National Aluminium Company

1.  Balance Sheet :
 
 1.1 Land:
 
 a) Freehold land includes land acquired through Government of Orissa,
 for which relevant title deeds have been executed except for land
 measuring 17.25 acres. Process of conversion of freehold land for
 Industrial use has been taken-up with Revenue Authority.
 
 b) Leasehold land includes payment to the Government of Orissa in
 respect of which lease deeds are yet to be executed for 1247.68 acres,
 though the Company has been permitted by the Government to use such
 land for industrial purposes.
 
 1.2 In order to compensate substantially land affected persons (SAPs)
 at Angul Sector in lieu of employment, the Company has offered a cash
 assistance package ranging from Rs.2.50 lakhs to Rs.15.00 lakhs per
 person depending upon the quantum of land, based on recommendation of
 Rehabilitation Advisory Committee (RAC), constituted by Government of
 Orissa for the said purpose. Compensation paid/payable to such SAPs has
 been determined at Rs.9.67 crore.
 
 1.3 Registration formalities in respect of office space for 6,459 Sq.f
 t allotted by Kolkata Municipal Development Authority, valuing Rs.5.50
 Crore at J.K.Millenium Centre, Kolkata in favour of NALCO is under
 process.
 
 1.4 Inventory of Rs.329.08 crore includes Rs.8.97 crore in respect of
 shop floor stock of Stores and Spares accounted for the first time
 during the year. Since such shop floor stocks were already charged to
 revenue in the corresponding years of its issue, this has resulted in
 increase of profit for the year to the extent of Rs.8.97 crore.
 
 1.5 Rolled Products Unit at Angul, established earlier as a 100% Export
 Oriented Unit (EOU), was debonded w.e.f 15.05.2007, as one time option
 to exit from 100% EOU Scheme to EPCG Scheme by paying additional import
 duty of Rs.6.44 crore after furnishing legal undertaking to the
 Development Commissioner, FALTA special Economic Zone, Kolkata. As per
 the direction of the Juridictional Commissioner of Central Excise,
 Bhubaneswar a Bank Guarantee of Rs.14.31 crore and a bond of Rs.143.08
 crore has been furnished towards Central Excise Duty liability.
 
 1.6 45 nos of EPCG licences have been obtained between the period from
 18.10.2006 to 18.03.2009 for 2nd phase of expansion on payment of
 concessional import duty. The value of concession availed by payment of
 duty at lower rate amount to Rs.270.70 crore, on the stipulation that
 the export obligation to the extent of (i) 50% of the duty saved has to
 be fulfiled over a block period of 1st to 6th year and (ii) 50% of the
 duty by saved over a period of 7th and 8th year, commencing from the
 date of issue of authorisation.
 
 1.7 IDCO, a Government of Orissa Undertaking, has leased 11.70 Acres of
 land to the Company for installation of Aluminium Wheel plant at
 Bhubaneswar, which was shelved due to economic unviability. In stead,
 the Company decided to set up a R&D and Technology Development Center
 and has sought permission from IDCO in this regard, which was turned
 down and the matter was under sub-judice with Hon’ble High court of
 Orissa. The Court has constituted a High Power Committee headed by
 Cabinet Secretary, Govt. of India and directed to resolve the issue,
 which is under process.
 
 1.8 The Company has availed Bank Guarantee, Letter of Credit and PCFC
 credit facilities from the bank secured against stock and book debts.
 
 1.9 Contingent Liabilities not provided for:
 
 
                                                   (Rupees in crore)
                                               As at         As at
                                        31st March 2009  31st March 2008
 
 a) Estimated amount of contracts 
 to be executed
 on capital account 
 (net of advances and L/Cs opened)          1,015.98        1,604.52
 
 b) Outstanding letters of credit,
    guarantees and counter
    guarantees                                143.08          164.64
 
 c) Claims against the Company not 
    acknowledged as debts:
 
 i)  Sales Tax                                464.33          475.66
 
 ii) Excise Duty                              105.66          113.18
 
 iii) Customs Duty                              3.57           11.68
 
 iv) Claims of contractors, suppliers & others 89.77           76.35
 v)  Land acquisition and interest thereon     39.84           37.60
 vi) Unrealised bank guarantees due to court 
     injunctions                                2.55            0.57
 
 vii) Income Ta x & Wealth Tax                203.48          138.99
 viii) Entry Ta x and Road Tax                 55.77           50.78
 
 ix) Employee State Insurance                   0.32            0.32
 x) Provident Fund Commission                   0.05              -
 xi) Water charges                              0.74            2.19
 
 xii) Royalty on bauxite and interest thereon   13.71          13.42
      TOTAL                                    979.79         920.74
 
 2.  Profit and Loss Account:
 
 2.1 Price dif ferential of US $ 30,58,900 has been received pertaining
 to a sale in the financial year 2006-07, as a result of an arbitration
 award in favour of the Company. The rupee equivalent value of the same,
 Rs.13.53 crore has been accounted for under “Prior Period Income/
 Expenses”
 
 2.2 Depreciation was charged in respect of main Plant and Machinery and
 related Factory Buildings and Storage go-downs etc., at the rate of 5
 per cent up to 31st March 1994, based on estimated useful life of
 assets being 20 years without retention of 5 per cent residual value.
 The useful life of these assets has been revised to 18 years to bring
 it at par with the life of “Continuous process plant” as envisaged in
 Schedule XIV of Companies Act, 1956. Such change in life of assets has
 been considered from 1.4.93 i.e. from the year of introduction of
 “Continuous process plant” in Schedule XIV of Companies Act, 1956.
 Depreciation rates on all such assets have been recomputed based on
 guidelines issued under Circular No.14/93 dated, 20.12.93 by Department
 of Company Affairs, by allocating the unamortized value over the
 remaining life after retention of 5 per cent residual value except for
 assets already written off fully.
 
 2.3 Based on the guidelines of Department of Public Enterprise,
 additional liability on account of pay revision of executives has been
 computed w.e.f. 1.1.2007. Similarly, liability on account of
 non-executives w.e.f. 1.1.2007 has been calculated provisionally,
 considering the aforesaid minimum benefits as per DPE guidelines. The
 total liability both for executives and non-executives, so accounted,
 works out to Rs.123 crore during the year.
 
 2.4 Liabilities in respect of employees benefit as per AS-15 (Revised
 2005) has been provided on the basis of Actuarial valuation.
 
 2.5 Actuarial liability in respect of gratuity has been computed
 considering the applicable ceilings known as on date in case of
 executives & non-executives.
 
 2.6 Provision for differential liability on account of gratuity in
 respect of executives who have expired or resigned or opted for VRS or
 retired on superannuation during the period from 01.01.2007 to
 28.02.2009 amounting to Rs.3.37 crore has been provided.
 
 3.  i) As per AS-18 “Related Party Disclosures” issued by the Institute
 of Chartered Accountants of India, the names of the related parties are
 given below:- Directors: a) Sri C.R. Pradhan, b) Sri K.K. Mallick, c)
 Sri P. K Routray,
 
 d) Sri B.L Bagra, e) Sri Joy Varghese.
 
 ii) Related party transactions: Remuneration and loans to whole time
 directors are disclosed in Note no. 1 of Additional information forming
 part of accounts.
 
 4.  SEGMENT REPORTING:
 
 4.1 The Company has considered Chemicals, Aluminium and Electricity as
 the three primary business segments. Chemicals include calcined
 alumina, alumina hydrate and other related products. Aluminium includes
 aluminium ingots, wire rods, billets, strips and other related
 products. Bauxite produced for captive consumption of alumina is
 included under chemicals.
 
 4.2 India and Outside India are the two geographical segments. Since
 all production and other facilities are located in India, segment
 assets except export debtors are shown under one geographic segment
 i,e. India.
 
 4.3 Inter-unit transfer of alumina is valued at annual weighted average
 realization from export sales, reduced by railway freight. Inter-unit
 transfer of electricity is valued at annual weighted average sales
 price to state GRIDCO.
 
 4.4 Revenue and expenses have been identified to segments on the basis
 of their relationship to the operating activities. Revenue, expenses,
 assets and liabilities, which relate to the enterprise as a whole and
 are not allocable on a reasonable basis, have been included under
 “Unallocated Corporate” segment.
 
 5.  Previous year’s figures have been regrouped / rearranged wherever
 necessary to make them more comparable.