Submitted To: Dr.

JASPAL SINGH

Submitted By: HEMANT KALIA Mba Sem (II) Roll No. 41

INTRODUCTION
Hindalco Industries Ltd. is one of the world's largest Aluminum manufacturing company and is a subsidiary of theAditya Birla Group. It is run by one of the world's youngest billionaires, Mr. K.M. Birla.

Financial information
The company has annual sales of $ 5 billion and employs 13,675 people and is listed on Forbes 2000. A metals powerhouse with a turnover of US$ 14 billion, Hindalco is one of the world's largest aluminum rolling companies and one of the biggest producers of primary aluminum in Asia. History The Hindustan Aluminum Corporation Limited was established in 1958 by the Aditya Birla Group. In 1962 the company began production in Renukoot in Uttar Pradesh making 20,000 million metric tons per year of aluminum metal and 40,000 million metric tons per year of alumina. In 1989 the company was restructured and renamed Hindalco.Sz Novelis acquisition On February 11, 2007, the company entered into an agreement to acquire

the Canadian company Novelis for U$6 billion, making the combined entity the world's largest rolled-aluminum producer. At 2007 Novelis was the world's largest producer of rolled aluminum and a major recycler of aluminum cans. On May 15, 2007, the acquisition was completed with Novelis shareholders receiving $44.93 per outstanding share of common stock. Hindalco, through its wholly owned subsidiary AV Metals Inc., acquired 75,415,536 common shares of Novelis, representing 100 percent of the issued and outstanding common shares.

Immediately after closing, AV Metals Inc. transferred the common shares of Novelis to its wholly owned subsidiary AV Aluminum Inc. When Hindalco made this bid in 2007 this became the largest Indian investment in North America and the second-largest overseas investment by an Indian company (behind Tata Steel Europe's purchase of Corus two weeks earlier) to this time. The day after Hindalco announced the acquisition its stock fell by 13% resulting in a USD $600 million drop in market capitalization. Shareholders criticized the deal but K.M. Birla responded that he had offered a fair price for the company and stated, "When you are acquiring a world leader you will have to pay a premium.

Other acquisitions and takeovers

In July 2007, Hindalco announced it is acquiring the stake of Alcan Inc.'s in the Utkal Alumina Project located in Orissa.

In June 2000, acquisition of controlling stake in Indian Aluminum Company Limited (Indal) with 74.6 per cent equity holding.

Forbes ranking
Hindalco is listed on the 2011 Forbes Global 2000 at the position 643.

CORPORATE GOVERNANCE REPORT

GOVERNANCE PHILOSOPHY The Aditya Birla Group is committed to the adoption of best governance practices and its adherence in the true spirit, at all times. Our governance practices are a product of self-desire reflecting the culture of the trusteeship i.e. deeply ingrained in our value system and reflected in our strategic thought process. At a macro level, our governance philosophy rests on five basic tenets viz., Board accountability to the Company and shareholders, strategic guidance and effective monitoring by the Board, protection of minority interests and rights, equitable treatment of all shareholders as well as superior transparency and timely disclosure. In line with this philosophy Hindalco Industries Ltd continuously strives for excellence through adoption of best governance & disclosure practices.

Compliance with Corporate Governance

Guidelines
The Company is fully compliant with the requirements of the prevailing and applicable Corporate Governance Code. Your Companys compliance with requirements is presented in the subsequent sections of this Report. All the Directors have intimated periodically about their Directorship and Membership in the various Board committees of other companies, which are within permissible limits of the Companies Act, 1956 and Corporate Governance Code. Public Member Chairman 1. Independent Director means a director defined as such under Clause 49 of the Listing agreement. 2. Mr. A. K. Agarwal was an Executive Director till 10th September 2003. Thereafter, he has moved to other responsibilities in the Aditya Birla Group.

3. Excludes Directorship held in Private Companies, Foreign Companies and Companies incorporated under Section 25 of the Companies Act, 1956. 4. Represents only membership/chairmanship of Audit Committee and Shareholders / Investors grievance Committee of Indian Public Limited Companies. 5. Ceased as a Director w.e.f 24th December, 2010 due to his demise. 6. Appointed as an Additional director w.e.f 12th February, 2011.

SWOT ANALYSIS OF HINDALCO

Strengths
Cost advantage Asset leverage Effective communication High R&D Innovation Online growth Loyal customers Market share leadership Strong management team Strong brand equity Strong financial position Supply chain

Pricing Real estate Reputation management

Weaknesses
Bad communication Diseconomies to scale Over leveraged financial position Low R&D Low market share No online presence Not innovative Not diversified Poor supply chain Weak management team Weak real estate Over leveraged financial position

Strengths
Cost advantage Asset leverage Effective communication High R&D Innovation

Weaknesses
all this is bull *** [*]Bad communication [*]Diseconomies to scale [*]Over leveraged fiancial position [*]Low R&D [*]Low market share [*]No online presence

Online growth Loyal customers Market share leadership Strong management team Strong brand equity Strong financial position Supply chain Pricing Real estate Reputation management Unique products

[*]Not innovative [*]Not diversified [*]Poor supply chain [*]Weak management team [*]Weak real estate [*]Weak, damaged brand [*]Ubiquitiouegory, products, services [/list]

Threats Opportunities
Competition Acquisitions Cheaper technology Asset leverage Economic slowdown Financial markets (raise money through debt, etc) Emerging markets and expansion abroad Exchange rate fluctuations Innovation Lower cost competitors or imports Online Maturing categories, products, or services Product and services expansion Price wars Takeovers Product substitution External changes (government, politics, taxes, etc)

Balance Sheet of Hindalco Industries

Mar '11

Mar '10

Mar '09

Mar '08

Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

Sources Of Funds Total Share Capital 191.46 Equity Share Capital 191.46 191.37 191.37 170.46 170.05 122.65 122.65 104.33 104.33

Share Application 4.47 Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities 0.00

3.99

3.17

139.50

0.00

0.00

0.41

0.00

0.00

29,504.17 27,715.61 23,584.69 17,173.67 12,313.71 0.00 0.00 0.00 0.00 0.00

29,700.10 27,910.97 23,758.32 17,435.82 12,418.04 5,170.31 5,153.90 5,713.23 6,205.42 6,410.20 2,101.19 1,203.00 2,611.06 2,123.16 958.40 7,271.50 6,356.90 8,324.29 8,328.58 7,368.60 36,971.60 34,267.87 32,082.61 25,764.40 19,786.64

Mar '11 12 mths

Mar '10 12 mths

Mar '09 12 mths

Mar '08 12 mths

Mar '07 12 mths

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits 14,287.32 13,793.35 13,393.07 12,608.46 11,252.66 6,702.94 6,058.53 5,506.10 4,799.12 4,245.95 7,584.38 7,734.82 7,886.97 7,809.34 7,006.71 9,464.05 3,702.79 1,389.63 1,119.87 1,476.43 18,246.75 21,480.83 19,148.84 14,107.99 8,675.32 7,652.19 5,921.41 4,070.14 5,097.91 4,315.31 1,268.99 1,311.87 1,201.22 1,565.02 1,504.50 111.12 139.96 213.48 131.05 187.45

9,032.30 7,373.24 5,484.84 6,793.98 6,007.26

1,750.22 1,588.62 1,709.16 1,116.35 1,360.86 122.27 0.25 630.24 15.93 478.05

Total CA, Loans & 10,904.79 8,962.11 7,824.24 7,926.26 7,846.17 Advances Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 8,583.69 6,891.19 3,363.91 4,293.04 3,937.01 Provisions Total CL & Provisions 644.68 721.49 803.16 906.01 1,284.14

9,228.37 7,612.68 4,167.07 5,199.05 5,221.15

Net Current Assets 1,676.42 1,349.43 3,657.17 2,727.21 2,625.02 Miscellaneous Expenses Total Assets 0.00 0.00 0.00 0.00 3.17

36,971.60 34,267.87 32,082.61 25,764.41 19,786.65

Contingent Liabilities Book Value (Rs)

11,333.90 18,607.32 9,775.80 17,660.42 1,362.42 155.07 145.85 139.71 140.95 107.11

Profit & Loss account of Hindalco Industries

Mar '11

------------------- in Rs. Cr. ------------------Mar '10 Mar '09 Mar '08 Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost 16,435.73 13,666.78 10,855.14 12,486.62 11,438.31 2,221.48 1,938.00 2,231.56 1,910.83 1,848.62 1,054.39 904.90 200.32 535.63 386.50 -335.78 675.05 143.46 447.53 357.12 0.00 631.07 115.90 444.65 401.33 0.00 529.58 232.17 381.11 231.02 0.00 25,255.01 20,516.43 19,641.40 20,943.69 19,921.40 1,497.87 1,059.45 1,481.59 1,825.68 1,608.47 23,757.14 19,456.98 18,159.81 19,118.01 18,312.93 304.25 403.63 574.62 765.87 712.66 -537.81 571.18 141.80 283.52 443.89

24,465.02 20,797.47 18,334.66 19,830.99 19,040.34

Other Manufacturing Expenses 255.84 Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised 552.73 471.46 -390.30

Total Expenses

20,601.33 17,296.35 14,709.86 15,990.40 14,660.81

Mar '11

Mar '10

Mar '09

Mar '08

Mar '07

12 mths

12 mths

12 mths

12 mths

12 mths

Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax

3,559.44 2,926.50 2,912.14 3,269.41 4,096.01 3,863.69 3,501.12 3,624.80 3,840.59 4,379.53 610.26 613.78 336.93 280.63 242.39

3,253.43 2,887.34 3,287.87 3,559.96 4,137.14 687.48 0.00 671.36 0.00 644.34 0.00 587.81 3.62 552.80 4.00

2,565.95 2,215.98 2,643.53 2,968.53 3,580.34 39.63 157.60 198.55 597.74 9.54

2,605.58 2,373.58 2,842.08 3,566.27 3,589.88 468.66 462.10 610.88 705.34 940.30

2,136.92 1,915.63 2,230.27 2,860.94 2,564.33 4,165.60 3,629.57 3,854.72 3,503.78 3,222.51 0.00 287.17 46.59 0.00 258.32 42.90 0.02 229.58 39.03 0.02 226.89 38.56 0.00 177.34 24.87

Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs) 19,149.44 19,134.62 17,002.71 12,271.30 11,593.30 11.16 150.00 155.07 10.01 135.00 145.85 13.12 135.00 139.71 23.31 185.00 140.95 22.12 170.00 107.11

Key Financial Ratios of Hindalco Industries

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) Adjusted Net Profit Margin(%) 14.98 11.87 12.08 12.00 12.00 8.83 8.83 15.04 11.41 11.59 10.89 10.89 9.69 9.69 16.03 12.07 12.48 13.76 13.76 11.87 11.87 17.10 13.64 14.02 14.31 14.31 14.56 14.56 21.90 18.55 22.27 16.72 16.90 13.76 13.91 1.00 1.50 18.59 1.00 1.35 15.29 1.00 1.35 17.12 1.00 1.85 26.64 1.00 1.70 34.60

124.06 101.68 106.81 155.79 157.96 108.11 98.72 25.68 25.69 86.31 28.92 138.43 103.16 40.09 47.13

Return On Capital Employed(%) Return On Net Worth(%) Adjusted Return on Net Worth(%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio

8.90 7.19 7.45

7.46 6.86 5.30

9.00 9.38 8.16

12.44 16.54 12.83

19.07 20.65 20.88

155.07 145.85 139.71 140.95 107.09 155.07 145.85 139.71 140.95 107.09 9.44 7.73 9.72 13.56 20.03

0.96 0.34 0.24 0.17

1.02 0.39 0.23 0.19

1.20 0.88 0.35 0.25

1.08 0.53 0.48 0.37

1.22 0.66 0.59 0.52

5.89 0.24 6.52 5.63

4.30 0.23 5.26 5.21

10.43 0.35 10.48 9.53

13.63 0.48 13.53 13.30

20.90 0.59 17.87 13.88

3.43 18.41 3.43 1.67 0.64

3.63 15.48 3.63 1.42 0.57

5.16 13.13 5.16 1.37 0.57

4.32 12.46 4.32 1.53 0.74

4.32 13.30 4.89 2.30 0.93

Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition

1.67 86.80 4.76 25.40

1.42 66.64 4.72 24.97

1.37 49.40 3.66 72.50

1.53 58.22 5.60 51.35

1.64 42.95 4.20 51.60

69.18

70.24 89.76 1.86 27.12

59.77 86.35 1.75 28.38

65.31 90.35 1.62 33.65

62.46 89.50 1.60 38.10

Imported Composition of Raw Materials Consumed 88.47 Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio AdjustedCash Flow Times 15.61 11.81 84.94 88.51 2.51 1.70 29.87

15.72 11.64 79.67 86.01 2.95

12.04 9.34 86.16 89.61 3.22

9.27 7.68 88.05 90.56 2.96

7.88 6.47 92.20 93.58 2.34

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Earnings Per Share Book Value

11.16

10.01

13.12

23.31

22.12

155.07 145.85 139.71 140.95 107.11

Management - Hindalco
Name Kumar Mangalam Birla Rajashree Birla Madhukar Manilal Bhagat Askaran Agarwala Ram Charan Name Debnarayan Bhattacharya Chaitan Manbhai Maniar Kailash Nath Bhandari Narendra Jamnadas Jhaveri Jagdish Khattar Designation Chairman / Chair Person Non Executive Director Non Executive Director Non Executive Director Non Executive Director Designation Managing Director Non Executive Director Non Executive Director Non Executive Director Independent Director

Material developments in human resources industrial relations front, including number of people employed. Our Group has time and again is adjudged amongst the best employer in India by global agencies such as Hewitt . Our culture and reputation as a business leader in the industry enables us to recruit and retain the best available talent in India.

Human capital
Our professionals are our most important assets. We are committed to remaining among the industrys leading employers. We have a pool of around 19,300 employees in our fold. The group has a well laid talent development plan that ensures attracting the talent and provides for nurturing and enhancement of talent.

Training and Development

Our training, continuing education and career development programs are designed to ensure that our professionals enhance their business skills. Our group initiatives and our learning campus provide continuous learning opportunities. Our in house faculty conducts integrated training for our new employees. Leadership development is a core part of our training program. Conclusion Yet again your Company recorded a strong performance in a year that witnessed strong commodity prices, but nevertheless was a very challenging year in many ways. Strong inflationary pressures leading to sharp rise in input prices, especially energy, appreciating rupee, rising coal prices in India these were some of the challenges faced by industry. In addition, your company also witnessed some of the one off unfortunate disruptions such as Hirakud outage and Dahej cooling tower failure that led to significant production loss and severe cost escalation. On this backdrop, this strong performance is testimony to the sound business models of our Aluminium and Copper businesses, the underlying strength of business operations, stable and capable processes, and successful implementation of a well thought out strategic plan for uantum growth supported by a strongbalance sheet and robust cash flows from existing operations. The year also witnessed a strong performance by Novelis and ABML two contrasting businesses operating in two entirely different geographies amidst different challenges. During the year, We not only tied up financing for our Greenfield projects (Utkal and Mahan) but through Novelis refinancing also successfully aligned our capital structure to the business needs thus

facilitating the future growth. Global economy is expected to continue its recovery; however this revival could be slow and may face strong headwinds. The upstream aluminum industry may continue to witness pricing pressure on account of large inventories while the cost push is expected to continue. The copper business too will continue to face challenges on account of cost inflation even as TC/RC s are expected to better in FY12. At present the focus is on Maintaining profitability in an uncertain, inflationary macro- economic environment Maximising Free Cash Flow from existing operations Ensuring planned progress on the projects in a challenging environment Your company has strengthened its balance sheet, has reduced our leverage and improved our capital structure. We also have achieved financial closure of two projects .This would allow us to progress on the Greenfield projects through a calibrated approach. The Brownfield expansions at Muri and Hirakud have been commissioned and will deliver the targeted cash flows to help finance our growth aspirations. We are working on five greenfield sites, in difficult terrains, in a challenging regulatory environment and have put in place the necessary organization to keep these projects on track. These plans will enable your Company to grow in a steady and robust manner. Some of these projects have gained a significant visibility and are on course to reinforce low-cost advantage. This low cost advantage, along with high end technology of Novelis and a considerable head start with respect to foot print expansion in the well understood emerging markets shall catapult your company to greater heights.