Corporate Presentation - National Aluminium Company Ltd.

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1Overview of NALCOCorporate Presentation October 2012

Our Genesis, Vision & MissionVision: To be a reputed global company in the metals and energy sectorsTo achieve sustainable growth in business through diversification, innovation and global competitive edgeTo continuously develop human resources, create safe working conditions, improve productivity andquality and reduce cost and wasteMissionTo satisfy the customers and shareholders, employees and all other stakeholdersTo be a good corporate citizen, protecting and enhancing the environment as well as discharging socialresponsibility in order to ensure sustainable growthTo intensify R&D for technology developmentDiscovery of bauxitedeposits along theeastern coastCommencement ofsale of aluminium1st Phase ExpansioncompletedEstablished NALCOFoundation for CSRTop export award ofCAPEXIL for 23rd yearin successionEvolution &KeyMilestones19751981Foundation stone laidby the then PM,Late Mrs. IndiraGandhi19871989Registration at theLondon MetalExchange20042008 2011Granted Navratnastatus2010 20122nd Phase ExpansioncompletedCorporate Presentation October 20125

2Production & SalesCorporate Presentation October 2012

Average Realization304 316264350 374328418 400354 339 341310AluminaExport ($/T)FY08 FY09 FY10 FY11 FY12 H1FY13Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY132,6542,2341,9462,335 2,4342,1282,726 2,5992,265 2,228 2,191 2,102AluminiumExport ($/T)FY08 FY09 FY10 FY11 FY12 H1FY13Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13AluminiumDomestic(Rs/T)110,563 108,65995,368110,038120,301 125,845124,365119,489115,949120,986123,135128,500FY08 FY09 FY10 FY11 FY12 H1FY13Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13Corporate Presentation October 201211

India Demand OutlookConsumption Pattern (1)Per Capita Consumptions (Kg) (2)Machinery &Equipment9%ConsumerDurables6%Electrical11%Other8%Packaging18%WorldTransport28%Construction20%Machinery &Equipment7%ConsumerDurables7%Electrical48%Other6%IndiaTransport15%Construction13%Packaging4%38.226.227.622.316.7 16.76.881.8IN BRZ CHN CNDA USA ITLY JAP GER Wrld Avg.Drivers for End UseConsumer appliance market expected to see significant upsides onaccount of rapid urbanization and growth in the economyIndia is one of the world’s largest auto marketsWhile power and construction are seeing short term headwinds,given the “deficits” – they are likely to see continuing investmentsShare of Major Primary Producers (FY 12)Sterlite39%NALCO27%HINDALCO34%(1) Source: EAA, US GS, INDIASTATS, CRU(2) Source: IMF, Industry EstimatesCorporate Presentation October 201213

4FinancialsCorporate Presentation October 2012

Quarterly Income Statement(Rs. Cr) Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13Net Sales 1,733 1,584 1,430 1,753 1,718 1,586Expenses 1,146 1,460 1,383 1,478 1,444 1,610Raw Materials 234 284 265 248 316 291Power & Fuel 481 639 569 509 605 753Staff Expenses 246 233 297 256 283 296Other Expenses* 185 304 252 465 240 270EBITDA 587 124 47 275 274 (24)Margin (1) 34% 8% 3% 16% 16% N.MDepreciation 102 118 124 123 122 124Financial Expense 1 3 4Other Income 155 161 147 191 170 161Exceptional Items 86 (64)PBT 554 167 71 406 319 9PAT 377 139 51 282 223 5Margin (2) 22% 9% 4% 16% 13% 0%(1) EBITDA Margin = EBITDA/Net Sales(2) PAT Margin = PAT/Net Sales* Including stock adjustmentsCorporate Presentation October 201217

5Our Expansion ProjectsCorporate Presentation October 2012

Our Track Record of ExpansionExpansion PhaseCommissioningDateCapital Cost(Rs Cr)Capacity AdditionBauxite (MTPA) Alumina (MTPA) Aluminium (MTPA) Power (MW)Phase 1 1999-2004 4,200 2.4 0.78 0.13 360Phase 2 2008-2011 4,400 1.5 0.52 0.11 240Upgradation 2013 409 0.5 0.18Total 6.8 2.3 0.46 1200Bauxite Mining Capacity (MTPA)Alumina Refining Capacity (MTPA)6.36.82.102.284.81.582.40.851986 2004 2011 2013Aluminium Smelting Capacity (MTPA)1985 2004 2011 2013Captive Power Capacity (MW)0.461,2000.359600.226001985 2003 20091985 2003 2010Corporate Presentation October 201219

Capex Plans(Rs. Cr)Plan XII Expenditure3,2143,2993203292,6382,7392,3433163031,1394167251,8171,1871,4551,711 1,7551,1351,153472FY13E FY14E FY15E FY16E FY17EBrown Field projects Green Field projects AMRCorporate Presentation October 201220

6Projects Under ConstructionCorporate Presentation October 2012

Energy ProjectsLocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionImpact on ProfitabilityProject: Wind Power Phase IDeveloped by SuzlonStage II forest clearance receivedfrom MoEF in Jun 2012Site work commenced since JulGandikota,Andhra Pradesh50.4 MW274(funded frominternal accruals)2012Capacity allocation agreementnovated to NALCO in Aug 2012Draft PPA signed with APSPDCL(discom) in Oct 2012, finalagreement to signed after vettingby APERCDec 2012, 16out of 24 mastserectedWill meet about 85% of nonsolarRPO requirementProject: Utkal-E Coal ProjectEnvironmental Clearance receivedin Dec 2009Prior approval for mining leasereceived in Jun 2011 from MoCTalcher, Odisha 2 MTPA 338Disbursement of landcompensation since Apr 2012Order placed for construction ofR&R colony in Aug 2012Forest clearance and appointmentof MDO in progressDec 2013To meet additionalrequirements beyond linkageCorporate Presentation October 201222

Refining & Smelting ProjectsLocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionImpact on ProfitabilityProject: Refinery 4 th Stream UpgradationDamanjodi,Odisha0.525 MTPA(mining), 0.175MTPA (refining)409 Overall project progress – 85% Dec 2012Increased production ofaluminaProject: 200 KA Upgradation of SmelterAngul, OdishaIncrementalsmelter capacityof 0.107 MTPA900DPR preparation underwayEIA being carried outEnhancement to 200 KA from 180KA2017Increased production ofAluminiumCorporate Presentation October 201223

CDM ProjectsProjectEst. Investment (Rs. Cr)Estimated annualreduction in CO2 (ton)StatusEstimated annual returnon CERs (Rs Lakh)*PDD webhosted and project is underImplementation of VFDin refinery8 7,429validationReply to draft validation report (DVR) beingprepared10.1CBD heat recovery in CPP 3.5 13,113PDD webhosted and under validation3rd party validation report from NPC on‘Specific coal consumption’ and ‘First of itskind project ’ has been submittedFinal validation report from DoE is awaited17.8AP wind project 274 85,927 16 out of 24 masts erected 116.8* @ EUR 2/CERCorporate Presentation October 201224

7Projects Under PlanningCorporate Presentation October 2012

Brownfield ProjectsLocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionImpact on ProfitabilityProject: 5 th Stream in Alumina RefineryLinked to Pottangi bauxiteDamanjodi,Odisha1 MTPA 4,570In-principle approval for mininglease received from Govt. of OdishareceivedDPR under preparation2016deposits (reserves of 65 MT)Enables second source ofbauxite to the alumina refineryExpected additional revenueof Rs 1,800 Cr, additional PATof Rs 435 CrProject: Captive Power PlantApplied to OSPCB for consent toestablish in May 2011Angul, Odisha 2 x 250 MW 2,700Applied to MoEF for environmentalclearance in May 2011, wasconsidered by EAC in Jul 2012, TORis awaitedAviation clearance for chimneyconstruction received from AAI inJun 2012Power system study underway2017Will meet the powerrequirement of 220 KA upgradationof smelterPotential of surplus power saleto gridCorporate Presentation October 201226

Greenfield ProjectsLocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionProject: Alumina Refinery in collaboration with GMDCKutch Dist,Gujarat1 MTPA (Phase I,with potential for0.5 MTPA inPhase II)4,065GMDC will supply bauxite for 25 yearsGMDC has offered to own 26% equity in the projectProject and bauxite supply agreements under finalizationConsultant engaged for preparation of DPR1500 acres of land under acquisition by GMDC2017Project: Smelter & Power PlantProject cleared by Govt. of Odisha in Sep 2012Sundargarh Dist,Odisha0.5 MTPA, 1,260MW16,345Water allocation likely from Hirakud reservoirSite is being finalizedAllocation of captive coal block is being pursued2018Project: Bauxite Mines & Alumina RefineryBased on Gudem and KR Konda bauxite reserves (Reserves: 81 MT)VisakhapatnamDist, AP4.2 MTPA bauxite,1.4 MTPAalumina6,000Pre-feasibility report prepared in Jun 09Govt. of India and Govt. of AP recommended for lease in Sep 09Applied to APIIC for approval of refinery proposal (location, water etc)Forest clearance awaited for detailed exploration of KR Konda blocksSoft CSR activities initiated-Corporate Presentation October 201227

Vertical Integration ProjectsLocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionProject: Caustic Soda plant in collaboration with GACLDahej, Gujarat 0.2 MTPA 600-800Project: Aluminium Conductor plant in collaboration with PGCILTo be firmed up 0.55 MTPA 200MoU signed with Gujarat Alkalis and Chemicals Ltd (GACL)DPR being prepared by GACLCritical factors are availability of salt (main raw material) and disposal ofchlorine (toxic by-product)Favourable factors are availability of salt & ethylene and well-developedmarket for chlorine in GujaratMOU signed with PGCIL in Oct 2011NALCO to supply aluminium and PGCIL to source conductors from the JV atmutually agreed priceFeasibility report under preparation2016-Corporate Presentation October 201228

Diversification Projects (Power)LocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionProject: Nuclear Power in collaboration with NPCILKakkarpar,Gujarat2 x 700 MW11,459(NALCO’s 49%share of equity:1,685)JV incorporated in Mar 12Initial equity investment of 26% (Rs 894 Cr) approved by the Board, to beenhanced to 49% upon approval of GoI through CCSApproval of CCS is awaited for 1st tranche of equity contribution.2016Project: Solar PowerTo be firmed up 15 MW 150Project: Wind PowerFeasibility report preparedSelection of suitable site is underwayPower generation will meet future solar RPO2015II: RajasthanIII: OdishaII: 50 MWIII: To be firmedupII: 285Phase II - Selection of developer is underway through open globalcompetitive bidding process, LoI to be issued by Dec 2012Phase III - Wind data validation completed by CWET, TEFR under preparation,capacity & investment to be ascertained2014Project: IPP (UMPP) in consortiumTo be firmed up 4,000 MW 20,000Participating in consortium as a lead partnerDiscussions held with interested CPSEs for consortium bidding for UMPPsRFQ submitted for UMPP Odisha & UMPP Chhattisgarh-Corporate Presentation October 201229

Diversification Projects (Other)LocationCapacityEst. Investment(Rs. Cr)StatusLikelyCompletionProject: Titanium Slag Manufacturing in collaboration with IRELChhatrapur,Odisha0.1 MTPA 400MoU signed with Indian Rare Earth Ltd (IREL) in Jan 2011Technology partner to be selected through open global competitive bidding-Corporate Presentation October 201230

8Awards & GovernanceCorporate Presentation October 2012

Recent Awards2012Dun & Bradstreet’s Best PSU Award in Non-Ferrous Metal Category2012Think Odisha Leadership Award for the Education Initiative in Tribal Belt of Koraput organized by the Times of India Group2010Best Listed CPSE Award by Govt. of India2011PSE Excellence Award for CSR initiatives by Govt. of India2011, 2010National Energy Conservation Award1998-2011Top Export Award of CAPEXIL2010EEPC (Eastern Region)’s Gold Award as Top Exporter in Large Enterprise categoryCorporate Presentation October 201232

CSR InitiativesCSR PolicyStarted allocating 0.5% of net profit every year for peripherydevelopment activities since FY99Doubled to 1.0% of net profit since FY03Further increased to 2.0% of net profit since FY11 (equally splitbetween periphery development & CSR)Allocation: 40% - Damanjodi area where mines & refinery are located 40% - Angul area where smelter & power plants are located 20% - Other areasSet up by the Board in Jul 2010 for CSR activities, to be funded to theextent of 1.0% of net profitFocused on development of villages located within 15 km of NALCO’sMines & Plants in Damanjodi and Angul including proposed miningareas such as Pottangi (Koraput) and Gudem & KR Konda(Visakhapatnam & East Godavari districts of AP)361 tribal & non-tribal children from periphery villages have beensponsored for education in reputed institutionsSkill development initiativesNALCO FoundationPeriphery Development ExpenditureRehabilitation & Periphery Development Advisory Committees(RPDACs), at Koraput and Angul headed by concerned RDCs, withlocal representatives decide all policy and project mattersNALCO has contributed Rs 158 Cr since inception for rural roads,education, healthcare, water supply, community development, socialwelfare and environment4 schools (DPS and Saraswati Vidya Mandir) are being run at bothcomplexes since 1983-84, in which nearly half of the students belongto periphery villagesProject-based Accountability ApproachShifted away from the earlier donor-based approachEnsuring participation of the primary stakeholders at the grassroots inthe decision making processBroad methodology: Need assessment & baseline survey Project identification Selection of implementing agencies Monitoring and evaluation Social auditing by independent bodies Documentation of experienceCorporate Presentation October 201233

Best Practices in Operations and Corporate GovernanceOperationsCorporate GovernancePeriphery development through CSR activitiesDirect & indirect employment to land affected personsCare for ecology & environmentSustainability development report publishedEnergy conservation measures & energy auditTotal Quality Management – including ISO 9001, ISO 14000,OHSAS:18000 & SA 8000 (ISO 50001 under certification)Compliant with Clause 49 of the Listing AgreementCompliant with corporate governance guidelines issued byGovernment of IndiaAdditional voluntary initiatives include Secretarial audit Daily reconciliation of paid-up share capital Placing unpaid dividend warrants list on the website Fraud prevention policyTransparency in policies and product salesAdoption of integrity pactERP compliantCorporate Presentation October 201234

Thank YouCorporate Presentation October 2012