Hindalco Industries Limited

Performance Review Consolidated 2007-08 Presentation to the Investors 20th June’08

1

The Big Picture - Backdrop & Highlights

Business Performance – Standalone Hindalco

Consolidated Hindalco – An Overview

2

Hindalco: Impressive Growth
FY 00
Sales $Bn EBIDTA $Bn PAT $Bn Capital employed $ Bn Business Segments Plants Countries 0.47 0.25 0.15 1.00 1 2 1

FY 08
CAGR 14.8 1.8 0.6 14.1 2 46 13
Spread Across 5 continents
3

64% 33% 22% 46%

Gordon Copper Mines Increase stake in Utkal from 20% to 55%. Hirakud to 65.000 tpa Listing of Aditya Birla Minerals Ltd.Hindalco Growth Path 2000-2008 HINDALCO – ALM EX AEROSPACE Copper business acquisition and expansion to 250. Further increased to 100% in 2007.000 tpa. JV agreement signed with Almex for aerospace alloys Acquisition Others Acquisition of Novelis 2000 2001 2002 2003 2004 2005 2006 2007 2008 Majority stake in Indal through largest allcash acquisition in India Aluminium Expansion at Renukoot to 342.000 tpa Doubling of copper capacity to 500. on Australia Stock Exchange in May 2006 raising AUD 299 million Doubling of Hirakud Smelter capacity to 143.000 tpa Expansion Acquisition of Nifty & Mt.000 tpa Alumina Expansion at Muri 4 .

it still engages headline writers. A Multinational Company with over 33.an acquisition so significant. Novelis: In May 2007. Hindalco completed the acquisition of Novelis . Aluminium India: India's largest aluminium producer having low cost upstream operations with power / coal backup. Novelis has manufacturing presence in 4 continents and has marketing presence worldwide.Hindalco: Global Non Ferrous Metals Company Copper 3 years ago A Bluechip Indian Company Now A Key Global Player India: One of the largest single location Smelters with integrated port facilities located at Dahej. Pursuing several exciting upstream projects.000 employees with 15 Nationalities 5 . Gujarat. The Australian subsidiary. Hindalco acquired and put into operation copper mines at Nifty and Mt. ABML is the first Indian Company to be listed on the ASX. Australia: In 2005. Gordon. and strategically located downstream units close to the markets.

Consolidated Hindalco: Dimensions Number Of Entities FY 07 Subsidiaries Associates Joint Ventures 18 01 02 FY 08 57 06 02 6 .

46 Operations in 13 countries EUROPE CANADA RENUKOOT (U. AMERICA USA 7 .P) ASIA Locations Bauxite Alumina Primary Rolled Products Extrusion Recycling Wheels Power Coke Regional Office Executive Office Sales Center Research and Development Copper Mines Copper Smelter AUSTRALIA S.

00 2.00 7.50 Aluminium Copper 5.50 1960 1965 1970 1975 1980 1985 1990 1995 2000 Nickel Zinc Steel Lead Tin 2005 Copper Tin Lead Crude Steel Zinc Nickel Aluminium 8 .Consolidating position in two of the fastest growing metals in the world Growth Multiple 10.

31% 1429% 13% Volume Growth in Copper Cathodes Volume Growth in Copper Concentrate Volume Growth in CC Rods 12% 74% 28% 9 .Global Portfolio:FY07 VS FY08 Operational Performance Higher Production Volumes Volume Growth in Aluminium Metal Volume Growth in Aluminium FRP Volume Growth in Aluminium Extrn.

1 4.Consolidated Financial Highlights (Rs.662 2.9 14.387 56.2 0.975 3. Crores) Results Net Sales EBITDA EBIT Profit before Tax Net Profit Capital Employed Net Worth FY 2006-07 19.814 FY 2007-08 60.8 1.6 14.291 4.6 5.8 0.285 12.835 2.7 0.013 7.986 2.686 23.3 10 .2 1.8 1.4 2.346 (Bn US$) FY FY 2006-07 2007-08 4.9 0.1 0.840 3.266 17.316 4.

Towards Sustainable Predictable Growth 2007 •India centric Operations •Globally cost Competitive due to secured key inputs •Presence in upstream predominantly commodity segment Sustainable Future De-risked Operations owing to • Presence in multiple geographies • Costs and revenues in different currencies • Presence across the value chain 2015 •Global scale of Operations •High Value added Products •Marquee Customer base •Multi location. Recycled aluminium an important growth segment going forward with Rising power costs and scarcity of Raw material. Growth in both primary as well as recycled aluminium segment 11 . offers Enormous growth potential especially In emerging markets. Proximity to Customers •Advanced Technology Hindalco Cost Advantage & Novelis Technology & customer base.

o o o o Reduced price ceiling exposure Product Mix & Price Gains Volume improvements WC management 12 .Novelis: Significant EBITDA & Free cash Flow improvement FY07 Normalised EBITDA ($Mn) 303 FY08 491 Change 62% Free cash Flows improved by $ 164 Mn Driven By……..

Hindalco Standalone Overview 13 .

664 FY08 Average.37 46 3000 Avg FY 07 .45.US$2.5 FY 07 Average.5 2700 2600 2500 FY 07 FY 08 40 39.47 2900 2800 44 11% 42 Avg FY 08 .Backdrop : FY08.US$2. a Challenging year Adverse Global Macro economic factors Sharp appreciation of INR Vs USD Average Al LME lower than last year 3100 US$/Mt 48 46.623 45.40.82 2400 2300 2200 38 FY07 FY08 36 Q1 FY07 Q2 FYT07 Q3 FY07 Q4 FY07 Q1 FY08 Q2 FY08 Q3 FY08 Q4 FY08 2100 2000 Ap ri l M ay Ju ne Ju ly Au g Se pt O ct No v De c Fe b M ar ch Ja n 14 .

109 Cr FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 Copper Duty Differential 33.9% 3.3% 5.0% 10.0% 15.Rs.0% 31.9 % to 3.6% 8.0% 18.0% o Copper duty differential down from 4.08% to 5.72% • Annual Impact.1 %.57 Cr FY01 FY02 20.7% 4.7% o Aluminium Customs duty down from 8.8% 11.Rs.Adversities On Domestic Front Too…… Aluminium import duty • Reduced Import duty differential 33.0% 19.0% 30.1% 5. • Annual Impact.1% FY08 FY03 FY04 FY05 FY06 FY07 15 .0% 28.

748 110000 105000 105000 100000 FY07 FY08 100000 Q4 FY07 Q4 FY08 16 .098 110000 115000 111.400 125000 130000 YOY drop11% 125000 QOQ drop15% 120000 120000 115000 111.124 130000 125.Impact Of Adverse Macroeconomic Trends Sharp fall in Aluminium Realisation (Rs/Mt) (Rs/Mt) 135000 131.

000 4.000 1.Copper.000 200.400.000 6.000 3.000 FY07 Avg 150 1.000 600.200. 17 20 08 .000 50 100 Weakening spot TC/RC 250 US$/Mt 9.000 5.000 800.000 0 2002 2003 2004 2005 2006 2007 2008 2.000.Strong Demand & Prices Copper LME continues to be strong with falling stock (Mt) 1.000 1.600.000 1.000 8.000 0 0 20 00 20 01 20 02 20 03 20 04 20 05 FY08 Avg 20 06 20 07 * 2008 LME figures is Till March’08 But little to cheer for Custom smelters as TC/RC remained subdued.000 400.000 Indexed 200 LME CSP US$ 7.

9 8.75 9 10 Surging Freight costs 9000 8000 7000 6000 5000 4000 Baltic Dry Freight Index 7107 8626 6 4442 3141 WTI Crude ($/bbl) Nymex Natural gas ($/mbtu) 4 3000 2000 1000 H1 FY07 H2 FY07 H1 FY08 H2 FY08 18 3 .Backdrop : FY08. a Challenging year Incessant Cost Push Energy prices reached all time highs 110 100 90 8 80 70 60 50 5 40 30 20 Q1 Q2 Q3 Q4 FY07 FY07 FY07 FY07 Q1 Q2 Q3 Q4 FY08 FY08 FY08 FY08 7 97.

extrusion up 13%) o Focus on improving markup of value added products • FRP-exports net markup grew by 7% & Extrusion exports net markup grew by 28% during FY08 through improved product mix and better premium.200 Mt o Continued sweating of assets in downstream businesses resulting in • Higher value added downstream production (FRP up 2%.Metal production enhanced by more than 9. • Domestic markups also improved for FRP (3%) as well as Extrusions (16%) 19 .Performance Overview: The following steps had already been taken which helped in mitigating the adverse macro economic impact • Aluminium o Brownfield expansion: • Timely progress of Hirakud expansion led to incremental production growth of 35% compared to FY07 o De-bottlenecking smelter assets • At Renukoot.

• Copper o Improved operating efficiency • Cathode production increased by 12% to 324KT (19% growth excluding production from Cu II in FY07) • Continuous Cast Rod production rose by 28% to 140KT • Conversion costs improved significantly o Improved geographic & product mix • More sales in domestic markets (up 37%) • Increased Continuous Cast Rod Sales (up 27%) • Alumina • More sale of Specials in domestic market (52% of total sales as against 49% during FY07) 20 ..Performance Overview continued….

883 T 19% growth excluding Cu II production in FY 07 12% • Highest ever Copper CC rod production at 139.315 T 13% Vs FY 2007 • Highest ever Copper cathode Production at 323.726 T 8% • Highest ever FRP production at 215.198 T 2% • Highest ever Extrusion Production at 43.833 T 28% • Improved Copper conversion cost Without by-product credit 24% All round improvement in Operating performance 21 .Operations: FY 2008 at a Glance • Highest ever Aluminium production at 477.

5 22 .894 3026 2320 2861 24. FY07 (Rs.385 3505 2564 2564 25.201 4.56 FY08 4741 961 747 573 706 0.5 3. Cr) Change FY07 FY08 % 5% Net Sales & Op revenues -11% EBIDTA -14% PBT -10% PAT (before tax write backs) 12% PAT (after tax write backs) -4% Basic EPS FY07 4025 964 770 564 564 0.Hindalco Stand-alone Financials: Recap FY08 VS.313 19.60 (Mn US$) Change % 18% -3% 2% 25% 7% 18.

Aluminium Business 23 .

423 -17% 644 598 -7% Note: As per SEBI Format 24 .614 1.344 7.929 2.Aluminium Performance affected due to 11% drop in metal realisation & sharp increase in input Aluminium costs. (Rs.145 -3% 1.764 9% 2.Cr) Change (%) Net Sales & Operating Revenue EBIT (Mn US$) Change (%) FY 07 FY08 FY07 FY08 7.

Rs/Mn Kcal (Indexed Base=100) 115 110 105 100 95 90 85 Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY07 Q1 FY08 Q2 FY08 Q3 FY08 Q4 FY08 100 97 99 93 98 97 109 109 • • Alloying element prices have moved up significantly Crude price increase is a major factor for most cost escalations o Higher crude derivative costs such as CP coke or Fuel oil Higher freight costs 25 Higher alternate energy sources cost o o .Cost escalations: Cost Push to Continue CP Coke Price at all time high Rs/Mt (Indexed Base=100) 120 110 100 100 120 Aluminium Fuel Oil Price at High Levels 140 130 120 110 100 90 80 70 60 Rs/Mt (Indexed Base=100) 127 112 100 80 60 2005-06 2006-07 2007-08 2005-06 2006-07 2007-08 Coal price gone up by 10% from Q4 FY07.

315 28.184 .328 26.721 Foils _______________________ Source: Company Data Primary Metal Wire Rods FRP Extrusions All round improvement in production 27.Adversity Mitigation: Consistent production growth 442.730 68.814 190.645 26 32.685 477.998 71.198 38.088 215.140 Aluminium FY 06 FY 07 FY 08 67.580 211.726 (Mt) 429.282 43.

000 430.429 200 180 160 152 FY 06 180 170 FY 07 FY 08 +7% 140 120 100 80 60 40 20 0 FRP Extrusions 38 32 43 27 .000 455.000 435.000 425.000 475.000 460.301 (Mt) Consistent increase in value added sales volume ‘000 Mt 473.000 465.000 450.000 FY 07 FY 08 441.000 440.000 470.Adversity Mitigation: Maximising sales revenue through Improved Aluminium sales volume … 480.000 445.

but our margins maintained EBIT comparison EBIDTA Margin fall contained 50% 120 100 80 60 40 20 0 Q4 FY07 100 76 56 100 100 Q4 FY08 100 72 46% 42% 38% 34% 30% 37% 31% 40% 45% 39% 26 26% 22% Hindalco Global Major 1 Global Major 2 Indian Company 18% 14% 10% FY 07 Indexed: Base =100 (All currencies translated into US$) EBIT as per SEBI format for Hindalco 2003-04 2004-05 2005-06 2006-07 2007-08 28 .High input costs & adverse macro-economic factors are affecting even the global leaders.

Copper Business 29 .

to 0 320KT FY 07 FY 08 160 CC rod Production KT139..8 109. 80 40 • Operating efficiency and Conversion cost improved.023KT 250 200 150 100 50 o Overall Copper sales volumes up 10 %.0 • Improved product & market mix (more domestic & CC rod) resulted in higher realizations 120 • Significantly higher by-product Realization as compared to FY07.FY 08 key levers of performance ……….9 In FY 08. 0 FY 07 FY 08 30 . • All round improvement in performance… o Cathode Production KT 350 Copper 323.4 300 Cathode production increased by 12% Continuous Cast Rod production rose by 28% Sulphuric Acid production increased by 15 % to 1. compared to FY 07 o o o 290.

Operational efficiency & higher by product 31 credit boosted the bottom line by 20% even though TCRC dropped by 30% .Improvement in bottom line in spite of drop in the TCRC TCRC . Base=100 150 140 130 Copper 120 120 110 100 100 90 80 70 60 FY07 FY08 PBT EBIT TCRC Reduction in finance cost by better working capital Management 100 100 97 Operational and byproduct credits Improvements 70 Better working capital management . PBT & EBIT Indexed.

Copper Business performance Copper (Rs.Cr) ($ Mn) FY07 FY08 Change (%) FY07 FY08 Change (%) 10.3% EBIT 114 124 9% Note: As per SEBI Format 32 .066 10% Net Sales & Operating Revenue 2413 2979 23% 517 503 .978 12.

Aluminium Outlook

33

Aluminium demand expected to be robust.
World Aluminium consumption to grow sharply driven largely by China
(Kt)
60000 China 50000
CA GR

4,000 3,000

Regional Metal Imbalance to grow, leading to deficit in the relevant markets
Asia’s Supply Gap (excluding China Asia’s Supply & Middle east) to remain large.

55153 World
-8

2,000
% .1

1,000 0 -1,000

40000
kt

30000

22062 20000

- 3.7% CAGR

27442

GR CA

-

% .1 19

24482
-2,000 -3,000 -4,000 -5,000

10000

14.2% CAGR 5089 2293
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0

-6,000
A sia * W .E ur op N e .A m er ic a E. Eu ro pe C hi na M id dl e Ea st A m er ic a A us tra lia A fri ca W or ld C IS

Source: CRU Long term Outlook -2007

Source: CRU April’08

2005

2007

La t.

2009

34

Major investments required for the production to catch up with demand
100000 90000 80000
4,000

Kt
Required capacity Projected capacity
5,000

Avg. Capex Asia’s Supply 4,500
3,823

4,604

70000 60000 50000 40000 30000 20000 10000 Source: CRU Long term Outlook-2007 Edition 0
2006 2007 2008 2009 2010 2011 2015 2020 2025 2030
US$/Mt

3,500 3,000 2,500 2,000 1,500 1,000 500 0
Capex Historical Projects Capex 2005/06 Capex 2007

2,791

By 2010, ~ 1.1 Mn Tonnes additional smelting capacity needed to meet the world demand. The gap is expected to rise to 32.7 Mn tonnes by 2030.

Capex for new smelter construction to be significantly higher
35

700 in CY2007 as per CRU • 2008 will be even higher • 1/4th of the world capacity has to be shut down if the prices fall below US$2.014 and 2500 2014 2000 US$2.000.Operating cost Increase to Keep the Prices Up CRU Aluminium Cash cost curve 3000 US$/t 2699 • Last quartile of the cost between US$2. 1728 1540 1500 1000 1129 500 0 0% 11% 24% 31% 42% 49% 55% 60% 64% 69% 75% 80% 85% 90% 95% Source CRU 2007 data (% of World Production) 98% 36 .

000 tonnes • South African power supplier ESCOM is running short of power generating capacity and also facing issues with coal supplies o Around 10% production cut in Hillside. of which Chinese smelters lost around 600. Bayside and Mozal smelters of total capacity of 1.5mn tonnes • Production cut in Rio’s smelter in New Zealand due to lower water level • Power cuts in Tajikistan smelter & in Brazil • Rising oil and coal prices • Increasing interest by funds in the commodities on account of depressed equity markets following sub prime crisis. • Rumors of increase in export tax on Aluminium in China 37 .Other Drivers influencing price • Power shortages: Almost a million tonne metal production was lost in last 12 months.

prices have shown an upward trend in anticipation of supply concerns Exchange Stock 1.100. in-spite of an increase in LME stock.000 900.000 1.240 LME US$-CSP 3.800 In recent months.300 1.000 500.300.Conclusion: Prices to remain strong Aluminium 1.000 600.800 3.300 3.007 2.200.000 1.000 12/May/06 10/Jul/06 16/Jul/07 22/Feb/07 11/Sep/07 20/Jun/07 7/Jan/08 5/Sep/06 27/Dec/06 23/Apr/07 31/Oct/06 6/Nov/07 3/Mar/08 3/Apr/06 3.300 800 A rising forward curve reflects the bullish sentiments about aluminium prices 3200 3100 3000 2900 2800 2700 2600 2500 2400 2300 2200 2100 2000 1M 4M 7M 13th June'08 31st Jan'08 20th July'07 10M 13M 16M 19M 22M 25M 28M 31M 34M 37M 40M 43M 46M 49M 52M 55M 58M 38 61M .000 800.000 1.800 2.000.000 700.

Copper Outlook 39 .

Copper Price Forecast Copper • Prices expected to remain strong through 2008 on account of continued strong demand & concerns about Supply o o Demand: Chinese copper consumption continue to drive the market US consumption decline will be offset by demand from emerging markets o Supply: Restricted Chilean supply due to energy. interest costs and declining copper grades 40 . security. water availability and labour unrest o Delay in New mine capacities due to Socio-political & environmental issues o Increasing interest by funds in the commodities on account of depressed equity markets following sub prime crisis o Rising Capital & Operating costs due to increased input.

700 3.500 2008 2009 2010 2011 Merril Lynch Deutsche Bank JP Morgon Chase & Co Societe Generale Source : Brrok Hunt May 2008 Source : Bloomberg (14-06-2008) Copper stock at historically low levels has led to strong price forecast in coming years Year 2008 2009 2010 2011 Bloomberg Average LME (USD/t) 7878 6951 5089 4917 41 .300 7.500 8.Low global copper inventories & strong price forecast USD/t USD/t 9.900 4.100 5.

Bloc are the main drivers of copper demand thereby offsetting weaknesses elsewhere W Europe E.6% 0.4% Russia India Germany China World Consumption Growth 2003-06 Source Q4 2007 Brook hunt 2007 2008 2009-20 India and China followed by E.7% 1.0% 4% 7.42% Growth in 2008-10 Driven by 4.0% 6.5% 1.Copper Consumption growth 6% 6.34% 3.2% 0.2% Copper 3.6% 9.Bloc Brazil 42 USA .

5 0.8 25 20 16.5 Japan Taiwan Russia China Source : Population CIA fact book July’07 estimates Copper consumption Q4 2007 Brook hunt Per capita consumption of Cu in India and china is very low India USA 43 .4 Copper Per Capita Consumption 15 10 5 0 Italy Germay 14.0 6.9 10.9 4.India Presents Significant Growth Potential … Kg/Person Copper 30 27.7 3.

credit crunch & environmental issues resulting into delay in planned production o Major new discoveries and projects located in politically sensitive countries and involve high risk • Strong refined copper demand resulting in continued expansion in smelting capacities • Higher consolidation in the mining industry resulting in increased supplier power 44 . rising capex .Custom smelters : No immediate relief Copper • • TC/RC expected to continue to remain subdued on account of Tightness in concentrate supply as incremental supplies finding difficult to keep pace with demand o High input costs.

Projects 45 .

07. o Inspection completed.11.Notification & acquisition by Govt.Commissioning in Progress.Obtained • Land for future mud disposal site . Deemed consent • Other Statutory Clearances . awaited • Construction Status o - Muri expansion Overall. • Rail Network Overall. 46 .Muri Alumina Expansion • Basic & Detailed Engineering .Completed and Rail movement commenced.Commissioning in progress • Power Plant Overall.+99% complete • Refinery Overall.Completed • Environmental Clearance -“Consent to Operate” application filed on 24.

Completion Date of Phase II: Q2 ’FY 08-09 Line #2 pots after prebaked conversion • Power .)– Conversion of 314 pots completed and operations stabilized o o Conversion of balance 86 pots in progress.Hirakud Expansion • Smelter – Phase-I (35 kTPA expn.)o o o Completed in Dec’06 & operation stabilized.100MW (Unit#4). Phase-II (43 kTPA expn.Three boilers and single turbine o Commissioned with two boilers (Boiler-10 & 11) on 8th Feb 08 o o 100 MW generation achieved on 17th May08 All systems stabilised Power House 47 .

Recruitment being done as required • Mechanical Completion Date – Q3’ 2010 . Basic engineering completed EPCM consultants – Finalized for all major areas Equipments.5 million tpa bauxite mining capacity at Baphlimali (Rayagada District) Refinery 1.Land acquisition mostly completed. Imported supplies for various packages has started arriving. which after debottlenecking can produce 2 million tpa within 3 years of startup Bauxite mine & refinery Land .5 million tpa alumina refinery at Doragurha (Rayagada District). R&R scheme Phase 1 completed and Phase 2 is under implementation Technology .Utkal Alumina Project Project Highlights Mining 4.Major orders issued for all major equipments. Clearances – All major clearances are in place 48 Organization – Project organization finalized.Technology supplier finalized (Alcan).

5 million tpa alumina refinery at Kansariguda (Rayagada District). • Expected date of Project completion : Q3’2011 49 . Talabira 2& 3.Aditya Alumina and Aluminium Project Project Highlights Mining 4. which after debottlenecking can produce 2 million tpa within 3 years of startup Coal 20 million TPA JV Coal Mine at Ib Valley. • Water : Agreement signed for drawal of water. committee of MoEF. SIA clearance from Government received. Orissa Power 900 MW capacity captive power plant at Lapanga Smelter 359 ktpa capacity aluminium smelter at Lapanga Coal mine. Area measuring 115. CPP & smelter Bauxite mine & refinery • Technology agreement with Aluminium Pechiney (AP) signed. • Environment Clearance for Kodingamali Mine cleared by expert env.2 million tpa bauxite mining capacity at Kodingamali (Koraput District) Refinery 1.71 ha is already notified . Alumina Technology tie up with ALCAN signed • Engineering consultant for smelter as well as power plant finalised and Engineering work in progress. • In-principle approval obtained for 855 ha of SEZ at Lapanga . district Sambalpur.

Water: Water resource department of GOMP has allotted 45. of India extended the validity of in-principle approval of SEZ up to 31st Oct’08 Construction Power: 132KV grid connectivity approved.12 cusecs Environmental Clearances: Application has been submitted to MOEF on 31st January 07 and TOR obtained from MoEF on 18th July 2007.Mahan Aluminium Project Bhopal Bhopal District HQ Project Highlights Smelter 359 ktpa capacity aluminium smelter near Bargawan. Singrauli District of Madhya Pradesh JHARKHAND Power 900 MW capacity captive thermal power plant near Bargawan. Technology Agreement: Signed with Pechiney for Smelter. EPCM consultant: For Smelter & Power plant finalised Expected Commissioning date: Q3’2012 50 . SEZ: Govt. Sidhi District of Madhya Pradesh Coal 3. Pre project activities in progress.5 million tpa of coal from Mahan Coal Block of Main Basin in Singrauli Coal Fields (in joint venture with Essar Power) Proposed site Coal: Coal block allotted in Apr’06 in JV with ESSAR. SIA clearance obtained. Public hearing conducted on 14th Mar’08.

Jharkhand (in JV with Tata Power) inclusive of 0. Expected Commissioning date: Q3’2013 51 .6 million tpa of coal from Tubed Coal Mine of Auranga Coal Fields. Land Acquisition: Few sites have been short listed but work can start only after GoJ indicates the location of water source.6 million tpa coal requirement of Muri Tubed Coal Mine AllottedJoint venture formed between Tata power and Hindalco. Technology Agreement signed with Aluminium Pechiney for Aluminium Smelter All other activities can start only after finalisation of location of water and land is cleared by GoJ.Jharkhand Aluminium Project Project Highlights Proposed site Smelter 359 ktpa capacity aluminium smelter at Jharkhand Power 900 MW capacity captive thermal power plant at Jharkhand Coal 4. JV agreement in progress Water Allocation – awaiting clearance from GoJ for 55 MCM water from Subernrekha basin.

Summary: Hindalco Operations A Challenging year. containment of input costs will be key. Domestic consumption growth for both aluminium and copper augers well for Hindalco. inspite of major challenges in the coming volatile period. the Management feels encouraged to face them and to maintain the growth trend. enhanced asset productivity. on account of macroeconomic factors & these factors are here to stay…… Anticipation of the adverse trend and the remedial steps taken to face the emerging challenges have helped in containing the adverse impact TCRC will continue to have a negative influence on Copper Business. 52 . which has embarked on the ambitious growth plan through the low cost greenfield aluminium projects So.

Aditya Birla Minerals 53 .

• Explorations / infill drilling is in progress in MGO to extend the mineralization at depth with encouraging initial result – Construction of a new haulage shaft has been conceptualised for cast reduction by increasing ore production from depth and extension of mine life. • Development of Esperanza south UG mine is being taken up in FY09. Further explorations drilling is in progress in MGO. • The project for Oxide Heap re-treatment has been taken forward – construction of screening and washing plant is in progress. 54 • Maroochydore.Scoping study is in progress.ABML – Highlights • Highest Metal production since acquisition of mines. . • Ongoing underground drilling has successfully extended mine life of MGO till 2012. • Long Hole – Stope mining has successfully been implemented in the Nifty underground mine.

Crs) Net Sales EBIT Operating Cash Flow* * Operating Cash Flow is after capex and mine development expenditure FY07 1127 39 -390 FY08 2335 562 447 Chg (%) 107% 1342% 215% 600 500 400 300 Rs. Crs) 39 FY 07 FY 08 -99 -40 Year 55 .ABML Financials – FY 08 (Rs. Crs 200 100 0 -100 -200 FY 05 FY 06 562 EBIT Trend (Rs.

Novelis 56 .

flat rolled products in fast-growing markets such as India and China 57 . upstream commodity business o Industry leading technology. should act as a natural hedge for LME-driven. assets and expertise can be leveraged to grow high-value-added. volatile.Novelis Acquisition – A Recap • In May 2007. Hindalco acquired Novelis for US$6 billion • The rationale: o Immediate global reach and scale along with technological expertise o Downstream business derives its margin through conversion mark-up.

jointly realising downstream vision. and international marketing • Improving Novelis’ financial performance: focus on costs. lenders and courts • Integration: Integration of companies with diverse cultures.Challenges of the Acquisition • Quick completion: Approvals from government agencies. people skills to be expanded across greater Hindalco • Identifying and realising synergies: IT and risk management skills. company boards. pricing and working capital 58 . nationalities across various levels and functions • Retaining cutting edge: Spirit and capability of innovation. operations. key customer relationships.

Sustaining Global Leadership • Fusion Technology : Process Stabilisation. Research on new end-uses. Expansion of Fusion Facilities. • • Thrust on recycling Capacities: New investments and de-bottlenecking Increasing rolling capabilities through mill upgrades and innovative practices • • Renewed focus on OEE & energy efficiencies Partnering with customers for product development/enhancement: Several auto programs on the anvil • Leverage on first mover advantage in high value added product segments in India 59 .

a combination of organic & inorganic growth • Upstream growth through organic route.To Sum Up: Beginning of an exciting new era • Hindalco has embraced an aggressive growth plan. a prudent mix of Brownfield & Greenfield expansions • Downstream growth through acquisition (Novelis) Priorities Maintain Growth Momentum Build New Assets Realise Novelis Synergies •Continued stress on operational excellence •Progress on planned Greenfield projects & deliver as per schedule •Financial turnaround With continued Operational improvement •Leverage on technology Well Positioned for Greater Value Creation 60 .

President and COO Steve Fisher. 2008 .Brighter ideas with aluminium Novelis Fiscal Year 2008 Presentation to Investors Martha Brooks. CFO June 20.

and financial and operating conditions of.” or similar expressions. health or safety compliance. Forward-looking statements may include statements preceded by. including changes in duties or tariffs. and prices for. cyclical demand and pricing within the principal markets for our products as well as seasonality in certain of our customers' industries. glass. such as litigation. factors affecting our operations. changes in interest rates that have the effect of increasing the amounts we pay under our principal credit agreements and other financing arrangements. fluctuations in the supply of. continuing obligations and other relationships resulting from our spinoff from Alcan.” “projects.” “forecasts. forward-looking statements involve risk and uncertainty and that Novelis' actual results could differ materially from those expressed or implied in such statements. the risk factors included in our Annual Report on Form 10-K for the fiscal year ended March 31. regulatory and political factors within the countries in which we operate or sell our products. as filed with the SEC. the effectiveness of our hedging activities. are specifically incorporated by reference into this presentation. changes in the prices and availability of aluminum (or premiums associated with such prices) or other raw materials we use.” “estimates. Further. The above list of factors is not exhaustive.” “expects. changes in government regulations. our ability to successfully negotiate with our customers to remove or limit metal price ceilings in our contracts. our ability to access financing for future capital requirements. changes in the relative values of various currencies. labor relations and negotiations. or including the words “believes. by their nature. particularly those affecting environmental.Safe Harbor Statement Statements made in this presentation which describe Novelis' intentions. the effect of metal price ceilings in certain of our sales contracts. our customers and suppliers. Important factors which could cause such differences include: the level of our indebtedness and our ability to generate cash.” “anticipates. competition from other aluminum rolled products producers as well as from substitute materials such as steel. Novelis cautions that. expectations or predictions may be forwardlooking statements within the meaning of securities laws. our ability to maintain effective internal control over financial reporting and disclosure controls and procedures in the future. economic. relationships with. Other important risk factors are included under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31. energy in the areas in which we maintain production facilities. breakdown of equipment and other events. the development of the most efficient tax structure for the Company. and the integration with Hindalco. plastic and composite materials. including our internal used beverage can and smelter hedges. followed by. changes in the fair market value of derivatives. changes in general economic conditions. 2008. and may be discussed in subsequent filings with the SEC. 62 . 2008.” “plans.

Operational Highlights Martha Finn Brooks President and Chief Operating Officer 63 .

Significant Financial Improvements Normalized Operating EBITDA increased 62% Free Cash Flow improvement: $ 164 M* Normalized Operating EBITDA ($ M) $500 $400 $300 $200 $100 $0 FY2007 FY2008 $80 $60 $40 $20 $0 ($20) ($40) ($60) ($80) ($100) Free Cash Flow ($ M) FY2007 FY2008 * FY’08 FCF reduced by acquisition cost of $92 M 64 .

Achieving Higher Profitability
Record production in key locations Can ceiling volumes reduced from approximately 20% - 10% of global sales Portfolio improvements Price increases $ 65 M Net of input cost increases

Novelis Fusion expanded to each of our four regions Working capital improvements: better inventory, logistics and accounts receivable management Significant SG&A cost reductions, primarily corporate office

65

Overcoming Challenges
New metal risk management program One contract with can price ceiling remains Cost increases in energy, freight and alloys - $110 M Softness in certain North American markets – housing and transportation LME and SHFE volatility Strong Real (BRL) and Euro (EUR)

66

Strong Growth for Flat Rolled Products
Novelis a Market Leader in All Regions

Western Europe +2.6% North America -6.2% Middle East +10.2% Asia Pacific +18.6%* Latin America +9.3% Eastern Europe & CIS +10.7% Japan -1.2%

Global growth + 4.2%
Source: CRU, 2007 as compared to 2006 flat rolled products consumption

67

Aluminium Flat Rolled Products Quarterly.000 1.000 thousands of tonnes 3.500 2.500 4.500 3.500 1. May 2008 68 .000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: CRU.Growth in Aluminium Beverage Cans 5 YR CAGR 2.2% 4.000 2.

400 1.600 1.200 1. May 2008 69 .Novelis is Leader in Can Sheet Market 5 YR CAGR* 0.000 1.800 Europe thousands of tonnes 900 800 700 600 500 400 300 200 100 0 5 YR CAGR* 6.1% thousands of tonnes 1. Aluminium Flat Rolled Products Quarterly.2% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Latin America 350 #1 producer in all regions 1000 Asia Pacific thousands of tonnes 900 800 700 600 500 400 300 200 100 0 5 YR CAGR* 1.2012 Source: CRU.000 800 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Novelis 37% global market share 5 YR CAGR* 4.3% 1000 North America 2.8% thousands of tonnes 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 * CAGR Percentage Increase 2007 .

Aluminium Use in Autos – North America 180 145 149 157 161 160 125 140 106 120 Kilograms per vehicle 83 87 100 68 64 62 40 20 0 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 Source: Ducker Worldwide 2006 70 37 38 38 40 45 52 60 54 55 59 60 61 63 66 80 71 75 79 92 96 102 110 114 117 120 130 134 140 153 .

AMM. EAA. Novelis 32 37 43 44 45 46 47 48 60 52 56 61 62 64 80 72 76 78 81 92 100 113 117 120 122 130 133 135 137 71 150 . McKinsey. JAA. Knibb Gormezano & Partner.Aluminium Use in Autos – Europe 180 140 142 146 160 126 140 106 110 120 Kilograms per vehicle 83 85 100 68 60 40 20 0 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 Sources: Ducker Research. GDA.

5 million vehicles this year First entry into Asia Source: Novelis estimates 72 .Novelis is Leader in Auto Sheet Market North America Europe Korea Novelis Preferred partner for automakers Over 70 models in production 4.

Global Footprint for Novelis Fusion™ Oswego. Facility to be operational in 2009 Sierre start-up team 73 . South Korea Smooth. Brazil Investment announced May 2008. Commercial volume production started in March Sierre. Novelis Fusion™ casting to begin in August Ouro Preto. Switzerland Greenfield casthouse commissioned in April. New York Installation of new melting furnace this spring will significantly increase Novelis Fusion™ casting capacity Ulsan. rapid startup.

Growth Platforms for Novelis Fusion™ Global markets Heat exchangers Automotive structures and body panels Regional markets Household Appliances Architectural/Building High Pressure Cylinders Existing Clad Products Transportation Examples of target markets for Novelis Fusion 74 .

Investments for Strategic Growth Completed in FY’08 Start-up laser cutting center at Sierre ($4M) Install new melting furnace at Pinda ($7M) Start-up Novelis Fusion™ at Ulsan ($5M) Expand rolling mill at Yeongju ($30M) Construct new casthouse at Sierre ($49M) Multi-stand rolling mill in Yeongju In Progress Start-up Novelis Fusion production at Sierre Install new melting furnace at Oswego ($9M) Upgrade anneal/lacquer line at Nachterstedt ($17M) Upgrade rolling and recycling at Pinda ($21M) Install Novelis Fusion™ at Ouro Preto ($5M) Pilot project to integrate IT systems in Brazil ($5M) Expansion of hydro capacity in Brazil ($41M) 75 Hydroelectric dam in Brazil .

Dudelange and Sierre Opened innovation center in Ulsan Strengthened in-house capabilities for molten metal & advanced solidification technology Ulsan Technology Center “Solution Center” tools and techniques fostering creativity.Cost-effective Research & Development Kingston Global Technology Center -. moved resources to market-focused innovation centers at Gottingen. helping customers to solve challenges and find solutions 76 .innovation partnering and consolidation of footprint through facility sharing with a leading Canadian university Exited Neuhausen.

Product and Process Innovation Goals: Generate increasing levels of profits from new products. process or business model breakthroughs Be rated best innovation partner by our customers NIMES: Novelis Innovation Management and Execution System 77 .

Plus Pack.Ford Motor Co. Supplier of the Year . a leading European packaging company Recycling Industry Award .The Manufacturer Export Tower Award for top performing exporter .Republic of Korea Korean export award 78 . a leading UK provider of recycling solutions Alcoa supplier award Design & Innovation Award for Novelis Fusion™ .Valpak.Customer and Industry Recognition World Excellence Award .Alcoa Architectural Products Supplier of the Year .

Driving the Conversion Model 12% Growth FY 2007 – FY 2008 Price/Mix Currency Volume 79 .

Regional Highlights: North America FY07 vs FY08 FRP Shipments (kt) Sales ($ M) Operating EBITDA ($ M) FY07 1.722 (54) FY08 1.135 3.102 4.110 242 Growth % (3) 10 550 Reduced ceiling exposure (one contract remains) Purchase accounting benefit Price increases in face of difficult economic conditions Improved metal inputs mix 80 .

Regional Highlights: Europe FY07 vs FY08 FRP Shipments (kt) Sales ($ M) Operating EBITDA ($ M) FY07 1. but capacity constrained in some markets Construction of Novelis Fusion™ casthouse at Sierre FY ’08 nearly $60 M better than FY ’07 when metal timing is removed 81 .075 4.341 273 Growth % 1 13 (1) Price increases across all major markets and strong Euro effect Solid operational performance.068 3.857 276 FY08 1.

Regional Highlights: Asia FY07 vs FY08 FRP Shipments (kt) Sales ($ M) Operating EBITDA ($ M) FY07 463 1.726 72 FY08 495 1.829 52 Growth % 7 6 (27) Challenging mix with decline in Korean industrial market One-time refinancing expenses Yeongju hot mill upgraded and Novelis Fusion™ capacity added in Ulsan at year end Price increases across all major markets in Q4 82 .

028 162 Growth % 14 9 (11) Strengthening Real inhibits smelter profits Price increases across all major markets Record operational performances. Pinda capacity improvements Headcount optimization 83 .Regional Highlights: South America FY07 vs FY08 FRP Shipments (kt) Sales ($ M) Operating EBITDA ($ M) FY07 285 945 181 FY08 324 1.

000 30. Brazil (Real) Crude Oil Price (AoM) 120 110 5.000 500 Apr-06 Hardeners (China FOB basis) $ per Barrel 90 80 70 60 50 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 $/MT 100 Jul-06 Oct-06 Jan-07 Apr-07 Mn 99. Euro Jul-07 Oct-07 Jan-08 Apr-08 .600 2.500 4.0% -10.0% 25. Korea (Won) .400 2. Crude Oil Price and Hardeners LME Cash(AoM) 3.500 2.0% 5.Underlying Cost Drivers: LME Cash.0% 0.000 4.5 84 . Canadian ($) .000 2.800 2.0% Apr-06 Jul-06 Currency Movements (AoM) $/MT 2.500 5.200 3.0% -5. Currencies.0% 20.000 1.0% 10.9 Si 98.7 Jul-07 Oct-07 Jan-08 Apr-08 MG 99.000 3.200 2.0% 15.500 3.000 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Oct-06 Jan-07 Apr-07 .500 1.

Actions to Reduce Costs SG&A reductions Closure of Louisville. Kentucky plant Restructuring: Bridgnorth. Brazil smelter potline Energy projects (Energy Task Force) Continuous Improvement Process Foil rolling at Bridgnorth 85 . UK foil operations Korean finishing lines Ouro Preto.

Financial Section Steve Fisher Chief Financial Officer 86 .

However. to facilitate a discussion of our results. financial information for the 12 months ended March 31. In addition. 2007. our Predecessor and Successor results for the period from April 1.Explanation on Financial Materials Presented Under U. GAAP. 2008. 2007. 2007. segment information or cash flows. are presented on a combined basis. do not include any pro forma assumptions or adjustments and should not be used in isolation or substitution of the Predecessor and Successor operating results. Combined operating results. 2007. are presented on a combined basis.S. and for the period from May 16. 87 . segment information and cash flows are non-GAAP financial measures. 2007. allows a more meaningful analysis. consolidated financial statements for FY 2008 are presented in two distinct periods. and are not comparable in all material respects. through March 31. as Predecessor and Successor entities. Comparing the consolidated financial statements for FY 2008 with the combined financial statements for the year ended March 31. through May 15.

Financial Highlights Since the acquisition by Hindalco. This position has been solidified by: Stronger earnings performance Refinancing of Senior Secured Credit Facilities Better working capital management 88 . This improvement is driven by: Reduced exposure to the price ceilings Improved pricing and mix Lower corporate costs The company has also improved its performance on a Free Cash Flow basis and has maintained a strong position in terms of liquidity. the company’s earnings performance on a normalized basis has improved significantly when compared to the prior year.

utilize internal and external hedges to mitigate the risk No new contracts with ceilings 89 .The Conversion Business Model Product price structure with two components: “Pass-through” aluminium price based on the LME plus specified local market premiums Conversion premium price related to the value added of rolling and the competitive market conditions for the product Elimination of price ceilings: Approximately 8% of overall estimated shipments are under price ceilings for FY ‘09 Cash flows are negatively impacted .

005 / t (Mar. some non-cash P&L volatility continues because of markto-market and inventory accounting TIME Note: illustrative example only Mar-08 90 .000 Mar-07 Benefit: Substantial mitigation of cash exposure. short term exposure exists Current: Hedging in place to remove LT & ST exposures (Jan. '08) NVL Selling Price $3.New Risk Management Approach Metal Price Lag USD / ton (LME Graph) 2.446 / t 2.600 2. '08) NVL Buying Price $2.900 How we manage the risk Historical: Long term metal price lag exposure balances out.300 Processing time (60 days) 2.

Net Unrealized Loss on Change in Fair Value of Derivatives Proportional Consolidation of Non-Consolidated Affiliates Operating EBITDA 32 18 150 36 316 32 2 2 72 644 (265) (98) 3 207 233 81 FY08 (69) 7 4 199 395 536 EBITDA = Earnings before interest. depreciation and amortization 91 . tax.Operating EBITDA Reconciliation FY07 vs FY08 FY07 Net Income (Loss) Provision (Benefit) for Income Taxes Minority Interests' Share Interest Expense and Amortization of Debt Costs. Net Depreciation and Amortization EBITDA Reconciliation to Operating EBITDA: Sale Transaction Fees Other Expenses.

Normalized Operating EBITDA FY07 vs FY08 FY07 Operating EBITDA Normalizations Metal Price Lag (Gain)/Loss Purchase Accounting benefit Stock Compensation expense Normalized Operating EBITDA 316 FY08 644 (43) 30 303 21 (219) 45 491 Strong operational and market performance translating to significantly higher operating EBITDA 92 .

Normalized Operating EBITDA Bridge FY07 vs FY08 ($ M) 700 29 600 8 115 33 119 500 US$. Price and Volume Price Ceiling Exposure Corporate SG&A Brazil Social Tax Higher Currency. millions 400 180 300 491 200 303 100 0 FY07 Mix. Net of Operating Cost Hedge FY08 93 .

Better Working Capital Management Free Cash Flow Improvement $164M Operating with lower metal volumes – Inventory reduction by 25 KT year-over-year Improved collection of Receivables – DSO reduced by 6.5 days More rigorous cash management ensuring adequate liquidity and lower interest costs year-over-year 94 .

Liquidity ($ M) Year Ended March Year Ended March 31 FY07 FY08 Cash and cash equivalents Amount available under senior secured credit facilities Total estimated liquidity $128 234 $362 $326 582 $908 Facilities refinanced to provide for additional capacity Maintaining forfaiting and factoring arrangements in Asia and South America to provide for flexibility and liquidity Sufficient liquidity to provide for higher LME 95 .

Credit Facilities ($M) Amount Prior Revolver – $500 Term Loan – $958 New Revolver – $800 Term Loan – $960 Varies Current Market Maturity Revolver – 2.5 years Term Loan – 4.10% and monthly reporting of Borrowing Base Springing Covenant .15% and monthly reporting of Borrowing Base 96 .5 years Revolver – 5 years Term Loan – 7 years Varies Rate Revolver – L + 250 bps Term Loan – L + 225 bps Revolver – L + 125 bps Term Loan – L + 200 bps Revolver – L + 175 bps Term Loan – L + 350-400 bps Covenants Financial covenants Revolver1 and Term Loan No financial covenants Revolver2 – No financial covenants Term Loan – Financial covenants 1 2 Springing Covenant .

2008 Variance Operating EBITDA Interest expense Unrealized gain (loss) on derivativies Depreciation and amortization Proportional consolidation Corporate S. 2007 Year Ended March 31.Reconciliation from Operating EBITDA to Net Income (Loss) Year Ended March 31. G & A Corporate Realized Derivatives Tax Other Net Income (loss) 316 (207) (150) (233) (36) (121) (37) 98 106 (265) 644 (199) (2) (395) (72) (93) 13 (7) 42 (69) 328 8 148 (161) (36) 28 50 (105) (64) 196 97 .

Tax Rate Reconciliation – FY 2008 Q1 Pre-tax income / (loss) Income taxes at statutory rate Increase/(decrease) in valuation allowances: Canada Europe Exchange translation items in Canada and Brazil: Canada Brazil Exchange remeasurement of deferred income taxes Enacted tax rate changes items with no tax effect Tax Rate Differences on Foreign Earnings Uncertain Tax Positions Other Provision for taxes on income 38 5 6 5 (20) 4 2 3 40 22 5 4 (74) (10) (2) 9 (3) (36) 12 2 18 (32) 0 0 3 1 4 (23) 1 2 23 26 (12) 3 1 (1) 49 13 30 (78) (4) (10) 17 2 7 (114) 0 (37) 30 4 34 Q2 (19) 0 (6) 11 8 19 Q3 (41) 0 (14) 8 6 14 Q4 119 0 38 (37) (23) (60) Combined (55) (19) 12 (5) 7 98 .

e.net: Realized and included in Segment Income* Realized on corporate derivative instruments* Unrealized Gain (loss) on derivative instruments ..net 78 0 (37) 41 Q2 Q3 Q4 FY 2007 61 0 (98) (37) 56 (35) (16) 5 33 (2) (1) 30 228 (37) (152) 39 * . 99 .net 39 5 (10) 34 Q2 22 29 (87) (36) Q3 (28) 2 (24) (50) Q4 (1) (23) 118 94 Q1 Gain (loss) on derivative instruments . realized) during that period.net: Realized and included in Segment Income* Realized on corporate derivative instruments* Unrealized Gain (loss) on derivative instruments .Gains (Losses) on Derivatives FY 2008 32 13 (3) 42 Q1 Gain (loss) on derivative instruments .For Segment Income purposes we only include the impact of the derivative gains or losses to the extent they are settled in cash (i.

Summary Very strong year for cash flow performance Substantial operating improvements Novelis Fusion global footprint Solid progress on risk management Improvements in pricing and portfolio Reduction in price ceilings Reduction in corporate costs 100 .

Brighter ideas with aluminium! Thank you .

Financials
Hindalco Standalone Refinancing of Novelis Acquisition Hindalco Consolidated

102

Highlights FY’08
• Sales - We sold more and grew @ 10% (Copper) & 7% (Aluminium) by:
Producing More (Highest ever production of Copper, Aluminium, FRP & Extrusion)
• CC Rods ⇧28%, Cathodes ⇧ 12% • Hirakud ⇧ 35%, Renukoot ⇧ 3% • Taloja ⇧ 7%, Mouda ⇧ 24%, Extrusions ⇧ 13%, Wire Rods ⇧ 4%bv

103

Highlights FY’08
And Improving Realisations by
o

Enriching Product Mix –
• CC Rods ⇧ 27%, Specials ⇧ 5% , FRP ⇧ 6%, Extrusion ⇧ 12%,

o

Improving Market Mix
• Copper Domestic Sales up 37 % . • Specials - Domestic Sales up from 49% to 52% of total sales • Extrusions – Domestic Sales up from 89% to 92% of total sales

o

Realising Higher Mark-up & Premium
• Premium on Copper Domestic sales ⇧ 10% • FRP Exports net mark-up ⇧ 7% • Extrusions Exports net mark- up ⇧ 28%

o

Reducing gap between domestic ingot prices and import parity price from Rs 5209/ton to Rs 2194/ton

104

Aluminium • Hirakud Pre baked conversion ⇧ Power Efficiency • Energy efficiency improved to offset price escalation o Copper • Recovery improved by 1% • Power generation up by 10% (lower grid drawal & surplus exported) • Byproducts credits improved – Sulphuric acid & DAP subsidy 105 .Highlights FY’08 • Efficiencies o o Cost pressure off-set by plant efficiencies: Rs 225 Crs.

3% o However all macro economic parameters turned adverse Aluminium: LME.2427Crs Disposal of idle assets – Mouda conductor plant o • Treasury/Tax Management o Pre-tax treasury yield 10. Duty.7% ETR down from 26. Re/$. Carbon Prices 106 Copper: Re/$. Fuel & Tc/Rc .Highlights FY’08 • Free Cashflow o Cashflow from Operations Rs. Coal. Duty. Fuel.8% to 23.

400 6862 34 4. LME Effective Al. Customs duty Domestic Ingot Realisation Cu LME Copper TcRc Cu Duty differential Unit Rs $/t % Rs/t $/t c/lb % FY07 45.7 111.098 7521 24 3.1 125. Timely brownfield expansions/acquisitions and better asset productivity helped contain EBIT fall.1 Change % -11% -2% -30% -11% 10% -30% -35% LME is a pass thru but adversely impacts working capital All the key value drivers deteriorated against FY07.9 FY08 40.5 2623 5.5 2664 8. 107 .Drivers of Performance : FY08 Particulars Re/US$ Al.

51 108 .Stand Alone Financial Highlights –FY08 (Rs.52 FY08 19201 3894 3306 3026 2320 2861 24. Revenue EBIDTA EBIT Pre-tax profits Net Profit before tax write Back Net Profit Basic EPS (Per Share) 18313 4385 3747 3505 2564 2564 25. Cr) Change (%) 5% -11% -12% -14% -10% 12% -4% FY07 Net Sales & Op.

Key Ratios: Aluminium Business 1.9 FY07 FY08 40% 42% 34% 31% EBIT Margin ROCE % Cap. Turnover 41% 40% 130000 39% EBIT Margin Ingot Real Rs/t 125000 125400 111098 120000 37% 115000 110000 35% 35% 34% 98286 90888 30% FY05 FY06 FY07 FY08 105000 33% 100000 95000 31% 90000 29% 109 85000 .0 0.

EBIT Trends and Peer Comparison EBIT/Sales % (Aluminium) 60 50 40 30 20 10 0 Indian Company 1 Indian Company 2 Hindalco 14 25 25 49 55 FY06 FY07 FY 08 38 35 40 34 Relatively less impacted by LME & INR volatility compared to pure play companies ROCE .Peer Companies Aluminium 60 50 40 30 20 10 0 Indian Company 1 Indian Company 2 Hindalco Global Major 29 26 28 53 42 31 FY07 13 FY 08 14 HIL ROCE better than Peers 110 Strategic thrust to combine cost leadership & portfolio derisking .

PAT Bridge Rs.Crs Segment Al EBIT 2929 2423 (506) Cu EBIT 517 503 (14) Interest (242) (281) (38) Other Income 370 493 123 Unallocable Expenses (69) (113) (44) Company PBT 3505 3026 (479) Tax (940) (705) 235 PAT 2564 2320 (244) Tax W/Back 0 541 541 Reported PAT 2564 2861 297 FY07 FY08 Change 534 FY07 FY08 640 493 370 102 Current Tax 940 Deferred Tax 705 88 995 Tax Write back 242 281 153 391 217 617 Treasury Income Treasury Income Net Interest Gross Interest FY07 FY08 (55) FY07 FY08 Interest Other Income Tax 111 • Net and Gross interest higher due to higher average borrowings & higher average Interest rate • Treasury income higher due to higher pre-tax treasury yield & higher average treasury • Provision for Taxes lower due to lower PBT. lower ETR & higher capitalization .

32 5010 941 789 690 536 1077 8. Revenue EBIDTA PBIT Pre-tax profits Net Profit before tax write Back Net Profit Basic EPS (Per Share) 4749 1173 1016 958 721 721 7.78 6% -20% -22% -28% -26% 49% 19% 112 . Cr) Q4FY07 Q4 FY08 Change (%) Net Sales & Op.Stand Alone Financial Highlights –Q4 FY08 (Rs.

748 7684 19.8 3.4 2800 8. Lower LME.124 5949 33.8 Q4FY08 40. depressed margins .1 Change % -10% -2% -30% -15% 29% -42% -17% 17 89 5 Impact Rs.Crs 189 88 36 All the key value drivers deteriorated against FY07. LME Effective Al.1 2742 5.Drivers of Performance : Q4 FY08 Particulars Re/US$ Al.1 131.7 111.4 3. Strong rupee. lower Tc/Rc affected the topline. coupled with higher input 113 costs primarily on account of a sharp surge in crude. This. Customs duty Domestic Ingot Realisation Cu LME Copper TcRc Cu Duty differential Unit Rs $/t % Rs/t $/t c/lb % Q4FY07 44.

$41. 114 17/Jun 1/Jan 6/May .1 Avg.40 20/May Leading to…….$40.Positive trend going into Q1 of FY09 Aluminium LME 44 Rupee : USD 3400 3200 3000 43 42 41 2800 40 2600 2400 Avg.$2982 39 38 37 8/Apr 22/Apr 3/Jun 11/Mar 25/Mar 15/Jan 29/Jan 12/Feb 26/Feb 2200 2000 2/Jan 2/Apr 2/Feb 2/May 2/Mar 2/Jun Avg.$2742 Avg.

Rupee weakens marginally Strong LME.Improving Domestic Ingot Realisations LME improves but rupee stronger 140000 130000 120000 110000 100000 90000 80000 Fall in LME + Rupee strong + Duty cut Spurt in LME. Rupee depreciates 124312 119403 126678 131124 121355 109139 103137 111748 70000 60000 Q1FY07 Q2FY07 Q3FY07 Q4FY07 Q1FY08 Q2FY08 Q3FY08 Q4FY08 Apr'08 115 May'08 128469 122471 .

2 billion refinanced through ABL.48 billion) Equity US$450 million Lenders for bridge loan of US$3.03 billion Netherlands Hindalco Industries Ltd India 116 . Existing US$1. AV Aluminum Inc AV Metals Inc Canada AV Minerals (Netherlands) BV (Total funds US$3.Funding Structure for the Acquisition of Novelis Novelis Inc Existing bank loans of US$1.4 billion notes continue. term loan.

US$ 3.Take out Financing Plans .03 Bn Bridge Loan • Rights Issue Not Exceeding Rs 5000 Crs • Balance o o o International loan or Bonds Rupee loan or Bonds Treasury Put in place Optimal Capital Structure to Preserve Balance Sheet Strength to Fund Value Accretive Projects 117 .

27 Number of Entities FY 2006-07 FY 2007-08 18 1 2 57 6 2 Relationship Subsidiary Holding/ Control > 50% Methodology Line by line Consolidation Minority Interest shown separately Adjustment in carrying cost of investment Line by line Proportionate 118 Consolidation Associate Joint Venture > 20% ≤ 50% Jointly Controlled Entities .Consolidation: Dimensions & Schematic Relationship Subsidiary Associate Joint Venture Relevant Account Standards (AS) AS .23 AS .21 AS .

387 20.013 7.) Net Worth 18.415 19.1% -23.7% 21.5% 19.5 17.346 32.385 3.814 94.316 4.835 2.2% -11.686 26.Consolidated Financials (Under Indian GAAP) Rs Crores FY 2006-07 Share of Stand Alone FY 2007-08 Share of Stand Alone Increase/Decrease Standalone Consolidated Standalone Consolidated Standalone Consolidated Net Sales EBITDA EBIT Net Profit EPS (Rs.5% 35.5 17.5 12.0% 53.4% 119 Quantum growth through Acquisition .9% 40.436 60.313 4.6% -3.7% 50.564 25.4% 210.747 2.4% 68.894 3.7 12.291 4.8% 90.8% -11.3% 95.306 2.861 24.840 3.6% -11.6% 94.8% 4.201 3.975 2.4% 119.8% 11.

92 2.02 2.346 32.171 23.95 3.285 25.27 4.892 4.04 0.814 8.710 12.81 0.285 262 17.266 2.817 13.27 5.07 4.09 0.37 2.21 0.454 8.08 .24 120 14.266 0.48 1.951 56.48 0.824 159 170 7.07 14.08 US$ Bn. 31-Mar-07 31-Mar-08 31-Mar-07 31-Mar-08 10.20 0.617 4.352 1.443 857 1.35 0.257 23.98 5.04 1.40 1.271 56.084 17.874 4.94 0.34 8.833 3.35 6.94 1.Consolidated Balance Sheet Rs Crores Particulars Application of Funds Fixed Assets and CWIP (net) Goodwill Other Intangibles Investments Net Current Assets Total Sources of Funds Share Capital Reserves and Surplus Net Worth Loans Minority Interest Deferred Tax Liabilities Total 104 12.

• Two new subsidiaries Tubed Coal Company Limited (with Tata Power as the other JV partner) and East Coast Bauxite Mining Company Private Limited (with Orissa Mining Corporation as the other JV partner) have been formed. 2007 and approved by the Ontario Superior Court of Justice on May 14. 2007..Major Developments During the Year: • On May 15. • Pursuant to a scheme of amalgamation.564. 121 . Limited an existing subsidiary was amalgamated with the Company effective April 1. the Company acquired Novelis Inc. 2007 the Company acquired shareholding of Alcan Inc. Indian Aluminium Company. 2007. Canada through its indirect wholly-owned subsidiary AV Metals Inc. 2007. • On October 5. (Acquisition Sub) pursuant to a plan of arrangement (Arrangement) entered into on February 10.each in Utkal Alumina International Limited (Utkal). consisting of 78.384 equity shares of Rs 10/.

644 Crores.Novelis : US GAAP and I GAAP Reconciliation Reconciliation of Profit/(Loss) . mainly interest 122 .Rs Crores Item Profit/Loss as per US GAAP (Full Year) Less: Related to Predecessor Period Profit/(Loss) as per US GAAP (for Successor Period wef 16/05/07) Less Adjustment for GAAP differences (i) Deferred Financing cost (ii) Actuarial loss of pension liabilities (iii) Deferred Tax assets on above adjustments Profit/(Loss) as per Indian GAAP Novelis AV Aluminum AV Metals AV Minerals (276) (133) (9) (485) (387) 111 (133) (9) (485) Total (902) (387) (515) (107) (68) 30 (33) (5) (13) (133) (14) (498) (125) (68) 30 (677) GAAP differences are only three Total Loss of Rs.

5 crores) Consolidated Net Sales 384.1 76.3 1.931.3 59.316.4) 618. 6.656.66% of total Sales of Rs.8 .5 19.229.909.012.8 0.6 18.2 (2.0 0.839.9) 40.Reconciliation of Net Sales Rs Crores 2006-07 Net Sales of Hindalco Industries Limited (Standalone) Impact of Subsidiaries:Novelis Inc.517.1 144. Limited Minerals & Minerals Limited - 2007-08 19.0 (1.5 1.426.1 582.2 174.0 18.3 42.6 Less: Inter Company Sales Net Sales of Hindalco and its Subsidiaries Impact of Joint Venture: Idea Cellular Limited (8.3 1.561.430.201.220.9 54.5 123 60.0 39. Aditya Birla Minerals Limited (Consolidated) Bihar Caustic & Chemicals Limited Dahej Harbour and Infrastructure Limited Indian Aluminium Company.0 2.0 56.723.313.

3 2.5) 106.6 2.4 3.9) (200.8 228.7 42.3) 2.9) (565.4 2007-08 2006-07 2007-08 Total Profit 37.5 20.6 30.3 .4 3.7 44.8 56.9 2.8 1.9 Our Share 37.5 (1.3) 42.642.0 (363.7 408.3) 1.5 33.9 2.2 3.295.3 (0.7 (1.3 124 1.0 (162.042.686.8 34.3 (10.0) (1.3 3.564.5) 2.387.Aditya Birla Science & Technology Ltd.6 2.Reconciliation of Net Profit Rs Crores 2006-07 Net Profit of Hindalco Industries Limited (Standalone) Impact of Subsidiaries: Dahej Harbour & Infrastructure Limited Bihar Caustic & Chemicals Limited Aditya Birla Minerals Limited (Consolidated) Renuka Investment & Finance Limited Renukeshwar Investment & Finance Limited Novelis Inc. Consolidated Net Profit 502.860.3) 1. (Group) AV Companies (SPVs) Other Subsidiaries Total of Subsidiaries Less: Unrealised Profit in inter Company Inventory Less: Others Net Change due to Subsidiaries Net Profit of Hindalco and its Subsidiaries Impact of Joint Ventures & Associate: Joint Venture .2 27.4) 90.7 3.1 90.Idea Cellular Limited Associate .9 2.6) (1.0) (644.5 (33.8) 2.9 2.5 (33.0) (644.

THANK YOU 125 .