Hindalco Industries LimitedHindalco Industries Limited

Performance Review Performance Review

20062006--0707

Presentation for the InvestorPresentation for the Investor’’s Meets Meet

44thth May 2007May 2007

2

FY 2007 at a GlanceFY 2007 at a Glance

HIGHEST EVERHIGHEST EVER

Turnover : Rs. 18313 Crores (US$ 4455.1 mn)

EBIDTA : Rs.4385.1 Crores (US$ 1067 Mn)

PAT: Rs.2564.3 Crores (US$ 623.8 Mn)

Aluminium production at 442,685 T

Copper cathode Production at 290425 T

61%61%

54%54%

3%3%

55%55%

38%38%

Note: Exchange rate of 30th April’07 considered

3

Q4 FY 2007at a GlanceQ4 FY 2007at a Glance

HIGHEST EVER IN ANY QHIGHEST EVER IN ANY Q

Turnover : Rs.4,748.9 Crores (US$ 1,155 mn)

EBIDTA : Rs.1,173.2 Crores (US$ 285.4 Mn)

PAT : Rs.721.3 Crores (US$ 175.5 Mn)

Aluminium production at 114,334 T

Copper cathode Production at 81460 T

30%30%

17%17%

7%7%

15%15%

22%22%

Note: Exchange rate of 30th April’07 considered

4

52%25.5 --EPS

Change (%)Full YearChange

(%)Q4

2,564.3

3,504.6

4,385.1

18,313.0

15%

20%

17%

30%

721.3

957.9

1,173.2

4,748.9

55%

66%

54%

61%

Net Profit

Pre-tax profits

PBDIT

Net Sales & Operating Revenue

Financial Highlights Financial Highlights ––FY07FY07

Rs. CroresRs. Crores

BackdropBackdrop

Business Performance & OutlookBusiness Performance & Outlook

Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials

6

Backdrop : Global Macro Trends (FY06 to FY07)Backdrop : Global Macro Trends (FY06 to FY07)

2832

395

1,500

1,700

1,900

2,100

2,300

2,500

2,700

2,900

3,100

FY04 FY05 FY06 FY07190

240

290

340

390

440

490

540

590

640

690

Aluminium ($/t)

Alumina ($/t)

Aluminium prices at high levels & Alumina price again rising

60.74

7.22

30

40

50

60

70

80

FY04 FY05 FY06 FY072

4

6

8

10

12

14

16

Natural Gas ($/mmbtu)

WTI Crude ($/bbl)

Energy: Remaining Volatile

5388

0

1000

2000

3000

4000

5000

6000

7000

FY04 FY05 FY06 FY07

Baltic Dry Freight Index

Freight cost keeps moving up

Weakening Tc/Rc and Strong copper prices

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Apr

-04

Jul-0

4

Oct

-04

Jan-

05

Apr

-05

Jul-0

5

Oct

-05

Jan-

06

Apr

-06

Jul-0

6

Oct

-06

Jan-

07

0

10

20

30

40

50

60

Copper Price ($/t) Tc/Rc (c/lb)

7

Backdrop : Domestic Macro Trends (FY06, FY07 & FY08)Backdrop : Domestic Macro Trends (FY06, FY07 & FY08)

5.7%7.7%10.6%

0%

10%

20%

30%

40%

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08

Aluminium import duty

3.1%4.9%5.7%

0%10%20%30%40%

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08

Copper Duty Differential

Exchange rate- INR appreciating continuously

44.02

42.22

41.2141

42

43

44

45

46

47

April

'05

May'05

June

'05Ju

ly'05

Aug'0

5Se

pt'05

Oct'0

5No

v'05

Dec'0

5Ja

n'06

Feb'

06Mar

ch'06

April

'06

May'06

June

'06Ju

ly'06

Aug'0

6Se

pt'06

Oct'0

6No

v'06

Dec'0

6Ja

n'07

Feb'

07Mar

ch'07

April

'07

May'07

8

Significant Progress in the Strategic planSignificant Progress in the Strategic plan

Significant move into value added products accomplished through Novelis

acquisition.

Aluminium Growth plans

Hirakud Phase – I Expansion (upto 100 Kt) completed on schedule. Phase II (143 Kt) on

track.

Muri Expansion to be completed by Q3 FY08.

Hindalco has formed a JV with Almex, USA to manufacture high strength Aluminium

alloys for application in aerospace, sporting goods and surface transport industry.

All Greenfield Projects implementation plans moving as per schedule.

o Allotment of Tubed coal block (Latehar smelter project) reaches final stages.

o The State Governments have recommended both Aditya and Mahan Smelter projects for SEZ

status

Further cost effective de-bottlenecking of Aluminium production planned.

BackdropBackdrop

Business Performance & OutlookBusiness Performance & Outlook

Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials

AluminiumAluminium--Business PerformanceBusiness Performance

11

Aluminium EBIDTA MarginsAluminium EBIDTA Margins……..

1617

343939

50

Hin

dalc

o

Rio

Tint

o

Veda

nta

BHP

Alco

a

Alca

n

__________________________________________Source: Hindalco FY07, Vedanta & BHP YTD Dec’06 data, Alcan, Alcoa, Rio Tinto CY06 data.

Highest ever EBIDTA Margin Amongst the best in the industry

36%

50%

44%42%

0%

10%

20%

30%

40%

50%

60%

FY04 FY05 FY06 FY07

Note:EBIDTA includes Other income

EBIDTA Margin %

12

EBIT: At a new highEBIT: At a new high

810

1,109 1,042835

1,092

1,619

2,128

2,929

0

500

1000

1500

2000

2500

3000

3500

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

(Rs. Crs.)

Smelter Disruption

Indal Acquisition

_______________________Source: Company Data

13

AluminaAlumina

1198

.6

1203

.3

1159

.6

100%103%104%

0

200

400

600

800

1000

1200

1400

FY05 FY06 FY07

Prod

ucti

on (

Kt)

70.0%

76.0%

82.0%

88.0%

94.0%

100.0%

106.0%

Cap

acity

Util

isat

ion%

Alumina ProductionCapacity Utilisation%

Alumina: Capacity utilisation Special Alumina Sales as % of total Alumina Sales

49%

35%39%

0%

10%

20%

30%

40%

50%

60%

FY05 FY06 FY07

Standard Alumina realisation(Hindalco Vs Market):

596

481 481

550

281

218

347

0

100

200

300

400

500

600

700

Q1 FY07 Q2 FY07 Q3 FY07 Q4 FY07

US$

/Mt

Hindalco realisation

Alumina market price

• Consistently sweating the assets to the maximum

level.

• Focus on Speciality Alumina to increase the

profitability and reduce volatility.

• Alumina Realisation higher than market due to

the judicious blend of long term contracts

entered by the company along with a portion of

spot sales.

14

Aluminium ProductionAluminium Production……. At an all time high. At an all time high

Highest Ever Production of Metal, Wire rod, Rolled and Extrusions

3232

8

2618

4

3828

2

2569

9

4291

40

1905

80

6773

0

4426

85

2110

88

6899

8

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

Metal Rolled Wire rods Extrusions Foils

FY 06 FY 07

Aluminium Production (KT)

15

Value added Products Value added Products …………registers continuous improvementregisters continuous improvement

583

613

2,546

2,638

Foil & wheelsExtrusions

Rolled Products

Primary Products

522

410

1,870

2,153

Foil & Wheels

Extrusions

Rolled Products

Primary Products

25.7

32.2

0

5

10

15

20

25

30

35

FY04 FY05 FY06 FY07

Rs/

Kg

Mark up

27.7

35.7

0

5

10

15

20

25

30

35

40

FY04 FY05 FY06 FY07

Rs/

Kg

Mark Up

Rolled- Domestic

Extrusions

Markup in the downstream business has improved consistently.

Sales Revenue- FY06 Rs.4955 Crores

Sales Revenue- FY07 Rs.6380 Crores

VAP Share 57%

VAP Share 59%

Note: Markup normalised for customs duty

Note: Markup normalised for customs duty

CopperCopper--Business PerformanceBusiness Performance

17

Cathode production up 80 KT (38%) YoY

LME Backwardation has come down from US$162/t in FY06 to 29 $/t in FY 07

(for 3M spread) , In Q4 LME moved from Backwardation to Contango of US$ 18/t

Copper cathode sales was up by 73KT (33%) in FY07

Achieved highest ever Copper sales of 29 kt in Feb’07

In FY 07 Domestic market share increased to 46 % from 43 % in FY 06.

Operating efficiency and Conversion cost improved.

Better realisation due to improved product mix.

FY 07 Key levers of PerformanceFY 07 Key levers of Performance

18

FY 07 FY 07 –– Copper Production PerformanceCopper Production Performance

15

45

61

88

0

10

20

30

40

50

60

70

80

90

H1 FY06 H2 FY06 H1 FY07 H2 FY07

Kt

Production trend of Cu III

99111

136

154

-10

10

30

50

70

90

110

130

150

170

H1 FY06 H2 FY06 H1 FY07 H2 FY07

Kt

Overall Copper Cathode Production

Copper Production grew by 38% during the year

19

Improving Market shareImproving Market share

Source: Hindalco

18% 43%39%

14%46%

40%

BC SIL HCL & SWIL

FY06 FY07

BC continues to be the Market leaderBC continues to be the Market leader

Aluminium Business OutlookAluminium Business Outlook

21

World Aluminium Market in Deficit during 2006World Aluminium Market in Deficit during 2006

Overall deficit of 486 Kt. The consumption growth at 8% was led essentially by China

____________________Source: CRU Quarterly April 2007

Aluminium Production Aluminium Consumption

33906

31970

29883

28017

8.7%

6.0%

7.0%6.7%

0

5000

10000

15000

20000

25000

30000

35000

40000

2003 2004 2005 20060%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%Production (Kt)

Growth %

343923184230314

27654

9.6%

8.0%8.3%

5.0%

0

5000

10000

15000

20000

25000

30000

35000

40000

2003 2004 2005 20060.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%Al. Consumption (Kt)

Growth %

22

Aluminium Stock position (Aluminium Stock position (LME+Comex+ShanghaiLME+Comex+Shanghai))

500000

700000

900000

1100000

1300000

1500000

1700000

1-Apr-0

316

-Jun

26-A

ug4-N

ov16

-Jan

26-M

ar10

-Jun

19-A

ug-0429

-Oct-

0412

-Jan-05

23-M

ar-05

7-Jun-05

16-A

ug-0526

-Oct-

059-J

an-06

20-M

ar-06

12/M

ay/06

24/Ju

l/06

3/Oct/

0611

/Dec

/0622

/Feb/07

800

1,300

1,800

2,300

2,800

3,300

3,800

Total Inventory (tonnes)

LME - CSPUS$/tonne

US$ 2792/Mt

962615 Mt

US$/MtInventory (Mt)

23

-6000

-4000

-2000

0

2000

4000

6000

Asia*

W. Euro

peN. A

merica

E. Eu

ropeChin

aMiddle Ea

stAfric

aLa

t. Americ

aAus

tralia CIS

World

kt

2005 2006 2007 2008 2009 2010

Though market is expected to be back to surplus during 2007; AsiThough market is expected to be back to surplus during 2007; Asia a (excl. china and middle east) continues to be major deficit area(excl. china and middle east) continues to be major deficit areass

KT

80

-486

576

458

226

315

-400

-300

-200

-100

0

100

200

300

400

500

600

2005 2006 2007 2008 2009 2010

World Metal balanceWorld Metal balance Regional Metal balanceRegional Metal balance

____________________Source: CRU Quarterly April 2007

____________________Source: CRU Quarterly April 2007

* Asia excluding China and Middle East

24

There is tremendous long term growth potential in the countryThere is tremendous long term growth potential in the country…………

1.3

4.5

8.5

20.8

28.130.5

31.732.9 33.8

Indi

a

Braz

il

Chi

na

Fran

ce

Italy

Can

ada

USA

Japa

n

Ger

man

y

Per capita consumption (kg/capita)Per capita consumption (kg/capita)

China had 1.3 per capita consumption in1989-90 Source: Alcan Jan’07

If and when India achieves 50% of Chinese per capita consumption, the aluminum consumption in India will reach 4.2 Mn tonnes/annum (More

than 3 times the existing level)

25

HindalcoHindalco--Taking the lead in driving the marketTaking the lead in driving the market

The Consistent efforts of Our Market Development Cell is expected to result in

Aluminium consumption growth in the following markets during FY08.

Motor Cycles-Muffler/Handle bar/Connector

Windmills-Platforms/Nacelle Cover

Pallets- For Yarn Storage/Transport

Cycles – Aluminium Frames.

Railway Wagons

Roof-on-Roof Structures.

Three Aluminium Galleries already opened across the country. Many more are in the

pipeline.New Product

26

Alumina Alumina -- Market Outlook Market Outlook

Alumina Production expected to reach 74.54 Mn T in 2007 – 10% y-o-y growth.

The Alumina market is expected to be in surplus driven mainly by china –

approx. 5 million tonnes of alumina capacity expected to be added in China

alone during 2007.

Average spot Prices at present at ~ US$400/Mt level mainly due to Bauxite

supply disruptions at Guinea.

Re-processors in China becoming active with softening of MGA prices- will erode

prices in low value specials.

With increasing competition and lower MGA prices, softening of Specials prices

expected in 2007 & 2008.

27

Copper Business OutlookCopper Business Outlook

28

0

5000

10000

15000

20000

25000

2003 2004 2005 2006 2007 2008 2009-2%

0%

2%

4%

6%

8%

10%

MT CAGR

Copper Copper –– Demand & Market BalanceDemand & Market Balance…………....Kt Cu

Source: Brook Hunt

World Concentrate Market Balance

-300

-200

-100

0

100

200

300

400

500

600

700

2003 2004 2005 2006 2007 2008 2009

World Cu Demand Growth Rate

China Cu Demand Growth Rate

Demand growth in India and China projected to be strong

CAGR – 3.7 % 2007-09

0

1000

2000

3000

4000

5000

6000

2003 2004 2005 2006 2007 2008 20090%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

MT CAGR

Kt Cu

Kt Cu

0

100

200

300

400

500

600

700

2003 2004 2005 2006 2007 2008 20090%

2%

4%

6%

8%

10%

12%

14%

16%

18%

MT CAGR

India Cu Demand Growth RateKt Cu

CAGR – 9.5% 2007-09CAGR – 7% 2007-09

29

Significant growth prospects in the country Significant growth prospects in the country ……..

15.8

10.3

7.2

3.0

0.4

0

2

4

6

8

10

12

14

16

Germany Japan USA China India

Copper Per Capita Consumption Pattern

Kg/Person

Per capita consumption of Cu in India promises lot of potential in Indian market.

30

To Sum upTo Sum up

Strong metal prices in the current fiscal with some softening towards the end.

Continued cost push

Domestic market expansion to continue

Benefits to flow from

Focus on value added products

Enhanced capacity though its impact in FY08 will be marginal

Concentrate availability poor; Tc/Rc coming down sharply

Significant improvement in Copper production

Combination of factors like Cost Push, Reduced Customs duty & Strong rupee will make the current year a very challenging one. We are, however, confident

to overcome them by the steps already planned.

NovelisNovelis

32

Transportation15% Beverage

36%

Construction & Industrial

24%

Foil/Packaging

21%

Other4%

Novelis: Global Leader in Rolled AluminiumNovelis: Global Leader in Rolled Aluminium

2005 Global AluminiumRolled Products Production

Source: CRU, based on production data and Novelis estimates

Global leader in rolled aluminium: #1 rolled products supplier worldwide

Leader in: – Fusion technology

– Can, auto, foil markets

– Europe, Asia & S-A

– Rolling technology

– Continuous casting technology

– Recycling

2005 Global AluminiumRolled Products Production

Alcan6%

Novelis19%

Alcoa16%

Norsk Hydro6%

Aleris/Corus6%

Others47%

100% = 15,600ktTop 5 = 53%

33

NovelisNovelis: Global Aluminium Footprint: Global Aluminium Footprint

Employees: 3,000Revenues: $3.3bnShipments: 1,194kt 1

North America

Note:1 Shipments exclude inter-segment sales

Employees: 2,100Revenues: $0.6bnShipments: 288kt 1

South America

Employees: 1,600Revenues: $1.4bnShipments: 524kt 1

AsiaEurope

Employees: 5,500Revenues: $3.1bnShipments: 1,081kt 1

Employees: 12,5002005 Revenues: $8.4bn2005 Rolled Product Shipments: 2,873kt2005 Ingot Product Shipments: 214kt

Novelis Total

36 manufacturing facilities in 11 countries

Leading Market PositionLeading Market PositionLeading Market Position

Leading Market Position

Blue chip customer base: Coke, Pepsi, Rexam, Ford, Ball, Thyssen, Toyota, etc.

34

NovelisNovelis –– Global Market PositionGlobal Market Position

35

Financing StructureFinancing Structure

3550TOTAL

450Hindalco's Treasury

3100Recourse Financing by banks

on Corporate Guarantee of

Hindalco

HINDALCO NOVELISFigures in USD Millions

Novelis Enterprise Value ~ USD 6 billion

2400TOTAL

1400High Yield Bonds

1000Term Loans

Non Recourse Backstop committed

by banks on Novelis Balance Sheet

to refinance existing debt on

Change of Control

BackdropBackdrop

Business Performance & OutlookBusiness Performance & Outlook

Detailed Q4 & FY07 FinancialsDetailed Q4 & FY07 Financials

37

Financial HighlightsFinancial Highlights

2852

4385

2106

3505

1655

2564

11397

18313

FY06 FY07

EBIDTA PBTPAT Sales

Rs. crores

FY 2007

1004

1173

797

958

626721

3657

4749

0

200

400

600

800

1000

1200

1400

Q4 FY06 Q4 FY07

EBIDTA PBT PAT Sales

Rs. crores

Q4 FY 2007

61%

EBIDTA > $1 Bn.

Highest ever sales and Profits in Q4 07 and FY 07

54%

66%

55%

30%

20%

15%

17%

Sustained Performance– Q on Q

475398

435

797 814 838896

958

379314 336

626 602 598644

721

FY06 Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY07 Q1 FY07 Q2 FY07 Q3 FY07 Q4

PBT PAT

Rs. crores

39

Drivers of Performance : FY07Drivers of Performance : FY07

UOM FY'06 FY07

LME - Aluminium $/T 2029 2664

Rs/USD 1$ = Rs. 44.17 45.25

Custom Duty on Al. % 10.6% 7.7%

Domestic Metal Prices Rs./T 98,256 125,436Standard Alumina $/T 401 498 % of LME % 19.8% 18.7%

Copper LME $/T 4105 6862

TcRc C/Lb 22.03 34.01

Duty Differential in Copper % 5.7% 4.9%

40

Detailed Financial ResultsDetailed Financial Results

(In Rs. Crores) % Q4 Q4 % FY07 FY06 Chg FY07 FY06 Chg

Net Sales 18,313.0 11,396.5 61% 4,748.9 3,657.4 30%Other Income 370.1 243.9 52% 123.3 74.3 66%PBDIT 4,385.1 2,852.0 54% 1,173.2 1,004.1 17%Interest & Finance Charges 242.4 225.2 -8% 57.7 62.4 7%Depreciation & Impairment 638.1 521.1 -22% 157.6 144.3 -9%Profit Before Tax 3,504.6 2,105.7 66% 957.9 797.4 20%Provision for Taxes 940.3 450.2 -109% 236.6 171.1 -38%PAT 2,564.3 1,655.5 55% 721.3 626.3 15%E.P.S. (Rs.) 25.5 16.8 52% 7.2 6.4 13%C.E.P.S. (Rs.) 31.9 22.1 44% 8.7 7.8 12%

41

Segment ResultsSegment Results

40%

85%

60%

60%

15%

40%

Sales

EBIT

C.E

Aluminium Copper

Business Mix – FY07

FY07 FY06 % Chg FY07 FY06 % Chg

Net Sales & Op. Revenues 7,344 6,042 22% 10,978 5,354 105%

EBIT 2,929 2128.1 38% 517.1 19.3

EBIT Margin 39.9% 35.2% 4.7% 0.4%

Capital Employed 7,451 6,579 13% 4,931 5,074 -3%

ROCE (%) 41.8% 35.2% 10.3% 0.4%

Particulars Rs Crs.

Aluminium Copper

ALUMINIUMALUMINIUM

43

Aluminium Business: FY07 HighlightsAluminium Business: FY07 Highlights

First line of 214 pots- Prebake Smelter

commissioned at Hirakud

Metal Production increased by 3.2% to

442,685 MT

VAP (Rolled and Extrusion) Production

increased to 249,370 MT, an increase of

12.5% Over FY 06.

Domestic and Export Realisations

increased due to higher LME, Higher

Alumina prices and Rupee Depreciation

1,6831,437Exports

Highest ever Sales, Profits and Exports

2684

3694

2128

2929

6042

7344

FY06 FY07EBIDTA EBIT Sales

Rs. crores 22%

38%

38%

44

Aluminium: Production Performance Aluminium: Production Performance –– FY07FY07

Present Capacities fully stretched.

Brownfield Expansions will Kick in from FY 08.

Unit FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgAlumina MT 1,198,658 1,203,383 -0.4% 296,411 299,006 -0.9%Metal MT 442,685 429,140 3.2% 114,334 106,825 7.0%Wire Rods MT 68,998 67,730 1.9% 16,948 16,738 1.3%Rolled Products MT 211,088 190,580 10.8% 48,322 45,536 6.1%Extrusions MT 38,282 32,328 18.4% 9,525 9,044 5.3%Foil MT 25,699 26,184 -1.9% 6,144 6,315 -2.7%Alloy Wheels Nos. 196,621 194,079 1.3% 45,193 58,569 -22.8%Power MU 8,315 7,845 6.0% 2,074 1,963 5.7%

45

Aluminium: Sales RevenuesAluminium: Sales Revenues

Sales Revenue FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgAlumina Rs.Crs. 732 801 -9% 197 241 -18%Primary Metal Rs.Crs. 1,701 1,448 17% 533 397 34%Wire Rod Rs.Crs. 915 705 30% 233 201 16%Rolled Products Rs.Crs. 2,541 1,860 37% 691 529 31%Extrusions Rs.Crs. 609 410 49% 170 121 40%Foils Rs.Crs. 543 485 12% 132 123 8%Wheels Rs.Crs. 40 37 8% 10 11 -6%Others Rs.Crs. 263 296 -11% 76 103 -26%Net Sales Rs.Crs. 7,344 6,042 22% 2,042 1,726 18%Of which Exports Rs.Crs. 1,683 1,437 17% 523 387 35%

46

1,860

2,541

410

609

485

543

FY06 FY07

DeDe--risk Product Portfolio risk Product Portfolio –– Focus on Value Added Focus on Value Added ProductsProducts

151,568169,866

38,11026,003

25,366

32,181

FY06 FY07

FoilsExtrudedRolled

VAP Revenues (Rs. Crores)VAP Sales Volumes (MT)

209752209752

233342233342

27552755

36933693

Recently acquired Mouda Sheet Plant and and Sangam Extrusion Press Harnessed

47

Aluminium Business Profitability Aluminium Business Profitability –– FY07FY07

Rs. Crs Sales increased by 21.5%

EBIT increased by 37.6% YoY.

Margins improved to 40% from 35%, backed by:-

Improved realisations and higher volumes

Improved operating efficiencies

Despite

Higher cost of Bauxite, Coal, caustic soda , furnace oil and Pitch

3,914

2,128

6,042

4,415

2,929

7,344

FY06 FY07

Segment Expenses Segment EBIT

COPPERCOPPER

49

Copper Business: FY07 HighlightsCopper Business: FY07 Highlights

Copper Cathode Production Increased by 38% to 290,425 MT

Sales of value added CC Rods grew 24% to 109,510 MT

Gold production increased to 10.334 MT, an increase of 54 %

Sulphuric Acid Production increased by 40% to 892,597 MT against 639,414 MT in FY 06,

Improved realisations due to higher LME, Higher TcRc and Rupee Depreciation

Sharp Turnaround

192

774

19

517

5354

10978

FY06 FY07EBIDTA EBIT Sales

Rs. crores 105%

304%

50

Copper : FY07 ProductionCopper : FY07 Production

Copper 3 Smelter Ramp up on higher trajectory

Production Unit FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgCopper Cathodes MT 290,425 210,227 38.15% 81,460 66,748 22.04%CC Rods MT 109,033 88,687 22.94% 30,076 23,725 26.77%DAP/NPK MT 219,333 218,199 0.52% 53,794 55,850 -3.68%Sulphuric Acid MT 892,597 639,414 39.60% 240,860 223,146 7.94%Gold Kg 10,334 6,711 53.98% 2,961 1,951 51.77%Silver Kg 48,462 35,079 38.15% 17,827 9,879 80.46%

51

Rs. Crs.Rs. Crs.

Copper: FY07 Sales RevenuesCopper: FY07 Sales Revenues

Product FY 07 FY 06 % Chg Q4 FY 07 Q4 FY 06 % ChgCopper Cathodes 5667 2462 130.2% 1320 984 34.2%CC Rods 3572 1919 86.1% 791 589 34.3%DAP/NPK 348 319 9.2% 84 96 -12.0%Sulphuric Acid 48 47 2.7% 12 18 -33.3%Gold 944 452 109.0% 274 147 86.2%Silver 89 40 122.1% 35 12 187.3%Others 309 115 167.6% 194 86 126.6%Total Sales 10978 5354 105.0% 2711 1932 40.3%of which Exports (FOB) 5322 2249 136.7% 1207 908 33.0%

52

5,335

19

5,35410,46

1

517

10,978

0

2,000

4,000

6,000

8,000

10,000

12,000

FY06 FY07

Segment Expenses Segment EBIT

Sales more than Doubled

Segment EBIT Higher than FY 06 due to

Higher Sales Volumes

Improved Efficiencies

Higher LME

Better TcRc

Despite

Target Plus Impact

Smelter II Impairment

Input Cost Escalations

Rs. Crs.Rs. Crs.

Copper Business Profitability Copper Business Profitability -- FY07FY07

53

Other Income Other Income -- FY07FY07Other Income increased due to:-

Higher Interest income on Income Tax refund

Rs. Crs

INR Average Yields

244

370

FY06 FY07 Other Income

The hardening at the short end of the yield curve has reflected The hardening at the short end of the yield curve has reflected in Treasury yields in Treasury yields

4.50%

5.50%

6.50%

7.50%

8.50%

FY-06 5.66% 5.97% 6.73% 7.12%

FY-07 7.22% 6.96% 7.52% 7.78%

Overnight 1 year 5 Year 10 Year

Interim Dividend received. From Group Companies

54

Interest & Finance Charges Interest & Finance Charges –– FY07FY07

Net Interest and finance charges higher than last year due to

Increase in working capital

requirement at Copper driven by

higher LME

Lower interest capitalization due

to completion of Copper III

Increase in average borrowing

cost

225 242

30

176255

418

FY06 FY07

Net Int. CapitalisedNet InterestGross Interest

Rs. Crs

55

Taxes Taxes –– FY07FY07

Provision for Current Taxes higher mainly due to

Higher pre-tax profits which rose 66% YoY and

Lower proportion of income exempt from tax.

Deferred Assets have been created for Impairment of Assets. 334

116

995

-55

FY06 FY07

Current Tax Deferred Tax

Rs. Crores

940

450

Effective Tax Rate : 26.8% vs. 21.4% (last year)

649

Thank YouThank You

Sustained Performance– Q on Q

475398 435

797 814 838896

958

FY06 Q1 FY06 Q2 FY06 Q3 FY06 Q4 FY07 Q1 FY07 Q2 FY07 Q3 FY07 Q4

PBT

Rs. crores

58

Aluminium: Sales VolumesAluminium: Sales Volumes

Sales Tonnage Unit YTD YTD % Chg Q4 Q4 % Chg FY07 FY06 FY07 FY06

Alumina MT 299,762 388,646 -23% 86,427 106,295 -19%Primary Metal MT 134,756 146,785 -8% 40,884 35,755 14%Wire Rod MT 69,067 67,895 2% 17,439 16,834 4%Rolled Products MT 169,866 151,568 12% 45,708 39,830 15%Extrusions MT 38,110 32,181 18% 10,344 8,810 17%Foils MT 25,366 26,003 -2% 5,950 6,255 -5%Wheels Nos 188,772 199,403 -5% 46,118 61,494 -25%

59

Copper : FY07 Sales VolumesCopper : FY07 Sales Volumes

Sales Volumes Units FY07 FY06 % Chg Q4 FY07 Q4 FY06 % ChgCopper Cathodes & others MT 181,944 130,436 39.49% 51,275 44,182 16.05%CC Rods MT 109,510 88,331 23.98% 31,039 23,851 30.14%DAP/NPK MT 220,935 216,902 1.86% 54,389 51,850 4.90%Sulphuric Acid MT 559,033 294,755 89.66% 153,789 129,547 18.71%Gold KG 10,484 6,736 55.65% 3,041 1,921 58.31%Silver KG 48,716 35,973 35.42% 19,227 9,560 101.11%