HINDALCO-NOVELIS

Case study

ADITYA BIRLA GROUP A US $28 billion corporation, in the

league of Fortune 500. Extraordinary force of 100,000

employees, belonging to 25 different nationalities.

"The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007.

Over 50 per cent of its revenues flow from its overseas operations

GLOBALLY THE ADITYA BIRLA GROUP IS A metals powerhouse, among the world's

most cost-efficient aluminum and copper producers. Hindalco-Novelis is the largest aluminum rolling company.

No.1 in viscose staple fibre The fourth largest producer of insulators The fourth largest producer of

carbon black The 11th largest cement producer

globally, the seventh largest in Asia and the second largest in India

Among the world's top 15 BPO companies and among India's top four

HIGHLIGHTS OF THE DEAL The acquisition of Novelis by Hindalco

was in an all-cash transaction, which values Novelis at enterprise value of US $6.0 billion, including approximately US $2.4 billion of debt.

After merger Hindalco will emerge as the biggest rolled aluminium products maker and fifth -largest integrated aluminium manufacturer in the world.

HIGHLIGHTS OF THE DEAL The Novelis acquisition will give the

company immediate scale and strong a global footprint

Novelis has a rolled product capacity of approximately 3 million tonne

HIGHLIGHTS OF THE DEAL Novelis is the global leader in aluminium

rolled products and aluminium can recycle, with a global market share of about 19%.

Hindalco has a 60% share in the currently small but potentially high-growth Indian market for rolled products

Novelis will work as a forward integration for Hindalco as the company is expected to ship primary aluminium to Novelis for downstream value addition.

HIGHLIGHTS OF THE DEAL Novelis is a globally positioned

organization, operating in 11 countries with approximately 12,500 employees.

In 2005, the company reported net sales of US $8.4 billion and net profit of US $90 million.

THE MANUFACTURING PROCESS Aluminum manufacture is

accomplished in two phases: Bayer process of refining the

bauxite ore to obtain aluminum oxide

Hall-Heroult process of smelting the aluminum oxide to release pure aluminum

ALUMINUM PRODUCTION CYCLEBauxite ore is

mined;four or five tonnes ofbauxite ore are used to refine into two tonnes of alumina, which is then smelted to yield one ton of aluminium

Bauxite ore is refined into aluminium oxide or alumina

Aluminum* is melted and mixedwith various alloys depending onthe product to be made, thencast into ingot and billets, rolledand extruded; intermediateproducts are then cut, shaped,and molded into wide range ofproducts for use in applicationssuch as airplanes, automotive,beverage cans, and construction

Alumina is reduced to primaryaluminum by the process ofelectrolytic reduction

INGOTS AND BILLETS

ALUMINIUM EXTRUSIONS

ALUMINIUM –ROLLED PRODUCTS

ALUMINIUM –FOILS

ALUMINUM USES IN SOCIETY At Home- window frames, door knobs , utensils in

the kitchen aluminium foils

outdoor furniture, tennis bats, refrigerators, toasters, saucepans, kettles, etc.

Transportation - parts of aircraft, boats and ship construction , Railway carriages

Aluminium Uses In Cars -wheels, engine blocks, suspension components, hoods, transmission housings, wheel spacer bars are made of aluminium. Other parts such as carburettors housings, aluminium handles, few ornaments and logos, brackets, mirrors, air filler adapters, alternator housings, Valve covers are also made of aluminium

ALUMINUM USES IN SOCIETY Packaging-Drink cans, bottle caps, foils,

trays, etc. are all made out of aluminium. Other aluminium uses for packaging are storage boxes, utensil lids, thermos, etc.

Aluminium Uses in ConstructionAluminium scrap, casting, fabricating, pipes, sheets, tubing, tanks, bars, wire, stampings, windows, pins, doors, rods, railings, ladders, shutters, building bridges, skylights, etc. also used in commercial buildings. Staircases are also made from aluminium

ALUMINUM END-PRODUCTS – GLOBAL USES Transportation and construction

applications account for more than one-half of global demand

Aluminum usage differs by region and state of economic development

– In developed economies, the greatest demand is for transportation based applications

– In developing economies, construction-based applications (residential and commercial) are the largest source of demand

ALUMINUM END-PRODUCTS Examples of end-products by segment

– Transportation : aircraft, ships, automotive

– Building & Construction : from screws, nails, and rivets, to siding, gutters, roofing, etc.

– Packaging : soda cans and packaging for keeping food and cosmetics fresh

– Electrical : aluminum conducts electricity almost as well as copper and has a cost advantage, electric transmission lines almost exclusively use aluminum

ALUMINUM END-PRODUCTS – GLOBAL USESMachinery & Equipment : internal

parts of large and small machines and household appliances, assorted tubes, fencing, etc.

– Consumer durables : aluminum foil, containers

ALUMINUM CONSUMPTION Second most consumed metal in world Developed economies account for

about 75% of global consumption Significant growth predicted in

developing world – Overall GDP growth accompanied by

increases in per capita aluminium consumption

– China’s and India’s significant growth is expected to continue

ALUMINUM CONSUMPTION Per capita aluminum consumption in

China & India is still very low compared to developed countries and is expected to follow their historic growth patterns

Growth also driven by the development of new and improved end-use applications

ALUMINUM CONSUMPTION – TOP CONSUMERS

Eight countries are responsible for 2/3 of total world primary consumption

PER CAPITA ALUMINIUM CONSUMPTION

RIO TINTO Market Capitalization : $87 billion, Rio Tinto is far and away the biggest of the major

aluminum-producing companies on the major exchanges. Headquartered in London, England, and Melbourne,

Australia, Rio Tinto was founded in 1873 when a group of investors bought a Spanish mine on the Rio Tinto river.

Rio Tinto’s since evolved in the fourth-largest mining company on the planet, with six different mining divisions.

The important one here is the Rio Tinto Alcan, which focuses on aluminum mining and production.

Rio Tinto Alcan became the largest aluminum company in the world after merging with Alcan, Inc., in 2007. The deal pushed Rio Tinto ahead of Alcoa and Rusal.

RUSAL UNITED COMPANY Total Estimated Assets: $30 billion.

A private aluminum-producing company based in Russia, Rusal produces approximately 12 percent of the world’s aluminum. If they ever go public, investors will likely pounce on the stock. Despite a hefty debt load, the company has interests in 13 mines across 8 countries with more than 90,000 employees on their payroll.

ALCOA, INC Market Capitalization: $12.5 billion

The Aluminum Company of America is the third-largest aluminum producer in the world, behind Rio Tinto and Rusal. Alcoa was founded by Charles Martin Hall in 1903, and Hall himself was a co-inventor of the process used to smelt aluminum to this day. Hall’s prescience helped him establish a number of smelters across the country, and, for decades, the company was the only one legally allowed to supply aluminum in the United States. Today Alcoa has interests in 25 smelters in 8 countries around the world.

ALUMINUM CORPORATION OF CHINA Market Capitalization: $14 billion

Also known as Chalco or Chinalco, the Aluminum Corporation of China is the largest aluminum producer in the People’s Republic of China. It is, in fact, the only producer of alumina in the country. The company owns a 9 percent stake in Rio Tinto and will soon start mining in Peru.

BHP BILITON INC. Market Capitalization: $174 billion

BHP Biliton is the world’s largest mining company with roots in the Indonesian archipelago where mining rights were purchase in 1860. BHP Biliton now has interests in 10 aluminum smelters, bauxite mines and alumina refineries with an output of 1.3 million tons of aluminum every year.

MAJOR PLAYERS IN THE INDIAN ALUMINIUM INDUSTRY Hindustan Aluminium Company

(HINDALCO) National Aluminium Company (NALCO) Bharat Aluminium Company (BALCO) MALCO INDAL

India is world's fifth largest aluminium producer with an aluminium production competence of around 2.7 million tones, accounting almost 5% of the total aluminium production in the world.

India is also a huge reservoir of Bauxite with a Bauxite reserve of 3 billion tones.

HINDALCO: Hindalco is the biggest player in the

aluminium industry in India with around 39% of market share.

An Aditya Birla Group flagship company, Hindalco has its aluminium plant at Renukoot in Uttar Pradesh.

It has various aluminium products with a market share of 42% in primary aluminium, 20% in extrusions 63% in rolled products, 31% in wheels and 44% in foils.

STERLITE INDUSTRIES The aluminium business of Sterlite

Industries Limited comprises of two Indian aluminium giants – BALCO and MALCO. While BALCO is a partially integrated, MALCO is a fully integrated producer of aluminium. Sterlite has got a market share of around 32%.

NALCO: It is also one of the leading aluminium

producers in India. Government of India has a stake of 87.15% in this company. Its aluminium refinery is located at Damanjodi. It also has a smelter located at Angul, Orissa. Currently, NALCO is concentrating on a capex programme to increase its production from 345,000 tonnes to 460,000 tonnes.

KUMAR MANGALAM BIRLA, CHAIRMAN, HINDALCO INDUSTRIES

'We look upon the aluminium business as a core business that has enormous growth potential in revenues and earnings,' 'Our vision is to be a premium metals major, global in size and reach .... The acquisition of Novelis is a step in this direction'

PROFILE - HINDALCO Hindalco , a leader in Asia's aluminum

and copper industries, and is the flagship company of the Aditya Birla Group, a $14 billion multinational conglomerate, with a market capitalization in excess of $23 billion.

Established in 1958, Hindalco is currently structured into two strategic businesses, aluminum and copper, with 2006 revenues of approximately $2.6 billion.

market capitalization $4.3 billion.

PROFILE - HINDALCO Hindalco's copper division is situated in

Dahej in the Bharuch district of Gujarat Its copper smelter is the world's largest

custom smelter at a single location largest integrated aluminium producer in

the India and ranks among the top quartile of low cost producers in the world

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

PROFILE - HINDALCO Following the transaction, Hindalco, with

Novelis, will be the world's largest aluminum rolling company, one of the biggest producers of primary aluminum in Asia, and India's leading copper producer

PROFILE NOVELIS The Company operates in 11 countries, has

approximately 12,500 employees, and reported $8.4 billion in 2005 revenue.

Novelis Inc is the world's leading producer of aluminum rolled products

Novelis has manufacturing presence in 4 continents and has marketing presence worldwide.

Novelis has 33 operating plants and 3 research facilities in 11 countries, across 4 continents

PROFILE NOVELIS

PROFILE NOVELIS In the spin-off process, Novelis ended up

inheriting a debt mountain of almost $2.9 billion on a capital base of less than $500 million

It buys primary aluminium, processes it into

rolled products like stock for soft drink cans, automotive parts, etc., and sells it to customers such as Coke and Ford

PROFILE NOVELIS But the management took a wrong call on aluminium prices. In a bid to win more

business from soft drink manufacturers, it promised four customers not to increase

product prices even if raw material aluminium prices went up beyond a point

A few months after Novelis signed those contracts, aluminium prices shot up 39 per cent (between 30 September 2005 and 2006). To these four customers, Novelis was forced to sell its products at prices that were lower than raw material costs.

PROFILE NOVELIS These four account for 20 per cent of

Novelis’s $9-billion revenues. But the management’s wrong judgment led to losses of $350 million (in 2006).

By January 1, 2010, all the sales contracts will get expired and profitability will increase substantially from then onwards.

NOVELIS FINANCIAL DATA

YEAR NET SALES PBT PAT

2006 9849 (278) (275)

2005 8363 224 96

2004 7755 231 55

STRATEGIC RATIONALE FOR ACQUISITION Immediate global reach and scale

along with technological expertise Downstream business derives its

margin through conversion mark-up, should act as a natural hedge for LME-driven, volatile, upstream commodity business

Industry leading technology, assets and expertise can be leveraged to grow high-value-added, flat rolled products in fast-growing markets such as India and China

STRATEGIC RATIONALE FOR ACQUISITION In 2003 Hindalco was a upstream player in

commoditized industry ( it made aluminum), so its profits varied overtime.

It decided to add downstream operations (converting aluminum into aluminum products) to its portfolio to steady the profit stream and reduce its dependence on commoditized business.

To that end it acquired two leading downstream companies in the aluminum industry (Indal in India & Novelis in North America

STRATEGIC RATIONALE FOR ACQUISITION Post acquisitions, the company will get a

strong global footprint. After full integration, the joint entity will

become insulated from the fluctuation of LME Aluminium prices.

STRATEGIC RATIONALE FOR ACQUISITION Upstream growth through organic

route; a prudent mix of Brownfield & Greenfield expansions Downstream growth through acquisition (Novelis)

STRATEGIC RATIONALE FOR ACQUISITION Post acquisitions, the company will get a

strong global footprint. After full integration, the joint entity will

become insulated from the fluctuation of LME Aluminium prices

The deal will give Hindalco a strong presence in recycling of aluminium business. As per aluminium characteristic, aluminium is infinitely recyclable and recycling it requires only 5% of the energy needed to produce primary aluminium

STRATEGIC RATIONALE FOR ACQUISITION Novelis has a very strong technology for

value added products and its latest technology ‘Novelis Fusion’ is very unique one.

It would have taken a minimum 8-10 years to Hindalco for building these facilities, if Hindalco takes organically route.

As per company details, the replacement value of the Novelis is US $12 billion, so considering the time required and replacement value; the deal is worth for Hindalco.

ACCESS TO NEW SET OF CUSTOMERS… Coca-cola Budweiser Ford GM Audi BMW

NOVELIS FUSION

STRATEGIC RATIONALE FOR ACQUISITION Novelis being market leader in the rolling

business has invested heavily in developing various production technologies. One of such technology is a fusion technology that increases the formability of aluminium. This means that it can be better used formed into the design requirement by the car companies

All raw aluminium is processed so that it can be used in products. Forty percent of the products are rolled products and Novelis is in leader in rolling business with a market share of 20%.

STRATEGIC RATIONALE FOR ACQUISITION Any change in the raw material price is directly

passed on to the customers who range from coca cola to automobile companies like Aston martin

The current revenue of Hindalco is very much dependent on the aluminium prices and when the prices are high they make a larger margin, this not the case with rolling business which usually has a constant margin. For Hindalco to develop such technology will take a lot of time. According to “Standard and Poor” it would take 10 years and $ 12 billion to build the 29 plants that Novelis has with capacity of close to 3 million tonnes.

VALUATION FOR ACQUISITION Analysts believe the Birlas are paying

too high a price for a company that incurred a loss of US $170 million for the nine months ended 30 September 2006.

Hindalco paid US $44.93 a share for a loss-making company

Novelis share prices never crossed US $30 during 2005 and 2006.

VALUATION FOR ACQUISITION The valuation for the enterprise value for the

deal works out to around 11.4 times the company’s EBITDA, and this is a highier compared to global peers. Alcan trades at around 5.8 times its 2006 EBITDA and Alcoa at 5.5 times.

It would have taken a minimum 8-10 years to Hindalco for building these facilities, if Hindalco takes organically route.

As per company details, the replacement value of the Novelis is US $12 billion, so considering the time required and replacement value; the deal is worth for Hindalco.

FUNDING STRUCTURE FOR THE DEAL: The funding structure of this deal is

remarkably different from the leveraged buyout model that Tata Steel used to fund the Corus buy.

The Tatas purchased 100 per cent of Corus’ equity for $12.1 billion. Only $4.1 billion of this is being raised by the Tatas.The remaining $8 billion was raised (as debt) and repaid on the strength of the Corus

balance sheet. Effectively, the Tatas paid only a third of the

acquisition price.

FUNDING STRUCTURE FOR THE DEAL: This was possible because Corus had

relatively low debt on its balance sheet and was able to borrow more.

But that is not the case with Novelis. With a debt-equity ratio of 7.23:1, it can’t borrow any more.

To buy the $3.6 billion worth of Novelis’s equity, Hindalco is now borrowing almost $2.85 billion (of the balance, $300 million is being raised as debt from group companies and $450 million is being mobilised from its cash reserves).

FINANCIAL HIGHLIGHTS Since the acquisition by Hindalco, the

company’s earnings performance on a normalized basis has improved significantly when compared to the prior year. 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. This position has been solidified by

Stronger earnings performance Refinancing of Senior Secured Credit

Facilities Better working capital management

HINDALCO NET SALES & PAT

YEAR NET SALES PAT OPM

2004-05 9523 1329 23.86

2005-06 11355 1655 22.25

2006-07 18313 2564 21.9

2007-08 19118 2861 17.1

2008-09 18220 2230 16.03

2009-10 19536 1916 15.20

In Rs-crores

CONSOLIDATED FINANCIAL HIGHLIGHTSRESULTS FY 2006-07 FY 2007-08

Net Sales 19,316 60,013

EBITDA 4,840 7,291

Net Profit 2,686 2,387

CapitalEmployed

23,285 56,266

Rs Crores

HINDALCO(CONSOLIDATED) NET SALES & PAT

YEAR NET SALES

EBIDTA PAT OPM EPS

2007-08

60013

13645 7291 14.1% 17.04

2008-09

65963

3661 483.9 12.6 3.21

2009-10

60722

10069 3925.5 9.1% 22.17

In Rs-crores

2008/09 includes non-cash unrealized derivative loss of

around Rs. 2,381 crores

CONSOLIDATED RESULTS Consolidated revenues were lower at Rs.

60,722 crore, mainly due to lower aluminum prices and softness in the Company’s end-markets in the first half of the year, especially for Novelis.

Further, change in the status of Idea Cellular Ltd. from joint venture to associate w.e.f from 01 Jan 2009 for the purpose of consolidation, also resulted in proportionate revenue from Idea not being included in the consolidated revenues.

CONSOLIDATED RESULTS Profit before depreciation, interest and

taxes soared to a record level of Rs.10,069 crore from Rs. 3,661crore in FY09.This includes USD 578 million of unrealised gains consisting of USD 504 million reversal of previously recognised losses upon settlement of derivatives and USD 74 million of unrealised gains relating to mark to market adjustments on metal and currency derivatives at Novelis.

.

CONSOLIDATED RESULTS Aluminium business revenue fell by 11%

to Rs.48,091 crore on the back of lower LME and lower demand in first half of the year. Earning before interest and tax turned around from a loss of Rs.425 crore to a profit of Rs.5,998 crore. This reflects steady improvements in operations across the board. Copper business revenue increased by 13% to Rs.12,575 crore and EBIT trebled from Rs.374 crore to 1,003 crore

Overall results clearly reflect derisked business portfolio in terms of geographic and product mix.

REASONS FOR HINDALCO TO BID

1 De-risked Operations owing to Presence in multiple geographies Costs and revenues in different

currencies Presence across the value chain 2 Hindalco Cost Advantage & Novelis

Technology & customer base, offers Enormous growth potential especially In emerging markets

The flagship company of Aditya Birla group, Hindalco Industries revealed that its consolidated net profit for the year ended March 2010, escalated sharply due to enhanced productivity at its Canadian subsidiary Novelis and accounting gains from preceding derivative dealings.

Hindalco shared that it’s for the fiscal year increased eight-fold to Rs 3,926 crore from Rs 484 crore a year-ago. It had acquired Novelis in 2007 for an enterprise value of $ 6 billion. This profit comprise of a non-cash gain of $578 million as well as an additional profit of $74 million from market amendments on metal and currency derivatives at Novelis.

Though India's per capita consumption of aluminium stands too low (under 1 kg) comparing to the per capita consumptions of other countries like US & Europe (range from 25 to 30 kgs), Japan (15 kgs), Taiwan (10 kgs) and China (3 kgs), the demand is growing gradually. In India, the industries that require aluminium most include power (44%), consumer durables, transportation (10-12%), construction (17%) and packaging etc.

On basis of scale of operations and level of integration, aluminium producers can be categorized into the following two types:

Integrated producers/Primary producers: Integrated producers have presence right from the mining of bauxite (raw material) to producing aluminium ingots (finished product). Some companies may even go a step further and have downstream manufacturing facilities such as manufacturing of semi-fabricated products (foils). Primary producers could either be a company that is just into mining of bauxite and alumina production or pure aluminium ingot manufacturing. For companies, which have restricted themselves from venturing into the downstream segment, the user industries are basically the secondary producers

Secondary producers: For this segment of producers, which are involved in the production of semi-fabricated products, the raw material is acquired from primary producers, which is in the form of aluminium ingots and billets. The user industries for this segment would be the packaging industry (foils), auto ancillary (wheels), to name a few.

Aluminium products can be classified under three categories. Rolled products find applications in automobiles, consumer durable, construction and engineering sectors. Extrusions include bars, pipes and tubes that find usage in the electrical and the transportation sectors. Finally, foils are used in the packaging sector, which are high-value products and have higher margins.

aluminium is a value-add commodity. It is a highly capital intensive sector (Rs 200 bn required for a 1 million tonne greenfield capacity expansion)

Fortunately, the advantage of having the 5th largest bauxite reserves in the world coupled with cheap and abundant labour helps the Indian companies to retain the distinction of being the lowest cost producers in the world.

COMPANY REVENUE NET INCOME

EMPLOYEES

RIO TINTO ALCAN-CANADA

1.786 BILLION

68000

ALCOA-US 26.9 74 MIILION

87000

RUSAL-RUSSIA

14.3 3506 75000

ALUMINIUM INDUSTRY Aluminum represents the second largest

metals market in the world. Growing demand for the lightweight metal

is fuelled largely by the booming Chinese economy which already consumes a quarter of the world’s aluminium production

China consume 36% of world’s aluminium production as early as 2010

In addition, the EU is discussing the possibility of introducing stricter CO2 emission requirements for automobiles which will inevitably boost demand for aluminium

Aluminium is lighter than steel, so its wider use in the automotive industry will make cars much more efficient

A kilo of aluminium, used as a substitute for heavier metals in car industry, reduces gas consumption by 8.5 litres and produces 20 kg less CO2 emissions. A 10% reduction of car weight results in a 9% increase of fuel consumption efficiency.

Finally, rising prices for substitute metals, such as zinc and copper, stimulate a direct increase of demand for aluminium in the power, transportation and construction sectors in particular.

Demand is enormous, consumers are wealthy, profitability is evident: it seems a lot of companies should be rushing to enter the aluminium sector, yet, the situation is not as simple as it may seem. Only those who can establish and manage the full production cycle (from the extraction of raw materials, the production of alumina, and the reduction of aluminium) in a highly efficient way can become leaders in the aluminium industry.

WHOEVER OWNS RESOURCES OWNS THE WORLD Resources of bauxites, the raw material

for aluminium, are not widespread throughout the world. There are only seven bauxite-rich areas: Western and Central Africa (mostly, Guinea), South America (Brazil, Venezuela, Suriname), the Caribbean (Jamaica), Oceania and Southern Asia (Australia, India), China, the Mediterranean (Greece, Turkey) and the Urals (Russia). The main deposits of high-quality bauxites with high aluminium content (not less than 50%), are already divided by the main players. Other companies have to either buy alumina on the free-market — and wholly depend on price movements — or join forces with deposit owners.

Aluminium is mainly produced from bauxite. Over 90% of the world’s bauxite resources are concentrated on the tropical and sub-tropical belt in Australia, Guinea, Jamaica, Surinam, Brazil, and India

Alumina — or aluminium oxide (Al2O3), is produced from extracted ore. Despite its name, it has nothing to do with clay or black soil but resembles a flour or very white sand. Alumina is then transformed into aluminium through electrolytic reduction. One tonne of aluminium is produced from every two tonnes of alumina

Bauxite consist of 40-60% alumina, as well as earth silicon, ferrous oxide, and titanium dioxide. To separate pure alumina, the Bayer process is applied. First, the ore is heated in an autoclave with caustic soda. It is then cooled and a solid residue — «red mud» — is separated from the liquid. Aluminium hydroxide is then extracted from this solution and calcined to produce pure alumina.

The final stage is the reduction of aluminium through the Hall-Heroult process. It is based on the following principle: when the alumina solution is electrolyzed in molten cryolite (Na3AlF6), pure aluminium is produced. The reduction cell bottom serves as a cathode, and coal bars immersed in cryolite serve as anodes. Molten aluminium is deposited under a cryolite solution with 3-5% alumina. During this process, temperatures reach 950°C, considerably higher than the melting point of the metal itself, which is 660°C.

IMPORTANT FACTS ABOUT DEAL The acquisition of Novelis by Hindalco

was in an all-cash transaction, which values Novelis at enterprise value of approximately US $6.0 billion, including approximately US $2.4 billion of debt

This merger of Novelis into Hindalco will establish a global integrated aluminium producer with low-cost alumina and aluminium production facilities combined with high -end aluminium rolled product capabilities

NOVELIS Novelis is a globally positioned

organization, operating in 11 countries with approximately 12,500 employees. In 2005, the company reported net sales of US $8.4 billion and net profit of US $90 million

The company reported net sales of US $7.4 billion and net loss of US $170 million in nine months during 2006, on account of low contract prices.

NOVELIS By January 1, 2010, all the sales

contracts will get expired and p r o f i t a b i l i t y will increase substantially from then onwards

After merger Hindalco will emerge as the biggest rolled aluminium products maker and fifth -largest integrated aluminium manufacturer in the world

NOVELIS

Shipments of aluminium rolled products totalled 2,708 kilotonnes for fiscal 2010, a decrease of two percent compared to shipments of 2,770 kilotonnes in the previous year, driven by softer end-market conditions in most of the regions during the first half of the year

Net sales for fiscal 2010 were USD 8.7 billion; a decrease of 15 per cent compared to the USD 10.2 billion reported in the same period a year ago, a result of lower aluminum prices and softness in the Company’s end-markets in the first half ofthe year.

Adjusted EBITDA for the year was a record USD 754 million, representing a 55 per cent increase from adjusted EBITDA of USD 486 million posted for the same period a year ago. These record operating results were primarily due to the Company’s focus on cost reductions and restructuring initiatives

A TRANSMISSION HOUSING FOR AN AUTOMOTIVE VEHICLE

TODAY THE BIG TEN ALUMINIUM MANUFACTURERS ARE