EQUITY SHARES VALUATIONS

VALUATION OF EQUITY: AN ANALYSIS
Before presenting an analysis of the results obtained, a brief profile Hindalco Aluminium Ltd. is provided.

Hindalco Industries Limited, a flagship company of the Aditya Birla Group, is structured into two strategic business -Aluminium and Copper and is an industry leader in both. A non-ferrous metals powerhouse with a turnover of Rs. 11,396 crore (Fy06), Hindalco’s integrated operations and operating efficiency have positioned the company as Asia’s largest integrated primary producer of aluminium and among the most cost efficient producers gloablly. Its copper smelter is today the world’s largest custom smelter at a single location.

Established in 1958, Hindalco commissioned its aluminium facility at Renukoot in eastern U.P. in 1962 and has today grown to become the country’s largest integrated aluminium producer and ranks among the top quartile of low cost producers in the world.

With a strategic intent to achieve vertical integration in the copper business, Hindalco acquired two capitve copper mines in Australia - Nifty and Mt. Gordon through Aditya Birla Minerals Limited.

Some recent milestones
In May 2007 the company signed an M0U with the Government of Madhya Pradesh for setting up a Greenfield aluminium smelter and a captive power plant. The company also entered into a joint venture with Essar Power (M.P.) Ltd. To develop and operate coal mines at Mahan, Madhya Pradesh. The joint venture will supply coal to the proposed aluminium smelter and power complex in Madhya Pradesh.

In May 2006, the company’s copper mining subsidiary Aditya Birla Minerals Limited (formerly Birla Mineral Resources Ptv. Ltd. Came out with an equity offering and subsequent listing on the Australian Stock Exchange (ASX).

In March 2006, the company acquired an aluminium rolling mill and wire rods facility, from Asset Reconstruction Company (India) Limited (ARCIL), belonging to Pennar Aluminium Company Limited.

In January 2006, the company concluded 4:1 rights issue of its shares on partly paid basis. It was the largest ever rights issue in the history of corporate India and first one to issue partly paid instruments.

In September 2005, the company split its shares in ratio of 10:1 in order to enhance liquidity and to encourage participation from retail investors.

April 2005, the company signed an MOU to establish a world class aluminium project in the state of Orissa.

In April 2005, the company entered into MOUs with the Orissa and Jharkhand government for setting up a green field alumina facility and aluminium facility respectively, in the states.

In March 2005, the company entered into an M0U with the Government of Jharkhand to set up aluminium smelter and captive power plant in the state.

In August 2004, the boards of Hindalco and Indal approved a scheme of arrangement in which all assets of Indal other than the foil unit at Kollur in Andhra Pradesh were to be de-merged into Hindalco. This came into effect from 1 April 2004.

In FY 2002, Hindalco acquired the copper business of Indo Gulf Corporation Limited, a Group company. Over the last two years, with a strategic intent to achieve vertical integration, the copper business of Hindalco has acquired two captive copper mines in Austrialia — Nifty and Mt. Gordon.

In FY 2000, Hindalco acquired a majority stake in Indian Aluminium company Limited (Indal), an Alcan Canada Group Company, which had a major presence in downstream aluminium products and is a leader in specialty alumina chemicals.

Aluminium
Hindalco is one of Asia’s largest producers of primary aluminium and one of the most cost-efficient producers globally. In India, Hindalco enjoys a leadership position in specialty alumina, primary aluminium and downstream products.

Hindalco’s major products include standard and specialty grade aluminas and hydrates, aluminium ingots, billets, wire rods, flat rolled products, extrusions, foil and alloy wheels.

The integrated facility at Renukoot (Uttar Pradesh) houses an alumina refinery and an aluminium smelter along with facilities for production of semi-fabricated products, namelyu, redraw rods, flat rolled products and extrusions. The plant is backed by a co-generation plant and a 742 mw captive power plant at Renusagar to ensure continuos and consistent supply of power or smelter and other operations.

Other facilities include an aluminium smelter at Hirakud (Orissa) with a captive power plant, alumina refineries at Muri (Jharkhand) and Belgaum (Karnataka) and rolling mills at Belur (West Bengal) and Taloja, Mouda, (Maharastra) foil rolling at Kalwa (Maharashta) and Silvassa (UT of Dadra and Ngar Haveli) and an extrusions plant at Alupuram (Kerala). The foil plant t Kollur, Andhra Pradesh is the only remaining entity with the erstwhile Indal after the merger of Indal with Hindalco.

The aluminium alloy wheels plant is located at Silvassa (Dadra and Nagar Haveli). Hindalco was among the first few alloy wheels companies to have obtained the ISO/TS 16949 certification to meet the stringent standard of the automobile industry. All Hindalco units are ISO 9001:2000 and 14001 certified, and several have attained the OHSAS 18001 — the occupational health and safety certification.

The company has two R&D centres: the Belgaum Research and Development Centre in Belgaum, Karnataka and Taloja Research and Development Centre in Taloja, Maharashtra. They have been recognized by the Government of India’s Department of Scientific and Industrial Research (DSIR).

A strong presence across the value chain and synergies in operations have given Hindalco a dominant share of the domestic value-added products market. In India, the company enjoys a leadership position in specialty aluminas and hydrates as well as in primary aluminium and downstream semi-fabricated products. As a step towards expanding the market for value-added products and services, Hindalco launched several brands in recent years. These include the Aura Aluminium Alloy Wheels for cars, Everlast Roofing Sheets and Freshwrapp and Freshpakk household foil for packaging.

Apart from being a dominant player in the domestic market. Hindalco’s products are well accepted in international markets. Exports account for more than 20 percent of total sales of aluminium products.

SHOWING THE WAY
Our Vision
To be a premium metals major, global in size and reach, with a passion for excellence.

Our Mission
To relentlessly pursue the creation of superior shareholder value by exceeding customer expectations profitably, unleashing employee and being a responsible corporate citizen adhering to our values.

Our Values
Integrity
Honesty in every action.

Commitment
On the foundation of integrity, doing whatever it takes to deliver, as promised.

Passion
Missionary zeal arising out of an emotional engagement with work.

Seamlessness
Thinking and working together across functional silos, hierarchy levels, business and geographies.

Speed
Responding to stakeholders with a sense of urgency.

THE MARKET LEADER
Hindalco is a leading domestic player in two non-ferrous metals business segments — aluminium and copper.

The aluminium division’s product range includes alumina chemicals, primary aluminium ingots, billets, wire rods, rolled products, extrusions, foils and alloy wheels.

The company has a significant market share in all the segments in which it operates. It enjoys a domestic market share of 42 per cent in primary aluminium, 63 per cent in rolled products, 20 per cent in extrusions, 44 per cent in foils and 31 per cent in wheels.

Hindalcos portion of sales aluminium is 53% and copper is 47%, which shows that aluminium is having higher volume of sales.

AWARDS (LAURELS)
Hindalco has been active on many fronts, and takes its role as a socially responsible corporate house very seriously. The company has won a number of awards for community welfare and environment protection, as well as for its quality and export performance.

Year 2007
Hindalco won the prestigious “D.L. Shah National Award for Economics of Quality” given by Quality Council of India. Chief Manufacturing Officer, Mr. R.P. Shah and Mr. Arun Kumar received the award from the President of India, H.E. Dr. A.P.J. Abdul Kalam on 9 February 2007 at New Delhi.

Year 2006
The prestigious “National Energy Conservation Award-2006” was awarded to Hindalco by Ministry of Power, Government of India.

The IT department of Hindalco received prestigious IT certificates BS 15000 (IT services), ISO 9001 (Software development) and BS7799 (Information security). Hindalco Renukoot IT department is the first in our group as well as in India to be recommended for all these certifications in an integrated manner.

The prestigious Greentech Safety Award came Hindalco’s way for its outstanding performance towards organization health and safety.

The company’s fabrication plant’s hot mill team won the prestigious Qualtech Award for their project “Reduction of time in work role change time”.

Hindalco received the integrated Management System Certificate from D.N.V. certification agency. This certificate was for ISO-9001, ISO14001, OHSAS-18001 in an integrated manner.

Hindalco, Renukoot has won the National Award for Excellence in Water Management 2006 organized by CII.

Year 2005
Mr. Debu Bhattacharya, Managing Director was conferred with “Asian business leader award for the Aisa corporate citizen of the year” by the CNBC. The award was conferred in recognition of Hindalco’s outstanding contribution to arts, education, the environment and community development.

Mr. Kumar Mangalam Birla, Chairman, has been named “Business Today young super performer in the CEO category”

Hindalco’s fabrication team won the Qualtech Award 2005 presented by Qumpro College, Mumbai.

National Award for Excellence in Water management 2005 (Water Efficient Unit) from CII — Sohrabji Godrej Green Business Centre.

Greentech Environment Excellence Gold Award 2005 from Greentech Foundation, New Delhi.

Year 2004
Hindalco won the forth annual Greentech Safety Gold award for the year 2004-05 in metallurgy sector.

Renusagar Power awarded the Innovation Training and Development (HR) Practices award-2004 by Indian Society for Training & Development, New Delhi.

Joint winner of Aditya Birla planet award 2004 for community initiatives and rural development.

National energy conservation award 2004 in alumium sector by the government of India, ministry of power.

IMC Ramkrishna Bajaj National Quality award 2004 certificate of merit.

Prime Minister’s Shram awards 2004 — Shram Veer award to Mr. Ram Kailash of Alumina Plant and Shram Shree award to Mr. Suresh Prasad of alumina plant.

CII National Award for Excellence in Energy Management 2004.

Year 2003
Hindalco has been awarded the trophy for highest exports — prime metal ferrous and non ferrous (non-SSI) — 2003-04 Engineering Export Promotion Council (EEPC), India in recognition of outstanding export performance of engineering goods and services.

Industrial safety award (runners up) presented to Alupuram smelter for 2003-2005 for lowest average accident frequency by the National Safety Concil, Kerala chapter.

Greentech gold award 2003-04 to Renusagar Power by Greentech Foundation, New Delhi for organizational health and safety.

National Safety Award 2003 by Ministry of Labour and Employment.

Year 2002
FIMI’s Social Awareness Award
The FICCI Socio-Economic Development Foundation’s (FICCI-SEDF) Social Responsiveness Award for the year 2001, for projects on rural development and promoting economic self-reliance in over 334 villages.

Year 2001
The Fair Business Practices’ award by the CFBP Jamnalal Bajaj Uchit Vyavahar Puraskar 2001.

The ‘Outstanding Export Award’ for the years 2000 and 2001 from EEPC and CAPEXIL.

Adjudged the worldwide runner-up for the ‘Millenium Business Award for Environmental Achievement’, under the auspices of the United Nations Environment Programme.

Mother Teresa Commendation Certificate for Community Initiative Activities.
FICCI Award for Community Initiative Activities.
Energy Conservation Award by the Ministry of Power.
Various Awards for Mines Environment and Mineral Conservation by the Indian Bureau of Mines.

Year 2000
Alumina refinery is named as the ‘Best Safety Performing Plant’ in the world by the International Aluminium Institute.

Safety Performance Benchmarking — ‘Joint Best Smelter’ by International Aluminium Institute.
Safety Performance Benchmarking — Best Refinery’ by International Aluminium Institute.
Export Award from EEPC.
Export Award from CAPEXIL.
Annual Report — Best in Asia Winners by CFO Asia.

HAL MANAGEMENT TEAM
AT THE HELM
Board of Directors
Mr. Kuamr Mangalam Birla, Chairman
Mrs. Rajashree Birla.
Mr. C.M. Maniar
Mr. E.B. Desai
Mr. S.s. Kothari
Mr. M.M. Bhagat
Mr. K.N. Bhandari
Mr. A.K. Agarwala
Mr. N.J. Jhaveri
Mr. Debu Bhattacharya, Managing Director

Key Executives
Mr. S. Talukdar, President and Chief Financial Officer

Aluninium and Power
Mr. P. Balakrishnan, Chief Officer — Operations, Renukoot
Mr. S.M. Bhatia, Business — President — foil and Wheel
Mr. S.K. Maudgal, Chief Marketing Officer
Mr. Shankar Ray, Business Head, Chemicals and International Trade
Mr. S. Majumdar, Head Operations — De-merged Indal units
Mr. J. Bhaumik, Joint President, Renusagar Power Plant

Company Secretary
Mr. Anil Malik

Aditya Birla Minerals Limited
Mr. D. Bhattacharya, Chairman
Mr. Sanjay Loyalka, CEO and MD
Mr. M.R. Prasanna, Director
Mr. A Hogendijk, Director
Mr. B.McGowan, Director
Mr. K. Dharmananda, Director

Company Secretary
Mr. Peter Torre