The Directors are pleased to present the 48th Annual Report along with
the audited annual accounts for the year ended 31st March, 2007.
A major Strategic Initiatives
The Company has entered into a definitive agreement with Novelis Inc.
on 10th February, 2007 for acquiring all outstanding common shares
@ USD 44-93 per share in cash for a total consideration of approx.
USD 3.5 billion.
For this purpose, the Company has secured firm commitments of USD 3.1
billion bridge loan of 18 months against the corporate guarantee of the
Company and the balance of USD 450 million will be financed by the
Company by way of infusing equity/preferred stock/other securities in
its wholly owned subsidiaries. The acquisition will be effected
through one or more of its wholly owned subsidiaries. The transactions
were duly completed and V1&A closure achieved as per plan.
The strategic rationale for this acquisition as well as the acquisition
financing process are more fully dealt with in the MD&A section of this
Cost Reduction Initiatives
With the commissioning of the second 100MW power unit at Hirakud,
Orissa in December, 2006 in line with schedule, there has been a
substantial cost saving of operation.
Growth plans underway in Aluminium
The Company is aggressively pursuing various brownfield and greenfield
growth opportunities in Aluminium as described below:
The Company's brownfield expansion projects are on track. The
expansion of Muri Alumina Refinery from 110 KTPA to 450 KTPA is
expected to be commissioned in the second quarter of the next fiscal.
The commissioning of Phase 1 of Hirakud Smelting capacity from 65 KTPA
to 100 KTPA has been completed with all 150 pots energized. Phase - II
of the project, which will enhance smelting capacity to 143 KTPA, is on
track. The conversion of Pot Line-3 commenced in Nov'06 in a phased
manner. The first lot of 64 Pots were completed ahead of schedule. The
2nd 100 MW power plant was commissioned in Dec'06 in line with the
schedule while the third 100 MW plant is slated to go on stream by
Work on the 1,500 KTPA Alumina project is in progress. The pile
foundation for the precipitation area is progressing well and will be
completed by May'07. The layout of the non-plant buildings has been
finalized. The Detailed engineering for Mines has started and is
expected to be over by March 2009. The second phase of rehabilitation
and resettlement process is on track. The joint venture partner i.e.
Alcan Inc. has decided to exit the project and Hindalco is yet to
exercise its pre-emption right.
Aditya Alumina & Aluminium
This Greenfield integrated project of 1,500 KTPA Alumina, 325 KTPA of
Aluminium smelting and a Captive Power Plant of 750 MW is on track. The
proposed smelter has been accorded an SEZ status. The Rehabilitation
and Resettlement plan for both the smelters and CPP sites have been
submitted for statutory approval. The work on the Railway siding and
Energised Grid connectivity is underway.
This project envisages setting up of a 325 KTPA Smelter and 750 MW
Captive Power Plant supported by Captive Coal Mine. The Coal block was
allotted in April'06 in a JV with Essar. The production of coal is
likely to start from April 2009. The Govt. of Madhya Pradesh has
sanctioned an allocation of 1213 hectares of land and accorded an SEZ
For this project entailing the setting up a 325 KTPA Aluminium Smelter
with 750 MW Captive Power Plant, supported by 5 million TPA Captive
Coal Mine in Jharkhand, the allotment of coal block has reached its
final stages. Land acquisition is in progress. An application has also
been filed for environmental clearance, water, construction power and
other necessary infrastructure.
Other Significant Developments
Employee Stock Option Scheme
The Company appreciates the critical role its employees play in its
growth. Your Company strongly feels that the value created by its
employees should be shared by them. To promote the culture of employee
ownership in your company, the Board, of Directors of your Company at
their meeting held on 7th December, 2006 resolved to introduce the
Employee Stock Option Scheme - 2006 as per the provisions of the
Securities and Exchange Board of India (Employee Stock Option Scheme
and Employee Stock Purchase Scheme) Guidelines, 1999. The shareholders
have also approved the ESOP by the requisite majority through postal
However, no option has been granted to the employees during the year
First call money notice
As per the right offer documents, the Board of Directors in their
meeting held on 18th October, 2006 decided to send the first call money
notice @ Rs. 24 per share. Trading of the new 50% partly paid shares
commenced on the stock exchanges (BSE and NSE) on December 17, 2006.
(BSE Code: 890120, NSE Code: HINDALCO Market Type: E2)
The Company registered its best ever performance during the year under
review. Higher capacity utilization, increased realization, product mix
enrichment and improved operational efficiencies resulted in both
revenues and profits surpassing their previous levels. Alumina and
Aluminium plants continued to operate at utilization levels well above
their rated capacities. With the stabilization of the Hirakud
brownfield expansion, metal production rose by 3.2% to 442,686 MT. The
production of Value Added-Products i.e. Rolled and Extrusions increased
due to acquisitions completed in FY06 as well as higher utilization of
available assets. Of the total sales volume, the share of value added
products was an impressive 55%.
Despite falling aluminn prices in the international market, your
Company was able to maintain high realizations, largely because of its
focus on Speciality business as well as a prudent mix of forward
contracts and spot sales.
The production of Copper cathodes went up by 38% to 290,529 MT in
comparison to previous year on the back of the expanded capacity
commissioned last year. Production of value added CC rods grew 23% to
109,029 MT. Sulphuric acid output was up by 40% to 892,597 MT. In view
of the overall economics, Copper II operations remained suspended for a
part of year with copper concentrate in international markets becoming
more expensive due to supply constraints. The Company expects this
situation to be transient.
The Chairman's letter to shareholders and the Management's Discussion
& Analysis, which form a part of this Annual Report, provide the
strategic direction and a more detailed analysis on the performance of
individual businesses and their outlook.
Rs. in Million
Financial Results for the year ended 31.03.2007 31.03.2006
Net Sales & Operating Revenue 183,130 113,965
Profit before Extraordinary Items and Tax 35,046 21,027
Extraordinary Items - 30
Profit Before Tax 35,046 21,057
Provision for Current Tax 9841 3241
Provision for Deferred Tax (551) 1160
Provision for Fringe Benefits Tax 113 100
Net Profit 25,643 16,556
Transfer to Debenture Redemption Reserve 187 751
Dividend 1,773 2,168
Tax on Dividend 249 304
Transfer to General Reserve 24,434 14,395
The Directors have recommended interim dividend of Rs. 1.70 per share
(Last Year Rs. 2.20 per share). The total outgo including tax on
divided would be Rs. 2,022.2 million (Last Year: Rs. 2,472.5 million).
An amount of Rs. 3,890 crores was drawn at an average rate of 8.62%
p.a. against the 10 year Secured Rupee Term Loan facility syndicated in
earlier years. The Company met all its obligation on payment of
interest and repayment of principal.
As part of the bidding process under Canadian Law for undertaking the
arrangement transaction for the acquisition of Novell, your Company
obtained commitment letter from ABN AMRO, Bank of America and UBS of
US$3.1 Billion with recourse to your Company and secured by Hindalco's
corporate guarantee for paying the shareholders of Novelis. It also
obtained back-stop facility of approximately US$2.4 Billion from UBS
and ABN AMRO for refinancing the existing loans of the Novelis Balance
Sheet with recourse limited to the cash flows and assets of Novelis.
The Company was adjudged the successful bidder and all steps are being
taken to complete the legal and other formalities required to draw the
The Company has embarked on major growth plans to increase the smelting
capacity to 1.5mn tonnes and Alumina capacity to around 4.5mn tonnes
over the medium term. The total fund requirement to implement these
plans will be about US$7bn. To finance such organic growth, Hindalco
syndicated about US$1.5bn debt from the domestic market in 2005. This
was followed up with a partly-paid rights issue of around US$500mn on
which the final call (50%) is expected to be made in August'07. This
equity issue was considered sufficient to maintain prudential balance
sheet ratios after factoring in the expansion plans.
As mentioned earlier, your Company also put in a bid for acquiring 100%
of the equity of Novelis. The recommendation of our bid by the Novelis
Board for acceptance by the shareholders, followed by the signing of a
definitive agreement, paves the way for a transformational acquisition
which will see your Company emerge as a Fortune 500 company when the
transaction is consumated.
Our bid envisages US$ 3.55bn payment to equity shareholders. This has
been underwritten to the tune of US$3.1 bn by a consortium of banks and
the balance US$ 450 mn represents Hindalco's equity infusion for the
bid by the liquidation of free treasury. While this ensured certainty
of financing for our bid, the loan of US$ 3.1 bn represents a 18 month
bridge facility which will need to be refinanced to put in place an
efficient permanent capital structure at the opportune time.
The company issued securities to Promoters/Promoter Group on a
preferential basis in the following manner @ Rs. 173.87 per shares of
Re. 1/- each amounting to Rs. 25,646 Million :
1. Issuance of upto 67,500,000 equity shares of Re. 1/- each on a
preferential basis to the Promoters/Promoters Group in accordance with
the provisions of Chapter XIII of the Securities and Exchange Board of
India (Disclosure & Investor Protection) Guidelines, 2000 (SEBI (DIP)
2. Issuance of upto 80.000,000 warrants on a preferential basis to the
Promoters/Promoters Group entitling the holder of warrant to apply for
and obtain allotment of one equity share against one warrant in
accordance with the provisions of Chapter XIII of SEBI (DIP)
Consolidated Financial Statements
In accordance with Accounting Standards 21, 23 and 27 issued by the
Institute of Chartered Accountants of India, your Company is presenting
its consolidated financial statements. These Consolidated Financial
Statements form part of the Annual Report.
The Securities and Exchange Board of India (SEBI) has prescribed
corporate governance standards. Your Directors reaffirm their
commitment to these standards and this annual report carries a section
on Corporate Governance.
Environmental Protection and Pollution Control
The Company is committed to sustainable development. Your company is a
signatory to the Global Compact and subscribes to the principle of
triple-bottom line accountability.
A separate chapter in this report deals at length with your Company's
initiatives and commitment to environment conservation.
Human Resource Development & Industrial Relations
The Chairman in his letter at the beginning of this annual report, has
already highlighted the importance of the people processes of a
meritocratic organization like our Group. These processes span across
the Group Companies globally and your company is one of the flagship of
The Company has an enviable track record of successful human capital
management, which has remained the source of sustainable competitive
advantage. Fostering people development and harnessing their potential
has always remained the thrust area of your company. Identifying and
grooming management talent has helped in people capability building and
leadership development at all levels. Programmes launched over the
years in the areas of people development have enabled company to
attract, retain and develop talent.
The company's growth and success spanning over decades has generated a
reservoir of talent and expertise, helping company realize its vision.
A proactive and an effective succession management has not only helped
in passing on the baton but has also catalyzed continuous knowledge
replication and retention.
Introducing global HR practices, systems and best practices in the
areas of talent development, compensation management, recruitment etc
is enabling and preparing us to address future challenges effectively.
Implementation of People soft systems, Variable Pay plan, Job Banding,
online recruitment are the major initiatives taken in this direction.
The company has launched various new projects to strengthen HR
processes. The Recently concluded Organizational Health Study revealed
that more than 70% employees are satisfied with their business unit as
a place to work, 62% would advocate their business to others and close
to 68%) would continue to remain in the business.
Awards & Recognitions
Several accolades have been conferred upon your Company, in recognition
of its contribution in diverse fields.
A selective list :-
1. National Energy Conservation Award-2006 First Prize in Aluminium
Sector by Government of India, Ministry & Power. Award given by
Honourable Union Minister of Power.
2. National Award on Economics of Quality by Quality Council of India.
Award given by HE AQ P J Abdul Kalam, President of India.
3. National Award of Excellence in Energy Management 2006 conducted by
CII. Hindalco smelter won the Excellence Energy Efficient Unit Award.
4. The prestigious Qualtech Award was won by Hindalco Renukoot
Fabrication plant Hot Mill team. Quimpro College, Mumbai. constituted
5. The International Aluminium Institute-IAI has awarded Hindalco
Aluminium Smelter as well as Alumina Refinery of Renukoot the Best
Safety Performance 2005 award.
6. Prestigious Greentcch Safety Award for its outstanding performance
towards organization health and safety and Environmental Excellence.
7. IMC Ramkrishna Bajaj National Quality Award, 2006 - Certificate of
8. Rajiv Gandhi National Quality Award, 2006 - Commendation
9. Hirakud's Quality Circle `Jagruti' bagged national level honours at
the 20th National Convention of Quality Circles, organised by the
Quality Circle Forum of India.
10. Hirakud Power Plant Team received the State Safety Award-2006 for
their act of bravery in saving lives and preventing a disaster, by
their proactive initiative to arrest the chlorine leakage at the
Railway Colony in Sambalpur.
Dahej Harbour and Infrastructure Limited (DHIL) has recorded an
impressive performance this year. Its total income is up by 12% to
Rs.627 million as compared to Rs. 560 million last year. Net profit at
Rs.375 million has increased by 13.3% vis-a-vis Rs. 331 million in the
Indian Aluminium Company, Limited (Indal) has posted a turnover of
Rs.767 million and net loss of Rs. 25 million.
Bihar Caustic and Chemicals Limited (BCCL) has reported a stellar
performance. Net sales have increased by 28.3% to Rs. 1,430 million
vis-a-vis Rs. 1,115 million last year. Net profit at Rs. 336 million
has soared by 28.7% against Rs. 261 million in the preceding year.
The Central Government has granted an exemption to your Company under
Section 212(8) of the Companies Act, 1956, from attaching a copy of the
Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and the Report of the Auditors to all the Subsidiary Company
except AV Metals Inc. and AV Aluminum Inc. Subsidiary Companies, which
will not be attached with the financial statements of your company. The
Company has also applied to the Central Government for exemption from
attaching copy of Balance Sheet, P&.L A/c report of the Board of
Directors and report of the auditors for the remaining two subsidiaries
i.e. AV Metals Inc. and AV Aluminum Inc. These documents can be
requested by any member, investor of the company/subsidiary company.
Further, in line with the Listing Agreement and in accordance with the
Accounting Standard 21 (AS-21), Consolidated Financial Statements
prepared by the Company include financial information of its
Particulars as per Section 217 of the Companies Act, 1956
The particulars of employees, as required under Section 217 (2A) of the
Companies Act, 1956, are given as an Annexure to this Report.
A separate statement attached to this Report, which forms a part of the
Report, provides you with additional information relating to the
conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo required under Section 217(1)(e) of the Companies
In accordance with Article 146 of the Articles of Association of the
Company, Mr. K.M. Birla, Mr.A.K.Agarwala and Mr. E.B. Desai retire from
office by rotation, and being eligible, offer themselves for
Directors' Responsibility Statement
The Directors affirm that the audited accounts containing financial
statements for the financial year 2006-07 are in full conformity with
the requirements of the Companies Act, 1956. They believe that the
financial statements reflect fairly, the form and substance of
transactions carried out during the year and reasonably present the
Company's financial condition and results of operations. These
statements are audited by the statutory auditors M/s. Singhi & Co.
The Directors further confirm that:
(i) In the presentation of the Annual Accounts, applicable Accounting
Standards have been followed.
(ii) That the accounting policies are consistently applied and
reasonable, prudent judgement and estimates are made so as to give a
true and fair view of the state of affairs of the Company at the end of
the Financial Year.
(iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(iv) The Directors have prepared the Annual Accounts on a going concern
The Company's internal Auditors have conducted periodic audits to
provide reasonable assurance that established policies and procedures
have been followed.
The observations made in the Auditors' Report are dealt with separately
in the Notes to the Profit & Loss Account and the Balance Sheet in
Schedule 22 of the Accounts. These are self-explanatory and do not call
for any further comments.
M/s. Singhi & Company, Chartered Accountants and Auditors of the
Company, retire, and being eligible, offer themselves for appointment.
The Directors place on record their sincere appreciation for the
assistance and guidance provided by the Honourable Ministers,
Secretaries and other officials of the Ministry of Mines, Ministry of
Coal, the Ministry of Chemicals and Fertilizers and various State
Governments. Your Directors thank the Financial Institutions and Banks
associated with your Company for their support as well.
The Company's employees are instrumental in your Company scaling new
heights, year after year. Their commitment and contribution is deeply
The involvement as Shareholders is greatly valued. Your Directors look
forward to your continuing support.
For and on behalf of the Board
Dated the 4th Day of May, 2007
ANNEXURE `A' TO THE DIRECTORS' REPORT
[Statement of particulars under the Companies (Disclosure of
particulars in the Report of the board of Directors) Rules 1988]
A. CONSERVATION OF ENERGY
Energy Conservation is an effective key value driver to reduce cost of
production. Your Company has a well structured Energy Management System
with top down and bottom up approach where employees are encouraged to
give suggestions resulting in energy savings. Efforts in this direction
are focused through a Central Energy Cell whose mandate is to initiate,
facilitate, and sustain energy conservation throughout the
organization. Efforts to optimize process parameters, modernize and
upgrade technology as well as equipments, with the objective of
increasing Energy Productivity are continuous and ongoing. Competent
authorities have consistently recognized the company's efforts in
Energy Conservation. Different units of your Company's Aluminium
business have been recently awarded the First Prize and the Second
Prize in the National Awards for Energy Conservation instituted by
the Ministry of Power, Government of India for the year 2006. Your
company's Smelter Plant at Renukoot is also the recipient of National
Award for Excellence in Energy Management 2006 from CII.
(a) ENERGY CONSERVATION MEASURES TAKEN GENERAL
i. Regular auditing/optimization of Steam, Furnaces and Compressed air.
ii. Control on idle running of auxiliary equipment by interlocking
with main equipment.
iii. Installation of Variable Frequency Drive in phased manner.
iv. Using energy efficient lubes in Gearboxes.
v. Providing Limit Switches, Timers & PLC etc.
vi. Replacement of higher wattage luminaries with low watt energy
vii. Optimization of process to enhance production.
1. ALUMINA PLANT:
i. Reduction in water pumping Energy by implementing rain water
ii. Installation of Energy Efficient Plate heat exchangers for better
iii. Using Energy efficient Gear Oil in Gear Boxes of Ball Mills.
iv. Optimization of motor ratings of pumps.
v. Replacement of ultrasonic level indicators by DP Transmitters
indicator in Washer tanks to regulate speed of pumps,
vi. Optimization of pumping system.
2. SMELTER PLANT:
i. Use of modified anode stub in Pot Line 2 & 3.
ii. Modification in point feeder airline circuit in remaining 10 pot
iii. Replacement of existing Open type Fan with Backward Curve type Fan
in Baking Furnace # 3.
iv. Modification of Charging stand & spacers to increase the
throughput of Homogenizing Furnace.
v. Suitable modification in pulse air supply circuit of DSS Pot Line #
3 FABRICATION PLANT:
i. Optimization of soaking and aging cycles.
ii. Revamping of one Properzi furnace.
iii. Modification in door of Ageing Furnace # 1 to enhance capacity.
iv. Elimination of intermediate annealing of coil by partial
v. Conversion of coil annealing furnace from electrical heating to coal
4. POWER PLANT
i. Using Coagulant & Flocculants in feed water to reduce colloidal
silica in Boilers.
ii. Recovery of kinetic energy from cooling tower makeup water.
iii. Replacement of old Turbine internals with modern Energy efficient
iv. Replacement of gland packing with mechanical seal.
v. Higher size inefficient impeller replaced with energy efficient
5. FOIL AND WHEEL DIVISION
i. Replacement of 7.5 KW hydraulic power pack motor with 5.0 kw of
ii. Optimization/modification of thermopack and power distribution
6. COPPER BUSINESS
i. Replacement of propane burners with RLNG burners
ii. Installation of HT and LT capacitor bank to improve power factor
iii. Optimization of motor rating
iv. Cooling tower MS blades replaced with FRP blades
(b) ADDITIONAL INVESTMENT AND PROPOSALS BEING IMPLEMENTED ALUMINIUM
1. ALUMINA PLANT:
i. To convert existing Digestion technology with energy efficient
double digestion technology.
ii. To replace energy inefficient pumps (2Rx & 3 Rx) with energy
iii. Close circuit grinding for the ball mill.
iv. Energy efficient evaporators for better heat recovery.
v. To optimize air consumption in Precipitation area by modification
in air injection piping.
vi. Additional PHE installation for improved Heat recovery.
vii. Modernisation of Vanadium sludge unit.
2. SMELTER PLANT:
i. To use modified stub in Pot Line 1 and 4 to 11.
ii. Replacement of existing Open type Fan with Backward Curve type Fan
in Baking Furnace # 1& 3.
iii. Fabrication of small cruces to take back the drain out material
into furnace instead of making cake in Billet Casting furnace.
iv. Optimization of Point Feeder Header Pipe size of Compressed air
v. To install CFF heater in Billet Casting Furnace,
vi. Change over of smelting technology from HSS to Prebake at Hirakud.
3. FABRICATION PLANT:
i. Revamping of one no Properzi Furnace, 1 no. Homo Furnace and 3 nos.
ii. Conversion of another annealing furnace from electrical to coal gas
4. POWER PLANT
i. Heat recovery from gland steam condenser.
ii. Modification in piping of VAM system to reduce running of Cooling
Tower fan in winter season,
iii. Replacement of HP Heaters.
iv. Replacement of inefficient Boiler Feed Pumps of Unit # 3 & 4.
v. Cooling Tower upgradation.
vi. Replacement of higher size inefficient impeller with energy
efficient matching impeller in CW Pumps of Unit #6,7&8.
5. FOIL AND WHEEL DIVISION
i. Replacement of Flat belt into V-Belt in compressors.
ii. Installation of VFD in Air Circulating Fan.
iii. Conversion of fuel from LPG to furnace oil in melting furnaces.
6. COPPER BUSINESS
i. VFD tor combustion air fan of smelter.
ii. Installation of power capacitor in 3.3 kv panel.
(c) IMPACT OF MEASURES IN (a) AND (b) ABOVE
The various Energy Conservation Measures undertaken by your Company
have yielded encouraging results in most production centers. Efforts
continue to further optimize energy productivity through ongoing and
B. TECHNOLOGY ABSORPTTON
RESEARCH & DEVELOPMENT (R & D)
A. ALUMINIUM BUSINESS
1. Specific areas in which R&D carried out:
* Development of new products of special hydrates, aluminas, aluminium
and new applications for existing products.
* New product development e.g. Roofing Sheets, Colour Coated Coils,
Alclad sheets and Roof on roof structural and LPG Cylinder.
* Conservation of raw material and resources e.g Study of different
bauxites, their characterization and optimization of processing
* Optimization of process parameters for better efficiency like
* Development of Indigenous Lubricant for use in DC casting of
Aluminium Hard Alloys and post-lubrication of Semi Rigid Container
Foils, used in food packaging.
* Optimization of process parameters for casting practice and thermal
treatment of different aluminium alloys for Defence and other sectors.
* Development of software logic for heat regulating system for baking
* Performance evaluation of modified Carbon Cathode Blocks for
reduction in specific energy consumption.
* Development of Virtual Pot & Thermal Modelling for assessment of
changes in Pot variables.
* Superheat measurement of Electrolyte for better ratio control & pot
* Development of Advanced Process Control Software for Dynamic Feed
control of Alumina.
* Optimization of Process Parameters &. Process Up gradation through
increased Line amperage, metal pad, anode size & stub diameter.
* Development of analytical facilities to assess the health of Oils &
* Development of process for life enhancement for boiler super heater
* Waste minimization and reutilization :
Reduced red mud generation by increasing the extraction efficiency by
process optimization. Utilization of Fly ash in brick manufacturing.
ETP Sludge in red mud plantation.
Reduction in steam consumption through optimization of process
parameters thereby reducing wastes upstream.
* Environment preservation and sustenance e.g. Recycling of treated
industrial and domestic effluent for process use.
2. Benefits derived as a result of the above R&D:
* New market for special alumina and aluminium applications enabling
the company to maintain its leading position.
* Branding of Hindalco Products with pentration in new market segments.
* Increase in operating efficiency of different plants.
* Reduction in specific consumption of raw materials.
* Reduction in specific energy consumption in total production cycle.
* Improved waste management and better environmental condition in the
* Development of import substitute spares indigenously e.g turbine
parts, ECL Cranes etc.
* Sustenance in purity of metal.
* Better water resource management through chemistry control and
recycling and recovery from plant/colony effluents.
* Development of special alloy has opened avenue for inexpensive Import
* Improvement in surface quality of aluminium ingots.
* Better health of equipment and machinery through improved lubrication
* Hi-tech application of sheet products in auto industry.
3. Future plan of action:
* Exploratory research in the field of finer and speciality alumina
with thrust in application.
* To develop new aluminium product variant.
* To work for new application of aluminium alloys in transport
particularly in motor vehicles, railways, building & construction and
* To effectively use waste products e.g. Dross, Fly ash etc.
* To interact with reputed educational and industrial institutions to
explore joint projects in field of aluminium.
* Monitoring of thermal efficiency and identification of process
* Laboratory simulation of heat treatment process for dies and tooling.
* Analytical method development for better process control.
* Virtual pot & Thermal Modelling for design of High amperage Cells and
develop facilities for enhanced throughput.
* Explore possibility of increasing the production volumes for Defence
Sector & other import substitution alloys.
* Simulation studies for improvement in Rolled products manufacturing.
B. COPPER BUSINESS
1. Specific area in which R&D has been carried out:
* Enhanced campaign life of converter refractory.
* SAP-I & III cooling tower blow down water (500M3/day) being utilized
for PRJS make up water. Commissioning of additional water reservoir of
1,50,000 M3 capacity.
* Improvements in A1F3 operation.
* Modification of C furnace feed tank nozzle from 3 mm to 6 mm and dry
concentrate carrying system screen of S furnace feed.
* In-house modification of anode scrap charging machine of Smelter-III.
* Integration of CPP-I/II , CPP-III and SAP-III steam network.
* Elimination of roots blower operation for ash conveying by utilizing
air from PA fan.
* In-house re-engineering and manufacturing of CJD burner of Smelter-I.
2. Benefits derived as a result of above improvement:
* Improvement in plant availability and cost saving.
* Improved productivity and product quality.
* Reduced nozzle choking and downtime of equipment has resulted in
increased plant availability, cost saving and improved environment.
* Reduction in specific energy consumption for smelting.
3. Future plan of Action:
* To install new scrubbing system as per Monsanto design in Phosphoric
* CFD modeling and optimization of PS Converter.
* Flow and heat transfer studies in S-Furnace waste heat boiler.
* Simulations of hot gas generators for understanding the swirl pattern
inside the HGG of Captive Power plant.
* New technology for removal of Arsenic and Bismuth from Copper
Expenditure on R&D
(Rs in Million)
a. Capital 7.22 24.35
b. Recurring 98.03 74.26
c. Total - A+B 105.25 98.61
d. Total R&D Expenditure as % of total turnover 0.06% 0.09%
Technology Absorption, Adaptation and Innovation
i. Efforts in brief
The Company continued to make efforts to absorb the imported technology
and its assimilation in Indian environment to fully harness the same.
Areas of technology absorptions are :
* Process control for special automobile application products.
* Surface treatment for speciality sheet products.
* Better gauge and dimensional tolerance for sheet products.
ii. Benefits derived:
Efforts have resulted in better understanding of imported technologies
and utilize the same with cost competitiveness and enhanced product
iii. Details of technology imported in the past 5 years
Technology imported Year of Has technology If not fully absorbed,
for Import been fully areas where this has
absorbed not taken place, reason
thereof and future plan
Anode moulding 2003-04 Yes N.A.
red mud from
pregnant liquor 2004-05 Yes N.A.
treatment and flatness 2004-05 Yes N.A.
manufacturing 2005-06 Yes N.A.
for Copper-II 2002-03 Yes N.A.
Oxygen-III 2002-03 Yes N.A.
for Copper-III 2003-04 Yes N.A.
Oxygen-IV 2005-06 Yes N.A.
Oxygen-V 2006-07 Yes N.A.
C. FOREIGN EXCHANGE EARNINGS & OUTGO
a) Activities related to Exports
The Company has taken successful initiatives to increase exports during
the year to Rs. 69,732.05 million.
b) Total Foreign Exchange used and earned
Foreign exchange used Rs. 100,831.85 million
Foreign exchange earned Rs. 69,775.37 million