State Hockey Championship, NALCO Cup State Open Tennis Tournament and NALCO Cup Basket Ball Championship.
As matter of policy to encourage young sports person, your Company felicitates sports person of the State participating and excelling in the field of sports.
Mr. Sukhram Majhi and Md. Jafar Iqbal, team member of Indian Blind Cricket Team, who won the World Cup - 2016, were felicitated on 1st April, 2017 in the occasion of Utkal Divas.
Your Company also offered job to four women Hockey players from the State who participated in the Rio Olympics, as a policy to encourage young sports person.
VIGILANCE
Broad details of the Vigil Mechanism, established in your Company are given below:-
- Your Company has a well established vigilance organization in the Company headed by a Chief Vigilance Officer (CVO) who is appointed on deputation from Government 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 Circulars/ 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.
- Liaoning 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
The functions of CVO are as follows:
- Maintaining a good link with CVC and CBI besides organizing structured review meeting with CBI.
- Furnishing of various return/ report to ministry/CVC/CBI.
- Assisting CVC in selection of Independent External Monitors (IEMs) for
I.P (Integrity Pact).
- Assisting management in formulation/updating of anti-corruption policies/ measure.
Whistle Blower Policy
Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.
The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing to prohibit managerial personnel action. It protects employees wishing to raise a concern about serious irregularities within the Company.
Details of the policy are available in the website of your Company.
Fraud Reporting
No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 during the year under report.
The company has a Board approved Fraud prevention Policy and the same is placed in the Company''s website wwwinalcoindia.com.
RIGHT TO INFORMATION
In order to address the provisions of Right to Information Act (RTI), one Public Information Officer and nine Assistant Public Information Officers responsible for providing information sought by stakeholders has been appointed. The following are the details of the RTI applications and appeals during 2016-17.
-Including one case transferred to other Public Authorities.
NALCO has been aligned with the Online RTI portal of Department of Personnel and Training (www.rtionline.gov.in) with effect from 18.01.2017. The RTI requests are received and replied through this online portal also. 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 fees for the year 2016-17 were paid to these stock exchanges on time.
CAPITAL RESTRUCTURING
Buy-back of Shares
Based on the decision of the Board of Directors and approval of the shareholders by a special resolution through postal ballot on 14.07.2016,
your Company had bought back 64,43,09,628 number of equity shares of ''5/- each on 21.09.2016 representing 25% of the total number of equity shares in the paid-up equity share capital of the Company. These shares were extinguished on 26.09.2016. The buy-back offer was at a price of Rs, 44/- per share for an aggregate consideration of Rs, 2,834.96 crores. The paid-up capital of the Company has come down from Rs, 1,288.62 crores to Rs, 966.46 crores. After the buy-back, the shares held by the President of India has come down to 74.58% from 80.93% of the total paid-up capital of the Company.
Subsequent to the buy-back of shares, public shareholding in the Company has gone up to 25.42% thereby complying with the requirement of minimum public shareholding, as mandated by Ministry of Finance for all listed CPSEs. Offer for Sale (OFS)
The Government of India sold 14,24,55,941 shares to non-retail investors and 3,56,13,986 shares to retail investors on 19th April, 2017 and 20th April, 2017 respectively through stock exchange mechanism comprising in total, 9.2125% of the paid-up capital of the Company. The Government of India received a consideration of Rs, 1,193.09 crores through this Offer for Sale (OFS). Post OFS, the total shares held by the President of India have come down from 74.58% to 65.36% of the total paid-up capital of Rs, 966.46 crores.
SERVICES TO SHAREHOLDERS
All matters relating to transfer/transmission of shares, issue of duplicate share certificates, payment of dividend, de-materialization and re-materialization of shares and redressal of investors grievances are carried out by the Company''s RTA i.e. M/s. Karvy Computershare Pvt. Ltd., Hyderabad.
PAYMENT OF ANNUAL CUSTODY/ISSUER FEES TO DEPOSITORIES
Annual connectivity fees and custody fees/issuer fees for the year 2016-17 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 2016-17 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.
Reports on Sustainable Development
- Business Responsibility Report addressing the requirements of economic, environmental, social & governance aspects based on the National voluntary guidelines, a mandatory requirement of SEBI, is prepared and published in the Annual Report.
- The stand alone Sustainable Development Report based on international guidelines (GRI G4) was also prepared as a voluntary annual disclosure and the same was approved by Management for review at the headquarters of the international body i.e. GRI at Amsterdam. The submitted report with minor modifications were also finally accepted by GRI.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Research & Development
- 150m3 per batch Effluent Water Treatment Plant with Emrion Nano Technology of Eesavyasa Technology Pvt Ltd, first of its kind in the world was commissioned at Smelter Plant and is in operation. After completion of the Defluoridation Plant based on the nano technology trial was completed on 30.11.2016 successfully.
- After development of the process, High Speed Extrusion Alloy (HSA) billet, a value added product, the New Product Grade CH-90 added to NALCO''s standard product list. Commercialization of High Speed Extrusion Alloy (HSA) billet was done 25.01.2017, with dispatch of the 1st consignment.
- Under the MOU agreement with CHALIECO/ Guiyang Aluminum Magnesium Design & Research Institute Co. Ltd. (GAMI), China lab scale study for extraction of iron concentrate from red mud, a waste of Alumina Refinery Plant has been completed. Conventional High Gradient Pulse Magnetic Separation and a new technology-Disperse Magnetic Calcinations & Magnetic Separation was attempted for extraction of iron concentrate from Red mud.
- A study was undertaken to establish suitability for iron recovery and 100% utilization of Red Mud (Plant waste) with M/s. Shenwu Group, China. Lab scale study has been successfully completed and the test report has been received.
- MOU has been signed with Bhabha Atomic Research Centre (BARC), Mumbai on 10th May, 2016 for development of chemical method and technologies for value added processes and product in aluminum industry. Under the agreement two studies have been under taken
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.
NALCO Head Quarters
by BARC i.e. (i) development of Gallium extraction technology from Bayer''s Liquor of Alumina Refinery process and (ii) Use of red mud in nuclear reactors.
- MOU agreement was signed with âThe Energy and Resources Institute'' (TERI) for (i) Generating new knowledge on mining rehabilitation methods and technologies, (ii) Sustainable Rehabilitation of Red mud areas, and (iii) Capacity building of relevant officials.
- Four Patent applications were filed during the year.
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.
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors'' pursuant to the provisions of Section I34(3)(c) and 134(5) of the Companies Act, 2013, 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
- 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; and
- 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. the members to Note No. 43 of the financial statements which sets out related party disclosures.
No contract has been entered with any related party during the year under report. However, a report in Form AOC-2 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
- Shri N.R. Mohanty, Director (P&T) till 31.01.2017
- Shri K.C.Samal, Director (Finance)
- Ms. Soma Mondal, Director (Commercial) till 28.02.2017
- Shri V.Balasubramanyam, Director (Production)
- Shri Basant Kumar Thakur, Director (HR) (w.e.f. 04.07.2016)
- Shri S K Roy, Director (P&T) (w.e.f. 03.02.20I7)
- Shri K.N.Ravindra, Executive Director
- Company Secretary till 31.05.2017
- Shri N K Mohanty, Company Secretary w.e.f. 01.06.2017 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, 20I5.
Meetings of the Board
During the year, eight Board meetings were held. Details of the meetings are available in the report on Corporate Governance (Annexure-V) placed in this Annual Report.
^ramous 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, as amended and notification dated 5th July, 20I7.
- Company''s policy on Director''s appointment and remuneration including criteria for determining qualification, attributes, independence, etc. as per Section I34(3)(e) and Section I78(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 I34(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
During the year, one case was reported under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 20I3, which has been closed as on date.
Particulars of loans, guarantees and investments
Particulars of loans, guarantees and investments form part of Notes for 10 and
12 respectively to the financial statements provided in the Annual Report.
Subsidiaries, Joint Venture Companies and Associated Companies
The Company does not have any subsidiary. Neither any company has become subsidiary, JV or associate company nor has any company ceased to be subsidiary, JV or associate company during the period under report. Particulars regarding joint venture companies and associated companies form part of Note 47 of the Consolidated Financial Statements provided in the Annual Report.
Salient features of JV/Associate companies in Form AOC-I (Note 48) forms integral part of the consolidated financial statement of the Company. Awards & Recognitions
- The Panchpatmali Bauxite Mines of NALCO has been conferred with the 5-Star Rating by the Ministry of Mines in February, 20I7 for its efforts and initiatives towards Sustainable Development Framework.
- Highest Export Award for its outstanding export performance in Minerals and Ores sector for the year 20I4-I5, by Chemical & Allied Products Export Promotion Council (CAPEXIL) in February, 20I7.
- Performance Excellence Award, from Indian Institution of Industrial Engineering (IIIE) in February, 20I7.
- SCOPE Meritorious Award for Corporate Social Responsibility & Responsiveness for the year 20I4-I5 in FY 20I6-I7.
- SCOPE Excellence Award in Institutional Category-I for Navratna and Maharatna Companies for the year 20I4-I5 in FY 20I6-I7.
- Ist Prize for safety & welfare for contractor''s workers and Ist Prize for water management/monsoon preparation for Panchpatmali Bauxite mines, awarded by DGMS in July, 20I6.
Other Notable Awards
- India Pride Award for the year 20I5-I6 for CSR, Environment Protection & Conservation, instituted by the Dainik Bhaskar Group in April, 20I6.
- âOutstanding CSR Practices in Community Development Award'', during the Odisha CSR Summit 20I6, jointly organized by KIIT School of Rural Management and Odisha LIVE at Bhubaneswar in April, 20I6.
- âCSR Excellence Award'' in Gold category for the year 2015 by the Institute of Quality and Environment Management Services (IQEMS) in association with Rotary Club - Heritage, Bhubaneswar in May, 20I6.
- âEmerging Global Brand Award'' by a leading web channel network Odisha Live, at Bhubaneswar in June, 20I6.
- The Times of India Group felicitated NALCO for its CSR initiatives in August, 20I6.
- Best Exporter Awards consecutively for the years 20II-I2, 20I2-I3 and 2013-14, under metallurgical products category in September 20I6 at Bhubaneswar.
- Best Mother Plant award in the 30th Annual State Level Convention
- 20I6 organized by Odisha Assembly of Small & Medium Enterprises (OASME)â, on I2th August, 20I6.
IMPLEMENTATION OF GOODS AND SERVICES TAX (GST)
Goods and Services Tax (GST) was implemented by Government of India, effective from Ist July, 20I7. The Company was well prepared to migrate into GST regime on compliance of statutory provisions, reconfiguration of ERP system and training of personnel to address the business requirement in compliance to GST Law. The Company has also conducted vendor awareness programmes in its plants and offices.
The Company has successfully migrated into GST w.e.f. Is of July, 20I7 without any business disruption and is well equipped to address all the future changes those will be notified by the Government from time to time.
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 âNil'' comments from C&AG on the standalone financial statements of the Company. Further, C&AG has also given âNil'' 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 20I6-I7.
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 20I6-I7. In terms of the provisions of section I48 and all other applicable provisions of the Companies Act, 20I3, read with the Companies (Audit and Auditors) Rules, 20I4, M/s. Tanmaya S Pradhan & Co, have been appointed as Cost Auditors for the year 20I6 I7.
Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairs within the stipulated time period.
Secretarial Auditors
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 Auditors 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 CA firms for carrying out internal audit functions of your Company for the financial year 20I6-I7:
- M/s. SRB & Associates for Corporate Office, Bhubaneswar
- M/s. SCM & Associates for Smelter & Power Complex, Angul
- M/s. Rao & Kumar for Mines & Refinery Complex, Damanjodi & Port Facilities, Visakhapatnam
- M/s. Bhatia & Bhatia for Northen Regional Office, New Delhi
- M/s. Prabir Ranjan Datta & Co. for Eastern Regional Office, Kolkata
- M/s. Raghavan & Muralidharan for Southern Regional Office, Chennai
- M/s. MKPS & Associates 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 Subhash Chandra, Joint Secretary, Ministry of Mines was appointed as Part-time Official Director w.e.f. 20.I0.20I6.
- Shri S K Roy was appointed as Director (P&T) of the Company w.e.f.
03.02.2017.
- Ms. Kiran Ghai Sinha was appointed as Part-time Non-official Director w.e.f. 03.02.20I7.
- Dr. Niranjan Kumar Singh, Joint Secretary, Ministry of Mines was appointed as Part-time Official Director w.e.f I5.03.20I7.
Cessation
- Shri N B Dhal, Joint Secretary, Ministry of Mines ceased to be Part-time Official Director on the Board of your Company w.e.f 20.I0.20I6.
- Shri R Sridharan, Special Secretary, Ministry of Mines ceased to be Part-time Official Director on the Board of your Company w.e.f
03.01.2017.
- Shri N R Mohanty, Director (P&T), superannuated on 3I.0I.20I7.
- Ms. Soma Mondal, Director (Commercial) ceased to be associated with the Company w.e.f 0I.03.20I7.
Your directors wish to place on record their appreciation for the valuable services rendered by Shri N B Dhal, Shri R Sridharan, Shri N R Mohanty and Ms. Soma Mondal during their tenure on the Board of your Company.
ACKNOWLEDGEMENT
Your Directors wholeheartedly place on record their appreciation for the continued and unstinted support of 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, 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, Solicitors and JV Partners, Business Associates, other Government agencies and CPSEs for the co-operation rendered by them during the year.
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.
Last but not the least, your Directors also place on record their appreciation for the dedication, commitment and sincere services rendered by the employees at various levels and due to the active support and co-operation received from the Trade Unions & Officers'' Associations for sustained improvements.
For and on behalf of Board of Directors
Place : Bhubaneswar Dr. Tapan Kumar Chand
Date : I9.08.20I7 Chairman-cum-Managing Director
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 PracticesÂ2013'' 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 AwardÂ2013 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 ofë 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