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HINDALCO INDUSTRIES LIMITEDANNUAL REPORT 1999-2000

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Highlights ................................................................................................... 3

Chairman�s Letter ....................................................................................... 4

Management�s Discussion and Analysis ..................................................... 7

Environment Report .................................................................................. 19

Social Report ............................................................................................. 21

Corporate Governance Report ................................................................... 23

Shareholder Information .......................................................................... 30

Board of Directors ..................................................................................... 35

Financial Highlights ................................................................................. 36

Directors� Report ....................................................................................... 38

Auditors� Report ........................................................................................ 52

Balance Sheet ........................................................................................... 54

Profit and Loss Account ............................................................................. 55

Schedules .................................................................................................. 56

Secretarial Compliance Certificate ............................................................ 84

Reconciliations of Profits and Stockholders

Equity under US GAAP with Indian GAAP ............................................... 87

Subsidiary Company Accounts ................................................................... 89

Contents

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Highlights

Commenced work on the Rs.18 billion brown-field expansion at Renukoot

Acquiring a majority stake in Indian Aluminium Company Limited

Metal production up 3.3% year-on-year; Smelter utilisation at recordhigh levels of 103%

Share of value added products risen from 49% to 52%

Sales revenues grew by 15%, export revenues soared 89%

Operating costs up only 1.6%, defied even inflationary trends

Operating margins improved further from 44% to 46.3%

Pre-tax profits soared 24%; Net profit after extra-ordinaries up 8%

Return on average capital employed up from 21.4% to 22.7%

Debt-equity down further to 0.14x

Received commendation certificates - CII Exim Award for BusinessExcellence and Rajiv Gandhi National Quality Award.

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The Chairman�s Letter to Shareholders

“ Our strategiesaim to leverageon the Company�sstrategic and costadvantages toenhance value inthe changingbusinessenvironment. Weare proud to beamongst thelowest costproducers in theworld withbenchmarkedefficiencies”Kumar Mangalam birla,Chairman

Dear fellow shareholders,

HINDALCO � IN FOCUSHINDALCO � IN FOCUSHINDALCO � IN FOCUSHINDALCO � IN FOCUSHINDALCO � IN FOCUS

It was yet another successful year for us at Hindalco. To transform it from being a supplier of metal to acomplete solutions provider and to maintain its leadership in the domestic aluminium industry, theCompany has made several value creating strategic moves during the year.

Hindalco decided to acquire a 54.6% stake in Indian Aluminium Company (Indal) from Alcan. It isalso in the process of making a public offer for a further 20% stake, as per regulatory norms. This isthe biggest cash buy-out made by any corporate in India so far. The synergistic benefits of theacquisition, arising out of Indal�s surplus alumina capacity, strong market position in downstreamproducts and locational advantages will enable Hindalco move closer to customers and enhance valuefor shareholders.

The Company has opted in favour of a brownfield expansion at its existing site in Renukoot andhas already commenced work on the project. It will be commissioned in phases during the next threeyears and will contribute immensely towards Hindalco retaining the coveted position of the �marketleader� in the domestic aluminium industry.

Hindalco has shelved the greenfield project, Aditya Aluminium, on value creation criteria. Asmentioned in my letter last year, we carried out a detailed study on the proposed greenfield project withthe help of Kaiser Bechtel. The outcome was not encouraging and expected returns were notcommensurate with the risk associated with the project. This necessitated shelving of the project duringthe year.

These proactive measures, I believe, will go a long way in strengthening Hindalco�s competitiveposition in the domestic and international markets. It will also aid the Company to continue to be oneof the lowest cost aluminium producers in the world.

It was an excellent year operationally. Overall performance demonstrated significant improvementon the back of improved plant efficiency, higher yields and better price realisation. Consumption normswere further improved, reflecting a continued search for excellence by the management of the Company.The revenues and profitability have reached record high levels. Gross sales revenues grew by 15%while pre-tax profit and net profits have risen by 24% and 8% respectively.

Our outlook for aluminium and Hindalco is buoyant. The global aluminium industry is on thegrowth trajectory and is benefiting from the on-going recovery in Asia, consolidation in Europe andstable US markets. LME pricing outlook is also promising. Benefiting from such positive trends andaccelerating levels of economic and industrial activity, the domestic aluminium industry is expected togrow strongly in future. Increasing acceptance for new applications will contribute positively towardsthis end.

Deregulation and globalisation have made geographical boundaries meaningless and resulted inincreased competition from international producers and threat from substitute products. Going forward,tight control over costs, improved efficiency and optimum asset utilisation will be key to enhancingmargins. We, at Hindalco, are fully seized of the situation. Our strategies aim to leverage on theCompany�s strategic and cost advantages to enhance value in the changing business environment. Weare proud to be amongst the lowest cost producers in the world with benchmarked efficiencies.

The Company�s strategy for delivering outstanding value in the new millennium is three pronged:Strengthen cost structure, improve market effectiveness and pursue value creating growth opportunities.

The Company will maintain its cost competitiveness through further improvements in control overkey inputs, enhanced asset utilisation and reduction in consumption norms. Hindalco will capitalise onits advantages of integrated manufacturing facility and scout for opportunities to further strengthencontrol over key inputs. It will better consumption norms of bauxite, alumina, power and steam byembracing cost efficient technologies and refining process efficiencies.

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Greater market effectiveness by emphasising on value-added products and long-term competitivenessis the second leg of our strategy. The Company will increase share of value added products to mitigatethe impact of LME volatility and create competitive entry barriers in the market place. Applicationdevelopment will remain a focus area. Energies will be riveted on sustaining long-term competitivenessby leveraging Hindalco�s strong metal base and competitive cost structure.

Thirdly, we will pursue value adding growth opportunities through creation of globally competitivecapacities in the primary and downstream segments, where required. Timely expansions and acquisitionswill be considered for capturing opportunities in the aluminium industry. Such moves will be made onlyif it makes economic sense and offers significant potential to create value for shareholders.

In essence, aluminium is, and will remain, a core growth business for the Aditya Birla Group.Hindalco will continue to focus only on aluminium in future. The Company�s well crafted strategy,benchmarked efficiencies and continuing search for excellence, I believe, will allow it to scale newheights and deliver outstanding value for shareholders and other stakeholders in the new millennium.

At this juncture, I would like to take the opportunity of placing on record my admiration for ouremployees and the management team at Hindalco. Their dedication and commitment have been, andcontinue to be, integral to our success and to creating shareholder value.

THE ADITYA BIRLA GROUP � IN PERSPECTIVETHE ADITYA BIRLA GROUP � IN PERSPECTIVETHE ADITYA BIRLA GROUP � IN PERSPECTIVETHE ADITYA BIRLA GROUP � IN PERSPECTIVETHE ADITYA BIRLA GROUP � IN PERSPECTIVE

I would now like to brief you on some of the measures taken by us at the Group level. As you areaware, tectonic shifts are changing the very contours of the economic and business environment,regardless of geographic boundaries. Digitalisation, deregulation, globalisation and investor activismhave altered the corporate landscape and ushered in an era of discontinuity. Organisations in Indiahave had to reconstruct their business architecture and we, at the Aditya Birla Group, are no exception.

To face these challenges, over the last few years, we have been constantly re-inventing our Group.Our basic objective is to ensure sustainable success and deliver outstanding value for our shareholders,customers, employees and the community at large.

A slew of proactive measures have been unveiled, riding on our renewed strategic thrust, innovativestructural initiatives and contemporary systems adoption. In my letter last year, I had shared several ofthese. Today, I wish to keep you abreast of the progress achieved in these areas and the growthtrajectory that we will traverse in this new millennium.

RENEWED STRATEGIC THRUSTRENEWED STRATEGIC THRUSTRENEWED STRATEGIC THRUSTRENEWED STRATEGIC THRUSTRENEWED STRATEGIC THRUST

Fundamental value creation and a razor-sharp business focus continue to be the pillars of ourstrategic thrust.

Consequent to the in-depth review of business portfolio by the Boston Consulting Group, we haveidentified the core business for each of our Companies. Businesses have been evaluated againststringent value creation criteria. We have made a conscious decision to build and grow only thosebusinesses that have high value creation potential.

While in the past, our portfolio focused heavily on capital intensive manufacturing businesses, thefuture may see us move increasingly into knowledge-based, brand-management and service sectors, whereagain we will scout for a premium position � a position of leadership. At the portfolio level, we willcontinue to look into some of the businesses that are futuristic and add to enhancing shareholder value.

Knowledge-based industries offer enormous growth. This sunrise sector is far less capital intensiveand has the advantage of enhanced value creation in a much shorter time frame. Acquiring managementcontrol in Learning Byte International by overseas companies of the Group and the strategic alliancewith Lawson for setting up the Lawson Competency Centre by Birla Consultancy and Software Services,

“ Our basicobjective is toensure sustainablesuccess anddeliveroutstanding valuefor ourshareholders,customers,employees andthe community atlarge”

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“ In response tothe changingtimes, we arecontinuouslystriving to makethe Aditya BirlaGroup as market-driven and agile”

a division of Grasim Industries Limited � are forward steps in this direction. Similarly, the acquisitionof Madura Garments by Indian Rayon and Industries Limited has overnight catapulted the Group to thetop-of-the-league in the branded apparels sector. Importantly, these strategic moves have significantlyenhanced value for shareholders of Indian Rayon and Grasim.

In the new economy, cellular services offer a significant growth platform in the telecom sector thatis rapidly consolidating. Our strategic alliance with Tata Telecommunications is a forward step that willhelp take our telecom business ahead.

To bring in sharper business focus and to realise better synergies, we have recoursed to restructuring,where ever necessary. Restructuring of the cement business has not only created synergies and simplicityof operations, but has given us one resounding voice in the market place, propelling our growth from onestrong platform vis-à-vis fragmented units in operation.

STRUCTURAL INITIATIVESSTRUCTURAL INITIATIVESSTRUCTURAL INITIATIVESSTRUCTURAL INITIATIVESSTRUCTURAL INITIATIVES

To institutionalise enabling processes that help us benchmark with the best in the world, to alignthe interest of shareholders and employees, and to better manage capital, we have chosen Cash ValueAdded (CVA) as our measurement metric. It is the cornerstone of the �value management� architecture,to which I am personally committed. CVA helps us focus on the three key aspects of value creation, i.e.,profitability, asset productivity and growth. Simply put, CVA is a structured, exhaustive process thatentails understanding business variables in depth and quantifying their effect on value creation. Thisprocess enables us put our finger on the key drivers of value creation in every single activity that wedo.

In response to the changing times, we are continuously striving to make the Aditya Birla Group asmarket-driven and agile. To do so, we are doing our utmost to create an organisational ambience wheretalent can bloom. Unleashing people power in a planned manner through a focus on their growth,development and learning is our priority. Our thrust is on developing the Group�s intellectual capital.Infusion of fresh blood and talent at all levels coupled with the creation of �thought leaders� has gainedmomentum.

Six directors have been inducted at the Corporate level and professionals of high calibre have beenrecruited. The retirement policy has been implemented. Succession plans are well in place. Building,developing and upgrading competencies across the Group through training and development continuesas an integral ongoing activity. These steps will not only help us nurture leaders, but capable, self-assured colleagues across all levels. The push on growing intellectual capital in the Group will propelit to new heights of value-creation in future.

CONTEMPORARY SYSTEMS ADOPTIONCONTEMPORARY SYSTEMS ADOPTIONCONTEMPORARY SYSTEMS ADOPTIONCONTEMPORARY SYSTEMS ADOPTIONCONTEMPORARY SYSTEMS ADOPTION

We are institutionalising processes to realise better value for our shareholders. To create a wiredorganisation, which will accentuate the quality of communication and information flow throughout theGroup, we are in the process of setting up the �Aditya Birla Information Highway�. �Gyanodaya� ourtemple of learning has gone on-stream. It will help us constantly upgrade our knowledge base.

These proactive measures, in my view, will help weave our Group into one seamless organisation,with the singular aim of creating value for our shareholders in 21st century and beyond.

Thank you,Yours sincerely,

Kumar Mangalam Birla

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OVERVIEWOVERVIEWOVERVIEWOVERVIEWOVERVIEWIt was another excellent year for Hindalco, both strategically and operationally. The Company recorded all-round improvement in performance with improved asset utilisation, better yields and higher price realisa-tion. The Company has achieved the highest ever volumes and revenues during the year.Gross sales revenues have gone up 14.6% year-on-year (YoY) to Rs.23.08 billion and operating profits havesoared from Rs.7.78 billion in 1998-99 to Rs.9.40 billion in 1999-2000. Net profit before extraordinarieshas gone up 12% from Rs.5.67 billion to Rs.6.35 billion. Net profit after extraordinaries at Rs.6.12 billionreflects an increase of 8% YoY.

STRATEGIC MOVES TO ENHANCE SHAREHOLDER VALUESTRATEGIC MOVES TO ENHANCE SHAREHOLDER VALUESTRATEGIC MOVES TO ENHANCE SHAREHOLDER VALUESTRATEGIC MOVES TO ENHANCE SHAREHOLDER VALUESTRATEGIC MOVES TO ENHANCE SHAREHOLDER VALUEIt was a landmark year strategically. The Company announced the acquisition of Indian Aluminium CompanyLimited (Indal), commenced work on brownfield expansion and shelved the greenfield project on the valuecreation criteria. These moves will enable Hindalco deliver outstanding value for shareholders on a sus-tained basis in future.

Acquisition of Controlling Stake in IndalThe Company decided to acquire a majority stake in Indal, through the acquisition of a 54.6% stake from Alcan,followed by a public offer for an additional 20% stake as per regulatory norms. The acquisition will be done ata price of Rs.190 per share and would cost the Company around Rs.10.1 billion. The acquisition will be fundedthrough surplus cash available, with no fresh debt or equity. The entire process is expected to be completed byend-June 2000.

The acquisition offers significant synergistic benefits to the Company. It will enable Hindalco strengthenpresence in the alumina and downstream products. Indal has a strong position in the downstream productsand benefits from its locational and distribution strengths. These factors, together with Hindalco�s existingleadership in the primary aluminium market, will enable it to reach closer to the customers efficiently.

Brownfield Expansion UnderwayFollowing its decision to shelve the green-field project and the need to ensure future growth, the Companyembarked on a brownfield expansion at the existing location in Renukoot, Uttar Pradesh. This project willbe implemented at a cost of Rs.18 billion. It will expand the Smelter capacity by 100,000 tonnes per annum(TPA). In addition, alumina refining capacity will be increased by a 210,000 TPA with a matching increasein captive power generation facilities. The project will be funded through debt and internal cash generation.The work on the project has already begun and will be commissioned, in phases, in next 3 years.

Greenfield Project Shelved on Value Creation CriteriaThe Company shelved the proposed greenfield project in Orissa on the value creation criteria. A detailedfeasibility study on the greenfield aluminium project was completed during the year. The results were notpromising and expected returns were not commensurate with the risk associated with such a large project.The initial cost of Rs.228 million incurred on the project was written-off as a one-time, non-recurring costduring the year.REVIEW OF OPERATIONSREVIEW OF OPERATIONSREVIEW OF OPERATIONSREVIEW OF OPERATIONSREVIEW OF OPERATIONS

Operational Review and AnalysisThe performance of the Company demonstrated significant improvement during the year. Improved plantefficiency, higher yields as well as better price realisation in the local and export markets led to recordhigh volumes, better revenues and enhanced profitability.

Capacity Utilisation at Record High LevelsThe Company enhanced its overall assets utilisation considerably. This was substantial in the Smelter, RolledProduct, Extrusion and Foil plants. Smelter utilisation soared from 99.6% to 102.9% on the back ofimproved current efficiency and resulted in a 3.3% rise in metal output to 248,930 tonnes in 1999-2000. Itis significant considering the fact that the smelter was already operating at optimum utilisation level.

Management�s Discussion and Analysis� From the President and Whole-Time Director to Shareholders

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Benefiting from this and increased focus on high-margin value-added products, downstream facilities alsoreported notable improvement in utilisation levels during the year.

Sales Volume and Product MixSales volumes grew by 8.5% on the back of a substantial recovery in the demand from key consumingsectors viz., consumer durables, electrical and electronics, construction and transportation. The recovery inthe economy and resultant pick-up in demand for end-use products had a positive bearing on aluminiumconsumption. Taking advantage of this and aggressive marketing efforts, Hindalco consciously increased itsshare of high margin, value added products, up from 49% to 52% in 1999-2000.

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FoilsRedraw RodsExtrusionsRolled ProductsMetal

1997-98 1998-99 1999-00

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Foil4%Rolled

19%

Rods19%

Billets4%

Ingots48%

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Foil1%Rolled

18%

Rods22%

Billets3%

Ingot s51%

1999-2000 1998-1999

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Its renewed export focus to take advantage of a recovery in global demand also contributed towardsimproving sales volumes. Overall exports zoomed from Rs.1.66 billion in 1998-99 to Rs.3.12 billion in1999-2000, an increase of 89%YoY. Export of value added products contributed significantly.

Sales Volume (Tonnes)Sales Volume (Tonnes)Sales Volume (Tonnes)Sales Volume (Tonnes)Sales Volume (Tonnes) Gross Sales (Rs. in Million)Gross Sales (Rs. in Million)Gross Sales (Rs. in Million)Gross Sales (Rs. in Million)Gross Sales (Rs. in Million)

1999-20001999-20001999-20001999-20001999-2000 1998-991998-991998-991998-991998-99 % Change% Change% Change% Change% Change 1999-20001999-20001999-20001999-20001999-2000 1998-991998-991998-991998-991998-99 % Change% Change% Change% Change% Change

Ingots 120,540 118,050 2.1 9,722 9,180 5.9Billet 10,552 7,357 43.4 823 572 43.9Redraw Rods 48,311 51,031 (-)5.3 4,425 4,436 (-)0.2Rolled Products 48,742 41,439 17.6 5,055 4,132 22.3Extrusion 15,257 11,664 30.8 1,624 1,220 33.1Foils 7,314 1,505 386.0 979 198 395.8Others � � � 448 393 14.0Total 250,716 231,046 8.5 23,076 20,131 14.6

� Ingots and BilletsThe combined sales of ingots and billets grew by 4.5% from 125,407 tonnes in 1998-99 to131,092 tonnes in 1999-2000. Export of these products nearly doubled to 35,775 tonnes on theback of improved billet volumes to the US and Asian markets. The modest rise in aggregatesales volumes of ingots and billets reflect the Company�s conscious shift towards value addedproducts.

� Redraw RodsRedraw rods was the only product category, where we experienced a decline in volumes. Salesvolumes dipped by 5.3% from 51,031 tonnes in 1998-99 to 48,311 tonnes in 1999-2000. This wasthe result of a conscious decision taken by the Company due to a slack in demand from the StateElectricity Boards and poor realisation.

� Rolled ProductsThe sales of rolled products grew by 17.6%, on top of a 25.8% growth last year, to 48,742tonnes in 1999-2000. Improved demand from the construction, transportation, consumer durables,electrical and electronics sectors contributed towards this end. Aggressive marketing efforts andsuccessful penetration into the new export markets also contributed positively. Exports of rolledproducts grew by 46% from 6,067 tonnes in 1998-99 to 8,875 tonnes in 1999-2000.The quantum jump in commercial vehicle sales led to a spurt in demand for rolled products usedfor body-building activities. The growth in demand from the electrical sector, especially in thelamp cap and bus bar applications also contributed towards better volumes during the year. Apick-up in the construction sector also contributed positively with higher demand for roofingsheets.The Company benefited immensely from its concerted efforts to introduce new applications. Duringthe year, the Company successfully established novel applications in the following areas:� Litho stock used for printing� Alclad brazing stock being supplied to Auto-sector for usage in car radiators� Circles for elite cookware� Flooring sheets for bus-body application� Stucco embossed sheet for roofingThese applications contributed modestly to volumes during the year. The share of these productsshould rise substantially with increasing acceptance in future.

� ExtrusionsThe upturn in the transportation, construction, electrical & electronics and consumer durablesectors helped the extrusions segment as well. The sales of extruded products grew by 31% YoY

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to 15,257 tonnes as against a negative growth in 1998-99. The key contributors of such animpressive growth were recovery in demand for commercial vehicles, increasing shift towardsaluminium bodies by commercial vehicle users and better demand from the construction sector forcurtain walling, partition and door/window panelling applications.The Company�s new product development efforts enabled it to broaden its product profile andenlarge the customer base, eventually resulting in better extrusion volumes and realisation. Newproducts and applications successfully introduced during the year include:� Turbo cooler stock for computer-hardware� Lead free machining alloys for high machining speeds� 6005 / 6082 medium strength alloys for the transport and the construction sector

� FoilsThe year marked a significant improvement in the operations, volumes and product-mix in thefoils segment. Sales volumes jumped 386% YoY to 7,314 tonnes with stabilisation of the plantoperations. Going forward, the Company will focus on high value products, including thinnergauge materials and converted foils.

� WheelsThe aluminium alloy wheel plant at Silvassa commenced operations during September 1999 andis being stabilised. The Company produced 5,451 wheels and focused energies on getting productapproval from the Original Equipment Manufacturers (OEMs). The Company recorded a salesvolume of 2,126 wheels and was primarily in the after-sales market. The Company madesignificant progress in its efforts to set up the marketing network for aluminium alloy wheelsand will be reaping its benefits in the current financial year.

Pricing and ProfitabilityThe LME aluminium prices recovered sharply during the year, after touching a 5-year low of US$ 1,141per tonne during March 1999. This resulted in a recovery in the global demand and drop in the LMEinventories.The global aluminium industry fared well during 1999, on the back of a 6.3% growth in demand, aftera weak performance in 1998. Strengthened demand from Asia, notably from China, continued stronggrowth in the US as well as a consolidation in Europe contributed towards this end. Global supplies,however, grew by only 4.2% and enabled a recovery in global aluminium prices during the year. Globalalumina shortages due to disruption in supplies also contributed towards firm LME price trends duringthe year.LME monthly prices reported a growth of 14% YoY at US$ 1,473 per tonne in 1999-2000, a majorportion of which came through only during the last quarter of 1999-2000. It thus had a limited impact onthe average realisation for the Company. The monthly average price on LME was US$ 1,358 per tonneand US$ 1,362 per tonne respectively during the calendar years 1998 and 1999.

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LME Cash Prices

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The Company�s average price realisation grew only by 6% YoY in 1999-2000. The primary reason forsuch divergent trend is the time lag between change in the price of aluminium in the global anddomestic markets. The domestic price follows LME trends, but with a lag of 2-3 months. The Company�saverage realisation also does not capture short-term volatility in LME prices, since domestic prices arerevised only with the emergence of a clear trend on the LME front.

Operating margins improved further

1999-2000 1999-2000 1999-2000 1999-2000 1999-2000 1998-99 1998-99 1998-99 1998-99 1998-99 % Change% Change% Change% Change% Change

Sales Volume (Tonnes) 2,50,716 2,31,046 8.5Sales Turnover (Rs. in Million) 20,311.8 17,669.9 14.9Operating expenses (Rs. in Million) 10,912 9,895 10.3Operating Expenses/tonne (Rs./Ton) 43,523 42,827 1.6

Operating Margins (%) 46.3 44.0 5.3

Hindalco maintained its cost competitiveness during the year. The average cost of production grew only by1.6% from Rs.42,827 per tonne in 1998-99 to Rs.43,523 per tonne, defying even the average inflationrate prevailing during 1999-2000. This was possible due to higher volumes, increased availability ofcaptive alumina and further improvements in consumption norms. The impact would have been higherbut for the rise in costs of key inputs.

Benefiting from a modest rise in operating costs, the rising share of value added products, better assetutilisation and a 6% higher realisation, the Company improved operating margins further from 44% in1998-99 to 46.3% in 1999-2000.

Improvement in consumption normsThe Company succeeded in its efforts to reduce the consumption norm for key inputs from its presentstretched levels. This was achieved in the areas of power, bauxite, caustic soda and steam, which togetheraccount for over 50% of cost of production.

The Company reduced smelter power consumption by 0.36% and reported a current efficiency of 95.1%as against 94.2% in 1998-99. This is a credible achievement considering an already high currentefficiency at the Smelter. The smelter power is the key cost in the entire manufacturing process andhence even this marginal reduction had a significant positive impact on operating costs and profitability.In addition, the Company reduced alumina production cost by reducing consumption norms of bauxite,caustic soda and steam. Bauxite consumption declined by 1.2% while the unit consumption of caustic sodaand steam declined by 5.7% and 4.2% respectively.

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1999-00

Average Gross Realisation

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Sharp rise in key costs masked the full impactThe rise in prices of coal, bauxite and freight costs affected the overall cost of production.� Power: The unit cost of power generated at the captive power plant increased by 5.4% due to a

sharp rise in coal and manpower costs, as well as shut down expenses. The cost of coal was up7.2% due to increased prices and higher transportation costs. Availability of captive powerimproved substantially and met the entire requirement of Hindalco. The total available power fromcaptive plant was 4,050 million units in 1999-00 as compared to 3,837 million units in 1998-99.The available power from the co-generation plant was up by 8.4% from 226.4 million units to245.5 million units during this period.

� Bauxite: The average cost of bauxite increased by 9.4% primarily due to a sharp rise in transpor-tation costs. Initiatives have been taken to reduce transportation cost and the Company expects tosee its impact during the current financial year.

� Utilities: Over 30% YoY rise in price of furnace oil, L D oil and other petroleum products also hada bearing on the operating profits.

� Salaries and wages: The average wage bill grew by over 18% from Rs.1,192 million 1998-99 toRs.1,408 million in 1999-2000. This is on top of a 21% rise in the previous year, which wasprimarily due to the full year�s impact of the new wage agreement, which came into force fromJanuary 1, 1999.

� Selling, administration and distribution: Selling and distribution expenses went up 15% due toincreased volumes. Increase in export expenses on the back of rising export volumes and highergeneral administration costs also contributed towards this end.

The operating profit increased by Rs.162.2 million on account of change in the accounting policy ofvaluing inventories, as required by revised Accounting Standard 2.

FINANCIAL REVIEW AND ANALFINANCIAL REVIEW AND ANALFINANCIAL REVIEW AND ANALFINANCIAL REVIEW AND ANALFINANCIAL REVIEW AND ANALYSISYSISYSISYSISYSIS

Highlights (Rs. in Millions)

1999-20001999-20001999-20001999-20001999-2000 1998-991998-991998-991998-991998-99 % Change% Change% Change% Change% Change

Gross Turnover 23,075.7 20,130.9 14.6Net Turnover 20,311.8 17,699.9 15.0Operating Profit 9,400.3 7,775.2 20.9Other Income 1,386.5 1,445.0 (-)4.0Interest 596.6 836.4 (-)28.7Depreciation 1,353.6 1,246.0 8.6Profit Before Tax 8,836.6 7,137.9 23.8Tax 2,485.0 1,470.0 69.0Profit After Tax but Before Extra-ordinaries 6,351.6 5,667.9 12.1Extra-ordinaries 227.9 0.0 -Net Profit 6,123.7 5667.9 8.0

RevenuesAggregate gross revenues have grown 14.6% from 20,130.9 million in 1998-99 to 23,075.7 million in1999-2000 largely due to a 8.5% rise in volumes and over 6% higher realisation during the year. Netturnover has gone up 15% YoY to Rs.20,311.8 million during the year.

Operating ProfitReflecting improved margins and higher volumes, operating profits has soared from Rs.7775.2 million in1998-99 to Rs.9,400.3 million, an increase of 20.9%YoY. Over 65% of the increase in absolute profitscame from higher realisation and improved volumes accounted for another 45% rise in operating profitsduring the year. The impact was partly offset by a 1.6% rise in unit operating cost.

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Other IncomeThe other income consists primarily of interest and dividend income from short-term investments. Theaggregate other income at Rs.1,387 million in 1999-2000 as against Rs.1,445 million in 1998-99represents a fall of 4% YoY and is attributed to a fall in interest rate and lower dividend from the UnitTrust of India.

InterestInterest charges have dropped from Rs.836.4 million in 1998-99 to Rs.596.6 million in 1999-2000, a fallof 29% YoY, due to partial repayment of existing loans and the currency-swaps entered into by theCompany.

DepreciationThe depreciation charge increased by 8.6% to Rs.1,353.6 million from Rs.1,246 million in 1998-99 onaccount of the charging of full year�s depreciation on assets capitalised towards end of last year. It alsoincludes depreciation of the Wheel plant, commissioned during September 1999. Depreciation was alsohigher due to other additions to fixed assets during the year.

TaxThe Company�s tax liabilities jumped over 69% from Rs.1,470 million to Rs.2,485 million in 1999-2000and increased effective tax rate from 20.6% to 28.1% during this period. Higher profits for the year,relatively lower capex and the imposition of a 10% surcharge on tax liability led to this sharp increase.

Profit After TaxPre-tax profits of the Company grew by 24% YoY to Rs.8,836.6 million in 1999-2000. Consequent to asharp rise in effective tax rate and resultant 69% YoY growth in tax charges, profit after tax beforeextraordinaries has reported a modest 12.1% YoY growth at Rs.6,351.6 million during the year.

Extra-ordinariesThe Company has written-off a sum of Rs.227.9 million spent on the proposed green field project as aone-time, non-recurring expense during the year. This extraordinary charge arises out of the Company�sdecision to shelve the green-field project in Orissa on the value creation criteria during the year.

Net ProfitThe Company�s net profit after extraordinary items increased only by 8% from Rs. 5,667.9 million in1998-99 to Rs.6,123.7 million in 1999-2000. The earning per share increased from Rs. 76.1 to Rs.82.2in 1999-2000, while cash earnings per share increased from Rs.92.8 to Rs.100.4 during this period. Thecash earnings per share reported by the Company is amongst the highest cash earnings reported by anycorporate in India.

Contributors to Profit Improvement

Realisation65% Quantity

45%

Cost-10%

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Cash Flow Analysis (Rs. in Millions)

1999-20001999-20001999-20001999-20001999-2000 %%%%%

Source of CashCash Flow from operations 6,611 86Non-operating cash flow 1,089 14

7 ,7007 ,7007 ,7007 ,7007 ,700 100100100100100Application of CashNet Capital Expenditure 1,525 20Net Investments 702 9Debt Repayment 1268 16Interest 609 8Dividend for 1998-99 532 7Free cash 3,064 40TTTTTo ta lo ta lo ta lo ta lo ta l 7 ,7007 ,7007 ,7007 ,7007 ,700 100100100100100

Source of Cash

Income from OperationsHindalco�s robust earnings has been the largest contributor to the Company�s cash flow of Rs.7,700million during the year. Cash inflow from operations is 21% higher at Rs.6,611 million as againstRs.5,457 million reported in the previous year.

Non-operating IncomeThe Company�s non-operating income consists primarily of interest and dividend income from short-terminvestments. Pending its utilisation for expansion and other growth opportunities, the surplus funds arebeing placed in short term, interest bearing deposits.

Application of Cash

Capital ExpenditureThe biggest component of cash utilisation for the Company during the year was for its capital expenditureprogramme. The Company invested a sum of Rs.1,525 million in 1999-2000 towards the new AlloyWheel plant at Silvassa, modernisation of plants including the Paste plant and towards completion ofprojects commenced in the earlier years.

InvestmentsThe Company made net investments of Rs.702 million in 1999-2000. Of this, around Rs.310 million(Rs.847 million last year) were invested in other companies in the Aditya Birla Group, including Rs.250million placed in the preference shares of Birla Global Finance Limited.

Reduction of DebtThe total borrowings at the end of the year stood at Rs.5,754 million, reflecting a fall of Rs.1,116million during the year. The Company repaid debt to the tune of Rs.1,268 million. As at the end of1999-00, the debt-equity ratio was at 0.142 x as compared to 0.204 x at the end of 1998-99. Net ofsurplus cash, the Company�s gearing was negative. Out of the total outstanding loan, Rs.1,698 million ispayable within one year and it accounts for 30% of outstanding loans.

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InterestTotal payments on account of interest outgo stood at Rs.609 million and indicate a fall of 29.5% in 1999-2000. Out of this, Rs.597 million is charged to revenues. The sharp fall in interest charges is attributed tothe repayment of debt and currency-swaps entered into by the Company during the year.

Dividend

The Company recorded a cash outflow of Rs.532 million for payment of dividend for 1998-99. For the year1999-2000, the Board has proposed a dividend of Rs.8.0 per share as against Rs.6.50 announced for 1998-99. This includes a sum of Rs.5.0 per share as millennium dividend and an additional sum of Rs.3.0 pershare as the final dividend.

Free cashAfter meeting its cash needs, the total surplus cash generated during the year was Rs.3,064 million againstRs.1,853 million in 1998-99. These funds have been placed in short-term investments in the form of fixeddeposits with domestic and foreign banks as well as in inter-corporate deposits.

Working capital facilityThe Company has a committed working capital facility of Rs.2,100 million, of which only Rs.323 million hasbeen drawn as at 31st March 2000. The facility is renewed ever year.

Business returnsAn analysis of Hindalco�s financial performance shows that the Company stacks up well on key parameters.ROACE went up from 21.4% in 1998-99 to 22.7% in 1999-2000. ROAE however declined from 18.9% to17.4% due to a fall in overall gearing. We expect ROAE to improve with the increase in asset turnover,deployment of surplus cash in manufacturing assets and optimum utilisation of these assets in future.

OUTLOOKOUTLOOKOUTLOOKOUTLOOKOUTLOOK

Global Outlook

The impact of the financial crisis in Asia, Russia, Latin America and a few other emerging markets startedto evaporate and resulted in a remarkable resurgence of growth in global consumption during 1999. Theoutlook for the global economy appears more stable and positive now. This will result in enhancedconsumption in most regions, especially in Asia and parts of Europe. Benefiting from this and stabledemand from the US, global aluminium consumption is likely to grow strongly in future. Industry expertsforecast consumption growth to be around 4-6% per annum over next two years. The strong performance ofthe automobile sector will be a key contributor for this growth in future.

Such a positive demand outlook coupled with likely moderation of production growth augurs well for theglobal aluminium sector. Global supplies are expected to grow only by 4% per annum due to slow growthin fresh capacities. The likely re-start of capacities in the US and Australia will have limited impact onsupplies. Global surplus is thus expected to disappear and a balanced demand-supply situation is likely toemerge in 2000.

The on-going consolidation in the global aluminium industry should also result in tightening control of swingcapacities and minimise its impact on LME prices in case of any downturn in the industry. LME pricesrecovered smartly during 1999 and hit a recent peak of US$1,681 per ton in January 2000. This primarilyreflects a sharp turnaround in the industry prospects. LME prices, however, have fallen from these levels to

1 61 61 61 61 6

US$1,450 levels during May 2000. We think, this is temporary in nature. Given the positive demand outlookand balanced demand-supply, LME prices are projected to remain firm during current fiscal.

Domestic Outlook

The outlook for domestic aluminium sector is positive. It is predicated on the likely strong growth in theend-use sectors, notably in the construction, transportation, consumer durables and packaging sectors.

The positive outlook for the Indian economy, expected GDP growth of 6-7% per annum and accelerating levelof industrial activity should give boost to the construction sector. The fiscal incentives for individual housingin recent budgets, availability of cheaper finance, rising per capita income and increasing level of consumerconfidence will drive housing demand in future. Together with the renewed focus on infrastructure develop-ment, it will reinforce the outlook for the construction sector. Gaining from it and the increasing preferencefor use of aluminium in curtain walling, partitions and door/window panelling, aluminium consumption inthe construction sector is slated to grow in double digits over the next two years.

The expected strong growth in the transportation sector will be a key driver of aluminium demand goingforward. The share of transportation in aggregate consumption is expected to rise significantly in the future.This will be driven by improving volumes of commercial vehicles on the back of a pick-up in industrialactivity, introduction of new vehicles by international car manufacturers and a shift towards aluminium usein select applications by domestic car manufacturers.

Additionally, higher disposable incomes and improving level of consumer confidence coupled with risingaspiration levels and changing consumer buying pattern is likely to boost demand for consumer durables infuture. The prospects of an increased consumption in the electrical sector are improving with the entry of theprivate sector in the distribution sector and restructuring of the State Electricity Boards by the Government.The need for strengthening distribution network in the power sector also augurs well for aluminiumconsumption in future.

We are thus quite optimistic about the future of the aluminium industry in India. Prospects of the industrywill improve further with the acceptance of aluminium in new applications, which is gaining momentumalready. Domestic aluminium prices are likely to follow the LME trends, outlook for which remains firm andpositive. The competition is likely to intensify with local producers expanding capacities, global manufactur-ers eyeing for an entry and the possible reduction in import tariff as part of WTO commitments. Thedomestic producers will have to keep a close watch on their cost structure for superior margins and earningsin future.

Outlook for Hindalco

The Company is one of the lowest cost producers in the world and has an enviable cost structure withbenchmarked efficiencies. The Company is thus well positioned to take advantage of the positiveoutlook for the global and domestic aluminium industry. The Company�s strategy for deliveringoutstanding value in the new millennium is three pronged: Continued focus on efficiency improvementto remain a low-cost producer, maintain leadership to improve market effectiveness and pursueemerging growth opportunities.

Efficiency Focus

The Company is determined to be amongst the lowest cost producers in the world in future too. Towards thisend, it will focus on improving control over costs and availability of key inputs, embracing cost efficienttechnologies and optimising asset utilisation and consumption norms from already stretched levels.

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The control over key inputs has been a significant contributor to the success of the Company in the past. It

will remain an area of focus in the future. The Company has well-integrated plant with captive bauxite

mines, alumina refinery, power generation, and smelting and downstream facilities. These facilities enable

the Company emerge as the most steady and reliable source of supplies, at competitive prices and strength-

ens its position in the marketplace. Hindalco is the most preferred supplier for users in India.

Hindalco�s thrust will be on further improvements in consumption norm and asset utilisation going

forward. The smelter utilisation exceeded its rated capacity in 1999-2000 and the Company is implement-

ing a brown field expansion to leverage on existing infrastructure and better realise synergies. It will

also concentrate on value added products to ensure higher realisation and optimum utilisation of brand

and distribution network in future. Further improvements in consumption norms of bauxite, alumina,

power and steam from already stretched levels as well as productivity enhancement will be focused in

future. These measures will enable Hindalco improve cost efficiency, strengthen market position and

enhance margins in future.

Effectiveness Focus

The second leg of Hindalco�s strategy is to improve market effectiveness and leadership through emphasis

on value-added products and sustaining long-term competitiveness.

The Company will increase its share of value added products from the present 52% to over 60% of sales

volumes in the next two years. This will enable it mitigate the impact of LME volatility on margins and

profitability effectively. Secondly, value added products will create strong competitive entry barriers by

bringing Hindalco closer to customers and transforming it from a �supplier of metal� to a �service and

solutions provider� for its customers in future. The Company will lay stress on development of new

applications for value-added products to ensure better use of aluminium in future.

Finally, energies will be focused on sustaining competitiveness in the domestic market by leveraging

flexibility derived from a strong metal base and globally competitive costs. The Company will maintain its

presence in the global market to cushion the impact of any domestic fall out and to adopt best practices in

the business. This strategy will also enable the Company keep abreast of developments in the aluminium as

well as downstream product markets in the world and contribute significantly towards strengthening of the

Company�s product and application development activities in future.

Growth Focus

Pursuing value adding growth opportunities in the aluminium sector is the third leg of its strategy to

enhance value in the new millennium. The Company is and will remain focused on aluminium and pursue

growth opportunities only if it adds value. Hindalco�s strategy for ensuring sustainable strong growth is

1 81 81 81 81 8

two pronged.

� Creation of fresh capacities that are globally competitive in terms of both costs and technology in the

primary and downstream product segments. The commissioning of the Foil plant in Silvassa during

1998-99 and the Aluminium Alloy Wheel plant, also in Silvassa, last year are steps in this direction.

� Timely expansions and cost-effective acquisitions for capturing the opportunities in the growing domes-

tic market are the second part of our growth strategy. The brown-field expansion at Renukoot and

acquisition of Indal are just the beginning. However, the Company will focus on such opportunities only

where it makes economic sense.

In addition to these, the Company has adopted the concept of Value Based Management (VBM), as part

of an initiative of the Aditya Birla Group, in all its planning, budgeting and decision making. This entails

looking at the business as an integrated chain of various value drivers. Cash Value Added (CVA), a

variant of Economic Value Added (EVA), is being used as metric for measuring the performance. The VBM

approach would re-orient employees at all levels to a bottom oriented approach in the decision making

process. The Company is confident that the new approach will ensure maximisation of value creation for

shareholders in future.

The Company recognises the importance of people assets and hence focuses on developing skills and

knowledge of employees at all levels through continuous training. The process of knowledge and information

sharing is a continuing phenomenon at Hindalco.

Given such a well-crafted strategy and its focus on technology improvement and employee development, we

are confident that Hindalco will continue to scale new heights of excellence and deliver outstanding value for

shareholders and other stakeholders in the new millennium.

CAUTIONARY STATEMENTCAUTIONARY STATEMENTCAUTIONARY STATEMENTCAUTIONARY STATEMENTCAUTIONARY STATEMENT

Statement in the �Management�s Discussion and Analysis� section describing the Company�s objectives,

projections, estimates, expectations or predictions may be �forward-looking statements� within the meaning of

applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

Important factors that could make a difference to the Company�s operations include global and Indian demand-

supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the

Company�s principal markets, changes in Government regulations, tax regimes, economic developments within

India and the countries within which the Company conducts business and other factors such as litigation and labour

negotiations.

1 91 91 91 91 9

Environment Protection - A Way of Life at HindalcoAt Hindalco, we firmly believe in sustainable development. We fully appreciate that the earth�s

resources and its capacity to absorb pollution and regenerate are finite. Therefore, operations at all of ourUnits are conducted in a manner that respects the ecological balance.

Naturally then the environmental dimension forms an integral part of all business decisions.

At Hindalco�s integrated aluminium complex, its Power Plant, its Mines, the Foil and Aluminium AlloyWheel Plant, pollution prevention, product stewardship and clean technologies enable us to fulfil our goalof sustainable development.

Hindalco�s integrated aluminium complex at Renukoot, is ISO 14001 EMS certified, as is the RenusagarPower Plant and its Mines in Bihar.

To validate its continuous conformity to �Environment Management Systems�, Aspects CertificationServices, U.K., a world renowned EMS Auditing firm, approved by UKAS conducted two environment auditsin 1999 at all the certified units. Their reports have confirmed the Plant�s total adherence to EnvironmentManagement Systems. UKAS is an internationally recognized accreditation agency for registration of the EMScertifying agency, headquartered in the UK.

Regular environmental audits are conducted by internal auditors who are EARA (Environmental Auditors�Registration Association) certified.

Hindalco is also aiming at ISO 14001 Certification for its operations at Silvassa and efforts in thisregard are being stepped up.

State-of-the-art Industrial Effluent Treatment Plants are in operation at all of our Plants. A majorquantity of the treated effluent is reused to meet the needs of the Plants. The solid waste sludge atRenukoot is used as a soil conditioner in special green belts developed on abandoned red mud disposalsites.

Hindalco has pioneered dry stacking of red mud. The disposal of red mud in the form of slurry whichis the normal process, is not reckoned to be environment friendly, as it poses the risk of percolation ofcaustic soda into the sub-soil. The treated red mud is free of this problem. Amazing as it may seem, aspecial �Nature�s corner� has been developed based on red mud. It is named �Sanjeevani�. Thousands oftrees sway on this soil.

To treat wastes generated within the colony, Hindalco has set a Domestic Effluent Treatment System,using water hyacinth (which effectively reduces toxic heavy metals and Bio-Chemical Oxygen Demand [BOD])as the treatment process in operation. This novel method has been adopted in consultation with the UP StatePollution Control Board.

To ensure minimalist emission of smelter gases such as fluorine and dust as well, High-tech DryScrubbing Systems have been installed on all of its potlines.

Hindalco�s Dry Scrubbing Systems have been designed in close partnership with Alesa Alusuisse, whohave proven expertise in the area of pollution control technology. These systems have been set up by Flakt,India, in collaboration with ABB ENV Flakt of Norway.

Interestingly Fly ash produced at Hindalco is used in manufacturing cement, bricks and the making ofroadways.

To minimize the generation of waste, and towards optimal use of energy and other scarce naturalresources, we are constantly engaged in process innovations. Much progress has been made in thisregard.

For instance through the installation of a computerized firing system in its Baking Furnaces,

�At the Plants,pollutionprevention,productstewardship andclean technologiesenable us to fulfilour goal ofsustainabledevelopment�.

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HINDALCO�S ENVIRONMENT POLICYHINDALCO�S ENVIRONMENT POLICYHINDALCO�S ENVIRONMENT POLICYHINDALCO�S ENVIRONMENT POLICYHINDALCO�S ENVIRONMENT POLICY

To live up to the principle of sustainable development, we at Hindalco, are committed to theconservation of all natural resources and the control of the environment aspects of all of ouractivities.These relate to the production of Alumina, Aluminium, Fabricated products and Power Generationat Renukoot to serve the cause of Sustainable Development. We strive to :● Innovate and improve our processes, equipment, operations, maintenance and other practices

continuously for pollution prevention.● Adopt cleaner technologies wherever techno-economically viable.● Conserve key input resources such as bauxite, caustic soda, coal, power, water, furnace oil

and other oils.● Keep exploring the feasibility of recycling and utilization of inevitable wastes specially of

water, lube oils, red mud and fly ash.● Ensure compliance with all applicable environmental laws and regulations and strive to go

beyond these.● Ensure continual improvement in our environmental performance through awareness and

training of our employees and contract workers.This Environment Policy must be adhered to by all of our employees.

A. K. Agarwala05-06-1997 President

Hindalco has successfully reduced fuel oil consumption. Similarly, a micro-processor based computerizedcontrol mechanism in the pot room has enabled Hindalco save substantially on power. An additionalbenefit that stems from this process is the optimizing of input material.

The quality of air emissions is monitored on an ongoing basis. To do so high volume air samplersand stack monitoring equipment are positioned at strategic locations.

A full-fledged state-of-the-art laboratory for testing of effluents, water, air and noise leveloperates round the clock.

Substantive investments have been made towards environment protection and pollution abatementmeasures. To date these are in excess of Rs. 175 crores.

Importantly at Hindalco, we encourage among our employees a great sense of responsibility for theenvironment, for safety, health and their well-being. Creating an awareness of these issues and enrollingthe commitment of our people to environment, safety and health, is achieved through extensive educationand training programmes. A well-articulated �Environment Policy� is in place. All of Hindalco�s 12,000employees have reaffirmed their total acceptance of the Policy and have pledged to practice it.

We are determined in our resolve to conserve the environment. To make sure that in meeting ourneeds, we do not encroach upon the ability of future generations to meet their needs of the earth�sfinite resources.

In fact all our Plants have a very wooded look, given the two hundred fifty thousand trees thatencircle them. They add grace and beauty to our Plants. The effect is one of tranquility. And for us atHindalco, it is �walking the talk�. �The

environmentaldimensionforms anintegral part ofall businessdecisions�.

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Social Report

To qualitatively impact the life of the weaker sections of society, we engage in a series of welfare driven initiatives. These are carried outunder the aegis of �The Aditya Birla Centre for Community Initiatives and Rural Projects�, spearheaded by Smt. Rajashree Birla, who isalso a Director on the Board of your Company.Our vision is �To actively contribute to the social and economic development of the communities in which we operate. In so doing, builda better, sustainable way of life for the weaker sections of society�.

Given this backdrop, we have adopted 307 villages, surrounding our Aluminium complex at Renukoot, RenusagarGiven this backdrop, we have adopted 307 villages, surrounding our Aluminium complex at Renukoot, RenusagarGiven this backdrop, we have adopted 307 villages, surrounding our Aluminium complex at Renukoot, RenusagarGiven this backdrop, we have adopted 307 villages, surrounding our Aluminium complex at Renukoot, RenusagarGiven this backdrop, we have adopted 307 villages, surrounding our Aluminium complex at Renukoot, RenusagarPPPPPower Division at Rower Division at Rower Division at Rower Division at Rower Division at Renusagarenusagarenusagarenusagarenusagar, U, U, U, U, U.P.P.P.P.P. and our mines at Bihar and Madhya P. and our mines at Bihar and Madhya P. and our mines at Bihar and Madhya P. and our mines at Bihar and Madhya P. and our mines at Bihar and Madhya Pradesh. Most of our project beneficiariesradesh. Most of our project beneficiariesradesh. Most of our project beneficiariesradesh. Most of our project beneficiariesradesh. Most of our project beneficiariesare among the poorest of the poorare among the poorest of the poorare among the poorest of the poorare among the poorest of the poorare among the poorest of the poor. W. W. W. W. We reach out to over four lakhs of people.e reach out to over four lakhs of people.e reach out to over four lakhs of people.e reach out to over four lakhs of people.e reach out to over four lakhs of people.

Our focus areas are health-care, water and sanitation, sustainable livelihood, education, women empowerment,Our focus areas are health-care, water and sanitation, sustainable livelihood, education, women empowerment,Our focus areas are health-care, water and sanitation, sustainable livelihood, education, women empowerment,Our focus areas are health-care, water and sanitation, sustainable livelihood, education, women empowerment,Our focus areas are health-care, water and sanitation, sustainable livelihood, education, women empowerment,espousing social reform through widow re-marriages and dowryless marriages, thus rehabilitating the destituteespousing social reform through widow re-marriages and dowryless marriages, thus rehabilitating the destituteespousing social reform through widow re-marriages and dowryless marriages, thus rehabilitating the destituteespousing social reform through widow re-marriages and dowryless marriages, thus rehabilitating the destituteespousing social reform through widow re-marriages and dowryless marriages, thus rehabilitating the destitutefamilies.families.families.families.families.

Espousing Social Reform

In the course of our work in the villages, we came across an unusually high incidence of young widows. MostIn the course of our work in the villages, we came across an unusually high incidence of young widows. MostIn the course of our work in the villages, we came across an unusually high incidence of young widows. MostIn the course of our work in the villages, we came across an unusually high incidence of young widows. MostIn the course of our work in the villages, we came across an unusually high incidence of young widows. Mostof them seemed condemned to a life of povertyof them seemed condemned to a life of povertyof them seemed condemned to a life of povertyof them seemed condemned to a life of povertyof them seemed condemned to a life of poverty, extreme hardship and exploitation. So almost five years ago, we, extreme hardship and exploitation. So almost five years ago, we, extreme hardship and exploitation. So almost five years ago, we, extreme hardship and exploitation. So almost five years ago, we, extreme hardship and exploitation. So almost five years ago, weembarked on a social reform process � that of widow re-marriages.embarked on a social reform process � that of widow re-marriages.embarked on a social reform process � that of widow re-marriages.embarked on a social reform process � that of widow re-marriages.embarked on a social reform process � that of widow re-marriages.

In the last four years we have been able to get 260 widows remarried. Emboldened by the success of this Project,In the last four years we have been able to get 260 widows remarried. Emboldened by the success of this Project,In the last four years we have been able to get 260 widows remarried. Emboldened by the success of this Project,In the last four years we have been able to get 260 widows remarried. Emboldened by the success of this Project,In the last four years we have been able to get 260 widows remarried. Emboldened by the success of this Project,Smt. Rajashree Birla persuaded us to take yet another step in this direction � that of dowryless marriages. WeSmt. Rajashree Birla persuaded us to take yet another step in this direction � that of dowryless marriages. WeSmt. Rajashree Birla persuaded us to take yet another step in this direction � that of dowryless marriages. WeSmt. Rajashree Birla persuaded us to take yet another step in this direction � that of dowryless marriages. WeSmt. Rajashree Birla persuaded us to take yet another step in this direction � that of dowryless marriages. Webegan this crusade in 1997. Since then over 200 dowryless marriages have been solemnised.began this crusade in 1997. Since then over 200 dowryless marriages have been solemnised.began this crusade in 1997. Since then over 200 dowryless marriages have been solemnised.began this crusade in 1997. Since then over 200 dowryless marriages have been solemnised.began this crusade in 1997. Since then over 200 dowryless marriages have been solemnised.

Restoring a People�s Self-esteemWe try and alleviate the lot of the physically impaired. Given their poor economic conditions and high dependency levels, they are trulya disadvantaged lot.Our constant aim is to examine the extent to which we can reduce their disability. So we reach out to them with tricycles, calipers,crutches, artificial limbs, special shoes � to cite a few examples.

More than 1200 physically impaired people are now better equipped to lead their life with these supportive aids. They do not think ofthemselves as a �burden� anymore.Medical CampsMedical CampsMedical CampsMedical CampsMedical CampsTo provide health care to villagers in the nook and cranny of the villages surrounding our Plants and Mines, we organise medical campsthrice a week.In the 150 medical camps conducted during the year, nearly 35,000 villagers were examined and treated for diverse ailments includingtuberculosis, leprosy, cataract, polio and skin-related diseases. Immunisation against major health hazards is also done at these camps.Patients who cannot be treated are referred to the Hindalco Base Hospital for in-depth investigation and treatment.Until now more than 12,000 children have been immunised along with 2500 pregnant women, 500 cataract patients operated upon successfully,over 1800 TB patients provided with treatment and nearly a 100 leprosy-afflicted looked after medically. These services are provided free of cost.

Beyond Business - Reaching Out to the Communities

2 22 22 22 22 2

Family Welfare Programme

TTTTTo encourage the small family norm, we have recoursed to a community based �family welfare projecto encourage the small family norm, we have recoursed to a community based �family welfare projecto encourage the small family norm, we have recoursed to a community based �family welfare projecto encourage the small family norm, we have recoursed to a community based �family welfare projecto encourage the small family norm, we have recoursed to a community based �family welfare project����� focussing focussing focussing focussing focussing on on on on onrrrrreproductive eproductive eproductive eproductive eproductive hhhhhealth ealth ealth ealth ealth cccccare and are and are and are and are and pppppopulation opulation opulation opulation opulation cccccontrol. Launched in 101 villages in Uttar Pradesh, Bihar and Madhyaontrol. Launched in 101 villages in Uttar Pradesh, Bihar and Madhyaontrol. Launched in 101 villages in Uttar Pradesh, Bihar and Madhyaontrol. Launched in 101 villages in Uttar Pradesh, Bihar and Madhyaontrol. Launched in 101 villages in Uttar Pradesh, Bihar and MadhyaPradesh, it is targeted towards 6000 young couples. A fully integrated project, it addresses the Family PlanningPradesh, it is targeted towards 6000 young couples. A fully integrated project, it addresses the Family PlanningPradesh, it is targeted towards 6000 young couples. A fully integrated project, it addresses the Family PlanningPradesh, it is targeted towards 6000 young couples. A fully integrated project, it addresses the Family PlanningPradesh, it is targeted towards 6000 young couples. A fully integrated project, it addresses the Family PlanningPPPPProject in a wholesome wayroject in a wholesome wayroject in a wholesome wayroject in a wholesome wayroject in a wholesome way. Its focus areas encompass : providing antenatal and post natal health care; creating. Its focus areas encompass : providing antenatal and post natal health care; creating. Its focus areas encompass : providing antenatal and post natal health care; creating. Its focus areas encompass : providing antenatal and post natal health care; creating. Its focus areas encompass : providing antenatal and post natal health care; creatingawareness and educatawareness and educatawareness and educatawareness and educatawareness and educatinginginginging the couples on reproductive health care; motivating couples to adopt the small family the couples on reproductive health care; motivating couples to adopt the small family the couples on reproductive health care; motivating couples to adopt the small family the couples on reproductive health care; motivating couples to adopt the small family the couples on reproductive health care; motivating couples to adopt the small familynorms through the spacing method and sterilizatinorms through the spacing method and sterilizatinorms through the spacing method and sterilizatinorms through the spacing method and sterilizatinorms through the spacing method and sterilizatingngngngng educating on reproductive tract infections and sexually educating on reproductive tract infections and sexually educating on reproductive tract infections and sexually educating on reproductive tract infections and sexually educating on reproductive tract infections and sexuallytransmitted diseases; investigating and treating different gynecological problems; counselling and providing treatmenttransmitted diseases; investigating and treating different gynecological problems; counselling and providing treatmenttransmitted diseases; investigating and treating different gynecological problems; counselling and providing treatmenttransmitted diseases; investigating and treating different gynecological problems; counselling and providing treatmenttransmitted diseases; investigating and treating different gynecological problems; counselling and providing treatmentfor infertility and for infertility and for infertility and for infertility and for infertility and gggggender sensitization, as well.ender sensitization, as well.ender sensitization, as well.ender sensitization, as well.ender sensitization, as well.

Spreading Literacy

TTTTTo raise the literacy level in and around Ro raise the literacy level in and around Ro raise the literacy level in and around Ro raise the literacy level in and around Ro raise the literacy level in and around Renukenukenukenukenukoot,we support �balwadis� � which are non-formal educationaloot,we support �balwadis� � which are non-formal educationaloot,we support �balwadis� � which are non-formal educationaloot,we support �balwadis� � which are non-formal educationaloot,we support �balwadis� � which are non-formal educationalcenters and schools as well. Through these Centres, we have been able to bring the benefits of education to overcenters and schools as well. Through these Centres, we have been able to bring the benefits of education to overcenters and schools as well. Through these Centres, we have been able to bring the benefits of education to overcenters and schools as well. Through these Centres, we have been able to bring the benefits of education to overcenters and schools as well. Through these Centres, we have been able to bring the benefits of education to over2000 children. Adult education classes are also held by us. T2000 children. Adult education classes are also held by us. T2000 children. Adult education classes are also held by us. T2000 children. Adult education classes are also held by us. T2000 children. Adult education classes are also held by us. To create an awareness on the values of education,o create an awareness on the values of education,o create an awareness on the values of education,o create an awareness on the values of education,o create an awareness on the values of education,good health and maintaining cleanliness, we hold puppet shows, dance-dramas and street plays in the interiors.good health and maintaining cleanliness, we hold puppet shows, dance-dramas and street plays in the interiors.good health and maintaining cleanliness, we hold puppet shows, dance-dramas and street plays in the interiors.good health and maintaining cleanliness, we hold puppet shows, dance-dramas and street plays in the interiors.good health and maintaining cleanliness, we hold puppet shows, dance-dramas and street plays in the interiors.Every show tells a story with a moral.Every show tells a story with a moral.Every show tells a story with a moral.Every show tells a story with a moral.Every show tells a story with a moral.

�Our social engagement stems from our fundamental belief that the organization of the future will be judged by the values it standsfor, for its contributions and for the benefits it offers to communities amidst which it operates�.

� Smt. Rajashree Birla

Chairperson, The Aditya Birla Centre for Community Initiatives and Rural DevelopmentChairperson, The Aditya Birla Centre for Community Initiatives and Rural DevelopmentChairperson, The Aditya Birla Centre for Community Initiatives and Rural DevelopmentChairperson, The Aditya Birla Centre for Community Initiatives and Rural DevelopmentChairperson, The Aditya Birla Centre for Community Initiatives and Rural Development

Water, the Gift of Life

For the last two years, in association with the UFor the last two years, in association with the UFor the last two years, in association with the UFor the last two years, in association with the UFor the last two years, in association with the U.P.P.P.P.P. Jal Nigam and UNICEF. Jal Nigam and UNICEF. Jal Nigam and UNICEF. Jal Nigam and UNICEF. Jal Nigam and UNICEF, we have been able to provide access to, we have been able to provide access to, we have been able to provide access to, we have been able to provide access to, we have been able to provide access tosafe drinking water to over 1,40,000 people in 103 villages in the Dudhi block off Renukoot. Handpumps at thesafe drinking water to over 1,40,000 people in 103 villages in the Dudhi block off Renukoot. Handpumps at thesafe drinking water to over 1,40,000 people in 103 villages in the Dudhi block off Renukoot. Handpumps at thesafe drinking water to over 1,40,000 people in 103 villages in the Dudhi block off Renukoot. Handpumps at thesafe drinking water to over 1,40,000 people in 103 villages in the Dudhi block off Renukoot. Handpumps at theinterval of every 10 huts have been installed. This project, which is run in its entirety by women, has met withinterval of every 10 huts have been installed. This project, which is run in its entirety by women, has met withinterval of every 10 huts have been installed. This project, which is run in its entirety by women, has met withinterval of every 10 huts have been installed. This project, which is run in its entirety by women, has met withinterval of every 10 huts have been installed. This project, which is run in its entirety by women, has met withgreat success. An additional benefit that has accrued from this Project is enabling more than 40 women, who havegreat success. An additional benefit that has accrued from this Project is enabling more than 40 women, who havegreat success. An additional benefit that has accrued from this Project is enabling more than 40 women, who havegreat success. An additional benefit that has accrued from this Project is enabling more than 40 women, who havegreat success. An additional benefit that has accrued from this Project is enabling more than 40 women, who havebeen trained as �hand-pump� mechanics, eke out a living.been trained as �hand-pump� mechanics, eke out a living.been trained as �hand-pump� mechanics, eke out a living.been trained as �hand-pump� mechanics, eke out a living.been trained as �hand-pump� mechanics, eke out a living.

It is our intent to extend this project to more villages in the near future.It is our intent to extend this project to more villages in the near future.It is our intent to extend this project to more villages in the near future.It is our intent to extend this project to more villages in the near future.It is our intent to extend this project to more villages in the near future.

Garnering Developmental AidFor the year 1999-2000, we mobilised Rs.194 million through different development programmes. This is apart from our own contri bution.We influenced the lives of over three lakhs people in a direct manner, by ensuring their well-being physically, and for many others offeringa sustainable means of livelihood.Making a DifferenceMaking a DifferenceMaking a DifferenceMaking a DifferenceMaking a DifferenceOur involvement in these community driven initiatives has made a perceptible difference to the lives of the marginalised section of society.Quite a few of these are no longer below the poverty line. And that gives us a humble sense of fulfillment, and pride in the fact that weare helping in the shaping of new societies.

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Corporate Governance ReportCORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECorporate governance refers to a combination of laws, regulations, procedures, implicit rules and voluntary practices which enablecompanies attract financial and human capital, perform efficiently and maximise long-term value for shareholders, while respecting theaspect of multiple stakeholders. Corporate governance strengthens the investors� trust and ensures a long-term partnership that helps infulfilling a company�s quest for higher growth and profits. Corporate governance rests upon four pillars viz., transparency, full disclosure,independent monitoring and being fair to all, especially to minority shareholders. A good corporate governance policy should ensure that� A best possible management team is in place� The Board is strong with non-executive and independent directors, who represent the interest of all stakeholders� The Board effectively monitors the management�s progress and key corporate decisions� The Board is aware of the concerns of the Company�s shareholders� The Management and employees have a stable environment, in which to plan and execute strategy� The Board is effectively in control of the Company�s affairs� The Company�s policies benefit all of its shareholders

In sum, the essence of Corporate Governance is thus the phrase �Your Company�. It is �your� company because it belongs to you - theshareholders. The Chairman and Directors are your fiduciaries and trustees. Their objective is to push the business forward to maximise�your� long-term value.

CORPORATE GOVERNANCE AT HINDALCOCORPORATE GOVERNANCE AT HINDALCOCORPORATE GOVERNANCE AT HINDALCOCORPORATE GOVERNANCE AT HINDALCOCORPORATE GOVERNANCE AT HINDALCO

Corporate governance is an important cornerstone of the Aditya Birla Group�s objective of creating shareholder value on a sustainablebasis. Your Company, a flagship company of the Aditya Birla Group, is no exception. Hindalco is committed to benchmarking itself withglobal standards in all areas, including corporate governance. Towards this end, the Company initiated the process of making substantialdisclosures on the Board of Directors, financial and stock performance in the Annual Report for the year 1998-99. While continuing tomake similar disclosures during the year, it has endeavoured to benchmark �your company� with the guidelines recommended by theSEBI Committee on Corporate Governance.

BOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSBOARD OF DIRECTORSComposition of the BoardComposition of the BoardComposition of the BoardComposition of the BoardComposition of the Board

The need for having a majority of non-executive directors on the Board is internationally well recognised. Hindalco�s Board meets thisrequirement as it consists of 11 non-executive directors, who account for 92% of the Board. Moreover, five of the non-executive directorsare �independent� (i.e., they have no business relationship with the Company) and two directors are nominees of financial institutions.

D i r e c t o rD i r e c t o rD i r e c t o rD i r e c t o rD i r e c t o r E x e c u t i v e / N o n - e x e c u t i v e /E x e c u t i v e / N o n - e x e c u t i v e /E x e c u t i v e / N o n - e x e c u t i v e /E x e c u t i v e / N o n - e x e c u t i v e /E x e c u t i v e / N o n - e x e c u t i v e / No. of OutsideNo. of OutsideNo. of OutsideNo. of OutsideNo. of Outside Refer NoteRefer NoteRefer NoteRefer NoteRefer NoteIndependent #Independent #Independent #Independent #Independent # Directorship heldDirectorship heldDirectorship heldDirectorship heldDirectorship held N o .N o .N o .N o .N o .

Mr Kumar Mangalam Birla Non-Executive 18 I

Mrs Rajashree Birla Non-Executive 9 I I

Mr E B Desai Non-Executive 15 I I I

Mr S S Kothari Non-Executive 1 I V

Dr P D Ojha Non-Executive / Nominee1 8Mr S K Kanwar Non-Executive / Nominee2 1 V

Mr T K Sethi Independent �Mr C M Maniar Independent 14 V I

Mr P K Daga Independent 14 I V

Mr M M Bhagat Independent 4 I V

Mr Marti G Subrahmanyam@ Independent 4 V I I

Mr A K Agarwala Executive / Whole-time Director 7 I V

# An independent director is� not a former executive and has no professional relationship with the company� not a large customer and / or vendor to the company� not a close relative of the promoter and / or any executive directors� not holding a significant stake� not a nominee of any large shareholder / creditor.1 � Nominee of Industrial Development Bank of India (IDBI)2 � Nominee of General Insurance Corporation of India (GIC)@ Resigned from the Board, effective 27th April 2000

I Excluding 18 foreign companies, SEBI, the G.D. Birla Medical Research &Education Foundation and 1 Private Limited Company

I I Excluding 16 foreign companies, the G.D. Birla Medical Research & EducationFoundation and 1 Private Limited Company

I I I Excluding 3 private companiesI V Excluding 1 private companyV Excluding 5 foreign companiesV I Excluding 7 private companiesV I IExcluding 8 foreign companies

2 42 42 42 42 4

Directors� Interest in the CompanyDirectors� Interest in the CompanyDirectors� Interest in the CompanyDirectors� Interest in the CompanyDirectors� Interest in the CompanyHindalco�s commitment to transparency goes beyond the statutory requirements. The Company has therefore decided to make full

disclosures regarding the interests of, and payments to, all Directors on the Board.

Director Relationship with Business Loans and Remuneration paid during 1999-2000Other Directors relationship with advances (All Figures in Rupees)

the Company, if receivedany from the Salrary **

Company* Sitting fees & perks Commission Total

Mr Kumar Mangalam Birla Son of � � 12,000 � � 12,000Mrs Rajashree Birla

Mrs Rajashree Birla Mother of � � 8,000 � � 8,000Mr Kumar MangalamBirla

Mr E B Desai � Solicitor � 12,000 � � 12,000Mr S S Kothari � Ex-president � 10,000 � � 10,000Dr P D Ojha � Nominee of IDBI � 8,000 � - 8,000Mr S K Kanwar � Nominee of GIC � 4,000 � � 4,000Mr T K Sethi � � � 6,000 � � 6,000Mr C M Maniar � � � 8,000 � � 8,000Mr P K Daga � � � 2,000 � - 2,000Mr M M Bhagat � � � 10,000 � � 10,000Mr Marti G Subrahmanyam@ � � � 4,000 � � 4,000Mr A K Agarwala � President and � � 22,86,000 � 22,86,000

Whole-time Director* Hindalco has a policy of not advancing any loans and not paying any commission from profits to non-executive directors.@ Resigned from the Board, effective 27th April 2000

Attendance Record of the DirectorsAttendance Record of the DirectorsAttendance Record of the DirectorsAttendance Record of the DirectorsAttendance Record of the Directors

It is important for the shareholders to know the number of times the Board had met during the past year as well as attendance recordof their Directors. The Company has, therefore, decided to make full disclosure on the board meetings as well as attendance record of allDirectors on the Board.

Director No. of MeetingsHeld Attended Attended

Last AGM*Mr Kumar Mangalam Birla 6 6 YesMrs Rajashree Birla 6 4 YesMr E B Desai 6 6 YesMr S S Kothari 6 5 YesDr P D Ojha 6 4 YesMr S K Kanwar 6 2 NoMr T K Sethi 6 3 YesMr C M Maniar 6 4 YesMr P K Daga 6 1 NoMr M M Bhagat 6 5 YesMr Marti G Subrahmanyam @ 6 2 YesMr A K Agarwala 6 6 Yes

* Annual General Meeting (AGM) held on 4th August 1999 at Birla Matushri Sabhagar, 19 Marine Lines, Mumbai@ Resigned from the Board, effective 27th April 2000

2 52 52 52 52 5

FINANCIAL DISCLOSUREFINANCIAL DISCLOSUREFINANCIAL DISCLOSUREFINANCIAL DISCLOSUREFINANCIAL DISCLOSURE

Debt Profile as on 31Debt Profile as on 31Debt Profile as on 31Debt Profile as on 31Debt Profile as on 31ststststst March 2000 March 2000 March 2000 March 2000 March 2000

(Rs. in Millions)Short Term (Payable in one year) Long Term

Rupee Debt Forex Debt Rupee Debt Forex Debt TotalSECUREDSecured Redeemable Non-Convertible Debentures * 430.18 � 1,750.00 � 2180.18Term Loans from Financial Institutions 219.12 � � � 219.12Term Loans from Banks 129.86 � � � 129.86From Government of Uttar Pradesh under subsidiesHousing Scheme for Industrial Workers 0.24 � 1.59 � 1.83From Housing Development Finance Corporation 15.79 � � � 15.79Cash Credit and Export Credit Account 322.69 � � � 322.69Foreign Currency Loan from Banks � 130.80 � 2,289.55 2420.35Bank Loans 40.00 � � � 40.00Sub-TotalSub-TotalSub-TotalSub-TotalSub-Total 1 ,157.881,157.881,157.881,157.881,157.88 130.80130.80130.80130.80130.80 1,751.591,751.591,751.591,751.591,751.59 2,289.552,289.552,289.552,289.552,289.555,329.825,329.825,329.825,329.825,329.82UNSECUREDDeposits 97.06 � 12.83 � 109.89Foreign Currency Loan from Banks � 313.99 � � 313.99Sub-TotalSub-TotalSub-TotalSub-TotalSub-Total 97 .0697.0697.0697.0697.06 313.99313.99313.99313.99313.99 12.8312.8312.8312.8312.83 ����� 423.88423.88423.88423.88423.88GRAND TOTALGRAND TOTALGRAND TOTALGRAND TOTALGRAND TOTAL 1,254.941,254.941,254.941,254.941,254.94 444.79444.79444.79444.79444.79 1,764.421,764.421,764.421,764.421,764.42 2,289.552,289.552,289.552,289.552,289.55 5,753.705,753.705,753.705,753.705,753.70

* Includes Rs.1.84 million towards interest accrued and due on Debentures

CONTINGENT AND EXPECTED LIABILITIESCONTINGENT AND EXPECTED LIABILITIESCONTINGENT AND EXPECTED LIABILITIESCONTINGENT AND EXPECTED LIABILITIESCONTINGENT AND EXPECTED LIABILITIESDetails of contingent and expected liabilities are highlighted as part of notes to accounts (Note No. 1J, Schedule 21)

RISK MANAGEMENTRISK MANAGEMENTRISK MANAGEMENTRISK MANAGEMENTRISK MANAGEMENTThe Company is exposed to risks from market fluctuations of foreign exchange, interest rate and commodity prices.

Foreign Exchange RiskForeign Exchange RiskForeign Exchange RiskForeign Exchange RiskForeign Exchange Risk

Hindalco is exposed to foreign exchange risk due to its exports and forex loans. The quantum of exports during the year was US$ 71.99million, while the amount of forex loan repayments was US$ 10.20 million. On balance, the Company is long on US$ due to an excessof exports over imports and hence is exposed to US$ depreciation (i.e., appreciation of the Indian Rupee).

Given the current economic environment and history of the US$/Indian Rupee exchange rate, the Company believes that the risk of US$depreciation is low and hence focuses attention on hedging US$ outflows in the form of loan repayments. This is being done primarilythrough placing money in EEFC deposit accounts. The US$ balances kept in these accounts enable the Company to take advantage of IndianRupee depreciation and provide a natural hedge for the Company�s forex loan repayments. The balance in all EEFC accounts includingTerm Deposits as on 31st March 2000 was US$ 27.71 million.Interest Rate RiskInterest Rate RiskInterest Rate RiskInterest Rate RiskInterest Rate RiskThe Company is exposed to the interest rate fluctuations due to its US$ and rupee denominated borrowings. Indian Rupee interest ratehedging has just been opened and this market is not yet liquid. The Company, therefore, manages the interest rate risk in the IndianRupee denominated borrowings by exploring opportunities for pre-paying and/or re-financing the loan or negotiating with the lenders forlower interest rate.The Company has been proactively using derivative instruments viz., cross currency swaps, to reduce the interest cost of its outstandingforeign exchange loans. As on 31st March 2000, the Company had foreign currency loans worth US$62.70 million, out of which loans worthUS$55.35 million has been swapped into Japanese Yen. This has resulted in lower effective interest costs. Besides, in order to protect itself

2 62 62 62 62 6

from the adverse movement of Japanese Yen vis-à-vis US$, the Company entered into a zero-cost option against the swapped loans ofUS$30 million during 1999-2000. The Company has insulated its liability risk on foreign loans of US$55.20 million by entering to interestrate swaps.

Commodity Price RiskCommodity Price RiskCommodity Price RiskCommodity Price RiskCommodity Price RiskHindalco�s metal selling prices, like other aluminium producers in the world, gets their reference from the quotations of the London MetalExchange (LME). Using hedging techniques can minimise the effect of volatility of the price quotations of LME into the metal prices. TheCompany is at an advanced stage of setting-up a hedging desk for this purpose. The necessary application is being filed with the ReserveBank of India and the hedging activities will start immediately on receipt of the requisite approvals.

Y2K RiskY2K RiskY2K RiskY2K RiskY2K RiskHindalco had successfully undergone Y2K roll-over at its plants. All systems and equipments are functioning normal in the post Y2Kenvironment.

CORPORATE GOVERNANCE DISCLOSURESCORPORATE GOVERNANCE DISCLOSURESCORPORATE GOVERNANCE DISCLOSURESCORPORATE GOVERNANCE DISCLOSURESCORPORATE GOVERNANCE DISCLOSURESAs mentioned earlier, �Your Company� has endeavoured to benchmark itself with the guidelines issued by the Committee on CorporateGovernance set up by the Securities and Exchange Board of India (SEBI). Hindalco adheres to most of the recommendations made by theSEBI Committee, but for a few areas such as audit committee, remuneration committee and the number of outside directorship. TheCompany is reviewing these recommendations.Recommendations Complied AlreadyRecommendations Complied AlreadyRecommendations Complied AlreadyRecommendations Complied AlreadyRecommendations Complied Already1. The Board should have an optimum combination of executive and non-executive directors and at least 50% of the Board should

comprise of non-executive directors. Further, at least one-third of the Board should comprise of independent directors where theChairman is non-executive and at least half of the Board should be independent in case of an Executive Chairman.92% of the Directors on the Board of Hindalco are non-executive directors, with considerable experience in their respective fields. Atpresent 42% of the Board consists of independent directors, who have no professional and/or business relationship with the Company.

2. The Board should set up a committee under the chairmanship of a non-executive / independent director to specifically look intoshareholder issues including share transfer and redressing of shareholder complaints.

Hindalco has a committee to look into the issues relating to shareholders and focuses primarily on share transfers.

3. To expedite the process of share transfers, the Board should delegate the power of share transfer to an officer or a committee or tothe registrar and share transfer agents. The delegated authority should attend to share transfer formalities at least once in afortnight.

The delivery of equity shares of the Company is mandatory in the dematerialised form in all the stock exchanges. The Company�sshares therefore are now traded in the dematerialised form. To expedite transfers in the physical segment, authority has beendelegated to the Share Transfer Committee. Any one Director can approve transfer of shares. Share transfers/transmissionsapproved by the Committee are placed at the Board Meeting from time to time.

Name and Designation of Compliance Officer: Mr Anil Malik, Dy Manager (Company Matters)

Details of complaints received, number of shares transferred during last year as well as average time taken for effecting thesetransfers during last year are highlighted in the �Shareholder Information� section of the Annual Report.

4. The Corporate Governance section of the Annual Report should make disclosures on remuneration paid to Directors in all formsincluding salary, benefits, bonuses, stock options, pension and other fixed as well as performance linked incentives.

Details of remuneration paid to the Directors are highlighted at the beginning of this section. Hindalco has a policy of not payingcommission on profits to any Director of the Company.

5. The Board Meetings should be held at least four times in a year, with a maximum time gap of four months between any twomeetings and all information recommended by the SEBI Committee should be placed before the Board.

The Board met 6 times during the past year. Agenda papers were sent to the Directors in advance of each meeting. As regards variousitems recommended by the SEBI Committee on Corporate Governance, the following items are not presented in a structured manner at

2 72 72 72 72 7

present. However, necessary steps are being taken to present all items recommended by the SEBI Committee in a structured mannerfrom the current financial year.

� Annual operating plans and budgets� Capital budgets and updates, if any.� Quarterly details of foreign exchange exposures and steps taken by the Company to limit the risk of adverse exchange rate

movement, if material.The Company is working on rectifying these issues and is confident of placing these information in a structured manner before the Boardat the earliest and in any case before 31st March 2001.Date of Board Meeting City No. of Directors Present6th May 1999 Mumbai 94th August 1999 Mumbai 1030th August 1999 Mumbai 822nd October 1999 Mumbai 729th January 2000 Mumbai 823rd March 2000 Mumbai 6

6 .6 .6 .6 .6 . As a part of the disclosure related to management, in addition to the Directors� Report, Management�s Discussion and Analysis reportshould form part of the Annual Report.

Management�s Discussion and Analysis forms part of the Annual Report. The Company introduced this new section in the Annual Reportfor the year 1998-99.

7. All company related information like quarterly results, presentation made to analysts be put on the Company�s web-site or may besent in such a form so as to enable the stock exchange on which the Company is listed to put it on its own web-site.

The Company makes a presentation to investors and equity analysts following the announcement of quarterly results. A copy of the PressRelease and results announcements are made available on the web site of the Company (www.hindalco.com) as well as theweb site of the Aditya Birla Group (www.adityabirla.com).

8. There should be a separate section on Corporate Governance in the Annual Report, with details on the level of compliance by theCompany. Non-compliance of any mandatory recommendation with reasons thereof and the extent to which the non-mandatoryrecommendations have been adopted should be specifically highlighted.

The Company introduced a separate section on Corporate Governance in its Annual Report for the year 1998-99, and continues with thispractice.

9. The Non-Executive Chairman of the Company should be entitled to maintain an office at the Company�s expense and also allowedreimbursement of expenses incurred in the performance of his duties. This will enable him to discharge the responsibilitieseffectively. (This is a non-mandatory recommendation)

The Company maintains a separate office for the Non-Executive Chairman.

Recommendation Under ReviewRecommendation Under ReviewRecommendation Under ReviewRecommendation Under ReviewRecommendation Under Review

The Company is reviewing the following recommendations of the SEBI Committee on Corporate Governance and aims to comply with amajority of these recommendations during the current financial year, latest by 31st March 2001.

� A qualified and an independent �Audit Committee� should be set up by the Board of the Company. This would go a long way inenhancing the credibility of the financial disclosures and promoting transparency.

� The Board should set up a �Remuneration Committee� to determine on its behalf and on behalf of the shareholders with agreed termsof reference.

2 82 82 82 82 8

� No Director should be a member in more than 10 committees or act as Chairman of more than five committees across all companiesin which he is a Director. Furthermore it should be a mandatory annual requirement for every director to inform the company aboutthe committee positions he occupies in other companies and changes.

� The Company should provide a brief resume, expertise in specific functional areas and names of companies, in which the person alsoholds the directorship and the membership of Committees of the Board, while appointing a new Director or re-appointing an existingDirector. These should form part of the Notice to shareholders.

� Disclosures to be made to the Board by the Management relating to all material, financial and commercial transactions, where theyhave personal interest, that may have a potential conflict with the interest of the Company at large. These include dealing in companyshares, commercial dealings with bodies, which have shareholding of management and their relatives, etc.

� The half-yearly declaration of financial performance including a summary of the significant events in last six-months, should be sent tothe household of each shareholder.

Recommendations not pertaining to the CompanyRecommendations not pertaining to the CompanyRecommendations not pertaining to the CompanyRecommendations not pertaining to the CompanyRecommendations not pertaining to the Company

� The financial institutions should under normal circumstances have no direct role in the decision making of the Board of theCompany. They should not have nominees on the Board, merely by virtue of their financial exposure in the Company. There ishowever a ground for the term lending institutions to have nominees on the Boards of the borrower companies, to protect theirinterests as creditors. In such cases, the nominee directors should take an active interest in the activities of the Board and assumeequal responsibility, as any other director on the Board.

Not a company level issue

Other disclosures recommended by the SEBI CommitteeOther disclosures recommended by the SEBI CommitteeOther disclosures recommended by the SEBI CommitteeOther disclosures recommended by the SEBI CommitteeOther disclosures recommended by the SEBI Committee

1. Details on Annual General Meetings

1.1. Location and time, where last three AGMs held

Year Location Date Time

1998-99 Birla Matushri Sabhagar, Mumbai 4th August 1999 3.30 p.m.1997-98 Birla Matushri Sabhagar, Mumbai 5th August 1998 3.30 p.m.1996-97 Birla Matushri Sabhagar, Mumbai 6th August 1997 3.30 p.m.

1.2. Whether special resolutions were put through postal ballot last year? NO

1.3. Are polls proposed to be conducted through postal ballot this year? NO

2. Disclosures on materially significant related party transactions i.e. transactions of the company of material nature, with itspromoters, the directors or the management, their subsidiaries or relatives etc. that may have potential conflict with the interestsof the Company at large.

A detailed disclosure on related party transactions are made in the financial statements prepared as per US GAAP, which areavailable upon request.

3. Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchange or SEBI or any statu toryauthority, on any matter related to capital markets, during the last three years.

None which require separate disclosure

2 92 92 92 92 9

4. Means of communication

➢ Half-yearly report sent to each household of shareholders No

➢ Quarterly results

➢ Which newspapers normally published in The Economic Times (All Editions)Maharashtra Times, Mumbai

➢ Any web site, where displayed www.adityabirla.comwww.hindalco.com

➢ Whether it also displays official news Yesreleases and presentation made toinvestors/ analysts

➢ Whether MD&A is a part of Annual Report Yes

➢ Whether Shareholder Information forms YesPart of the Annual Report

3 03 03 03 03 0

Shareholder Information1. Annual General Meeting

- Date and Time : 1st August 2000 (Tuesday) - 3.30 P.M.- Venue : Birla Matushri Sabhagar, 19 Marine Lines,

Mumbai 400020

2. Financial Calendar :- Financial reporting for the quarter ending June 30, 2000 : Early August 2000- Financial reporting for the half year ending September 30, 2000 : End October 2000- Financial reporting for the quarter ending December 31, 2000 : End January 2001- Financial reporting for the year ending March 31, 2001 : End April 2001- Annual General Meeting for the year ended March 31, 2001 : 1st fortnight of August 2001

3. Dates of Book Closure : 18th July 2000 - 1st August 2000

4. Dividend Payment Date : On or after 7th August 2000

5. Registered Office : Century Bhavan, 3rd Floor,Dr Annie Besant Road, Worli,Mumbai 400 025Phone: (91-22) 4308491/4308692Fax: (91-22) 422 7586 / 4362516E-Mail: ajjhala@worli.hindalco.comWeb: www. hindalco.com

6. Listing Details :

Equity Shares Global Depository Receipts(GDRs)

The Calcutta Stock Exchange Association Limited Societe de la Bourse de Luxembourg,7 Lyons Range, Calcutta 700 001 Societe Anonyme,

Madras Stock Exchange Limited R.C. B6222, B P 165, L-2011 Luxembourg

Exchange Building, 11 Second Line Beach, Chennai 600 001

The Stock Exchange, MumbaiPhiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 023

National Stock Exchange of India LimitedTrade World, Senapati Bapat Marg, Lower Parel, Mumbai 400 013

The Delhi Stock Exchange Association LimitedDSE House, 3/1, Asaf Ali RoadNew Delhi 110 002

Note: Listing fee has been paid to the Indian Stock Exchanges for the year 2000-01. Listing fees to the Societe de la Bourse de Luxembourg for GDRs hasbeen paid for the Calendar year 2000.

3 13 13 13 13 1

7. Stock Code :Reuters Bloomberg

Bombay Stock Exchange HALC.BO HNDL INNational Stock Exchange HALC.NS NHNDL INLuxembourg Stock Exchange (GDRs) � HDCD LI

8. Stock Price Data :Bombay Stock Exchange (BSE) National Stock Exchange (NSE) Luxembourg Stock Exchange

(In Rs.) (In Rs.) (GDRs in US$)

High Low Close Average High Low Close Average High Low Average

Apr-99 614.00 442.00 570.00 142,866 625.00 445.00 565.00 97,367 15.13 11.80 13.17May-99 683.45 540.50 577.00 118,970 682.50 539.55 574.00 108,999 18.95 14.25 16.69Jun-99 690.00 542.50 628.50 118,493 697.00 543.00 631.05 71,325 19.65 15.26 17.57Jul-99 955.00 635.90 831.50 232,446 968.00 635.95 850.40 236,962 27.00 20.25 23.59Aug-99 1,005.00 834.75 918.00 120,407 1,025.00 830.00 900.15 76,480 29.80 22.25 26.46Sep-99 967.00 877.00 891.50 96,133 965.00 870.25 894.90 50,902 28.75 24.75 27.06Oct-99 959.60 715.00 723.00 98,628 949.00 730.00 735.45 80,738 28.75 21.50 25.43Nov-99 912.45 717.00 850.00 73,409 906.95 720.00 848.50 52,387 24.50 22.20 23.55Dec-99 889.00 775.00 805.00 70,639 889.00 775.00 813.45 35,374 26.10 22.65 24.54Jan-00 1,130.00 764.60 764.60 120,677 1,124.00 772.75 772.75 67,996 31.90 22.50 27.70Feb-00 920.15 740.00 760.10 217,086 913.55 725.00 757.05 116,234 26.00 21.75 23.91Mar-00 772.50 579.60 735.10 86,320 774.00 579.60 737.25 48,668 21.50 16.50 18.36

9. Stock Performance (Indexed) :

10. Stock Performance Over The Past Few Years :(In Percentage) 1 Year 3 Years 5 Years

HINDALCOHINDALCOHINDALCOHINDALCOHINDALCO 5 5 . 65 5 . 65 5 . 65 5 . 65 5 . 6 ( - ) 2 0 . 0( - ) 2 0 . 0( - ) 2 0 . 0( - ) 2 0 . 0( - ) 2 0 . 0 2 6 . 02 6 . 02 6 . 02 6 . 02 6 . 0BSE Sensex 35.7 41.3 50.8BSE 200 65.6 87.2 68.6Nifty 43.7 57.5 52.0

70

90

110

130

150

170

190

210

230

250

HindalcoNiftyBSE 200BSE Sensex

Apr 99 May 99 Jun 99 Jul 99 Aug 99 Sep 99 Oct 99 Nov 99 Dec 99 Jan 00 Feb 00 Mar 0

3 23 23 23 23 2

11. Registrars and Transfer Agents : In-house Share Transfer(Share transfer and communication Share Transfer Departmentregarding share certificates, Ahura Complex, Ist Floor, �B� Wingdividends and change of address) Mahakali Caves Road, Andheri (East)

Mumbai 400 093Phone: (91-22) 8307100Fax: (91-22) 8241710

12. Share Transfer System : Share transfers are registered and returned within aperiod of 3 weeks from the date of receipt, if documentsare clear in all respects. The Share Transfer Committeemeets every fortnight.

The total number of shares transferred in the physicalform during the year was 459,355 (Previous year -50,64,803). Since more than 64% of the equity capitalis dematerialised, transfer of shares in the physicalsegment is significantly lower during the year.

1999-2000 1998-99

Transfer Period No. of No. of % No. of No. of %(In Days) Transfers Shares Transfers Shares

1-10 944 42,480 9.3 1,615 64,600 1.311-15 1,259 72,130 15.7 2,423 101,760 2.016-20 2,675 142,100 30.9 4,847 290,820 5.721-30 2,992 202,645 44.1 71,905 4,607,623 91.031and above - - - - - -

Total 7,870 459,355 100.0 80,790 5,064,803 100.0

13. Investor Services :Complaints received during the year

Nature of complaints 1999 - 2000 1998 - 1999Received Cleared Received Cleared

Relating to Transfers, Transmissions,Dividend and Change of address 51 51 46 46

Others 3 3 � �

Total 54 54 46 46

Legal proceedings on share transfer issues, if any: NIL

3 33 33 33 33 3

14. Distribution of Shareholding (as at the year end) :

1999-2000 1998-99

No. of Shares No. of % of No. of % Share No. of Share % of Share No. of Shares % shareHeld Share- Share- Shares Held holding holders holders Held holding

holders holders

1-100 21,979 55.26 884,921 1.19 20,718 53.42 849,965 1.14101-200 6,076 15.28 1,472,232 1.98 6,070 15.65 896,392 1.20201-500 6,723 16.90 2,189,399 2.94 6,828 17.61 2,211,704 2.97501-1000 2,958 7.44 2,069,183 2.78 3,095 7.98 2,156,670 2.901001-5000 1,742 4.38 3,233,269 4.34 1,806 4.66 3,330,658 4.475001-10000 94 0.24 645,602 0.87 112 0.29 751,138 1.0110001 and above 197 0.50 63,971,364 85.90 151 0.39 64,269,443 86.31

Total 39769 100.0 74,465,970 100.00 38,780 100.00 74,465,970 100.00

15. Categories of Shareholding (as at the year end) :

1999-2000 1998-99

Category No. of % of No. of % Share No. of Share % of Share No. of Shares % shareShare- Share- Shares Held holding holders holders Held holding

holders holders

Individuals 38,333 96.39 9,853,119 13.23 37,445 96.55 10,569,921 14.19Corporate 1,016 2.55 36,351,671 48.82 1,001 2.58 42,350,210 56.8FIIs 126 0.31 11,174,422 15.00 62 0.16 3,987,947 5.36NRI/OCBs 250 0.63 3,757,708 5.05 231 0.60 3,401,824 4.57Mutual Funds 43 0.11 756,001 1.01 40 0.10 980,519 1.32GDRs 1 0.01 12,573,049 16.89 1 0.01 13,175,549 17.69

Total 39,769 100.00 74,465,970 100.00 38,780 100.00 74,465,970 100.00

16. Dematerialisation of Shares and Liquidity : Over 64.3% of outstanding shares (including 16.9% ofoutstanding capital in the form of Global Depository Receipts)have been dematerialised.

Trading in Hindalco shares is permitted only in thedematerialised form from 5th April 1999, as per notificationsissued by the Securities and Exchange Board of India

17. Details on Use of Public Funds Obtained : Not Applicablein the Last Three Years

18. Outstanding GDR/ Warrants : Outstanding number of GDRs - 12,573,049(previous year 13,175,549). Each GDRsrepresent one underlying equity share. There are nowarrants/ convertible bonds outstanding at the year end.

3 43 43 43 43 4

19. Plant Locations : Principal Office & WorksPrincipal Office & WorksPrincipal Office & WorksPrincipal Office & WorksPrincipal Office & WorksP.O. Renukoot - 231217Dist. Sonbhadra, Uttar PradeshTel: (05446) 52077 - 9Fax: (05446) 52107

RRRRRenusagar Penusagar Penusagar Penusagar Penusagar Power Divisionower Divisionower Divisionower Divisionower DivisionP.O.RenusagarDist. Sonbhadra, Uttar PradeshTel: (05446) 72501 - 5Fax: (05446) 72382

Foil & Wheels DivisionFoil & Wheels DivisionFoil & Wheels DivisionFoil & Wheels DivisionFoil & Wheels DivisionVillage Khutli, Khanvel,Silvassa - 396 230U.T. of Dadar & Nagar HaveliTel: (02638) 47221Fax: (02638) 42936

20. Investor Correspondence : The Company SecretaryHindalco Industries LimitedCentury Bhavan, 3rd Floor,Dr Annie Besant Road, Mumbai 400 025Phone: (91-22) 4308491 / 92 / 93Fax: (91-22) 422 7586 / 4362516E-mail: ajjhala@worli.hindalco.com

21. Per Share Data :

1999-2000 1998-99 1997-98 1996-97

Net Earnings (Rs. Mn) 6,124 5,668 4,962 3,903Cash Earnings (Rs. Mn) 7,477 6,914 5,738 4,326EPS (Rs.) 82.2 76.1 66.6 52.5EPS Growth (%) 8.0 14.2 26.9 -2.5CPS (Rs.) 100.4 92.8 77.1 58.2Dividend Per Share (Rs.) 8.0 6.5 5.3 4.5Dividend Payout (%) 9.7 8.5 7.9 8.6Book Value Per Share (Rs.) 510.2 437.7 368.3 307.4Price to Earnings (x) * 8.9 6.1 10.1 17.4Price to Cash Earnings (x) * 7.3 5.0 8.7 15.7Price to Book Value (x) * 1.4 1.1 1.8 3.0

* Stock price as on 31st March

3 53 53 53 53 5

Board of Directors

Mr. Kumar Mangalam BirlaChairmanMrs. Rajashree BirlaMr. T.K. SethiMr. C.M. ManiarMr. E.B. DesaiMr. S.S. KothariDr. P.D. OjhaMr. P.K. DagaMr. M.M. BhagatMr. S.K. KanwarMr. A.K. Agarwala(Whole-time Director)

SPECIAL ADVISORMr. D.P. Mandelia

KEY EXECUTIVESMr. K.K. RathiExecutive President (Administration)Mr. O. S. ChaudharyExecutive President (Reduction Plant)Mr. R.K. KasliwalExecutive President (Finance and Commerce)Mr. K.G. BiyaniExecutive President (Fabrication Plant & Elect.)Mr. S.K. TewariExecutive President (Projects)Ms. N. ChainaniExecutive President(Corporate Affairs & Development)Mr. G.C. MehtaJoint President (Engineering)Mr. D.N. HimmatramkaJoint President (Material Resources)Mr. S.M. LakhotiaJoint President (Management Services)Mr. R.P. ShahJoint President (Alumina Plant)Mr. S.P. ShorewalaSenior Vice-President (Sales)Mr. K.N. SrivastavaSenior Vice-President (Legal)Mr. B.K. VarmaSenior Vice-President (Public Relations)Mr. Pushpendra SinghSenior Vice-President (Sales, Eastern Zone)

Mr. Ramesh KumarSenior Vice-President (North Zone)

Mr. V.K. MushranSenior Vice-President (Sales)

Mr. V.K. AgarwalSenior Vice-President (R&D)

Mr. A.K. KarmakarSenior Vice-President (Boiler & Co-generation)

Mr. R.P. TiwariSenior Vice-President (Projects)

Mr. Ajey SrivastavaSenior Vice-President (Operation & Planning)

Mr. P. K. PandaSenior Vice-President (H.R.)

Mr. S.L. TanejaVice-President (Engineering)

Mr. U.K. ChoubeyVice-President (HRD)

Mr. S.B. MaheshwariVice-President (Materials)

Mr. V.S. SuranaVice-President (Reduction Technical)

Mr. S.N. SharmaVice-President (Finance & Accounts)

Mr. S.C. TandonVice-President (Pot Room Operations)

Mr. O.P. SharmaVice-President (Alumina Maintenance)

Mr. C.M. AgarwalVice-President (Reduction Maintenance)

Mr. R. Haridas MenonVice-President (Sales, South Zone)Mr. R.N. GuptaVice-President (Export)

RENUSAGAR POWER DIVISIONMr. G.S. KhuranaExecutive President (Renusagar Power Plant)Mr. S.M. KejriwalSenior Vice-President (Finance & Commerce)Mr. S.R. GopalSenior Vice-President (Design)

Mr. P.V. RaoSenior Vice-President (Operations)

FOIL DIVISIONMr. J.D. MehtaSenior Vice-President (Foil Marketing)Mr. T.N.M. BalagopalanVice-President (Foils)

PROJECTDr. S.K. TamotiaPresidentMr. C.B. AgarwalVice-President (Projects)

ADVISORMr. Saurabh Mishra

COMPANY SECRETARYMr. Anil J. JhalaJoint President(Company Matters, Taxation & Treasury)

SOLICITORSMulla & Mulla &Craigie Blunt & Caroe, MumbaiKhaitan & Co., CalcuttaKhaitan & Partners, New Delhi

AUDITORSSinghi & Co.,Chartered Accountants, Calcutta

INDEPENDENT AUDITORS(US GAAP)KPMG, Mumbai

COST AUDITORSR. Nanabhoy & Co., Mumbai

BANKERSUCO BankState Bank of IndiaAllahabad BankAmerican Express Bank Ltd.Bank of AmericaCitibank N.A.ANZ Grindlays Bank p.l.c.ABN Amro Bank N.V.Union Bank of IndiaIDBI Bank Ltd.

3 63 63 63 63 6

Units 1999-001999-001999-001999-001999-00 1998-99 1997-98 1996-97 1995-96 1994-95 1993-94 1992-93 * 1991-92 1990-91PRODUCT IONPRODUCT IONPRODUCT IONPRODUCT IONPRODUCT ION

Aluminium Metal MT 248,930248,930248,930248,930248,930 240,926 200,304 166,272 175,398 164,280 155,761 163,485 166,197 139,762

Wire Rods MT 49,01849,01849,01849,01849,018 51,197 45,482 42,704 45,865 44,454 40,225 37,740 42,329 39,954

Rolled Products MT 58,69058,69058,69058,69058,690 44,668 34,193 18,302 31,378 38,202 30,740 29,619 31,529 27,762

Extruded Products MT 14,95914,95914,95914,95914,959 11,995 12,389 11,798 12,589 11,416 9,807 9,799 10,385 8,652

Foil MT 7,5377,5377,5377,5377,537 1,551 26 � � � � � � �

Wheel Pcs. 5,4515,4515,4515,4515,451 � � � � � � � � �

PROFIT & LOSS ACCOUNTPROFIT & LOSS ACCOUNTPROFIT & LOSS ACCOUNTPROFIT & LOSS ACCOUNTPROFIT & LOSS ACCOUNT (((((Rs. In Million)Gross Sales 23,07623,07623,07623,07623,076 20,131 16,707 13,083 14,222 11,307 9,217 9,756 8,559 6,716Net Sales 20,31220,31220,31220,31220,312 17,670 14,733 11,571 12,518 9,563 7,495 7,552 6,544 5,162Operating Expenses 10,91210,91210,91210,91210,912 9,895 8,676 7,309 6,915 5,727 5,252 5,343 4,834 3,887Operating Profit 9 ,4009,4009,4009,4009,400 7,775 6,057 4,262 5,603 3,836 2,243 2,210 1,709 1,276Other Income 1,3871,3871,3871,3871,387 1,445 1,275 1,754 1,773 1,267 711 539 326 205Interest Payment 597597597597597 836 723 489 616 474 480 532 323 313Gross Profit 10,19010,19010,19010,19010,190 8,384 6,608 5,528 6,760 4,629 2,473 2,216 1,713 1,169Depreciation 1,3531,3531,3531,3531,353 1,246 776 423 348 330 269 370 211 164Profit before Tax &Extraordinary Items 8,8378,8378,8378,8378,837 7,138 5,832 5,105 6,411 4,299 2,204 1,846 1,502 1,004Taxation 2,4852,4852,4852,4852,485 1,470 870 1,202 2,400 1,380 607 691 621 356Net Profit after Tax 6,1246,1246,1246,1246,124 5,668 4,962 3,903 4,011 2,919 1,597 1,155 880 648Equity Dividend(including dividend tax) 691691691691691 532 430 369 298 258 189 155 145 145Retained Profit 5 ,4335,4335,4335,4335,433 5,135 4,532 3,534 3,714 2,662 1,408 1,000 735 503

BALANCE SHEETBALANCE SHEETBALANCE SHEETBALANCE SHEETBALANCE SHEET (Rs. In Million)

Gross Fixed Assets (including CWIP) 53,45053,45053,45053,45053,450 52,055 36,205 30,812 25,046 22,117 19,701 18,675 5,668 5,230

Net Fixed Assets(excluding Revaluation Reserve) 20,00920,00920,00920,00920,009 19,950 18,929 14,202 8,845 6,262 4,173 3,412 2,000 1,773

Investments 11,32811,32811,32811,32811,328 10,628 10,012 7,144 9,455 8,415 4,921 2,627 2,105 1,856

Net Current Assets 12,40912,40912,40912,40912,409 8,851 6,282 7,059 6,339 4,576 2,852 2,920 1,988 1,448

Capital Employed 43,74643,74643,74643,74643,746 39,429 35,223 28,405 24,640 19,253 11,947 8,959 6,093 5,076

Loan Fund 5,7545,7545,7545,7545,754 6,870 7,799 5,513 5,282 4,385 3,007 3,370 2,606 2,268

Net Worth 37,99237,99237,99237,99237,992 32,559 27,424 22,892 19,357 14,868 8,939 5,589 3,487 2,808

Financial Highlights

3 73 73 73 73 7

Financial Highlights

Units 1999-001999-001999-001999-001999-00 1998-99 1997-98 1996-97 1995-96 1994-95 1993-94 1992-93 * 1991-92 1990-91(Rs. in Million)

Net Worth represented by :-

Share Capital 745745745745745 745 745 745 496 480 434 388 388 438

Reserves & Surplus(Excluding Revaluation Reserves) 37,24737,24737,24737,24737,247 31,814 26,679 22,147 18,861 14,388 8,505 5,201 3,099 2,371

Revaluation Reserve 14,34114,34114,34114,34114,341 15,816 4,943 5,648 6,339 7,030 7,721 8,411 375 502

RATIOS & STATISTICSRATIOS & STATISTICSRATIOS & STATISTICSRATIOS & STATISTICSRATIOS & STATISTICS

Operating Margin (%) 46.2846.2846.2846.2846.28 44.00 41.11 36.84 44.76 40.11 29.92 29.26 26.12 24.71

Gross Margin (%) 50.1750.1750.1750.1750.17 47.45 44.86 47.77 54.00 48.40 32.99 29.34 26.17 22.64

Net Margin (%) 30.1530.1530.1530.1530.15 32.08 33.68 33.73 32.05 30.53 21.31 15.29 13.45 12.56

Interest Cover (EBITDA/Interest) (x) 18.0818.0818.0818.0818.08 11.02 10.13 12.31 11.98 10.76 6.15 5.16 6.31 4.74

Gross Interest Cover(EBITDA/Gross Interest) (x) 17.7617.7617.7617.7617.76 10.70 7.23 8.63 11.98 10.76 6.15 5.16 6.31 4.74

Pre-tax Interest Cover(EBIT/Interest) (x) 15.8115.8115.8115.8115.81 9.53 9.06 11.44 11.41 10.07 5.59 4.47 5.65 4.21

ROACE (%) 22.6822.6822.6822.6822.68 21.36 20.61 21.09 32.02 30.60 25.68 31.60 32.67 29.95

ROAE (%) 17.3617.3617.3617.3617.36 18.90 19.72 18.48 23.44 24.53 21.98 25.45 27.97 29.59

Net Sales / Total Assets (x) 0 .460.460.460.460.46 0.45 0.42 0.41 0.51 0.50 0.63 0.84 1.07 1.02

Debts Equity Ratio(x) 0 .140.140.140.140.14 0.20 0.27 0.21 0.22 0.25 0.32 0.54 0.68 0.73

Debts Capitalisation Ratio (x) 0 .130.130.130.130.13 0.17 0.21 0.17 0.18 0.20 0.24 0.35 0.40 0.42

DPS (Rs.) 8 .008.008.008.008.00 6.50 5.25 4.50 6.00 5.50 4.50 4.00 3.75 3.00

EPS (Rs.) 82.2382.2382.2382.2382.23 76.11 66.64 52.50 80.79 60.81 36.41 27.69 22.74 16.72

CEPS (Rs.) 100.41100.41100.41100.41100.41 92.85 77.06 58.18 87.81 67.67 42.60 37.23 28.18 20.96

Book Value per Share (Rs.) 510.19510.19510.19510.19510.19 437.24 368.27 307.41 389.92 309.72 206.11 144.16 89.92 72.43

No. of Equity Shareholders 3976939769397693976939769 38780 37294 37656 38577 37981 35987 37729 37627 33369

Forex Earnings (Rs. Million) 3,1233,1233,1233,1233,123 1,655 1,702 1,566 1,054 672 467 772 240 121

Capital Expenditures (Rs. Million) 1,4741,4741,4741,4741,474 2,311 5,549 5,786 2,937 2,421 1,034 715 439 236

* Figures from 1992-93 are after merger of Renusagar Power Co. Ltd.

3 83 83 83 83 8

Directors� Report to the Shareholders

FINANCIAL RESULTS (Rs. in Million)

For the year For the yearended ended

31.03.2000 31.03.1999

Net Sales 20,311.81 17,669.94

Operating Profit 9,400.30 7,775.24

Profit before Tax and Extra-ordinary items 8,836.59 7,137.87

Provision for Tax 2,485.00 1,470.00

Profit after Tax and before Extra-ordinary items 6,351.59 5,667.87

Less Greenfield Project Expenses 227.89 �

Net Profit 6,123.70 5,667.87

Appropriations: -

Transfer to Debenture Redemption Reserve 175.55 230.40

Interim Dividend 372.33 -

Proposed Final Dividend 223.40 484.03

Tax on Dividend 94.94 48.40

Transfer to General Reserve 5,257.48 4,905.046,123.70 5,667.87

Sales revenue was Rs.20,312 million as against Rs.17,670 million in the previous year, a growth of 14.6%. Operating profit grew20.9 % to Rs.9,400 million as against Rs.7,775 million in the previous year.

Profit before Tax grew by a significant 23.8 % to Rs.8,837 million as against Rs.7,138 million during the previous year. Profitafter Tax and before extra ordinary item is 12.1% higher at Rs.6352 million against Rs.5,668 million during the previous year.

Consequent to a detailed techno-economic study, your Directors concluded that the proposed Greenfield Project in Orissa does notoffer adequate enhancement of shareholder value. The project has therefore been shelved. A sum of Rs. 228 million spent on the

DDDDDear Shareholders,

Your Directors are pleased to present the 41st Annual Report together with the audited Balance Sheet and Profit & Loss Accountfor the year ended 31st March 2000.

FINANCIAL PERFORMANCE :FINANCIAL PERFORMANCE :FINANCIAL PERFORMANCE :FINANCIAL PERFORMANCE :FINANCIAL PERFORMANCE :Your Company�s performance in 1999-2000 has been outstanding. Three factors have played a major role in your Company�s

success � (i) optimised capacity utilisation (ii) strengthened operating efficiencies and (iii) aggressive and innovative marketingstrategies. These financial results are a validation of the path your Company has opted, to enhance shareholder value andstrengthen its standing as a premier aluminium Company .

3 93 93 93 93 9

project has been accounted as one time expenditure of a non-recurring nature. After adjustment of this amount, the net profit attainedis Rs. 6,124 million.

US GAAP FINANCIALSUS GAAP FINANCIALSUS GAAP FINANCIALSUS GAAP FINANCIALSUS GAAP FINANCIALSTo provide globally accepted financial information and disclosures to all stakeholders, your Company is restating its financial

statements as per United States Generally Accepted Accounting Principles (US GAAP). This would provide your Company with a globalbenchmark to measure its performance, while facilitating an informed decision by all stakeholders. A statement of reconciliations ofsignificant differences in shareholders� equity and net income as on 31st March 2000 and 1999 between Indian Generally AcceptedAccounting Principles (Indian GAAP) and US GAAP, notes to reconciliation and an Independent Auditors� Report are set out in thisannual report. A full set of audited US GAAP financial statement with Independent Auditors� Report will be provided to the shareholderson their specific request.

D I V I D E N DD I V I D E N DD I V I D E N DD I V I D E N DD I V I D E N DA millennium dividend of Rs. 5 per share, amounting to Rs. 372.33 million was declared by your Board of Directors on March

23, 2000. Your Directors are now pleased to recommend the following final dividend for your consideration, which when approved atthe Annual General Meeting, will be paid in accordance with the regulations prevailing at that time:

(Rs. in Million)On 74,465,970 Equity Shares of Rs. 10 each @ Rs. 3 per Share 223.40

ACQUISITION OF SHARES IN INDIAN ALACQUISITION OF SHARES IN INDIAN ALACQUISITION OF SHARES IN INDIAN ALACQUISITION OF SHARES IN INDIAN ALACQUISITION OF SHARES IN INDIAN ALUMINIUM COMPUMINIUM COMPUMINIUM COMPUMINIUM COMPUMINIUM COMPANY LIMITEDANY LIMITEDANY LIMITEDANY LIMITEDANY LIMITED

Your Board of Directors has approved a proposal to acquire from Alcan Aluminium Limited (ALCAN) Canada, 38.84 millionequity shares aggregating 54.6% of the total outstanding equity shares of Indian Aluminium Company Limited (INDAL). The sharesare to be acquired for a consideration of Rs. 190 per share subject to necessary approvals from statutory authorities. In line with thetake over code prescribed by the Securities Exchange Board of India, your Company will also make an open offer for a further 14.22million equity shares, comprising 20 % of the total equity of INDAL, at a price of Rs. 190 per equity share.

The terms of the agreement include a non-compete commitment from ALCAN for a period of 3 years, which may be extended bya further period of 2 years. The acquisition will also provide an opportunity to your Company to participate in Utkal Alumina, theproposed 1 million tonnes per annum alumina project.

The acquisition of equity shares in INDAL will be funded entirely through internal accruals and surplus funds available with yourCompany.

Your Directors believe that the acquisition of shares in INDAL will greatly enhance value for shareholders. INDAL�s strengths inAlumina and Semi-fabrication will provide an excellent fit with your Company�s strong presence in Metal. This is of particularsignificance in view of your Company�s ongoing brownfield expansion. The consequent interaction will provide your Company with amuch better perspective of the domestic and international markets for the Metallurgical and Speciality Grade Alumina. Importantly,the acquisition creates significant opportunities for value addition through synergies achieved as a result of integrating logistics,product rationalisation and marketing strategies with an enhanced customer reach. Customers will benefit from improved diversity ofproducts and services. This in turn will contribute substantially to aluminium consumption growth in the country.

Additionally, it will strengthen your Company�s ability to meet competition in the rapidly consolidating and challenging globalmarket.

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OPERATIONAL REVIEWOPERATIONAL REVIEWOPERATIONAL REVIEWOPERATIONAL REVIEWOPERATIONAL REVIEW

Your Company�s operational performance has been exemplary for the year 1999-2000. Innovative practices in Smelting,Alumina Refining and Fabrication ensured improved efficiency, bettered productivity and played a key role in ensuring maximumcapacity utilisation.

METALYour Company is well established as India�s largest aluminium producer. In the process, it has attained global scales of operation.

Metal output was the highest ever at 248,930 MT as against 240,926 MT in the previous year. Given that the installed capacity is242,000 MTPA, the 3 % growth in output is the result of improved efficiency. Better power availability also played a major role inensuring higher metal output.

ALUMINA

Alumina production (Calcined) at 453,305 MT reflects a 7.5 % increase over that of 421,486 MT in the preceding year, which isslightly above the installed capacity of 450,000 MTPA. As Alumina is a key input for metal, increased production assumes greatsignificance.

REDRAW RODS

The production of Redraw Rods stood at 49,018 MT, is marginally lower than 50,145 MT achieved in 1998-99. As the demandfrom the State Electricity Boards remained slack, your Company took a conscious decision to scale down production. The demand forredraw rods is now looking up.

EXTRUSIONS

Production of Extrusions grew by an impressive 25 % from 11,995 MT in the previous year to 14,959 MT during the current year.The higher output is a consequence of the successful optimisation of capacities through refurbished Extrusion facilities.

ROLLED PRODUCTSThe output of Rolled Products grew by 33% to 58,594 MT, versus 44,086 MT in 1998-1999. Significant productivity improvement

contributed to this increase. Production during the second half of the year was significantly higher and augurs well for Rolled Productsoutput.

FOILS

Production of Foils at 7,537 MT was significantly higher over the output of 1,551 MT in the previous year. This higher productionreflects an optimisation of capacity as well as product mix and is way above the installed capacity of 5,000 MTPA.

ALLOY WHEELSYour Company�s Aluminium Alloy Wheel Plant at Silvassa was commissioned in September 1999. Alloy Wheels being a hi-tech

product, with the stabilisation of the Plant, production is slated to increase progressively. The initial market feedback has been veryencouraging. Your Company is moving forward in establishing a customer network.

POWER GENERATIONPower generated at your Company�s Renusagar Power Plant, was 4,555.3 MU, up 5 % over Generation of 4329.8 MU in the

previous year. The Co-generation Unit at Renukoot generated 283.0 MU of power, an increase of 8 % over generation of 262.5 MUin the previous year. Since power is a major and critical input for your Company, endeavours to increase its generation are ongoing.

4 14 14 14 14 1

SALES TURNOVER

Sales turnover increased to Rs. 20,312 million, 15 % higher over sales of Rs. 17,670 million during the previous year. Volumesgrew by 8% to 250,728 MT as against 231,046 MT during the last year. Higher realisations reflect a diversified and better product mixand improved international prices. Sales of value added Products namely rolled, extrusions and foils grew 37.3 %. Alloy Wheels willalso gradually contribute to an increase in Sales. The outlook for Sales is, therefore, encouraging.

Your Company capitalised on the marked improvement in the international scenario for aluminium. Exports grew 89 % toRs.3,123 million as against Rs. 1,655 million during the previous year. Higher exports include a shift to higher value products in boththe primary and semi-fabricated segments. With improved quality and services, your Company�s products are finding increasingacceptance in the most discerning markets.

INDUSTRY OVERVIEWINDUSTRY OVERVIEWINDUSTRY OVERVIEWINDUSTRY OVERVIEWINDUSTRY OVERVIEW

DOMESTIC

Aluminium consumption in India grew substantively during the year, prompted by a considerable improvement in industrialoutput amidst firming economic fundamentals. Aluminium production during the year increased to an estimated 622,000 MT asagainst 545,000 MT during the previous year.

The year under review saw a resurgent automobile industry. Other segments, which registered impressive growth include thepackaging and consumer durable industries. A revival was also evident in the building construction sector.

India presents enormous latent opportunities for increased aluminium consumption. Some of these opportunities have begun toemerge. For instance, the prospects for increased consumption in the traditional electrical sector appear bright given large scale plansfor addition to the power generation capacity. Demand from this segment is predicted to accelerate as aluminium finds application inthe transmission and distribution systems.

Your Company will capitalise on the emerging opportunities by ensuring improved availability and making concerted efforts forapplication development. It will seize every profitable market segment to create niches and maximise profits.

Your Company believes that the coming years will see a consolidation of Indian aluminium industry. This is a must for costefficiency, better quality and harnessing synergies towards application development, which Indian industry must ensure.

INTERNATIONAL

Aluminium fared well during 1999 with consumption growing by an estimated 6 % after a weak 1998. Increased consumptionresulted from a strengthening Asia and firm trends in China. The markets in USA grew strongly, belying expectations of a slowdownwhereas Europe consolidated. The strong consumption trends outgrew an estimated 4 % growth in output.

Aluminium prices improved on the back of sound fundamentals and alumina shortages resulting from a disruption in supply.Even as alumina supply fears gradually ease, good fundamentals and expectations of firm economic growth augur well for prices.Increased aluminium usage in automobiles and other segments of the transportation sector will be the primary growth drivers foraluminium in the near term.

The international aluminium industry is going through a period of consolidation. This is expected to lead to stability throughimproved discipline as well as concerted efforts to make aluminium usage grow. As the benefits of coming together accrue, moremergers are expected worldwide.

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EXPEXPEXPEXPEXPANSIONANSIONANSIONANSIONANSION

Your Company is of the view that growth is essential for sustainable prosperity. Following the shelving of the Aditya Aluminiumproject, your Company evaluated plans for a brownfield expansion at Renukoot. The evaluation revealed that substantial benefitsshould accrue from such an expansion. Accordingly, your Directors have approved the proposal for brownfield expansion, which willincrease Aluminium Smelting capacity by 100,000 MTPA. In keeping with your Company �s strategy ofensuring control on key inputs, the proposal also includes expansion of Alumina Refining Capacity by 210,000 MTPA and a matchingincrease in Power Generation capacity. Work on this project has just begun. It is scheduled for completion in phases by end 2002-03.Enhanced volumes from the expansion will enable your Company to further consolidate its leadership in the Indian market. The projectentails a capital expenditure of approximately Rs. 18,000 million, which will be met entirely through internal accruals and debt.

AWARDS AND RECOGNITIONAWARDS AND RECOGNITIONAWARDS AND RECOGNITIONAWARDS AND RECOGNITIONAWARDS AND RECOGNITION

In recognition of its strong commitment to TQM, the CII - Exim Commendation Certificate was conferred on your Company. YourCompany was also honoured with the Rajiv Gandhi National Quality Award Commendation Certificate.

Your Company�s outstanding exports effort during 1997-98 were recognised through the Award of the Engineering ExportPromotion Council�s �Regional Highest Exporters Trophy�. Your Company also received the Chemicals & Allied Products ExportPromotion Council�s `Special Award � for outstanding export performance during 1998-99. In addition, your Company�s exportsduring 1998-99 were recognised by a `Samman Award� from the Customs Authorities at Calcutta.

Your Company has been consistently commended for its successful energy conservation efforts. Deservedly, your Company wasawarded an Energy Conservation Award for 1999, for the 5th year in succession.

CORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCECORPORATE GOVERNANCEYour Company has been a strong advocate of ensuring a good code of Corporate Governance in the interests of shareholders.

Your Directors are committed to the standards of Corporate Governance introduced by the Securities Exchange Board of India (SEBI).This Annual Report includes a section on Corporate Governance and benchmarks your Company with the SEBI Code on CorporateGovernance.

Y 2 KY 2 KY 2 KY 2 KY 2 KMeasures taken by your Company to be Y2K Compliant enabled a smooth roll over to the new millennium.

ENVIRONMENTAL PROTECTION AND POLLUTION CONTROLENVIRONMENTAL PROTECTION AND POLLUTION CONTROLENVIRONMENTAL PROTECTION AND POLLUTION CONTROLENVIRONMENTAL PROTECTION AND POLLUTION CONTROLENVIRONMENTAL PROTECTION AND POLLUTION CONTROL

Since its inception, your Company has sought to ensure that it grows in harmony with the environment. Optimisation of resources,recycling and minimal wastage, creation and building of an eco-friendly Company have been and continue to be its priorities. Since1998, your Company is ISO 14001 certified. Your Company has ISO 14001 certification for all of its operations, barring Silvassa .Efforts are being stepped up to ensure ISO 14001 certification for your Company�s operations at Silvassa as well.

Your Company has sought to strengthen its Environment Management System (EMS) with additional Operational ControlProcedures (OCPs) and Environment Management Programmes (EMPs). Your Company�s EMS has been audited and is declared ISO14001 compliant.

Your Company is fully complying with all statutory environmental standards and norms. Its adherence to parameters well withinstatutory limits has been appreciated by regulatory authorities.

4 34 34 34 34 3

HUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONSHUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONSHUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONSHUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONSHUMAN RESOURCE DEVELOPMENT AND INDUSTRIAL RELATIONS

Your Company believes that intellectual capital and people power will see organisations through successfully in the newmillennium. That will be the key differentiating factor. We are therefore endeavouring hard to create an environment that istransparent, flexible and has a robust performance ethic. A razor-sharp focus on the growth and development of people is our on-going priority.

Your Company has charted a human resource policy that integrates people, their skills and needs of the organization. Empowermentand learning is encouraged at all levels.

The work processes in the Company are team driven. Your Company has created a culture of knowledge sharing and isendeavouring to make it a way of life in Hindalco. An appraisal system has been institutionalised. A performance based rewardmechanism is being evolved. Individual achievements and attainment of team objectives have been inter-linked. Continuous training,restructuring and induction of fresh talent are playing a key role in ensuring a dynamic and vibrant organisation.

These initiatives have facilitated extremely cordial industrial relations and a high level of employee commitment to the performanceof your Company.

RURAL DEVELOPMENT ACTIVITIESRURAL DEVELOPMENT ACTIVITIESRURAL DEVELOPMENT ACTIVITIESRURAL DEVELOPMENT ACTIVITIESRURAL DEVELOPMENT ACTIVITIES

As a caring corporate entity, your Company has stepped up activities that seek to improve the quality of life of the weaker sectionsof society in the neighbouring areas of Renukoot and Renusagar as well as its areas of mining operations in Madhya Pradesh andBihar. The integrated rural development activities undertaken by your Company include education, health and hygiene, sanitation,provision of safe drinking water and promotion of self-employment. Family welfare is another activity being increasingly emphasisedby the Company. These activities are carried out in close co-ordination with the District and Block Administrations, as well as Banksand other Voluntary Organisations.

Thousands of villagers from over 307 adopted villages benefited from these efforts, which are dwelt on in detail in a separatesection titled �Social Report� in this Annual Report. Your Company�s rural development wing mobilised Rs. 194 million towardsfulfilling their social engagement.

SUBSIDIARY COMPSUBSIDIARY COMPSUBSIDIARY COMPSUBSIDIARY COMPSUBSIDIARY COMPANIESANIESANIESANIESANIES

The financial statements of Minerals & Minerals Limited, Renukeshwar Investment & Finance Limited and Renuka Investments& Finance Limited are attached to this Annual Report.

JOINT VENTURE COMPJOINT VENTURE COMPJOINT VENTURE COMPJOINT VENTURE COMPJOINT VENTURE COMPANIESANIESANIESANIESANIES

BIHAR CAUSTIC & CHEMICALS LIMITEDBIHAR CAUSTIC & CHEMICALS LIMITEDBIHAR CAUSTIC & CHEMICALS LIMITEDBIHAR CAUSTIC & CHEMICALS LIMITEDBIHAR CAUSTIC & CHEMICALS LIMITED

Bihar Caustic & Chemicals Limited has recorded a satisfactory performance during the year under review with record productionand sales. Competition from cheaper imports and demand � supply mismatch in the domestic markets have adversely affectedrealisation. The lower realisation and retrospective increases in power tariffs have constrained the Company�s financial performance.To ensure an uninterrupted supply of economically priced power, work is on for installation of a captive power plant. The Plant isexpected to be commissioned by July 2000.

4 44 44 44 44 4

INDO GULF CORPORATION LIMITEDINDO GULF CORPORATION LIMITEDINDO GULF CORPORATION LIMITEDINDO GULF CORPORATION LIMITEDINDO GULF CORPORATION LIMITEDIndo Gulf Corporation achieved its highest ever production of Urea during the year under review. Urea production stood at 10.42

Lac MT against 10.20 Lac MT in the previous year. The Company�s SHAKTIMAN UREA continues to be the preferred choice of farmersin its entire marketing territory.

The Company�s state-of-the-art Copper Smelter Plant achieved 100 % capacity utilisation in the very first full year of operation.The Company has a 48 % share in the domestic copper market. To further improve realisation from by-products and as part of a valueaddition strategy, the Company is putting up a 4 Lac TPA Di-Ammonium Phosphate (DAP) Plant at Jagdishpur and a Precious MetalRefinery (PMR) at its Copper Smelter Plant at Dahej. Both these projects are at an advanced stage of implementation and are expectedto contribute significantly to the revenue and profits in the coming years.

TANFAC INDUSTRIES LIMITEDTANFAC INDUSTRIES LIMITEDTANFAC INDUSTRIES LIMITEDTANFAC INDUSTRIES LIMITEDTANFAC INDUSTRIES LIMITEDThe working of Tanfac Industries during the year under review was satisfactory. Sales volumes for Aluminium Fluoride and

Anhydrous Hydrofluoric Acid, the two main products were higher. Realisations and profitability were adversely impacted due tocompetition from cheaper imports in the DCFA segment. The Company has successfully developed overseas market for AnhydrousHydrofluoric Acid in Thailand. During the year, the Company had received the prestigious �TPM EXCELLENCE � FIRST CATEGORYAWARD� from Japan Institute of Plant Maintenance, Japan. Tanfac is the first Fluorine manufacturing Company in the World to getthis coveted award.

MANGALORE REFINERY AND PETROCHEMICALS LIMITEDMANGALORE REFINERY AND PETROCHEMICALS LIMITEDMANGALORE REFINERY AND PETROCHEMICALS LIMITEDMANGALORE REFINERY AND PETROCHEMICALS LIMITEDMANGALORE REFINERY AND PETROCHEMICALS LIMITEDMangalore Refineries� expansion of crude oil processing capacity from 3 MMTPA to 9 MMTPA was completed in September 1999,

two months ahead of schedule. Trial runs are in progress. The capacity expansion will enable the Company to have dual operatingstreams. This would lead to a continuity of operations throughout the year. In addition, the Company will benefit from economies ofscale and resultant improved cost efficiency, which will stand it in good stead in the de-regulated Hydrocarbon Sector in future.

BIRLA AT&T COMMUNICATIONS LIMITEDBIRLA AT&T COMMUNICATIONS LIMITEDBIRLA AT&T COMMUNICATIONS LIMITEDBIRLA AT&T COMMUNICATIONS LIMITEDBIRLA AT&T COMMUNICATIONS LIMITEDBirla AT&T has migrated to the New Telecom Policy 1999, which marks a watershed for the Cellular Industry in India. Amongst

the issues that the new telecom policy has addressed are an extension of licence period, a shift from fixed licence fees to revenue sharingand approval for an increase in the number of operators in each Circle. Birla AT&T expects an acceleration of sizable additions to itssubscriber base, an increase in revenue per user and will also benefit from the reduced licence fee.

A Memorandum of Understanding has been signed on 1st March 2000 with Tata Industries Ltd. for the merger of Tata CellularLimited with Birla AT&T Communications Limited. This initiative positions Birla AT&T as a major telecom player with 24 % of theCountry�s telecom population in its fold. The initiative will also benefit the Company from resultant synergies.

BINA POWER SUPPLBINA POWER SUPPLBINA POWER SUPPLBINA POWER SUPPLBINA POWER SUPPLY COMPY COMPY COMPY COMPY COMPANY LIMITEDANY LIMITEDANY LIMITEDANY LIMITEDANY LIMITED

Bina Power�s 578 MW coal based power generation facility being set up at Bina in Madhya Pradesh in Joint Venture withPowerGen of UK. While all project contracts and agreements had been executed/finalised, there has been a delay on account of theongoing litigation for Escrow Allocation. However, the Company has now received a favourable verdict from the Supreme Court, whichhas upheld the Division Bench judgement approving the Madhya Pradesh Electricity Board process of Escrow Allocation. TheCompany is hopeful of achieving Financial Closure in 2000-01.

4 54 54 54 54 5

PARTICULARS AS PER SECTION 217 OF THE COMPPARTICULARS AS PER SECTION 217 OF THE COMPPARTICULARS AS PER SECTION 217 OF THE COMPPARTICULARS AS PER SECTION 217 OF THE COMPPARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT 1956ANIES ACT 1956ANIES ACT 1956ANIES ACT 1956ANIES ACT 1956

The particulars of employees, as required by under Section 217(2A) of the Companies Act, 1956, are given as Annexure to thisReport. As per provisions of Section 219(1)(b) (iv) of the Companies Act 1956, the Report and Accounts are being sent to all theShareholders of the Company, excluding the aforesaid information. Shareholders who are interested in obtaining these particularsmay please write to the Company Secretary at the Company�s Registered Office.

Additional information relating to the conservation of Energy, Technology Absorption and Foreign Exchange Earnings andOutgo required under Section 217(1)(e) of the Companies Act 1956, is set out in a separate statement attached to this report and formspart of it.

DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORS

In accordance with Article 146 of the Articles of Association of the Company, Mrs. Rajashree Birla, Mr. S.S. Kothari and Mr. T.K.Sethi, retire from Office by rotation and being eligible, offer themselves for re-appointment.

Mr. Marti G. Subrahmanyam, Charles E Merrill Professor of Finance and Economics in the Stern School of Business at New YorkUniversity, U.S.A was appointed as a Director of the Company to fill up the vacancy caused by the resignation of Mr. G.D. Binani fromthe Board of Directors of the Company. Mr. Subrahmanyam has expressed his desire to resign from the Board of the Company. TheBoard of Directors while accepting the resignation with regret wishes to place on record their appreciation of the services rendered byMr. Subrahmanyam during his brief association with the Company.

AUDITOR�S REPORTAUDITOR�S REPORTAUDITOR�S REPORTAUDITOR�S REPORTAUDITOR�S REPORTThe observations made in the Auditors� Report are dealt with separately in the Notes to the Profit & Loss Account and the Balance

Sheet in Schedule 21 of the Accounts. These are self-explanatory and do not call for any further comments.

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORSM/s Singhi & Company, Chartered Accountants and Auditors to the Company, retire, and being eligible, offer themselves for

appointment.

APPRECIATIONAPPRECIATIONAPPRECIATIONAPPRECIATIONAPPRECIATION

Your Directors place on record the support and guidance provided by the Honourable Minister, the Secretary and other Officialsof the Ministry of Mines. Your Directors thank the Financial Institutions and Banks for their support.

Your Company�s employees deserve fulsome praise for their creativity and commitment to performance. This has been and willcontinue to be instrumental to our success. Your Directors place on record their wholehearted appreciation of your Company�semployees.

Your Directors also acknowledge with gratitude the backing of its Shareholders.

For and on behalf of the Board

MumbaiDated the 27th Day of April 2000. Chairman

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[Statement of particulars under the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988]AAAAA ..... CONSERVCONSERVCONSERVCONSERVCONSERVAAAAATION OF ENERGTION OF ENERGTION OF ENERGTION OF ENERGTION OF ENERGYYYYY

The Company continues to accord priority to energy conservation. The Company�s Central Energy Cell has been given the totalresponsibility for minimising energy consumption. Consistent efforts are being made for identifying potential areas for energysaving. Endeavours are on to optimise operating process parameters, modernise and upgrade technology and plant equipments. Tobenchmark, regular energy audits are carried out by the Energy Cell in all sections of the Plant. The Cell also creates awareness onthe importance of energy conservation amongst employees. Suggestions from employees on energy improvement measures arereviewed by the Energy Cell and Head(s) of Department on a regular basis to identify viable measures for implementation. TheCompany�s efforts have been recognised by the authorities. It has been conferred with the �National Award for Energy Conservation�for the 5th year in succession by the Ministry of Power, Government of India.a. ENERGY CONSERVATION MEASURES TAKEN :

GENERAL MEASURES:i Variable speed drives installed for optimising the running speed of equipments.ii Energy efficient Recuperators were installed for waste heat recovery and to minimise losses from melting furnaces.iii Regular monitoring of Air Compressor performance parameters and cooling systems.iv Development of a system to use Fuel oil in place of L.D.O., which is economical.1. ALUMINA PLANT :

i Substantial changes have been made in process orientation for achieving higher yield, additional volumes andreduction in energy as well as other inputs. Plant trials have been successful and favourable results are beingachieved.

ii To improve heat efficiency and caustic concentration of the process liquor, a change in quality of steam (pressureand temperature) used in the Evaporation unit has been made. This is resulting in higher production andreduced steam consumption.

iii To reduce substantial air consumption, air lift submergence and air lift nozzle modification in Precipitator Tankshas been effected.

iv For better flashing and heat recovery, modifications have been made in a Flash Tank of the Digestion Unit.v Modifications in steam circuit in the slurry heaters and steam pumps have helped reduce steam pressure, stop

steam let-down and save condensation losses in the co-generation process.vi To save electrical and heat energy, re-routing and modification of the condensate transportation system (Digestion

and HID area) has been recoursed to.

2. SMELTER:i A High Technical System for reducing electrical conductor resistance has been implemented in Pot lines. The

throughput in these Pot lines has increased.ii Modified anodes are being introduced progressively in the Smelter, to enable reduction in gross carbon consumption

and better fuel economy.iii Revamping of Paste Plant is under progress. This will improve the quality of the anodes substantially and result

in increased productivity and lower energy consumption.iv The design of Cathode & Anode bus bar is being optimised in new lined cells progressively to reduce energy

consumption.v Modified bath chemistry is being adopted to increase current efficiency and to improve productivity.vi State-of-the-art firing control system in the Baking Furnace for fuel saving and improving baked anode quality

is under implementation.

Annexure �A� to the Directors� Report

4 74 74 74 74 7

3. FABRICATION PLANT :i. Installed technologically upgraded Recuperator in place of Shell Type Recuperator in the Properzi furnace to get

better air combustion and reduce fuel oil consumption in furnaces.ii. Installed Magnetiser to save fuel oil consumption.iii. Installed inline oxygen gas analysers to check content of oxygen in the flue gases and ensure better control on

fuel oil and air consumption.iv. Modified positioning of burners in Furnaces to save fuel oil.v. Altered the screw down system in the Cold Mill to increase net rolling time and reduce power consumption.vi. Hot Mill Exit Table extended to ensure thinner gauge rolling and reduce the pass per coil at the Cold Mills,

resulting in significant energy savings.vii. PLC system introduced at the recoiling unit of Conform Machine to increase production of tube coils and save

power.viii. Quenching fans of Extrusion Press linked with PLC system of the Press to automatically stop fans in case of any

stoppage of the Press.4. FOIL DIVISION :

i. 66 KV lines have been installed in place of 11 KV to reduce transmission losses.ii. Annealing cycle time and loading has been optimised, saving electrical energy.

5. POWER PLANT :a. RENUSAGAR POWER UNIT:

i. Installation of efficient turbine rotor in TG for reducing turbine blade failure and energy loss.ii. Revamping of rotor of another TG after RLA with new design of high efficiency last stage buckets for

energy conservation and better heat rate.iii. Revamping of Instrumentation done.iv. Optimization of operating practices for utilising re-use water in the plant has led to the reduction in make-

up pump running hours.v. Installation of Dyna speed for coal feeders in Boilers.vi. Optimisation of operating practices to reduce coal consumption.vii. Installation of efficient luminaires.viii. Installation of FRP blades in place of GRP blades in Cooling Tower fans.

b. CO-GENERATION POWER UNIT:

i. Installation of EPIC II Controller in Boiler ESP.ii. Modification of auxiliary cooling water return line to Cooling Tower.iii. Installation of Vent Condenser in Boiler Deaerator for reduction in auxiliary steam consumption.

b. ADDITIONAL INVESTMENT AND PROPOSALS BEING IMPLEMENTED :Plans are on the anvil to try and implement the following proposals during the financial year 2000-2001:1. ALUMINA PLANT :

i. To convert one Flash Vessel of slurry heater condensate circuit as an additional Flash Tank for the Digestion Unitto get better heat recovery.

ii. Modification in Flash Tank slurry inlet system of the Digestion Unit for enhanced flashing and heat recovery.

ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �AAAAA� T� T� T� T� TO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (CCCCContd.ontd.ontd.ontd.ontd.)))))

4 84 84 84 84 8

iii. Revamping of Instrumentation and control.iv. To pass good condensate through all effects of the Evaporation Unit and tap it partially in between to avoid

water logging and also save thermal energy.2. SMELTER :

i. Pitch-fume collection system is being revamped with a state-of-the-art technology for efficient pollution control.This will reduce consumption of coal tar pitch.

ii. Implementation of Dynamic Alumina Feeding Strategy through High-Tech Graphic Softwares is on to improvecurrent efficiency and reduce energy consumption.

iii. Further trial of special insulation material as top blanket cover in Baking Furnaces is being undertaken toreduce heat losses from baking pits and improve quality of anodes.

iv. The design of Baking Furnace is being modified for increasing productivity and Fuel oil efficiency.

3. FABRICATION PLANT :i. Installation of technologically upgraded Recuperators on other Properzi furnaces.ii. Installation of the Coil Preparation Unit to reduce feeding delays and energy saving by eliminating idle time of

the machine.iii. Increased weight of Hot Mill Rolling Slab. This will increase production and reduce power consumption.iv. Cooling Fans of Extrusion Press of 1250 UST to be linked through PLC system of Press for its automatic stoppage

after certain period of Press shutdown.

4. FOIL DIVISION :i. Installation of capacitor banks to improve power factor and overall power qualityii. Installation of Refrigeration dryer at compressor for energy conservation.

5. POWER PLANT:a. RENUSAGAR POWER UNIT:

i. Water conservation measures being intensified and recycling plants viz. The Sewage Treatment, EffluentTreatment and Water Treatment Plants are being upgraded.

ii. Installation of efficient luminaires to continue.iii. Modification of economiser of one boiler by adding more coils will reduce flue gas temperature, resulting

in an increase in the Boiler efficiency.iv. Installation of Stainless Steel liners in coal bunkers for reducing coal flow interruption to avoid Boiler

tripping.v. RLA study of Boilers.

b. CO-GENERATION POWER UNIT:i. Pipelines and drains modification for recycling and reuse of waste-water for water conservation.ii. Modification of Bottoming Turbine Extraction III steam line to maximise LP steam use in process plant to

reduce specific steam consumption for power generation.

c. IMPACT OF MEASURES IN (a) AND (b) ABOVE:The various Energy Conservation Measures undertaken by your Company have yielded encouraging results in most of theproduction centres. Plans to further optimise energy utilisation with ongoing and newly introduced measures are on the anvil.

ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �AAAAA� T� T� T� T� TO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (CCCCContd.ontd.ontd.ontd.ontd.)))))

4 94 94 94 94 9

ddddd..... TTTTTOOOOOTTTTTAL ENERGAL ENERGAL ENERGAL ENERGAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION AND ENERGY CONSUMPTION AND ENERGY CONSUMPTION AND ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION :Y CONSUMPTION PER UNIT OF PRODUCTION :Y CONSUMPTION PER UNIT OF PRODUCTION :Y CONSUMPTION PER UNIT OF PRODUCTION :Y CONSUMPTION PER UNIT OF PRODUCTION :(As per Form �A� below)Form AForm AForm AForm AForm A 1999-20001999-20001999-20001999-20001999-2000 1998-19991998-19991998-19991998-19991998-1999A. Power & Fuel Consuption

1.1.1.1.1. ElectricityElectricityElectricityElectricityElectricityi) Purchased from SEB�s

Units (KWH in thousands) 6,131 36,847Total Amount (Rs in Lac) excluding 171.91 1,556.57Minimum Demand Charges for RenukootRate/Unit (Rs) 2.80 4.22

ii) Own Generation1 Through Steam Turbine/Generator

Units (KWH in thousands) 4,102,280 3,951,473Cost/Unit (Rs) (Coal & Fuel only) 0.5813 0.5814

2 Through Diesel GeneratorUnits (KWH in thousands) 3,623 1,115Cost/Unit (Rs) 4.87 3.27

22222 Steam Coal (for Generation of Steam)Steam Coal (for Generation of Steam)Steam Coal (for Generation of Steam)Steam Coal (for Generation of Steam)Steam Coal (for Generation of Steam)Quantity (Tonnes) 4,479,013 4,520,369Total Amount (Rs in Lacs) 27,469.45 26,381.88Average Rate (Rs) 613.29 583.62

33333 FFFFFurnace Oil (Furnace Oil (Furnace Oil (Furnace Oil (Furnace Oil (Fuel Oil,Luel Oil,Luel Oil,Luel Oil,Luel Oil,L.D.D.D.D.D.Oil,HSD Oil).Oil,HSD Oil).Oil,HSD Oil).Oil,HSD Oil).Oil,HSD Oil)Quantity (KL) 67,330 67,042Total Amount (Rs in Lacs) 5,847.52 4,514.52Average Rate (Rs) 8,684.87 6,733.87

44444 Steam (PSteam (PSteam (PSteam (PSteam (Purchased)urchased)urchased)urchased)urchased)Quantity (Tonnes) 155,046 147,745Total Amount (Rs in Lacs) 226.43 215.77Average Rate (Rs) 146.04 146.04

B. Consumption per Unit of Production (per M. T.) UnitUnitUnitUnitUnit 1999-20001999-20001999-20001999-20001999-2000 1998-991998-991998-991998-991998-991. Aluminium Metal (including Alumina)

Electricity kwh 16,089 16,270Furnace Oil Litres 214 221Steam Coal MT 1.863 1.992Average C.V. of Steam Coal K.Cal/kg 3,453 3,449

2 Redraw Rods (including Alloy Rods)Electricity kwh 77 79Furnace Oil Litres 49 54

3 Fabricated Products (Rolled & Extrusion)Electricity kwh 1,227 1,270Furnace Oil Litres 91 115

4 Aluminium FoilElectricity kwh 1,102 2,597

Note: (1) Last year figures regrouped where required(2) There was no purchase of power at Renukoot in 1999-2000

ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �AAAAA� T� T� T� T� TO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (CCCCContd.ontd.ontd.ontd.ontd.)))))

5 05 05 05 05 0

B.B.B.B.B. TECHNOLTECHNOLTECHNOLTECHNOLTECHNOLOGOGOGOGOGY ABSORPTIONY ABSORPTIONY ABSORPTIONY ABSORPTIONY ABSORPTIONe. EFFORTS MADE IN TECHNOLOGY ABSORPTION:

(As per Form �B� given below)

FORM - BFORM - BFORM - BFORM - BFORM - BRESEARCH & DEVELOPMENT (R&D)1.1.1.1.1. Specific areas in which R&D carried out by the Company during the year 1999-2000.Specific areas in which R&D carried out by the Company during the year 1999-2000.Specific areas in which R&D carried out by the Company during the year 1999-2000.Specific areas in which R&D carried out by the Company during the year 1999-2000.Specific areas in which R&D carried out by the Company during the year 1999-2000.

Research and Development efforts were directed towards process improvements, manufacturing cost reduction, energy conserva-tion, import substitution, new product development, recovery of by-products, environmental protection and non-destructive evalu-ation. Efforts ongoing to set standards for quality and service in aluminium products.

2.2.2.2.2. Benefits derived as a result of the above R&DBenefits derived as a result of the above R&DBenefits derived as a result of the above R&DBenefits derived as a result of the above R&DBenefits derived as a result of the above R&D.....a) Continuous improvement in performance indices of the plant processes with respect to energy, raw material consumption and

product quality.b) Indigenous development and import substitution of critical plant spares and components.c) Formulation, modification and evolvement of Indian Standards for aluminium and its products.d) New products developed at competitive prices.e) Lowest possible emissions well below the regulatory norms set by Pollution Control Board and waste minimisation.f) Production of high purity metal.g) Better technical support to customers.

3.3.3.3.3. FFFFFuture Plan of Action.uture Plan of Action.uture Plan of Action.uture Plan of Action.uture Plan of Action.a) To augment facilities on an ongoing basis through acquisition of state-of-the-art technologies, equipments and instruments.b) Assimilating state-of-the-art-technology for competitive advantage.c) Product development for specific customer requirement and specific end uses.d) Energy and resource conservation.e) Lowest possible emissions well below the regulatory norms set by Pollution Control Board and waste minimisation.f) Better management systems and procedures to compete both in domestic and international markets.

4.4.4.4.4. Expenditure on R&DExpenditure on R&DExpenditure on R&DExpenditure on R&DExpenditure on R&D1999-20001999-20001999-20001999-20001999-2000 1998-991998-991998-991998-991998-99

a) Capital Rs. 18.06 million Rs. 0.28 millionb) Recurring Rs. 7.11 million Rs. 6.93 millionc) Total (a+b) Rs. 25.17 million Rs. 7.21 milliond) Total R&D Expenditure as % of Total Turnover 0.12 % 0.04 %

5.5.5.5.5. TTTTTechnology absorption, adaptation and innovation.echnology absorption, adaptation and innovation.echnology absorption, adaptation and innovation.echnology absorption, adaptation and innovation.echnology absorption, adaptation and innovation.

I .I .I .I .I . Efforts in briefEfforts in briefEfforts in briefEfforts in briefEfforts in briefThe technology acquired has been successfully absorbed and the Company has been able to develop products that meetinternational standards of quality at an affordable price to the customer. The Company is now a pacesetter for creating acompetitive and quality sensitive environment for aluminium industry in India.

II.II.II.II.II. Benefits DerivedBenefits DerivedBenefits DerivedBenefits DerivedBenefits Deriveda) Enhancement of technological capabilities.b) World class products and services.c) Better environmental protection.

ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �AAAAA� T� T� T� T� TO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (CCCCContd.ontd.ontd.ontd.ontd.)))))

5 15 15 15 15 1

III.III.III.III.III. Details of technology imported in the past 5 years:Details of technology imported in the past 5 years:Details of technology imported in the past 5 years:Details of technology imported in the past 5 years:Details of technology imported in the past 5 years:

Technology Imported for Year of Import Has technology If not fully absorbed, areas wherebeen fully this has not taken place, reasonabsorbed there of and future plan of action

Construction and 1994-95 AbsorbedOperation of Foil PlantExtrusion Press 1994-95 AbsorbedBauxite Digestion Process 1995-96 AbsorbedRolled Products 1996-97 AbsorbedUpgraded Celtrol technology Beginning from 1997-98 to be Under

continued till 2000-01 implementationStub Welding technology Beginning from 1997-98 to be Under

continued till 2000-01 implementationManufacture of Beginning from UnderGreeen Anode Paste 1998-99 to be implementation

continued till 2001-02Design and manufacture Beginning from 1998-99 to be UnderAluminium Alloy Wheels continued for a period of 5 years implementation

from the date of commencement ofproduction

Precipitation process Beginning from 1999-2000 to be Undertechnology for Alumina plant continued till 2000-01 implementation

ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �ANNEXURE �AAAAA� T� T� T� T� TO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTO THE DIRECTORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (ORS� REPORT (CCCCContd.ontd.ontd.ontd.ontd.)))))

C.C.C.C.C. FOREIGN EX FOREIGN EX FOREIGN EX FOREIGN EX FOREIGN EXCHANGE EARNINGS & OUTGOCHANGE EARNINGS & OUTGOCHANGE EARNINGS & OUTGOCHANGE EARNINGS & OUTGOCHANGE EARNINGS & OUTGOfffff ..... Activities related to exportsActivities related to exportsActivities related to exportsActivities related to exportsActivities related to exports

Exports grew 89% during 1999-2000 to Rs. 3,122.53 million as against Rs. 1,654.57 million during the previous year. Thehigher exports were a result of an 80% growth in volumes as well as improved realizations. Your Company�s products andservices are being appreciated in new markets. In pursuit of its chosen strategy, your Company is also successfully increasingexports of high value items.

ggggg..... TTTTTotal foreign exchange used and earnedotal foreign exchange used and earnedotal foreign exchange used and earnedotal foreign exchange used and earnedotal foreign exchange used and earnedForeign Exchange used Rs. 146.22 millionForeign Exchange earned Rs. 3,157.36 million

5 25 25 25 25 2

WWWWWe have audited the Balance Sheet of HINDALCO INDUSTRIES LIMITED as at 31st March 2000 and the Profit & Loss Account ofthe said Company for the year ended on that date, both annexed hereto.

We report that :

1. In our opinion and to the best of our information and according to the explanations given to us, the annexed accounts read withthe notes in Schedule 21 give the information required by the Companies Act, 1956 (as amended) in the manner so requiredand give a true and fair view :

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2000 and

(b) In the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date.

2. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for thepurposes of our audit.

3. In our opinion, proper books of account as required by the Companies Act, 1956 (as amended) have been kept by the Companyso far as appears from our examinations of those books, and

4. The Balance Sheet and the Profit & Loss Account are in agreement with books of account and comply with the AccountingStandards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

As required by the Manufacturing and Other Companies (Auditor�s Report) Order, 1988 issued by the Company Law Board andon the basis of such checks as were considered appropriate, we further state that:

i) The Company has maintained proper records to show full particulars including quantitative details and location of fixedassets. These have been physically verified wherever possible during the year as confirmed by the management. Nosignificant discrepancies have come to our notice on such physical verification.

ii) None of the Fixed Assets of the Company have been revalued during the year.

iii) The stocks of finished goods (except finished goods lying with stockists and in transit), stores, spare-parts and raw materialshave been physically verified at reasonable intervals during the year by the Management.

iv) In our opinion, the procedure of physical verification of stocks followed by the Management is reasonable and adequate inrelation to the size of the Company and nature of its business.

v) The discrepancies between the physical stocks and book stocks, which are not significant, have been properly dealt with inthe books of account.

vi) In our opinion, the valuation of stocks of finished goods, work-in-process, stores & spare parts and raw materials has beenfair and proper in accordance with the normally accepted accounting principles. The basis of valuation of stocks of finishedgoods, work-in-process, raw materials and machinery spares not in regular use has been changed to bring it in line withthe Accounting Standard 2 (Valuation of Inventories) which has become mandatory from this year. The effect of the abovechange is stated in Note No. 16 (a) & (b) of Schedule 21. Other than above, other items of inventory remain to be valuedon the same basis as in earlier years.

vii) The Company has not taken any loan, secured or unsecured, from the companies, firms or other parties listed in theregister maintained under Sections 301 and 370(1B) (non operative) of the Companies Act, 1956.

viii) The Company has not given any loan, secured or unsecured, to the companies, firms or other parties listed in the registermaintained under Sections 301 and 370(1B) (non operative) of the Companies Act, 1956.

ix) 1) Recovery of principal and interest, for loans given to a limited company is as per terms stated in Note No. 12 (a)Schedule 21.

Auditors� Report to the Shareholders

5 35 35 35 35 3

2) The other Parties to whom loan/deposits have been granted by the Company are repaying the principalamount and interest as stipulated. Advances free of interest given to the employees are being recovered asper stipulation.

x) On the basis of checks carried out during the course of audit and as per explanations given to us, we are of theopinion that there is an adequate internal control procedure commensurate with the size of the Company for thepurchase of stores, raw materials including components, plant and machinery, equipment and other assets andfor sale of goods.

xi) According to the information and explanations given to us, and as per records provided there are no transactionsof purchase of goods and materials and sale of goods, materials and services made in pursuance of contracts orarrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and aggregatingduring the year to Rs.50,000 or more in respect of each party.

xii) As explained to us, the Company has a regular procedure for the determination of the unserviceable ordamaged stores, raw materials or finished goods and loss so determined has been properly dealt with in theaccounts.

xiii) Directives issued by the Reserve Bank of India and provisions of Section 58A of the Companies Act, 1956 and therules framed thereunder have been complied with in respect of deposits accepted from the public.

xiv) The Company has maintained reasonable records for the sale and disposal of by-products and scraps.

xv) The Company has an internal audit system, which in our opinion is commensurate with the size and nature ofthe business.

xvi) The Company has maintained proper cost records as prescribed by Central Government under Section 209 (1)(d) of the Companies Act, 1956 for the products of the Company but no detailed examination of such records hasbeen carried out by us.

xvii) The Company is regular in depositing Provident Fund and Employees� State Insurance dues with the appropriateauthorities.

xviii) According to the information and explanations given to us and the books and records examined by us, there areno undisputed amounts, payable in respect of Income-Tax, Sales-Tax, Customs Duty and Excise Duty outstandingas at 31st March, 2000 for a period exceeding six months from the date they become payable.

xix) The Company has a policy of authorising expenditure based on reasonable checks and controls. This policy isintended to ensure that expenses are authorised on the basis of contractual obligations or accepted businesspractices having regard to the Company�s business needs and exigencies. In terms of these observations, wehave not come across any expenses charged to Revenue Account, which in our opinion and judgement, and to thebest of our knowledge and belief, could be regarded as personal expenses.

xx) The Company is not a sick industrial company within the meaning of the Sick Industrial Companies (SpecialProvisions) Act, 1985.

For SINGHI & CO.Camp: MumbaiDated : The 27th day of April, 2000 RAJIV SINGHI1-B, Old Post Office Street PartnerCalcutta Chartered Accountants

5 45 45 45 45 4

Balance Sheet as at 31st March, 2000

As per our report annexed.For SINGHI & CO. A. K. AGARWALA Chairman : KUMAR MANGALAM BIRLARAJIV SINGHI Whole-time Director Directors : RAJASHREE BIRLA

Partner T. K. SETHIM. M. BHAGAT

Chartered Accountants S. S. KOTHARIP. D. OJHAC. M. MANIAR

Camp : Mumbai ANIL J. JHALADated : The 27th day of April, 2000. Company Secretary

(Rs. in Million) As at 31st As at 31st As at 31st As at 31st As at 31st As at 31st As at 31st As at 31st As at 31st As at 31st

S chedu leSchedu leSchedu leSchedu leSchedu le March, 2000 March, 2000 March, 2000 March, 2000 March, 2000 March, 1999 March, 1999 March, 1999 March, 1999 March, 1999SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSHAREHOLDERS� FUNDSShare Capital �1� 744.69 744.69Reserves & Surplus �2� 51,588.40 47,630.08

52,333.0952,333.0952,333.0952,333.0952,333.09 48,374.7748,374.7748,374.7748,374.7748,374.77LOAN FUNDSSecured Loans �3� 5,329.82 6,191.17Unsecured Loans �4� 423.88 678.96

5,753.705,753.705,753.705,753.705,753.70 6,870.136,870.136,870.136,870.136,870.13

TOTAL 58,086.7958,086.7958,086.7958,086.7958,086.79 55,244.9055,244.9055,244.9055,244.9055,244.90

APPLICAAPPLICAAPPLICAAPPLICAAPPLICATION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDSFIXED ASSETSGross Block �5� 52,350.48 50,906.52Less : Depreciation 19,099.93 16,288.80

Net Block 33,250.55 34,617.72Capital Work-in-Progress 1,099.02 1,148.14

34,349.5734,349.5734,349.5734,349.5734,349.57 35,765.8635,765.8635,765.8635,765.8635,765.86INVESTMENTS �6� 11,328.5311,328.5311,328.5311,328.5311,328.53 10,627.7410,627.7410,627.7410,627.7410,627.74CURRENT ASSETS, LOANS & ADVANCESInventories �7� 3,283.28 3,156.72Sundry Debtors �8� 1,854.60 1,638.71Cash & Bank Balances �9� 3,327.35 1,086.44Loans, Advances & Deposits �10� 6,218.45 5,124.27

14,683.6814,683.6814,683.6814,683.6814,683.68 11,006.1411,006.1411,006.1411,006.1411,006.14Less :CURRENT LIABILITIES AND PROVISIONSLiabilities �11� 1,534.43 1,564.66Provisions �12� 740.56 590.18

2,274.992,274.992,274.992,274.992,274.99 2,154.842,154.842,154.842,154.842,154.84

NET CURRENT ASSETS 12,408.6912,408.6912,408.6912,408.6912,408.69 8,851.308,851.308,851.308,851.308,851.30

TOTAL 58,086.7958,086.7958,086.7958,086.7958,086.79 55,244.9055,244.9055,244.9055,244.9055,244.90Notes on Accounts �21�

5 55 55 55 55 5

Profit & Loss Account for the year ended 31st March, 2000(Rs. in Million)

For the yearFor the yearFor the yearFor the yearFor the year For the year For the year For the year For the year For the year ended 31st ended 31st ended 31st ended 31st ended 31st ended 31st ended 31st ended 31st ended 31st ended 31st

S chedu leSchedu leSchedu leSchedu leSchedu le March,2000 March,2000 March,2000 March,2000 March,2000 March,1999 March,1999 March,1999 March,1999 March,1999INCOMEINCOMEINCOMEINCOMEINCOMESales & Conversion Charges(Tax Deducted at Source Rs.9.58 million) 23,075.71 20,130.85Less: Excise Duty 2,763.90 2,460.91

20,311.8120,311.8120,311.8120,311.8120,311.81 17,669.9417,669.9417,669.9417,669.9417,669.94Other Income �13� 1,386.54 1,444.97Increase /(Decrease) in Stocks �14� 39.58 352.49

21,737.9321,737.9321,737.9321,737.9321,737.93 19,467.4019,467.4019,467.4019,467.4019,467.40

EXPENDITUREEXPENDITUREEXPENDITUREEXPENDITUREEXPENDITURERaw Materials Consumed �15� 3,888.71 3,835.69Goods Purchased 0.02 �Manufacturing Expenses �16� 4,332.49 4,069.39Payments to and Provision for Employees �17� 1,408.47 1,191.96Selling, Distribution, Administrationand Other Expenses �18� 1,321.20 1,148.72Interest �19� 596.62 836.36Depreciation �20� 1,353.63 1,245.98Provision for Premium on Debenture Redemption 0.20 1.43

12,901.3412,901.3412,901.3412,901.3412,901.34 12,329.5312,329.5312,329.5312,329.5312,329.53

PROFIT BEFORE TAX & EXTRAORDINARY ITEM 8,836.598,836.598,836.598,836.598,836.59 7,137.877,137.877,137.877,137.877,137.87Provision for Taxation 2,485.00 1,470.00

PROFIT AFTER TAX & BEFORE EXTRAORDINARY ITEM 6,351.596,351.596,351.596,351.596,351.59 5,667.875,667.875,667.875,667.875,667.87Less: Greenfield Project Expenses 227.89 �

NET PROFIT 6,123.706,123.706,123.706,123.706,123.70 5,667.875,667.875,667.875,667.875,667.87Balance Brought Forward from Previous year 550.00 550.00

BALANCE ABALANCE ABALANCE ABALANCE ABALANCE AVVVVVAILABLE FOR APPROPRIAAILABLE FOR APPROPRIAAILABLE FOR APPROPRIAAILABLE FOR APPROPRIAAILABLE FOR APPROPRIATIONSTIONSTIONSTIONSTIONS 6,673.706,673.706,673.706,673.706,673.70 6,217.876,217.876,217.876,217.876,217.87

APPROPRIAAPPROPRIAAPPROPRIAAPPROPRIAAPPROPRIATIONSTIONSTIONSTIONSTIONSDebenture Redemption Reserve 175.55 230.40Dividend on Equity Shares:Interim 372.33 �Proposed Final 223.40 484.03Tax on Dividend (including surcharge ofRs. 4.84 million pertaining to previous year) 94.94 48.40Transfer to General Reserve 5,257.48 4,905.04Balance Carried to Balance Sheet 550.00 550.00

6,673.706,673.706,673.706,673.706,673.70 6,217.876,217.876,217.876,217.876,217.87Notes on Accounts �21�As per our report annexed.For SINGHI & CO. A. K. AGARWALA Chairman : KUMAR MANGALAM BIRLARAJIV SINGHI Whole-time Director Directors : RAJASHREE BIRLA

Partner T. K. SETHIM. M. BHAGAT

Chartered Accountants S. S. KOTHARIP. D. OJHAC. M. MANIAR

Camp : Mumbai ANIL J. JHALADated : The 27th day of April, 2000. Company Secretary

5 65 65 65 65 6

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stMarch, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

SCHEDULE �1 �SCHEDULE �1 �SCHEDULE �1 �SCHEDULE �1 �SCHEDULE �1 �SHARE CAPITSHARE CAPITSHARE CAPITSHARE CAPITSHARE CAPITALALALALALAUTHORISED

14,50,00,000 Equity Shares of Rs.10/- each. 1,450.00 1,450.005,00,000 14% Free of Company�s tax but subject to deduction of taxes

at source at the prescribed rates, Redeemable CumulativePreference Shares of Rs.100/- each. 50.00 50.00

1,500.001,500.001,500.001,500.001,500.00 1,500.001,500.001,500.001,500.001,500.00

ISSUED7,44,72,020 Equity Shares of Rs.10/- each 744.72744.72744.72744.72744.72 744.72744.72744.72744.72744.72

SUBSCRIBED AND PAID UP7,44,72,020 Equity Shares of Rs.10/- each fully paid-up 744.72 744.72

Less: Face value of Shares forfeited 0.06 0.06

744.66 744.66Add: Forfeited Shares Account [Amount Paid-Up] 0.03 0.03

744.69744.69744.69744.69744.69 744.69744.69744.69744.69744.69NOTESubscribed and paid-up Equity Shares Capital includes:

(i) 4,91,76,677 Shares allotted as fully Paid-up Bonus Shares by Capitalisation of General Reserve and Capital Redemption Reserve.

(ii) 6,00,000 Equity Shares of Rs.10/- each fully paid-up issuedpursuant to a contract for consideration other than cash.

SCHEDULE �2 �SCHEDULE �2 �SCHEDULE �2 �SCHEDULE �2 �SCHEDULE �2 �RESERVES AND SURPLRESERVES AND SURPLRESERVES AND SURPLRESERVES AND SURPLRESERVES AND SURPLUSUSUSUSUSCAPITAL RESERVEi) Subsidy received from U.P. Govt. under Subsidised Housing

Scheme for Industrial workers :As per last Balance Sheet 5.06 5.06

ii) Revaluation Reserve (Refer Note (A) in Schedule 5)As per last Balance Sheet 15,815.64 4,943.49

Add: On account of Revaluation during the year � 13,606.5415,815.64 18,550.03

Less: Adjustment of Depreciation upto 31.3.99on account of revaluation during the year � 1,262.18

15,815.64 17,287.85Less: Adjustment on sale of revalued Assets 2.81 �

15,812.83 17,287.85Less: Transferred to Profit & Loss Account being difference of

depreciation on revalued cost of assets and that on its original cost 1,471.90 1,472.21

14,340.93 15,815.64

Carried over... 14,345.99 15,820.70

5 75 75 75 75 7

(Rs. in Million)SCHEDULE �2 � (Contd.)SCHEDULE �2 � (Contd.)SCHEDULE �2 � (Contd.)SCHEDULE �2 � (Contd.)SCHEDULE �2 � (Contd.) As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

Schedules

Brought forward... 14,345.99 15,820.70SHARE PREMIUM ACCOUNTAs per last Balance Sheet 6,890.47 6,890.47

DEBENTURE REDEMPTION RESERVEAs per last Balance Sheet 791.88 583.15Add: Created during the year 175.55 230.40

967.43 813.55Less: Transferred to General Reserve on Redemption of Debentures 296.67 21.67

670.76 791.88INVESTMENT ALLOWANCE RESERVEAs per last Balance Sheet � 12.47Less: Transferred to General Reserve � 12.47

� �GENERAL RESERVEAs per last Balance Sheet 23,577.03 18,637.85Add: Transferred from Investment Allowance Reserve � 12.47

23,577.03 18,650.32Add: Transferred from Debenture Redemption Reserve 296.67 21.67

23,873.70 18,671.99Add: Transfer from Profit & Loss Account 5,257.48 4,905.04

29,131.18 23,577.03PROFIT & LOSS ACCOUNT BALANCE 550.00 550.00

51,588.4051,588.4051,588.4051,588.4051,588.40 47,630.0847,630.0847,630.0847,630.0847,630.08

SCHEDULE �3 �SCHEDULE �3 �SCHEDULE �3 �SCHEDULE �3 �SCHEDULE �3 �SECURED LSECURED LSECURED LSECURED LSECURED LOANSOANSOANSOANSOANSA. Secured Redeemable Non-Convertible Debentures of Rs.100/- each

40,00,000 17.5% Redeemable in three equal instalments on2nd December, 1997 (Redeemed), 2nd December,1998(Redeemed) & 2nd December, 1999 (Redeemed) � 133.54

3,00,000 17.75% Redeemable in three equal instalments on13th January, 1998 (Redeemed) 13th January, 1999(Redeemed) & 13th January, 2000 (Redeemed) � 10.00

3,50,000 18% Redeemable in three equal instalments on23rd June, 1998, (Redeemed) 23rd June, 1999 (Redeemed)& 23rd June, 2000 11.67 23.33

Carried over... 11.67 166.87

5 85 85 85 85 8

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

Brought forward... 11.67 166.873,00,000 18% Redeemable on 23rd June, 1999 (Redeemed) � 30.00

25,00,000 17% Redeemable in three equal instalments on11th May,1999, (Redeemed) 11th May, 2000 & 11th May, 2001 166.67 250.00

1,00,00,000 17.5% Redeemable in three instalments on 1st January, 2001,lst January, 2002 and lst January, 2003 1,000.00 1,000.00

2,000 of 13.2% Redeemable in three instalments onRs. 5,00,000 9th September,2002, 9th September,2003

each & 9th September, 2004 1,000.00 1,000.00All the above Debentures except 25,00,00017% Redeemable Debentures, 1,00,00,00017.5% Redeemable Debentures and 2,000 13.2%Redeemable Debentures are redeemable at a premium of5% and are Secured by Mortgage of immovable propertiesboth present and future, ranking pari-passu with chargescreated/ to be created in favour of Financial Institutions saveand except, some of the workers� Quarters and a floatingcharge on movable assets of the Company subject to chargecreated/to be created in favour of the Bankers for securingWorking Capital facilities.Interest accrued and due on aforesaid Debentures 1.84 1.85

B. Term Loans From Financial Institutions -These loans, ranking pari-passu, are secured by hypothecation of all movableassets ( save and except book debts ) subject to prior charges created/to becreated in favour of bankers on certain assets for securing workingcapital facilities. 219.12 686.32In addition to above a first mortgage of all the immovable properties,both present and future, ranking pari-passu with charges created in favourof Trustees for Debenture holders, save and except some of the workers�quarters and residential and other buildings executed (repayable withinone year Rs. 219.12 million)

C. Term Loan from Banks Secured by pari-passu first charge on the assetsfinanced by Banks (repayable within one year Rs. 129.86 million) 129.86 278.47

D. From Government of Uttar Pradesh under Subsidised HousingScheme for Industrial Workers.Secured by hypothecation of Workers� Quarters (repayable withinone year Rs. 0.24 million) 1.83 2.07

Carried over... 2,530.99 3,415.58

5 95 95 95 95 9

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.)SCHEDULE �3� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

Brought forward... 2,530.99 3,415.58

E. From Housing Development Finance Corpn. Ltd. Secured by a pari-passucharge on the plot of land and construction of Dwelling Units thereon presentand future with the existing charges already created/to be created in favourof Trustees for Debenture holders and Financial Institution (repayable withinone year Rs. 15.79 million). 15.79 48.00

F. From Scheduled Banks - Cash Credit & Export Credit Account 322.69 242.51

Secured by hypothecation of stocks of Raw Materials, Consumable Stores,Spares, Materials - in - Process and Finished Products (including interestaccrued and due Rs. 0.01 million)

G. From Scheduled Banks - Secured against pledge of Fixed Deposit Receipts 40.00 �

H. Foreign Currency Loans from Banks 2,420.35 2,485.08These Loans are ranking pari-passu and are secured by hypothecationof immovable assets and its accessories etc. installed and/or to be installed inUnit No.8 of the power plant. (Repayable within one year US$ 3.00 million)

5,329.825,329.825,329.825,329.825,329.82 6,191.176,191.176,191.176,191.176,191.17

SCHEDULE �4 �SCHEDULE �4 �SCHEDULE �4 �SCHEDULE �4 �SCHEDULE �4 �UNSECURED LUNSECURED LUNSECURED LUNSECURED LUNSECURED LOANSOANSOANSOANSOANSEmployees� & other Deposits 109.89 67.24Foreign Currency Loan from Banks(Repayable within one year US$ 7.20 million) 313.99 611.72

423.88423.88423.88423.88423.88 678.96678.96678.96678.96678.96

6 06 06 06 06 0

NOTES:(A) The major items of Land & Site Development and Buildings (Factory & Non-factory) on 1st January, 1985, 1st April, 1992 and 1st April, 1998 were revalued and also the revaluation of the

major items of Plant & Machinery as on 1.1.1977, 1.1.1981, 1.1.1985, 1.4.1992 and 1.4.1998 was done and the resultant increase in the book value is Rs. 25,926.09 Million (Gross)Depreciation for the year includes Rs.1471.89 Million pertaining to revalued amount.

(B) Includes cost of ownership flat Rs. 16.57 Million in Co-operative Socities and Ownership office at Delhi Rs. 3.74 Million.(C) Leasehold Land amounting to Rs.14.24 Million written off proportionately.(D) Mining Rights amounting to Rs. 49.69 Million for 20 years lease written off proportionately.(E) Includes Rs.163.56 Million towards rights to use & occupy an office space in a building for which the company has invested Rs. 131.81 Million in Shares & Debentures to be alloted in a company.(F) Includes in Land & Site Development Rs. 3.47 lacs, Buildings (Factory & Non-Factory) Rs.25.59 lacs, Plant, Machinery & Equipment Rs. 8.76 lacs & Furniture, Fixtures, Air conditioners, Office

Equipments 9.78 lacs transferred from Immovable Properties-Land,Buildings & Other assets under Co-ownership basis shown under the head �Investments�.(G) Includes Rs. 0.05 Million transferred to Pre-operative Expenses and Capitalised.

S C H E D U L E � 5 �S C H E D U L E � 5 �S C H E D U L E � 5 �S C H E D U L E � 5 �S C H E D U L E � 5 �FIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETS (Rs. in Million)

DESCRIPTION GROSS VALUE DEPRECIATION NET VALUE

LessSales/ Provided Less As at As at

Adjust- during Adjusted 31.03.2000 31.03.1999Additions ments Total the year on sales Total as per as per last

As at during the during upto Upto U/s or adjust- upto Balance Balance31.03.1999 year the year 31.03.2000 31.03.1999 205(2)(b) ments 31.03.2000 Sheet Sheet

Mining Rights 50.00 0.11 � 50.50.50.50.50.1111111111 2.48 2.48 (D) � 4.964.964.964.964.96 45.1545.1545.1545.1545.15 47.52

Land & Site Development 268.40 13.91 (F) 6.55 2222275.7675.7675.7675.7675.76 (A) 1.38 0.65 (C) � 2.032.032.032.032.03 273.73273.73273.73273.73273.73 267.02Buildings(Factory & Non-Factory) 4,780.22 330.84 (F) 1.80 5,109.265,109.265,109.265,109.265,109.26 (A)(B)(E) 956.57 128.44 0.34 1,084.671,084.671,084.671,084.671,084.67 4,024.594,024.594,024.594,024.594,024.59 3,824.25Plant, Machinery & Equipment 44,478.51 1,010.99 (F) 57.34 444445,432.165,432.165,432.165,432.165,432.16 (A) 14,773.90 2,585.05 11.19 17,347.7617,347.7617,347.7617,347.7617,347.76 28,084.4028,084.4028,084.4028,084.4028,084.40 29,704.94Aerial Ropeways 188.33 � � 188.33188.33188.33188.33188.33 94.98 14.89 � 109.87109.87109.87109.87109.87 78.4678.4678.4678.4678.46 93.35Construction & Mobile Equipments,Vehicles & Aircraft 560.36 34.91 11.75 583.52583.52583.52583.52583.52 238.76 47.80 6.41 280.15280.15280.15280.15280.15 303.37303.37303.37303.37303.37 321.60Railway Sidings 37.78 � � 37.7837.7837.7837.7837.78 16.25 1.51 � 17.7617.7617.7617.7617.76 20.0220.0220.0220.0220.02 21.53Furniture, Fixtures, Air-conditioners,Office Equipments, Computer, FireFighting Equipments etc. 507.01 121.84 (F) 1.84 627.01627.01627.01627.01627.01 200.93 47.68 1.24 247.37247.37247.37247.37247.37 379.64379.64379.64379.64379.64 306.40Live Stock 2.20 0.56 0.32 2.2.2.2.2.4444444444 � � � ����� 2.442.442.442.442.44 2.20Roads & Drainage 33.71 10.40 � 44.1144.1144.1144.1144.11 4.80 0.56 � 5.365.365.365.365.36 38.7538.7538.7538.7538.75 28.91

TOTAL: 50,906.52 1,523.56 79.60 52,350.4852,350.4852,350.4852,350.4852,350.48 16,290.05 2,829.06 (A)(G) 19.18 19,099.9319,099.9319,099.9319,099.9319,099.93 33,250.5533,250.5533,250.5533,250.5533,250.55 34,617.72

PREVIOUS YEAR 34,942.82 16,031.54 67.84 50,906.5250,906.5250,906.5250,906.5250,906.52 13,595.28 2,718.47 24.75 16,288.8016,288.8016,288.8016,288.8016,288.80 34,617.7234,617.7234,617.7234,617.7234,617.72 �

6 16 16 16 16 1

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �6 �SCHEDULE �6 �SCHEDULE �6 �SCHEDULE �6 �SCHEDULE �6 � March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSAAAAA ..... LLLLLONG TERM INVESMENTONG TERM INVESMENTONG TERM INVESMENTONG TERM INVESMENTONG TERM INVESMENT

i. i. i. i. i. UNQUOUNQUOUNQUOUNQUOUNQUOTEDTEDTEDTEDTED

a.a.a.a.a. GOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIES

Indira Vikas Patra (amount Rs. 200.00) � �National Plan Savings Certificates (Deposited as Security withExcise Authorities, Allahabad) (amount Rs. 1,000.00) (*Rs. 1,000.00) � �

National Saving Certificates (Includes Certificates for Rs. 90,200deposited as security with Govt. bodies) 0.29 0.19

National Defence Certificates (Deposited with D.S.O. Mirzapur)(amount Rs. 200.00) (*Rs. 200.00) � �5 1/2 Years Kisan Vikas Patra (amount Rs. 1,000.00) (*Rs. 1,000.00) � �

b.b.b.b.b. EQUITY & PREFERENCE SHARES IN SUBSIDIARY COMPEQUITY & PREFERENCE SHARES IN SUBSIDIARY COMPEQUITY & PREFERENCE SHARES IN SUBSIDIARY COMPEQUITY & PREFERENCE SHARES IN SUBSIDIARY COMPEQUITY & PREFERENCE SHARES IN SUBSIDIARY COMPANIESANIESANIESANIESANIES

35,006 Equity Shares of Rs.10/- each fully paid-up in Minerals &Minerals Ltd. (including 406 Shares of Rs.10/- each fully paid-upheld jointly with nominees) 1.51 1.5195,000 Equity Shares of Rs.10/- each fully paid-up in RenukaInvestments & Finance Ltd. [including 10 Shares of Rs. 10/-each fully paid-up in the name of nominee] 0.95 0.9591,55,000 Equity Shares of Rs.10/-each fully paid-up in Renuka Investments & Finance Ltd. 91.55 91.55

150 15% Redeemable Cumulative Preference Shares of Rs. 100/-each fully paid-up in Renuka Investments & Finance Ltd. 0.02 0.0210,000 Equity Shares of Rs.10/- each fully paid in RenukeshwarInvestments & Finance Ltd. [including 10 Shares of Rs.10/-each fully paid-up held in the name of nominee.] 0.10 0.10150 15% Redeemable Cumulative Preference Shares of Rs. 100/-each fully paid-up in Renukeswar Investments & Finance Ltd. 0.02 0.02

c.c.c.c.c. OOOOOTHER SHARESTHER SHARESTHER SHARESTHER SHARESTHER SHARES, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS16,54,331 Equity Shares of Rs.10/- each fullypaid-up in Gwalior Properties & Estates Ltd. 74.26 74.2616,92,221 Equity Shares of Rs.10/- each fullypaid-up in Seshasayee Properties Ltd. 76.54 76.54

16,58,292 Equity Shares of Rs.10/- each fullypaid-up in Turquoise Investments & Finance Ltd. 189.65 189.6516,83,417 Equity Shares of Rs.10/- each fullypaid-up in Trapti Trading & Investments Ltd. 192.54 192.54

Carried over 627.43 627.33

6 26 26 26 26 2

Schedules

2,500 Ordinary Shares of CHF 100 each fullypaid-up in Birla International Ltd. 5.29 5.29

25,00,000 10.75% Redeemable Cumulative Preference Sharesof Rs. 100 /- each fully paid up in Birla Global Finance Ltd. 250.00 �

17,35,72,882 (*17,06,86,896) Equity Shares of Birla AT&TCommunications Ltd. of Rs. 10/- each fully paid-up. 1,735.73 1,706.87

2 Equity Shares of Rs.100/- each fully paid-up in Udyog Services Ltd.(amount Rs. 200.00) (*Rs. 200.00) � �

20 Shares of Rs.50/-each fully paid-up in Shri Ganesh KrupaCo-operative Housing Society Ltd. (amount Rs.1000.00)(*Rs. 1,000.00) � �

5 Equity Shares of Rs. 50/- each fully paid-up in The Ivory TowerPremises Co-operative Housing Society Ltd. (amount Rs.250.00)(*Rs. 250.00) � �

100 12.10% Non Convertible Debentures of HDFC Ltd.of Rs 10,00,000/- 100.00 �

ii.ii.ii.ii.ii. QUOQUOQUOQUOQUOTEDTEDTEDTEDTED

a.a.a.a.a. GOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIESGOVERNMENT SECURITIESRs. 150 million Face Value 11.40% GOI Stock-2000 150.34 150.34

Rs. 100 million Face Value 11.40% GOI Stock -2000 100.20 105.07

b.b.b.b.b. SHARESSHARESSHARESSHARESSHARES, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS

b.1.b.1.b.1.b.1.b.1. TRADE INVESTMENTSTRADE INVESTMENTSTRADE INVESTMENTSTRADE INVESTMENTSTRADE INVESTMENTS

7,80,000 Equity Shares of Rs.10/- each fullypaid-up in Bihar Caustic & Chemicals Ltd. 7.80 7.809,95,652 Equity Shares of Rs.10/- each fullypaid-up in Tanfac Industries Ltd. 9.96 9.96

b.2.b.2.b.2.b.2.b.2. OOOOOTHERSTHERSTHERSTHERSTHERS

1,95,79,357 Equity Shares of Rs. 10/- each fully paid-upin Indo Gulf Corporation Ltd. 433.35 433.35

9,56,95,742 Equity Shares of Rs. 10/- each fullypaid-up in Mangalore Refinery & Petrochemicals Ltd. 1,519.00 1,519.00

Carried over 4,939.10 4,565.01

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTS

Brought forward 627.43 627.33

6 36 36 36 36 3

Schedules

58,76,536 Equity Shares of Rs.10/- eachfully paid-up in Indian Rayon & Industries Ltd. 365.15 1,054.76

17,62,960 Equity Shares of Rs. 10/- eachfully paid-up in Grasim Industries Ltd.** 689.61 �

37,500 Equity Shares of Rs. 10/- each fully paid-up in Century Enka Ltd. 7.50 7.50

6,85,900 Equity Shares of Rs. 10/- each fully paid-up in IDBI Ltd. 89.17 89.17

8,75,000 (*8,75,000) 17.5% Secured Redeemable Non-ConvertibleDebentures of Mangalore Refinery & Petrochemicals Ltd. of Rs.200/-each fully paid-up (Rs.40/- redeemed during the year,till date Rs.120/-) 69.59 104.38

20,000 Unsecured Redeemable Subordinated floating interest rateBonds of Rs. 1000/- each fully paid-up in State Bank of India. 20.00 20.00

1,500 11.40% ICICI Bonds (DPN)of Rs. 1,00,000/- each 150.08 �

930 11.25% IOC Secured Non-convertible Redeemable Bonds � Series I of Rs. 1,00,000/- each 100.15 �

-(*10,00,000) 14% Non Convertible Debentures ofReliance Industries Ltd. of Rs.50/- each fully paid-up(Redeemed during the year) � 46.31

-(*40) 13.25% Non-Convertible Debentures of RelianceIndustries Ltd. of Rs.50,00,000 lacs each(Redeemed during the year) � 199.80

10,20,000 16% Secured Redeemable Non-ConvertibleDebentures of IPCL of Rs. 60 each 62.18 62.18

6,40,000 9% Tax Free IRFC Bonds of Rs. 1000/- 593.85 593.85

1,00,000 9% Tax Free HUDCO Bonds ofRs. 1,000/- each 95.70 95.70

1,00,000 10.5% Tax Free HUDCO Bonds ofRs. 1,000/- each 105.25 105.25

3,00,000 9% (Tax Free) Secured NTPC Bonds ofRs. 1,000/- each 287.34 287.34

10 13.50% Non-Convertible Debentures of GE Capitalof Rs.25,00,000 each 24.88 24.88� (*1,500) 12.75% ICICI Bonds of Rs. 1,00,000 each(Redeemed during the year) � 150.3810 0% Reliance Capital Deep Discount Bond Maturity value ofRs. 10 Million each 52.88 52.88

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTS

Brought forward 4,939.10 4,565.01

Carried over 7,652.43 7,459.39

6 46 46 46 46 4

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTS

Brought forward 7,652.43 7,459.39

B.B.B.B.B. CURRENT INVESTMENTSCURRENT INVESTMENTSCURRENT INVESTMENTSCURRENT INVESTMENTSCURRENT INVESTMENTS

i.i.i.i.i. UNQUOUNQUOUNQUOUNQUOUNQUOTEDTEDTEDTEDTED

a.a.a.a.a. SHARESSHARESSHARESSHARESSHARES, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS

100 11.15% Non-convertible Debentures ofHDFC Ltd. Option-I of Rs.10,00,000/- each 100.00 �100 15.50% Non-convertible Debenture ofReliance Capital 2,000 of Rs.10,00,000/- each 103.63 �10 11.20% Secured Redeemable Non-convertibleDebentures of Reliance Industries Limited ofRs.100,00,000/- each 100.00 �

bbbbb COMMERCIAL PCOMMERCIAL PCOMMERCIAL PCOMMERCIAL PCOMMERCIAL PAPERAPERAPERAPERAPER

Rs.100 million (*Rs.50 million) Face Value with Telco 99.43 49.72-(*Rs.30 million) Face Value with ICI (I) Ltd. � 29.81Rs.50 million Face Value with Indian Rayon & Ind. Ltd. 49.41 �Rs.20 million Face Value with Dabur India Ltd. 19.65 �Rs.80 million Face Value with Tata Tea Ltd. 78.64 �Rs.120 million Face Value with Tisco Ltd. 118.41 �

ii.ii.ii.ii.ii. QUOQUOQUOQUOQUOTEDTEDTEDTEDTED

a.a.a.a.a. SHARESSHARESSHARESSHARESSHARES, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS, DEBENTURES AND BONDS

-(*3,000) 12.60% ICICI Bonds(Taxable) of Rs. 1,00,000 each � 301.37(Redeemed during the year)-(*1,000) 0% ICICI 99A Bond(Taxable) of Rs. 1,00,000 each(Redeemed during the year) � 90.27-(*100) 17.00% ICICI 99A Bonds(Taxable) of Rs.10,00,000 each.(Redeemed during the year) � 103.01-(*1,20,000) 13.50% MTNL Bonds (Taxable) Rs. 1,000 each(Redeemed during the year) � 121.1910,00,000 Mutual Fund units of Master Index Fundof UTI of Rs.10 each fully paid up 9.75 9.753,06,70,964.644 (*1,16,77,785.664) Birla Income Plus Unitsof Rs 10/- each fully paid-up in Birla Mutual Fund.(1,89,93,178.980 Units purchased during the year) 483.54 154.49

Carried over 8,814.89 8,319.00

6 56 56 56 56 5

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.)SCHEDULE �6� (Contd.) March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTS

Brought forward 8,814.89 8,319.00

10,00,000 GIC Growth Plus - II Units of Rs.10/-each fully paid-up in GIC Mutual Fund 10.00 10.0012,50,000 GIC Fortune Units of Rs.10/-each fullypaid-up in GIC Mutual Fund 12.50 12.501,03,49,385.813 units Alliance Liquid Income Growth MFof Rs.10/- each fully paid up 145.33 �2,48,39,865.595 units Prudential ICICI Income GrowthMF of Rs.10/- each fully paid-up 301.81 �1,07,46,424.924 (*5,00,000) units of DSP Merrill LynchGrowth MF of Rs.10/- fully paid-up(1,02,46,424.924 Units purchased during the year) 144.76 5.0038,76,870.590 units of Birla Cash Plus units of Rs.10/-each fully paid upto Birla Mutual Fund 50.09 �

b.b.b.b.b. UNITS OF UNIT TRUST OF INDIAUNITS OF UNIT TRUST OF INDIAUNITS OF UNIT TRUST OF INDIAUNITS OF UNIT TRUST OF INDIAUNITS OF UNIT TRUST OF INDIA

12,33,97,140.042 (*15,33,97,140.042) Units of Rs.10/- each(3,00,00,000 units were sold during the year)(Note No. 10 in Schedule �21�) 1,834.09 2,262.65

13,74,000 Master Gains 1992 of UnitTrust of India of Rs.10/- each fully paid-up. 15.06 15.06

11,328.53 10,624.21

C.C.C.C.C. IMMOVIMMOVIMMOVIMMOVIMMOVABLE PROPERTIESABLE PROPERTIESABLE PROPERTIESABLE PROPERTIESABLE PROPERTIESLand, Buildings & Other Assets underCo-ownership basis � 4.77Less: Depreciation upto 31.03.1999 � 1.24

� 3.53

11,328.53 11,328.53 11,328.53 11,328.53 11,328.53 10,627.74 10,627.74 10,627.74 10,627.74 10,627.74

Aggregate Book Value of Quoted Investments. 4,933.98 5,739.27Aggregate Book Value of US-64 & Mutual Fund Units 3,006.93 2,469.45Aggregate Book Value of Unquoted Investments 3,387.62 2,419.02

11,328.53 11,328.53 11,328.53 11,328.53 11,328.53 10,627.74 10,627.74 10,627.74 10,627.74 10,627.74Aggregate Market Value of Quoted Investments 5,170.35 4,854.69

Repurchase Price of US-64 & Mutual Fund Units 3,049.14 3,049.14 3,049.14 3,049.14 3,049.14 2,285.62 2,285.62 2,285.62 2,285.62 2,285.62

* Represent figures for previous year.** Pursuant to the scheme of arrangement between Indian Rayon and Industries Limited (IRIL) and Grasim Industries Limited (GIL)

the Company has received equity shares of the later company. The carrying cost of equity shares of IRIL have been apportioned toequity shares of GIL at a fair value.

6 66 66 66 66 6

Schedules

SCHEDULE �9 �SCHEDULE �9 �SCHEDULE �9 �SCHEDULE �9 �SCHEDULE �9 �CASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCash Balance on hand 2.47 2.39

Balance with Scheduled Banks :In Current Accounts (including remittances in transit) 235.36 56.64In E.E.F.C Accounts 103.25 127.56

In Account of Nominees for sale proceedsof Fractional Coupons of Bonus Shares 0.48 0.48

In Unpaid Dividends Account 9.84 7.44Cheques and Drafts in hand 116.68 152.72

In Fixed Deposit Account 2,792.59 735.08Interest Receivable on Fixed Deposits 66.68 4.13

3,327.353,327.353,327.353,327.353,327.35 1,086.441,086.441,086.441,086.441,086.44

SCHEDULE �8 �SCHEDULE �8 �SCHEDULE �8 �SCHEDULE �8 �SCHEDULE �8 �SUNDRY DEBTSUNDRY DEBTSUNDRY DEBTSUNDRY DEBTSUNDRY DEBTORS (Unsecured, Considered Good)ORS (Unsecured, Considered Good)ORS (Unsecured, Considered Good)ORS (Unsecured, Considered Good)ORS (Unsecured, Considered Good)Due for a period exceeding six months(including Rs. 4.43 million under litigation) 155.60 74.59

Other Debts (including Rs. 597.46 million secured) 1,699.00 1,564.12

1,854.601,854.601,854.601,854.601,854.60 1,638.711,638.711,638.711,638.711,638.71

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �7 �SCHEDULE �7 �SCHEDULE �7 �SCHEDULE �7 �SCHEDULE �7 � March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INVENTINVENTINVENTINVENTINVENTORIESORIESORIESORIESORIESClosing Stocks (As valued and certified by the Management)Closing Stocks (As valued and certified by the Management)Closing Stocks (As valued and certified by the Management)Closing Stocks (As valued and certified by the Management)Closing Stocks (As valued and certified by the Management)(including i(including i(including i(including i(including in -n -n -n -n - transit)transit)transit)transit)transit)Stores, Spare-parts etc. 620.07 781.04Coal & Fuel Oil (at Power Plant) 108.30 122.42Machinery Spares (Insurance Spares) 150.05 �Raw Materials 771.55 702.03Materials-in-Process (including Excise Duty & other expensesRs. 0.82 million) 1,023.31 1,017.05Finished Goods (including Excise Duty & other expensesRs. 102.38 million) 610.00 534.18

3,283.283,283.283,283.283,283.283,283.28 3,156.723,156.723,156.723,156.723,156.72

6 76 76 76 76 7

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �10�SCHEDULE �10�SCHEDULE �10�SCHEDULE �10�SCHEDULE �10� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999LLLLLOANSOANSOANSOANSOANS, AD, AD, AD, AD, ADVVVVVANCES & DEPOSITSANCES & DEPOSITSANCES & DEPOSITSANCES & DEPOSITSANCES & DEPOSITS(Unsecured Considered Good, unless otherwise stated)(Unsecured Considered Good, unless otherwise stated)(Unsecured Considered Good, unless otherwise stated)(Unsecured Considered Good, unless otherwise stated)(Unsecured Considered Good, unless otherwise stated)Interest accrued on investments. 87.52 89.39

Advance to a Subsidiary Company:Renuka Investment & Finance Ltd. � 0.15

Loan to a Subsidiary CompanyRenuka Investments & Finance Ltd.(including interest receivable Rs. 2.42 million) 80.28 �

Loan to Limited Companies (Refer Note No.12(a) inSchedule �21�) 125.97 3.42

Deposits with other Limited Companies & Financial Institutions(including interest receivable Rs. 90.02 million) (Including Rs.253.50 million Secured) 3,973.52 2,958.28

Advance against Share Application money(Refer Note No.12(c) in Schedule 21) 0.84 0.84

Advances recoverable in cash or in kind or for value to be receivedand/or to be adjusted:

To Staff & Workers (including doubtful/under Litigation Rs. 0.05 million) 90.83 100.59

To Suppliers (including doubtful/under Litigation Rs. 0.41 million) 138.32 271.25

To Others (including doubtful/under Litigation Rs. 0.11 million)(Refer Note No.12(d)(e) in Schedule 21) 680.90 595.87

To U.P. S.E.B. against disputed power bills (under protest) 3.65 3.65

913.70913.70913.70913.70913.70 971.36971.36971.36971.36971.36

Prepaid Expenses 158.20 175.47

Income-Tax and Interest Refund Receivable 93.12 194.74

Advance Income Tax paid (Net) 390.43 352.64

Security Deposits (including receipts of Fixed Deposits in Bank/Post Office Savings Bank Pass Book lying with GovernmentDepartments Rs. 0.10 million and Interest Receivable Rs. 1.07 million) 217.30 235.04

Excise Duty, Export Benefits & other claims receivable. 177.57 142.94

6,218.456,218.456,218.456,218.456,218.45 5,124.275,124.275,124.275,124.275,124.27

Schedules

6 86 86 86 86 8

Schedules

SCHEDULE �12�SCHEDULE �12�SCHEDULE �12�SCHEDULE �12�SCHEDULE �12�PROVIS IONSPROVIS IONSPROVIS IONSPROVIS IONSPROVIS IONSFor Excise Duty on Electricity (under dispute) (Refer Note No.6(f)(i)in Schedule �21�) 54.73 54.73

For Premium on Debenture Redemption � 3.02

For Interim Dividend 372.33 �

For Proposed Final Dividend 223.40 484.03

For Tax on Dividend 90.10 48.40

740.56740.56740.56740.56740.56 590.18590.18590.18590.18590.18

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �11�SCHEDULE �11�SCHEDULE �11�SCHEDULE �11�SCHEDULE �11� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999CURRENT LIABILITIESCURRENT LIABILITIESCURRENT LIABILITIESCURRENT LIABILITIESCURRENT LIABILITIESSundry Creditors :

For Goods Supplied (Including outstanding duesof SSI Undertakings Rs. 0.60 million) 568.19 611.90

For Expenses 562.89 546.96

For Other Finance 66.14 61.24

1,197.221,197.221,197.221,197.221,197.22 1,220.101,220.101,220.101,220.101,220.10

Customers� Credit Balances and Advance against orders 131.66 128.81Security Deposits 121.16 124.92

Excess Receipts of Call and DebentureApplication Money Refundable 0.02 0.02Unclaimed Dividends 9.84 7.44

Unclaimed amount of Secured Redeemable Non-convertibleDebentures, Preference Shares & Premium on Redemption 3.85 4.00

Unclaimed amount of Fractional Coupons ofBonus Shares (including interest) 0.48 0.48Interest accrued but not due on Debentures,Loans and Deposits 70.20 78.89

1,534.431,534.431,534.431,534.431,534.43 1,564.661,564.661,564.661,564.661,564.66

6 96 96 96 96 9

Schedules

SCHEDULE �14�SCHEDULE �14�SCHEDULE �14�SCHEDULE �14�SCHEDULE �14�INCREASE /(DECREASE) IN STINCREASE /(DECREASE) IN STINCREASE /(DECREASE) IN STINCREASE /(DECREASE) IN STINCREASE /(DECREASE) IN STOCKSOCKSOCKSOCKSOCKSClosing Stocks:

Finished Goods 507.62 476.84Materials-in-Process 1,022.49 1,013.69

1,530.111,530.111,530.111,530.111,530.11 1,490.531,490.531,490.531,490.531,490.53Less: Opening Stocks:

Finished Goods 476.84 266.15Materials-in-Process 1,013.69 871.89

1,490.531,490.531,490.531,490.531,490.53 1,138.041,138.041,138.041,138.041,138.04

39.5839.5839.5839.5839.58 352.49352.49352.49352.49352.49

(Rs. in Million)For the yearFor the yearFor the yearFor the yearFor the year For the yearFor the yearFor the yearFor the yearFor the year

ended 31stended 31stended 31stended 31stended 31st ended 31stended 31stended 31stended 31stended 31stSCHEDULE �13�SCHEDULE �13�SCHEDULE �13�SCHEDULE �13�SCHEDULE �13� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999OOOOOTHER INCOMETHER INCOMETHER INCOMETHER INCOMETHER INCOMERent (Gross) (Tax deducted at Source Rs. 0.54 million) 6.01 4.77Interest on Inter Corporate Deposits & Banks * 605.61 410.77Interest from Others:* (including Interest Receivedfrom Income Tax Dept. Rs. 22.82 million) (Net) 65.52 76.44

671.13671.13671.13671.13671.13 487.21487.21487.21487.21487.21Income from Investments:*

Income from Current Investments:Interest 111.94 53.00Dividend 207.09 349.02Income from Long Term Investments:Interest on Bonds (Tax free) 104.10 104.10Other Interest 106.22 151.10Dividend (including on Trade Investments Rs. 2.08 million) 108.80 70.15

638.15638.15638.15638.15638.15 727.37727.37727.37727.37727.37

Profit on sale of Fixed Assets (Net) 2.89 10.05Profit on sale of Investments (Net) 1.99 90.99Miscellaneous Receipts & claims (Net)(Tax deducted at source Rs. 0.02 million) 25.80 81.98Sundry Credit Balances written back(Net) 0.54 9.62Exchange Rate Difference(Net) 19.48 2.77Previous years� Adjustments (Net) 20.55 30.21

1,386.541,386.541,386.541,386.541,386.54 1,444.971,444.971,444.971,444.971,444.97* Tax deducted at source on Interest Received Rs. 163.90 million

7 07 07 07 07 0

SCHEDULE �16�SCHEDULE �16�SCHEDULE �16�SCHEDULE �16�SCHEDULE �16�MANUFMANUFMANUFMANUFMANUFACTURING EXPENSESACTURING EXPENSESACTURING EXPENSESACTURING EXPENSESACTURING EXPENSESStores, Spare Parts & Tools Consumed (including for repairs) 707.38 637.19

Conversion & Fabrication Charges 2.70 9.87Power Generation & Electricity charges(including cost of own generation) 3,334.43 3,203.27

Repairs, Renewals & Replacements :Buildings 67.84 54.28

Machinery 155.19 98.78Others (Net) 61.77 62.65

284.80284.80284.80284.80284.80 215.71215.71215.71215.71215.71

Raw Water Charges and Cess 3.18 3.35

4,332.494,332.494,332.494,332.494,332.49 4,069.394,069.394,069.394,069.394,069.39

SCHEDULE �17�SCHEDULE �17�SCHEDULE �17�SCHEDULE �17�SCHEDULE �17�PPPPPAAAAAYMENTS TYMENTS TYMENTS TYMENTS TYMENTS TO AND PROVISIONSO AND PROVISIONSO AND PROVISIONSO AND PROVISIONSO AND PROVISIONSFOR EMPLFOR EMPLFOR EMPLFOR EMPLFOR EMPLOOOOOYEESYEESYEESYEESYEESSalaries, Wages, Bonus, Ex-gratia, Pension and Gratuity(including for repairs) 1,002.65 865.69Gratuity contribution to Employees� Gratuity Fund 49.49 39.66

Welfare Expenses 234.09 184.81Provident Fund, Employees� Pension Fund andSuperannuation Fund Contribution 122.24 101.80

1,408.471,408.471,408.471,408.471,408.47 1,191.961,191.961,191.961,191.961,191.96

Schedules(Rs. in Million)

For the yearFor the yearFor the yearFor the yearFor the year For the yearFor the yearFor the yearFor the yearFor the yearended 31stended 31stended 31stended 31stended 31st ended 31stended 31stended 31stended 31stended 31st

SCHEDULE �15�SCHEDULE �15�SCHEDULE �15�SCHEDULE �15�SCHEDULE �15� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999RARARARARAW MAW MAW MAW MAW MATERIALS CONSUMEDTERIALS CONSUMEDTERIALS CONSUMEDTERIALS CONSUMEDTERIALS CONSUMEDOpening Stock 702.03 693.18Add : Purchases (Net) 3,958.23 3,844.54

4,660.264,660.264,660.264,660.264,660.26 4,537.724,537.724,537.724,537.724,537.72

Less : Closing Stock 771.55 702.03

3,888.713,888.713,888.713,888.713,888.71 3,835.693,835.693,835.693,835.693,835.69

7 17 17 17 17 1

(Rs. in Million)For the yearFor the yearFor the yearFor the yearFor the year For the yearFor the yearFor the yearFor the yearFor the year

ended 31stended 31stended 31stended 31stended 31st ended 31stended 31stended 31stended 31stended 31stSCHEDULE �18�SCHEDULE �18�SCHEDULE �18�SCHEDULE �18�SCHEDULE �18� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999S E L L I N GS E L L I N GS E L L I N GS E L L I N GS E L L I N G, D I S T R I B U T I O N , A D M I N I S T R A, D I S T R I B U T I O N , A D M I N I S T R A, D I S T R I B U T I O N , A D M I N I S T R A, D I S T R I B U T I O N , A D M I N I S T R A, D I S T R I B U T I O N , A D M I N I S T R AT I O NT I O NT I O NT I O NT I O NA N D OA N D OA N D OA N D OA N D O T H E R E X P E N S E ST H E R E X P E N S E ST H E R E X P E N S E ST H E R E X P E N S E ST H E R E X P E N S E SRates & Taxes (Net) 5.08 3.12

Rent 33.64 25.45

Insurance 207.38 211.04

Miscellaneous Expenses (including Law charges to a Firm ofSolicitors in which a Director is partner Rs. 0.09 million) 296.44 250.97

Travelling 98.06 80.18

Donations (including Contribution of Rs.14.50 million to General ElectoralTrust for political purposes) 43.71 31.90

Auditors� Remuneration :

Audit Fees 1.26 1.05

For Tax Audit 0.27 0.21

For Issuing Certificates 0.17 0.21

Expenses 0.38 0.41

2.082.082.082.082.08 1.881.881.881.881.88

Cost Audit Fee & Expenses 0.27 0.23

Guarantee Commission to Banks 0.92 1.46

Research & Development Expenses 7.11 6.93

Technical Know-how Fee 21.46 21.57

Sales Tax/Turnover Tax paid 0.50 1.15

Directors� Fees 0.08 0.07

Manager�s Commission � 0.04

Commission on Sales 133.90 137.65

Packing, Forwarding and Transport Expenses (Net) 470.57 373.64

Provision for Diminution in carrying cost of Investment � 1.44

1,321.201,321.201,321.201,321.201,321.20 1,148.721,148.721,148.721,148.721,148.72

Schedules

7 27 27 27 27 2

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTSTES ON ACCOUNTSTES ON ACCOUNTSTES ON ACCOUNTSTES ON ACCOUNTS1.1.1.1.1. SIGNIFICANT ACCOUNTING POLICIESSIGNIFICANT ACCOUNTING POLICIESSIGNIFICANT ACCOUNTING POLICIESSIGNIFICANT ACCOUNTING POLICIESSIGNIFICANT ACCOUNTING POLICIESAAAAA..... FIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETS

i) Fixed Assets other than those which have been revalued, are stated at cost. Major items of Land, Buildings and Plant & Machinery wererevalued and the resultant surplus has been added to the cost of such assets. Cost includes financing costs and other related overheadsincurred during the period of construction.

ii) Other Fixed Assets including Capital Work-in-Progress are stated at cost.

B.B.B.B.B. DEPRECIADEPRECIADEPRECIADEPRECIADEPRECIATION & AMORTISATION & AMORTISATION & AMORTISATION & AMORTISATION & AMORTISATIONTIONTIONTIONTION

i) Depreciation on Fixed Assets has been provided for on Straight Line Method at the rates prescribed under Schedule XIV to theCompanies Act, 1956, as amended. Depreciation on revalued amount of fixed asset is adjusted by transferring the equivalent amountfrom Revaluation Reserve Account.

ii) Leasehold land/mining rights are amortised over the period of lease.

C.C.C.C.C. INVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSINVESTMENTSi) Long term Investments are stated at cost after deducting provision, if any, in cases where the fall in market value has been considered

of permanent nature.ii) Current investments are stated at lower of cost and fair value.

(Rs. in Million)For the yearFor the yearFor the yearFor the yearFor the year For the yearFor the yearFor the yearFor the yearFor the year

ended 31stended 31stended 31stended 31stended 31st ended 31stended 31stended 31stended 31stended 31stSCHEDULE �19�SCHEDULE �19�SCHEDULE �19�SCHEDULE �19�SCHEDULE �19� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999INTERESTINTERESTINTERESTINTERESTINTERESTOn Debentures 357.72 401.79

On Long Term Loans 199.38 389.60

Others (Including Interest Paid to Income Tax department Rs. 13.66 million) 39.52 44.97

596.62596.62596.62596.62596.62 836.36836.36836.36836.36836.36

SCHEDULE �20�SCHEDULE �20�SCHEDULE �20�SCHEDULE �20�SCHEDULE �20�DEPRECIADEPRECIADEPRECIADEPRECIADEPRECIAT IONTIONTIONTIONTIONDepreciation 2,829.02 2,718.19Less: Excess Depreciation for earlier years written back 3.49 �

2,825.532,825.532,825.532,825.532,825.53 2,718.192,718.192,718.192,718.192,718.19

Less: Transfer from Capital Reserve 1,471.90 1,472.21

1,353.631,353.631,353.631,353.631,353.63 1,245.981,245.981,245.981,245.981,245.98

SchedulesSchedules

7 37 37 37 37 3

Schedules

DDDDD..... INVENTINVENTINVENTINVENTINVENTORIESORIESORIESORIESORIES

i) Inventories of stores and spare parts are valued at or below cost after providing for cost of obsolescence and other anticipated losses,wherever considered necessary.

ii) Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular (insurancespares) are written off over the estimated useful life of the parent asset.

iii) Inventories of items other than those stated above are valued �At cost or Net Realizable Value, whichever is lower�. Cost is generallydetermined on weighted average cost basis and wherever required, appropriate overheads are taken into account. Net RealizableValue is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costsnecessary to make the sale.

EEEEE..... FOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONSFOREIGN CURRENCY TRANSACTIONS

(a) Year-end balance of foreign currency transactions is translated at the year-end rates and the corresponding effect is given in therespective accounts. Transactions completed during the year are adjusted on actual basis.

(b) In respect of transactions covered by Forward Foreign Exchange Contracts, the difference between the forward rate and exchange rateat the inception of contract is recognised as income or expense over the life of the contract except for contracts relating to liabilitiesincurred for purchase of Fixed Assets, the difference thereof is adjusted in the carrying amount of respective Fixed Assets.

(c) Transactions covered by cross currency swap contracts to be settled on future dates are recognised at the year-end rates of theunderlying foreign currency. Effects arising of swap contracts are being adjusted on the date of settlement.

FFFFF..... RETIREMENT BENEFITSRETIREMENT BENEFITSRETIREMENT BENEFITSRETIREMENT BENEFITSRETIREMENT BENEFITS

(a) Year-end liabilities on account of Gratuity & Superannuation benefits to employees are provided and funded to approved funds.

(b) Leave Encashment benefits are provided for on Actuarial Basis.

GGGGG..... RECOGNITION OF INCOME & EXPENDITURERECOGNITION OF INCOME & EXPENDITURERECOGNITION OF INCOME & EXPENDITURERECOGNITION OF INCOME & EXPENDITURERECOGNITION OF INCOME & EXPENDITURE

Income & Expenditure are recognised on accrual basis.

H.H.H.H.H. PREMIUM ON DEBENTURE REDEMPTIONPREMIUM ON DEBENTURE REDEMPTIONPREMIUM ON DEBENTURE REDEMPTIONPREMIUM ON DEBENTURE REDEMPTIONPREMIUM ON DEBENTURE REDEMPTION

Premium payable on redemption of debentures is evenly recognised in the Profit & Loss Account during the period between their issueand redemption.

I.I.I.I.I. RESEARCH & DEVELRESEARCH & DEVELRESEARCH & DEVELRESEARCH & DEVELRESEARCH & DEVELOPMENT EXPENDITUREOPMENT EXPENDITUREOPMENT EXPENDITUREOPMENT EXPENDITUREOPMENT EXPENDITURE

Revenue expenditure is charged to Profit & Loss Account and Capital expenditure is added to the cost of Fixed Assets in the year in which itis incurred.

JJJJJ..... CONTINGENT LIABILITYCONTINGENT LIABILITYCONTINGENT LIABILITYCONTINGENT LIABILITYCONTINGENT LIABILITY

Contingent liabilities are not provided for in the accounts and are disclosed by way of Notes.(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stMarch, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

2. Capital Commitments outstanding (Advance/Deposit paid Rs. 58.74 million) 489.73 1034.08

3. Guarantees outstanding 6.00 6.00

4. Letters of Credit Outstanding 52.85 318.24

5. Other Bank Guarantees & Bonds besides those mentioned separately andcounter guaranteed by the Company 141.04 215.55

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

7 47 47 47 47 4

6. Contingent Liabilities not provided for in respect of :

(a) Claims not acknowledged as debt 133.59 15.92

(b) Bills discounted with Banks 638.08 436.41

(c) The Company has received supplementary bills on account of revisionin rate of power for Main Supply from the UPSEB for the period15.5.1976 to 30.6.1980 and the same remains unprovided for as disputed by the Company. 50.10 50.10

(d) Due to certain additions made in the assessment of earlier years thecompany has received demands from the Income Tax Department againstwhich it has gone in appeals. The Company has been advised thatconsidering the grounds of appeal no provision is required. 513.53 325.08

(e) 17,35,72,882 Equity Shares of Rs. 10/- each fully paid up in Birla AT & T Communications Ltd., held by the Company as investmenthave been pledged for securing financial assistance granted by the lenders to that company.

(f) The Company has received the following demands which are disputed by the Company and are not provided for :

i) A demand up to 30th September 1984 for Rs.145.94 million had been raised by the Assistant Collector, Central Excise, Mirzapur,being the amount of Excise Duty levied by the Central Government on the power generated by the Company�s captive powerplant, Renusagar Power Co. Ltd. (since amalgamated). The Delhi High Court has quashed the entire demand of Excise Duty; videits Order dated 9th July 1993. The Government of India has filed an appeal before the Division Bench of Delhi High Court, whichis pending.

However, The Assistant Collector, Central   Excise, Mirzapur has served a demand notice dated 16th February 1994 on theCompany that out of the aforesaid total sum of Rs.145.94 million, the Company has made provision for Rs.54.73 million in itsaccounts and the balance amount has been sequestered in the Aluminium Regulation Account constituted under the Aluminium(Control) Order, 1970 and these ought to have been deposited to the credit of the Central Government, as envisaged under theprovisions of Section 11-D of the Central Excise & Salt Act, 1944. The Company has challenged the same and filed a writ petitionin the Delhi High Court, which is pending, and demand is stayed. According to the terms of settlement dated 5.12.83 between theCompany and the Central Govt. and the subsequent correspondence on the subject, the amount relating to period from 27.3.1981onwards has been sequestered in the Aluminium Regulation Account, to be reimbursed to the Company in the event the Courtdecides the case against the Company and the amount becomes payable.

ii) A demand of interest for a sum of  Rs.29.04 million on past dues of the Aluminium Regulation Account up to 31.12.1987, isdisputed by the Company and not provided for.

iii) Rs. 44.36 million from the State of Bihar, under the Cess and other Taxes on Minerals (Validation) Act 1992, for alleged Cess onbauxite ore. The Patna High Court vide its Order dated 17.01.1996 has quashed the demand against which the State of Bihar hasfiled an appeal in the Supreme Court of India, which has been referred to a bench of three Judges and is pending.

iv) The Cess and Other Taxes on Minerals (Validation) Act 1992, was enacted by the Parliament, validating the imposition andcollection of cess on minerals under certain States Laws, including M.P., up to 4.4.1991. A Bench of two honourable Judges of theSupreme Court inter-alia upheld the validity of the said Act vide it�s judgement dated 26th July 1996. However, the same Bench

Schedules(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31stSCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

7 57 57 57 57 5

in another batch of cases has directed that the said matter be listed for hearing before a Bench of three learned Judges and thematter is pending. During the year 1997-1998, the Company has received demand notices for Rs. 52.35 million under the M.P. ActNo.15 of 1982 from Northern Coalfields Ltd. M.P. High Court by an interim order stayed the recovery proceedings for Rs. 52.35million on furnishing a Bank Guarantee by the Company. The Company holds a provision of Rs. 38.28 million against thedemand. The Company has also received a demand notice for Rs. 1.03 million under M.P. Act No.1 of 1982, from the M.P.Government in respect of cess on bauxite ore. On a writ petition filed by the Company, the Supreme Court has issued notices toState Government and has ordered that meanwhile no coercive steps shall be taken to make recovery.

v) The Uttar Pradesh State Electricity Board has claimed additional water charges of approximately Rs.35.66 million on account ofretrospective revision of water charges for water drawn from upstream and down stream of Rihand Reservoir, for the earlieryears for the Company�s Power Plant at Renusagar and Aluminium Plant at Renukoot and the townships. The Company disputesthe claim and has filed a writ petition in the Allahabad High Court, which is pending.

vi) The Company has received demand from Central Excise Department for Rs. 66.30 million disallowing MODVAT credit on certainCapital Goods. The Company disputes the demand and has filed an appeal, which is pending. In the meantime demand has beenstayed by the Allahabad High Court upon Company depositing a sum of Rs. 2.5 million.

vii) A levy of custom duty amounting to Rs. 108.29 million for import of books containing designs and drawings (including technicalmanuals) relating to project work for Unit No. 6 & 7 of Renusagar Power Division has been disputed by the Company and anappeal has been filed before CEGAT, Calcutta. In terms of the Contract if this duty becomes payable it would be recoverable fromthe supplier.

7. The Company has entered into an agreement with Alcan Aluminium Ltd., Canada to acquire 38.84 million equity shares of Indian AluminiumCo. Ltd., at a price of Rs.190/- per share subject to necessary statutory approvals. As per the requirements, the Company has to make an openoffer to the public for acquisition of further upto 14.22 million equity shares at Rs.190/- per share. The transactions involve an outlay of uptoRs. 10,082.68 million

8. During the year, the company has supplied 178.47 million Kwh of electricity to UPSEB. Pending finalisation of Agreement with UPSEB, anamount equal to generation cost of such power has been excluded from the Power Generation and Electricity Charges in the Profit & LossAccount and is shown as recoverable from UPSEB.

9. (a) Loss on account of Exchange rate difference of Rs. 7.53 million has been debited to Fixed Assets, and of Rs. 1.10 million to Profit & LossAccount.

(b) Consequent to the realignment of the Rupee value of foreign currency loans (outstanding as on 31.03.2000 US $ 62.70 million),liability of the Company has increased by Rs. 70.86 million as on 31.3.2000 out of which Rs. 1.36 million has been debited to Profit &Loss Account and Rs. 69.50 million has been added to the cost of relevant Fixed Assets and Capital Work-in-Progress.

(c) The Company has entered into cross currency swap transactions for payment of instalments and interest on future dates for US $ 55.35million loan. Since the fluctuations in the intervening period cannot be fairly estimated, the effect of swap contracts will be accountedfor in the year in which the contracted settlement takes place. Had the outstanding amount of this loan been stated at the parity rateprevailing at the year-end between US $ and Japanese Yen (swap currency), the principal amount would have increased by Rs. 199.80million. However, the outflow on account of future interest will be lower by Rs. 153.47 million

10. The  Company has earmarked 3,00,000 Units of the Unit Trust of India of Rs.10/- each cost being Rs. 3.77 million (repurchase price Rs. 4.34million) in compliance with the provisions of Rule 3A of the Companies (Acceptance of Deposits) Rules, 1975 (as amended).

SchedulesSCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

7 67 67 67 67 6

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

11. Advances (Dr.) include -

(a) Due from a firm of Solicitors & Advocates in which one of theDirectors is a Partner. (Maximum balance during the year Rs. 0.40 million) 0.35 �

(b) Due from Officers (Maximum balance during the year Rs. 2.04 million) 1.68 1.94

12. (a) Loans to a limited company represents unsecured loans of Rs. 125.97 million to Bihar Caustic & Chemicals Ltd. (BCCL) as promoterscontribution towards cost of projects. These loans will be repaid after the Institutional Loans for the projects are repaid in full. As peragreements the rate of interest on the Loan of Rs. 3.42 million is restricted to percentage of dividend declared by BCCL and on the loanof Rs. 122.55 million the rate of interest would be the Bank Rate or percentage of dividend declared by BCCL, whichever is higher.

(b) The Company has given undertakings to various financial Institutions for non-disposal of shares held in Bihar Caustic & Chemicals Ltd.,Tanfac Industries Ltd., Indo Gulf Corporation Ltd., Mangalore Refinery and Petrochemicals Ltd., Indian Rayon & Industries Limited andBirla AT&T Communications Ltd. till the Institutional loans are repaid in full.

(c) Advance against Share Application Money represents payment to Birla Telecom Ltd. Rs. 0.84 million wherein the Company is a Co-promoter.

(d) Advances recoverable in cash or in kind include payments made to Rosa Power Supply Co. Ltd. Rs. 17.88 million and Bina Power SupplyCo. Ltd. Rs. 462.15 million to be adjusted against the value of the Equity Shares to be issued by such Co-promoted Companies in theevent the relative projects are implemented after procuring all regulatory approvals.

(e) Advances recoverable in cash or in kind or for value to be received include Rs. 7.82 million incurred on a project undertaken by aconsortium of companies.

13. Excise Duty in respect of Finished Goods is being accounted for at the time of clearance of goods as per practice followed by the Company.Such excise duty liability as at 31.3.2000 on goods pending clearance from the factory is estimated at Rs. 61.26 million. However, thisliability, if accounted for shall not affect the profit for the year.

14. Outstanding dues owed by the Company to Small Scale Industrial Undertakings for a sum of Rs. 0.1 million or more, which is outstanding formore than 30 days, is :

International Industrial Gases Limited Rs. 0.29 million

15. Profit or Loss on sale of Stores & Spare-parts remains adjusted in Stores Consumed Account and not shown separately.

16. (a) In compliance with the revised Accounting Standard 2 (Valuation of Inventories), which has become mandatory from this year, theCompany has changed its accounting policy with respect to valuation of inventories resulting in higher valuation of closing inventoriesby Rs. 178.81 million with corresponding effects on profits.

(b) In compliance with the revised Accounting Standard 2 (Valuation of Inventories) read with Accounting Standard 10 (Accounting forFixed Assets) the Company has changed its accounting policy with respect to valuation of machinery spares of irregular use (InsuranceSpares). Due to this change profit for the year has decreased by Rs. 16.66 million.

Schedules

7 77 77 77 77 7

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

17. (a) Sales are after deducting cash discount allowed to the parties. 18.04 14.47

(b) Sales include export incentives 198.89 97.67

18. The following are included under other heads of expenses in the Profit & Loss Account:

Consumption of stores and spare parts 223.42 168.14

Repairs to buildings 16.87 15.28

Repairs to machinery 209.15 125.58

Repairs to others 74.73 50.05

Salaries, wages & bonus etc. 418.03 352.18

Contribution to provident and other funds 54.57 47.61

Workmen and staff welfare expenses 86.47 66.18

Royalty 26.80 24.76

Miscellaneous expenses 46.73 39.36

Insurance 1.08 0.91

Rent 0.48 0.51

Rates & Taxes 0.62 0.66

19. (a) The Company is one of the promoter member of Birla Management Corporation Limited (BMCL), a company limited by guaranteewhich has been formed to provide a common pool of facilities and resources to its members, with a view to optimize the benefits ofspecialisation and minimise cost for each member. The Company has participated in the common pool and has shared the expensesincurred by BMCL and accounted these under appropriate heads.

(b) Proportionate  expenses  reimbursed  for utilising services  of establishments maintained by others have been included in respectiveexpenses heads.

20. Rs. 0.07 million has been paid as pension (including perquisites) to a Director of the Company who was President of the Company before hisappointment as Director.

21. Insurance claims under various policies / other claims are not accounted for, as the amounts are still unascertained pending the completionof assessment/ settlement.

22. Sales include own manufactured items capitalized / used Rs. 26.97 million at cost (inclusive of excise duty).

Schedules

7 87 87 87 87 8

(Rs. in Million)As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21� March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Schedules

25. Additional information pursuant to paragraphs 3 and 4 of Part II of Schedule VI to the Companies Act,1956 (as amended)(a) Particulars in respect of Goods manufactured:-

(Rs. in Million)

CapacityCapacityCapacityCapacityCapacity InstalledInstalledInstalledInstalledInstalled ActualActualActualActualActual Stock Of Goods PStock Of Goods PStock Of Goods PStock Of Goods PStock Of Goods Producedroducedroducedroducedroduced

PPPPProduc tionroduc tionroduc tionroduc tionroduc tion OpeningOpeningOpeningOpeningOpening ClosingClosingClosingClosingClosing

Class of goodsClass of goodsClass of goodsClass of goodsClass of goods Licensed/RLicensed/RLicensed/RLicensed/RLicensed/Registered *egistered *egistered *egistered *egistered * Capacity **Capacity **Capacity **Capacity **Capacity ** QtyQtyQtyQtyQty..... QtyQtyQtyQtyQty..... 01.04.9901.04.9901.04.9901.04.9901.04.99 01.04.9801.04.9801.04.9801.04.9801.04.98 31.03.0031.03.0031.03.0031.03.0031.03.00 31.03.9931.03.9931.03.9931.03.9931.03.99

1999-001999-001999-001999-001999-00 1998-991998-991998-991998-991998-99 1999-001999-001999-001999-001999-00 1998-991998-991998-991998-991998-99 1999-001999-001999-001999-001999-00 1998-991998-991998-991998-991998-99 QtyQtyQtyQtyQty VVVVValuealuealuealuealue QtyQtyQtyQtyQty..... VVVVValuealuealuealuealue QtyQtyQtyQtyQty..... VVVVValuealuealuealuealue QtyQtyQtyQtyQty..... VVVVValuealuealuealuealue

Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes

Aluminium Metal 3,75,000 3,75,000 2,42,000 2,42,000 2,48,930 ($) 2,40,926 9,051 292.49 3,230 109.62 5,955 219.62 9,051 292.49

Rolled Products 1,28,000 1,28,000 80,000 80,000 58,690 (#) 44,668 2,794 116.54 2,552 113.62 3,477 178.79 2,794 116.54

Extruded Products 31,000 31,000 13,700 13,700 14,959 11,995 977 44.96 646 28.98 679 35.55 977 44.96

Conductor Redraw Rods 1,25,000 1,25,000 40,000 40,000 49,018 51,197 554 19.38 388 13.85 1261 48.37 554 19.38

Aluminium Foil 10,000 10,000 5,000 5,000 7,537 1,551 47 3.47 1 0.08 270 20.47 47 3.47

Aluminium Wheel 12,00,000 12,00,000 3,00,000 � 5,451 � � � � � 3,325 4.82 � �Pcs Pcs Pcs � Pcs � � � � � Pcs � � �

Electricity 581.7 MW 581.7 MW 581.7 MW 581.7 MW 4,555 MU 4,330 MU � � � � � � � �

Electricity (Co-generation) 37 MW 37 MW 37 MW 37 MW 283 MU 263 MU � � � � � � � �

TOTAL 476.84 266.15 507.62 476.84

**Registered Capacities are those Capacities for which registration granted pursuant to the scheme of delicensing vide notification No. 477(E), dated 25th July, 1991.

** As certified by the management.

$ Includes 8,902 MT (Previous year 13013 MT) converted for outside party.

#Includes 96 MT (Previous year 582 MT) converted from outside party, 21 MT (Previous year NIL) converted for outside party and 9,263 MT (Previous year 2,987 MT) transferred to Foil division.

23. Expenses include following payments to the Whole-Time Director :Salary 1.80 1.53Contribution to Provident Fund & Superannuation Fund 0.49 0.41Commission � 0.04

24. Figures for the previous year have been regrouped / rearranged wherever found necessary.

7 97 97 97 97 9

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Schedules

25. Additional information pursuant to paragraph 3 and 4 of Part II of Schedule VI to the Companies Act, 1956 (as amended) (Contd�..)(b) Particulars in respect of Sales:-

(Rs. in Million)1999-00 1998-99

Quantity Value Quantity Value(Tonnes) (Tonnes)

Aluminium Ingots / Billets 1,22,189 9,993.03 1,12,367 8,968.20Rolled Products 48,722 5,053.07 41,439 4,132.08Extruded Products 15,257 1,624.11 11,664 1,220.31Conductor Redraw Rods 48,311 4,424.71 51,031 4,436.46Aluminium Foil 7,314 979.36 1,505 197.55Aluminium Wheel 2,126 Pcs 3.88 � �Conversion Charges 8,923 554.05 13,040 783.69Items other than Finished Goods :

a) Vanadium Sludge 349 56.15 303 66.98b) Alumina � � 14 0.08c) Others � 387.35 * � 325.50

23,075.71 20,130.85

* Includes Rs. 198.89 million Export Incentive.(Previous year Rs. 97.67 million).(c) (i) Raw Material consumed during the year (excluding own manufactured items):-

(Rs. in Million)1999-00 1998-99

Quantity Value Quantity Value(Tonnes) (Tonnes)

Alumina Purchased 37,066 207.49 50,595 273.69Aluminium Fluoride 4,150 188.36 5,524 238.91Bauxite 11,87,083 850.86 11,44,481 750.11Calcined Petroleum Coke 92,067 539.64 87,939 592.27Caustic Soda 44,530 558.57 47,909 556.44Fuel Oil / Light Diesel Oil / HSD Oil 62,408 KL 525.46 61,528 KL 395.90Hard Pitch / Soft Pitch / Hard Coke 27,481 326.28 28,081 271.28Soda Ash / Starch/Lime etc. 60,642 150.23 48,564 132.27Steam Coal/Steam 8,14,455 343.61 8,53,319 366.43Chemicals 247 42.17 206 35.09Aluminium Ingots � � 498 30.01Anthracite Coal / Cathode Blocks 713 52.15 646 43.31Other Materials 2,137 173.15 1,041 119.68

2,687 Mtrs 4,148 Mtrs

3,957.97 3,805.39Adjustment on Account of intermediate products (-) 69.26 (+) 30.30

3,888.71 3,835.69

8 08 08 08 08 0

SchedulesSCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

25. Additional information pursuant to paragraphs 3 and 4 of Part II of Schedule VI to the Companies Act, 1956 (as amended) (Contd�..)(c) (ii) Value of following materials consumed for power generation is included in Power & Electricity Charges :-

(Rs. in Million)

1999-00 1998-99Quantity Value Quantity Value(Tonnes) (Tonnes)

Coal 41,77,668 2,526.08 42,28,621 2,390.77Fuel Oil/L.D.O 3,784 KL 42.98 5,423 KL 54.40

(d) Value of Imports by the Company:-(Rs. in Million)

CIF value of imports ConsumedExcluding goods in

transit and imported Totalitems purchased locally Consumption Imported amount % of Col.2 Indigenous amount % of Col.2

(1) (2) (3) (4) (5) (6)

1999-00 1998-99 1999-00 1998-99 1999-00 1998-99 1999-00 1998-99 1999-00 1998-99 1999-00 1998-99

i) Raw materials 148.09 120.70 3,888.71 3,835.69 160.26 181.55 4.12 4.73 3,728.45 3,654.44 95.88 95.27ii) Components

& Spare parts 133.43 129.63 640.19 425.87 174.81 173.68 27.31 40.78 465.38 252.19 72.69 59.22iii) Capital Goods 368.95 360.89 � � � � � � � � � �

(e) Finished Goods purchased and sold :-(Rs. in Million)

1999-00 1998-99Quantity Value Quantity Value(Tonnes) (Tonnes)

Aluminium Wire Rods 0.228 0.02 � �(Rs. in Million)

As at 31stAs at 31stAs at 31stAs at 31stAs at 31st As at 31stAs at 31stAs at 31stAs at 31stAs at 31st(f) Expenditure in Foreign Currency (Paid or Provided) : March, 2000March, 2000March, 2000March, 2000March, 2000 March, 1999March, 1999March, 1999March, 1999March, 1999

Technical know-how & Professional Fee 4.57 24.12Foreign Traveling 10.37 7.46Commission 14.94 7.96Training Expenses 0.76 4.99Interest 111.95 196.88Others 3.63 1.98

(g) Earning in Foreign Exchange :-Export of goods on FOB basis 3,122.53 1,654.57Royalty & Technical Services 0.36 0.38Interest 34.47 12.50Others � 5.15

8 18 18 18 18 1

SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�SCHEDULE �21�NONONONONOTES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS TES ON ACCOUNTS (Contd.)(Contd.)(Contd.)(Contd.)(Contd.)

Schedules

I .I .I .I .I . REGISTRAREGISTRAREGISTRAREGISTRAREGISTRATION DETTION DETTION DETTION DETTION DETAILSAILSAILSAILSAILS

Registration No. State Code

Balance Sheet DateDate Month Year

II.II.II.II.II. CAPITCAPITCAPITCAPITCAPITAL RAISED DURING THE YEARAL RAISED DURING THE YEARAL RAISED DURING THE YEARAL RAISED DURING THE YEARAL RAISED DURING THE YEAR (Amount in Rs. Million)Public/Euro Issue Right Issue

Bonus Issue Private Placement

III.III.III.III.III. POSITION OF MOBILISAPOSITION OF MOBILISAPOSITION OF MOBILISAPOSITION OF MOBILISAPOSITION OF MOBILISATION AND DEPLTION AND DEPLTION AND DEPLTION AND DEPLTION AND DEPLOOOOOYMENT OF FUNDSYMENT OF FUNDSYMENT OF FUNDSYMENT OF FUNDSYMENT OF FUNDS (Amount in Rs. Million)Total Liabilities Total Assets

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSPaid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

APPLICAAPPLICAAPPLICAAPPLICAAPPLICATION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDSTION OF FUNDSNet Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

IVIVIVIVIV..... PERFORMANCE OF COMPPERFORMANCE OF COMPPERFORMANCE OF COMPPERFORMANCE OF COMPPERFORMANCE OF COMPANYANYANYANYANY (Amount in Rs. Million)Turnover Total Expenditure

Profit (Loss) Before Tax & Extraordinary Item Profit/(Loss) After Tax & Extraordinary Item

EPS (in Rs.) Dividend %

VVVVV..... GENERIC NAMES OF THREE PRINCIPGENERIC NAMES OF THREE PRINCIPGENERIC NAMES OF THREE PRINCIPGENERIC NAMES OF THREE PRINCIPGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPAL PRODUCTS/SERVICES OF COMPAL PRODUCTS/SERVICES OF COMPAL PRODUCTS/SERVICES OF COMPAL PRODUCTS/SERVICES OF COMPANYANYANYANYANY

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

26.26.26.26.26. Balance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business Profile

1 1 - 1 1 2 3 8

3 1 0 3 2 0 0 01 1

N I L

N I L

N I L

N I L

6 0 3 6 1 . 7 8 6 0 3 6 1 . 7 8

7 4 4 . 6 9

5 3 2 9 . 8 2

5 1 5 8 8 . 4 0

4 2 3 . 8 8

3 4 3 4 9 . 5 7 1 1 3 2 8 . 5 3

1 2 4 0 8 . 6 9 N I L

N I L

2 3 0 7 5 . 7 1

+ 8 8 3 6 . 5 9

8 2 . 2 3

1 5 6 2 5 . 6 6

+ 6 1 2 3 . 7 0

8 0 %

A l u m i n i u m I n g o t s7 6 0 1

A l u m i n i u m R o l l e d P r o d u c t s7 6 0 6

A l u m i n i u m R e d r a w R o d s7 6 0 5

As per our report annexed.For SINGHI & CO. A. K. AGARWALA Chairman : KUMAR MANGALAM BIRLARAJIV SINGHI Whole-time Director Directors : RAJASHREE BIRLAPartner T. K. SETHIM. M. BHAGATChartered Accountants S. S. KOTHARIP. D. OJHA

C. M. MANIARCamp : Mumbai ANIL J. JHALADated : The 27th day of April, 2000. Company Secretary

8 28 28 28 28 2

Auditors� CertificateAuditors� CertificateAuditors� CertificateAuditors� CertificateAuditors� CertificateWe have verified the above Cash Flow statement of Hindalco Industries Limited compiled from the audited annual financial statement for the year endedMarch 31, 2000 and found the same in accordance therewith and also with the requirements of clause 32 of the listing agreements with Stock Exchanges.

(Rs. in Million)For the year ended For the year ended

March 31, 2000 March 31,1999AAAAA ..... CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERAOW FROM OPERATING ACTIVITIESTING ACTIVITIESTING ACTIVITIESTING ACTIVITIESTING ACTIVITIES

Net Profit before tax and extraordinary items 8,836.59 7,137.87Adjustments for :Depreciation 1,353.63 1,245.98Provision for premium on debenture redemption 0.20 1.43Foreign Exchange 1.36 6.60Investment activities (1,202.22) (1,314.17)Interest charged 596.62 749.59 836.36 776.20Operating Profit before working capital changes 9,586.18 7,914.07Changes in Working Capital :Trade and other receivable (258.91) (749.61)Inventories (126.56) (389.50)Trade payable (23.81) (409.28) 108.76 (1,030.35)

Cash generated from Operations 9,176.90 6,883.72Direct taxes paid (2,522.79) (1,426.10)

Cash flow before extraordinary items 6,654.11 5,457.62Extraordinary items (43.64) �NET CASH FROM OPERATING ACTIVITIES 6,610.47 5,457.62

B.B.B.B.B. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM INVESTMENT ACTIVITIESOW FROM INVESTMENT ACTIVITIESOW FROM INVESTMENT ACTIVITIESOW FROM INVESTMENT ACTIVITIESOW FROM INVESTMENT ACTIVITIESPurchase of Fixed assets (1585.62) (2,116.52)Sale of Fixed assets 60.37 53.14Acquisition of Companies � �Purchase of Investments (6,705.02) (4,375.57)Sale of Investments 6,002.71 3,930.03Interest received 773.51 751.67Dividend received 315.89 419.17NET CASH USED IN INVESTMENT ACTIVITIES (1,138.16) (1,338.08)

C.C.C.C.C. CASH FLCASH FLCASH FLCASH FLCASH FLOW FROM FINANCING ACTIVITIESOW FROM FINANCING ACTIVITIESOW FROM FINANCING ACTIVITIESOW FROM FINANCING ACTIVITIESOW FROM FINANCING ACTIVITIESProceeds from issue of Share Capital � �(including premium less Euro issue expenses)Proceeds from long term borrowings (net) (1,267.46) (973.49)Repayment of Finance Lease Liabilities � �Interest paid (608.54) (863.32)Dividend paid (532.43) (430.04)NET CASH USED IN FINANCING ACTIVITIES (2,408.43) (2,266.85)NET INCREASE IN CASH AND CASH EQUIVALENTS 3,063.88 1,852.69CASH AND CASH EQUIVALENTS - OPENING BALANCE 3,743.43 1,890.74CASH AND CASH EQUIVALENTS - CLOSING BALANCE 6,807.31 3,743.43

Cash Flow Statement for the year ended March 31, 2000

As per our report annexed.For SINGHI & CO. A. K. AGARWALA Chairman : KUMAR MANGALAM BIRLARAJIV SINGHI Whole-time Director Directors : RAJASHREE BIRLAPartner M. M. BHAGATChartered Accountants P. D. OJHA

C. M. MANIAR

Camp : Mumbai ANIL J. JHALADated : The 27th day of April, 2000. Company Secretary

As per our report annexed.For SINGHI & CO.RAJIV SINGHIPartnerChartered AccountantsCamp : MumbaiDated : The 27th day of April, 2000.

8 38 38 38 38 3

STSTSTSTSTAAAAATEMENT REGARDING SUBSIDIARY COMPTEMENT REGARDING SUBSIDIARY COMPTEMENT REGARDING SUBSIDIARY COMPTEMENT REGARDING SUBSIDIARY COMPTEMENT REGARDING SUBSIDIARY COMPANIES PURSUANT TANIES PURSUANT TANIES PURSUANT TANIES PURSUANT TANIES PURSUANT TO SECTION 212 (1) (e) OF THE COMPO SECTION 212 (1) (e) OF THE COMPO SECTION 212 (1) (e) OF THE COMPO SECTION 212 (1) (e) OF THE COMPO SECTION 212 (1) (e) OF THE COMPANIES ACTANIES ACTANIES ACTANIES ACTANIES ACT, 1956., 1956., 1956., 1956., 1956.

Name of the Subsidiary Company Financial Year of Extent of Holdingthe Subsidiary Company Company�s

ended on interest

Minerals & Minerals Limited 31st March, 2000 100 %Renukeshwar Investments & Finance Limited 31st March, 2000 100 %Renuka Investments & Finance Limited 31st March, 2000 100 %

The net aggregate amount, so far as it concerns members of Hindalco Industries Limited and is not dealt with the attached accounts of the Company,of the above Subsidiary Companies� profit deducting their losses or vice versa:

Profit/ (losses) not dealt within the HoldingCompany�s accounts.(Amount in Rupees)

Name of the Subsidiary Company For the Financial For the previousYear of the Financial Years of the

Subsidiary Company Subsidiary since itbecame the Holding

Company�s subsidiary

Minerals & Minerals Limited 4,02,700 51,62,916Renukeshwar Investments & Finance Limited 1,049 4,654Renuka Investments & Finance Limited 33,19,665 6,20,789

The net aggregate amount of the profits or losses of the above Subsidiary Companies which are dealt within the attached accounts of the Company (a)for the Financial Year of the Subsidiary Company ; and (b) for the previous Financial Years of the Subsidiary since it became the Holding Company�ssubsidiary is NIL.

As the financial year of the Subsidiary Companies coincides with the financial year of the Holding Company, Section 212(5) of the said Act is notapplicable in this case.

A. K. AGARWALA Chairman : KUMAR MANGALAM BIRLAWhole-time Director Directors : RAJASHREE BIRLA

M. M. BHAGATP. D. OJHA

C. M. MANIAR

Place : Mumbai ANIL J. JHALADated : The 27th day of April, 2000. Company Secretary

8 48 48 48 48 4

Secretarial Compliance CertificateTO WHOMSOEVER IT MAY CONCERNTO WHOMSOEVER IT MAY CONCERNTO WHOMSOEVER IT MAY CONCERNTO WHOMSOEVER IT MAY CONCERNTO WHOMSOEVER IT MAY CONCERN

This is to certify that Hindalco Industries Limited, having its registered office at “Century Bhavan”3rd Floor, Dr. Annie Besant Road, Mumbai - 400 025, has complied with all the statutory requirementsand maintained all books/records as required under the Companies Act, 1956 and all other applicablestatutes and rules thereunder.

For Hindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries Limited

ANIL J. JHALAANIL J. JHALAANIL J. JHALAANIL J. JHALAANIL J. JHALAJoint-President

Place : Mumbai (Company Matters, Taxation, Treasury) &Date: The 27th of April, 2000 Company Secretary

8 58 58 58 58 5

The Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of Directors

Hindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries Limited

WWWWWe have audited, in accordance with auditing standards generally accepted in the United States, the financial statementsof Hindalco Industries Limited and subsidiaries for the years ended March 31, 2000 and 1999, and have issued our reportthereon dated May 27, 2000. We have also audited the Reconciliations of Significant Differences Between AccountingPrinciples Generally Accepted in the United States (�US GAAP�) and Accounting Principles Generally Accepted in India(�Indian GAAP�) relating to stockholders� equity and net income of the Company as of, and for the years ended, March 31,2000 and 1999, included in those financial statements. The Reconciliations are the responsibility of the Company�smanagement. Our responsibility is to express an opinion on the Reconciliations based on our audits.

We conducted our audits of the Reconciliations in accordance with auditing standards generally accepted in the UnitedStates. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether theReconciliations are free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures related to the Reconciliations. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall presentation of the Reconciliations. Webelieve that our audits provide a reasonable basis for our opinion.

In our opinion, the Reconciliations referred to above present fairly, in all material respects, the significant differences instockholders� equity and net income between US GAAP and Indian GAAP as of, and for the years ended, March 31, 2000and 1999.

The United States dollar amounts are presented in the accompanying Reconciliations solely for the convenience of thereaders and are arithmetically correct on the basis described in Note 2.

May 27, 2000 KPMG

Independent Auditors� Report

8 68 68 68 68 6

RRRRReconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAP(Currency: Indian Rupees in million)

RRRRReconciliation of Net Incomeeconciliation of Net Incomeeconciliation of Net Incomeeconciliation of Net Incomeeconciliation of Net Income

US $ inUS $ inUS $ inUS $ inUS $ inmillionsmillionsmillionsmillionsmillions

Year ended YYYYYear endedear endedear endedear endedear ended YYYYYear endedear endedear endedear endedear endedMarch 31, March 31,March 31,March 31,March 31,March 31, March 31,March 31,March 31,March 31,March 31,

1999 20002000200020002000 20002000200020002000

Net income as per Indian GAAPNet income as per Indian GAAPNet income as per Indian GAAPNet income as per Indian GAAPNet income as per Indian GAAP 5,667.87 6,123.706,123.706,123.706,123.706,123.70 140.29140.29140.29140.29140.29

US GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustments

Consolidation of subsidiaries 1.15 3.733.733.733.733.73 0.080.080.080.080.08

Interest capitalised 28.61 (27.06)(27.06)(27.06)(27.06)(27.06) (0.62)(0.62)(0.62)(0.62)(0.62)

Foreign exchange losses (198.53) (80.50)(80.50)(80.50)(80.50)(80.50) (1.84)(1.84)(1.84)(1.84)(1.84)

Start up costs (139.20) 178.76178.76178.76178.76178.76 4.104.104.104.104.10

Amortisation of investment in debt securities 11.36 13.7413.7413.7413.7413.74 0.310.310.310.310.31

Retirement benefits (45.08) (72.17)(72.17)(72.17)(72.17)(72.17) (1.65)(1.65)(1.65)(1.65)(1.65)

Provision for contingencies (94.09) � �

Deferred income taxes (282.01) (432.14)(432.14)(432.14)(432.14)(432.14) (9.90)(9.90)(9.90)(9.90)(9.90)

Gain/(loss) on derivative contracts 22.02 (173.78)(173.78)(173.78)(173.78)(173.78) (3.98)(3.98)(3.98)(3.98)(3.98)

Inventory valuation 63.61 (161.34)(161.34)(161.34)(161.34)(161.34) (3.70)(3.70)(3.70)(3.70)(3.70)

Others (23.49) (6.99)(6.99)(6.99)(6.99)(6.99) (0.16)(0.16)(0.16)(0.16)(0.16)

TTTTTotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAP (655.65) (757.75)(757.75)(757.75)(757.75)(757.75) (17.36)(17.36)(17.36)(17.36)(17.36)

Net income as per US GAAPNet income as per US GAAPNet income as per US GAAPNet income as per US GAAPNet income as per US GAAP 5,012.22 5,365.955,365.955,365.955,365.955,365.95 122.93122.93122.93122.93122.93

Hindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries Limited

8 78 78 78 78 7

RRRRReconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAP(Continued)(Continued)(Continued)(Continued)(Continued)

(Currency: Indian Rupees in million)

RRRRReconciliation of Stockholders� Equityeconciliation of Stockholders� Equityeconciliation of Stockholders� Equityeconciliation of Stockholders� Equityeconciliation of Stockholders� Equity(US $(US $(US $(US $(US $

in millions)in millions)in millions)in millions)in millions)March 31, March 31,March 31,March 31,March 31,March 31, March 31,March 31,March 31,March 31,March 31,

1999 20002000200020002000 20002000200020002000

Stockholders� equity as per IndianStockholders� equity as per IndianStockholders� equity as per IndianStockholders� equity as per IndianStockholders� equity as per IndianGAAP excluding revaluation reservesGAAP excluding revaluation reservesGAAP excluding revaluation reservesGAAP excluding revaluation reservesGAAP excluding revaluation reserves 32,559.13 37,992.1637,992.1637,992.1637,992.1637,992.16 870.38870.38870.38870.38870.38

US GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustmentsUS GAAP adjustments

Consolidation of subsidiaries 4.63 8.368.368.368.368.36 0.190.190.190.190.19

Interest capitalised 1,916.54 1,889.481,889.481,889.481,889.481,889.48 43.2943.2943.2943.2943.29

Foreign exchange losses (488.04) (568.54)(568.54)(568.54)(568.54)(568.54) (13.02)(13.02)(13.02)(13.02)(13.02)

Start up costs (216.99) (38.23)(38.23)(38.23)(38.23)(38.23) (0.88)(0.88)(0.88)(0.88)(0.88)

Amortisation of investment in debt securities 37.00 50.7450.7450.7450.7450.74 1.161.161.161.161.16

Unrealised investment gains/(losses), net of tax effect (539.90) 280.95280.95280.95280.95280.95 6.446.446.446.446.44

Retirement benefits (139.67) (211.84)(211.84)(211.84)(211.84)(211.84) (4.85)(4.85)(4.85)(4.85)(4.85)

Provision for contingencies (94.09) (94.09)(94.09)(94.09)(94.09)(94.09) (2.16)(2.16)(2.16)(2.16)(2.16)

Deferred income taxes (2,537.91) (2,970.05)(2,970.05)(2,970.05)(2,970.05)(2,970.05) (68.04)(68.04)(68.04)(68.04)(68.04)

Gain/(loss) on derivative contracts 22.02 (151.76)(151.76)(151.76)(151.76)(151.76) (3.48)(3.48)(3.48)(3.48)(3.48)

Inventory valuation 210.60 49.2649.2649.2649.2649.26 1.131.131.131.131.13

Others (17.16) (24.15)(24.15)(24.15)(24.15)(24.15) (0.55)(0.55)(0.55)(0.55)(0.55)

TTTTTotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAPotal adjustments as per US GAAP (1,842.97) (1,779.87)(1,779.87)(1,779.87)(1,779.87)(1,779.87) (40.77)(40.77)(40.77)(40.77)(40.77)

Stockholders� equity as per US GAAPStockholders� equity as per US GAAPStockholders� equity as per US GAAPStockholders� equity as per US GAAPStockholders� equity as per US GAAP 30,716.16 36,212.2936,212.2936,212.2936,212.2936,212.29 829.61829.61829.61829.61829.61

Hindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries Limited

8 88 88 88 88 8

Hindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedHindalco Industries LimitedNotes to the RNotes to the RNotes to the RNotes to the RNotes to the Reconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAPeconciliations of Significant Differences between US GAAP and Indian GAAP

(Currency: Indian Rupees in million)1.1.1.1.1. Basis of preparation of the RBasis of preparation of the RBasis of preparation of the RBasis of preparation of the RBasis of preparation of the Reconciliationseconciliationseconciliationseconciliationseconciliations

Hindalco Industries Limited (�the Company�) prepares its statutory financial statements in accordance with Indian GAAP which differs in certainrespects from US GAAP. Significant Differences between Indian GAAP and US GAAP which impact stockholders� equity as of March 31, 2000 and1999 and net income for the years then ended have been shown as reconciling amounts in the Reconciliations. Such differences are discussed below.

2.2.2.2.2. Convenience translationConvenience translationConvenience translationConvenience translationConvenience translationThe Reconciliations have been prepared in Indian Rupees, the functional currency of Hindalco. For convenience purposes only, the Reconcilia-tions at March 31, 2000 have been reported in US Dollars by translating the amounts denominated in Indian Rupee, at the exchange rateprevailing on March 31, 2000 (1 US Dollar: Rs 43.65).

3.3.3.3.3. Consolidation of subsidiariesConsolidation of subsidiariesConsolidation of subsidiariesConsolidation of subsidiariesConsolidation of subsidiariesUS GAAP requires the consolidation of majority owned subsidiaries� financial statements with the financial statements of the Company. Thepractice of consolidation is not followed under Indian GAAP.

4.4.4.4.4. Interest capitalisationInterest capitalisationInterest capitalisationInterest capitalisationInterest capitalisationUnder Indian GAAP, interest cost is capitalisable only if specific borrowings exist. Under US GAAP, interest costs on specific and non-specificborrowings are capitalised if qualifying assets exist and construction activities are in progress.

5.5.5.5.5. Foreign exchange lossesForeign exchange lossesForeign exchange lossesForeign exchange lossesForeign exchange lossesUnder Indian GAAP, foreign exchange gains/losses incurred on foreign currency borrowings used to acquire specific items of property, plant andequipment are adjusted as part of the cost of acquisition. Under US GAAP, such gains/losses arising after acquisition of foreign currency loansare charged to income.

6.6.6.6.6. Start up costsStart up costsStart up costsStart up costsStart up costsUnder US GAAP costs incurred in connection with organisation/start up activities are required to be expensed as incurred.

7.7.7.7.7. Investment in debt and equity securitiesInvestment in debt and equity securitiesInvestment in debt and equity securitiesInvestment in debt and equity securitiesInvestment in debt and equity securitiesUnder US GAAP, debt securities held for investment purposes to maturity are stated at amortised cost. Available-for-sale securities are recordedat fair value. Unrealised holding gains and losses, net of the related tax effect, on available-for-sale securities are excluded from earnings andare reported as a separate component of stockholders� equity until realised.Under Indian GAAP, long term investments in debt and equity securities are accounted for at cost less adjustments for any other than temporarydeclines or impairments in carrying value, which are charged against earnings. Current investments are valued at the lower of cost and market.

8.8.8.8.8. RRRRRetirement benefitsetirement benefitsetirement benefitsetirement benefitsetirement benefitsUnder Indian GAAP, the Company accounts for gratuity costs, a defined benefit retirement plan, using the contribution method. Under US GAAP,the gratuity liability is determined actuarially in accordance with specific requirements.

9.9.9.9.9. ContingenciesContingenciesContingenciesContingenciesContingenciesUnder US GAAP, loss contingencies classified as �probable of occurrence� are required to be provided if a reasonable estimate of such losses canbe made. Under Indian GAAP, such contingencies are not accrued by the Company.

10.10.10.10.10. Deferred taxationDeferred taxationDeferred taxationDeferred taxationDeferred taxationUnder US GAAP, deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amountsof existing assets and liabilities as compared to their respective tax bases, using enacted tax rates.

11.11.11.11.11. Gain/(loss) on derivative contractsGain/(loss) on derivative contractsGain/(loss) on derivative contractsGain/(loss) on derivative contractsGain/(loss) on derivative contractsUnder Indian GAAP, gains/losses on such contracts are recognised when realised. Under US GAAP, gains/losses on marking-to-market of cross-currency and interest rate swaps not qualifying for hedge accounting are recognised in the statement of income.

12.12.12.12.12. Inventory valuationInventory valuationInventory valuationInventory valuationInventory valuationReconciliation adjustments in the inventory valuation at March 31, 2000 represent the effect of US GAAP adjustments to overheads. Thereconciliation adjustment as of March 31, 1999 also includes adjustments for overheads which under Indian GAAP, at that date, were not acomponent of inventory.

Dated : The 27th day of May, 2000

A. K. AGARWALAWhole-time Director

ANIL J. JHALACompany Secretary

Chairman : KUMAR MANGALAM BIRLADirectors : E. B. DESAI

C. M. MANIARR. K. KASLIWALExecutive President (Finance & Commerce)

8 98 98 98 98 9

Directors� ReportDDDDDear Shareholders,

The Directors of your Company have pleasure in presenting the Annual Report and AuditedStatement of Accounts for the year ended 31st March, 2000.

FINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULFINANCIAL RESULTSTSTSTSTSThe working during the year shows a gross surplus of Rs. 10.78 lacs against Rs. 16.06 lacs in the

previous year out of which a sum of Rs. 2.75 lacs (Rs.3.97 lacs) has been provided for depreciationand Rs. 4.00 lacs for Income Tax (Rs. 5.45 lacs) leaving a balance of Rs. 4.03 which is transferred toBalance Sheet. A sum of Rs. 6.96 lacs being previous year�s Profit has been transferred to GeneralReserve Account.

GENERALGENERALGENERALGENERALGENERALBauxite raising improved during the year under review to 55,015 MT as against production of

52,060 MT in the previous year. Production would have been higher but for depleting reserve and adisturbed working environment. Efforts are on to improve working for better output.

Your Company is making efforts to expedite Mining Leases, applications for which are pendingwith the Government of Bihar.

PPPPPARTICULARS UNDER SECTION 217 (i) (e) OF THE COMPARTICULARS UNDER SECTION 217 (i) (e) OF THE COMPARTICULARS UNDER SECTION 217 (i) (e) OF THE COMPARTICULARS UNDER SECTION 217 (i) (e) OF THE COMPARTICULARS UNDER SECTION 217 (i) (e) OF THE COMPANIES ACTANIES ACTANIES ACTANIES ACTANIES ACT, 1956, 1956, 1956, 1956, 1956

A statement giving particulars as required under the Companies (Disclosure of particulars in theReport of Board of Directors) Rules, 1988 is annexed.

PPPPPARTICULARS OF EMPLARTICULARS OF EMPLARTICULARS OF EMPLARTICULARS OF EMPLARTICULARS OF EMPLOOOOOYEESYEESYEESYEESYEESThe Company has no employee in the category specified under Section 217 (2A) of the Companies

Act, 1956.

DIRECTORSDIRECTORSDIRECTORSDIRECTORSDIRECTORSShri K.K.Rathi retires from office by rotation in accordance with the requirement of the Companies

Act, 1956 and being eligible offers himself for reappointment.

AUDITORS� REPORTAUDITORS� REPORTAUDITORS� REPORTAUDITORS� REPORTAUDITORS� REPORTThe observations made in the Auditors� Report are dealt with separately by Notes on Accounts

in Schedule 15 of the Accounts. These are self explanatory and do not call for any further comments.

AUDITORSAUDITORSAUDITORSAUDITORSAUDITORSM/s G. Basu & Co., Chartered Accountants and Auditors of the Company, retire and being

eligible, offer themselves for reappointment.

Camp : Renukoot Directors : A.K.AGARWALADated : The 22nd day of April, 2000 K.K.RATHI

Minerals & Minerals Limited

9 09 09 09 09 0

SSSSStatements of Particulars under Companies (Disclosure of particulars in the Report of Board ofDirectors) Rules, 1988

AAAAA ..... CONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGYCONSERVATION OF ENERGYThere is no direct consumption of electrical energy in mining of Bauxite Ore at our Mines.

However, all possible care is taken to minimise the consumption of electricity wherever used.

B .B .B .B .B . TECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONTECHNOLOGY ABSORPTIONBauxite Mines are open cast mines and ore is excavated after removing overburden with the help

of Earth Moving Machinery and drilling with Compressor and blasting operations manually. Anysophisticated technology is not in use at our mines.

C .C .C .C .C . FOREIGN EXCHANGE EARNING AND OUTGO RFOREIGN EXCHANGE EARNING AND OUTGO RFOREIGN EXCHANGE EARNING AND OUTGO RFOREIGN EXCHANGE EARNING AND OUTGO RFOREIGN EXCHANGE EARNING AND OUTGO Rsssss . � NIL. � NIL. � NIL. � NIL. � NIL

Camp : Renukoot Directors : A. K. AGARWALADated : The 22nd day of April, 2000 K. K. RATHI

Annexure to the Directors� ReportMinerals & Minerals Limited

9 19 19 19 19 1

WWWWWe have audited the attached Balance Sheet of MINERALS & MINERALS LIMITED as at 31stMarch, 2000 and the annexed Profit & Loss Account for the year ended on that date and report that:

i) We have obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit.

ii) In our opinion, proper Books of Account, as required by law, have been kept by the Companyso far as appears from our examination of the books of the Company.

iii) The Balance Sheet and Profit & Loss Account dealt with by this Report are in agreement with theBooks of Account.

iv) In our opinion the Profit and Loss Account and the Balance Sheet comply with AccountingStandards referred to in sub-section 3 (C) of Section 211 of the Companies Act, 1956.

v) In our opinion and to the best of our information and according to explanation given to us, thesaid accounts subject to Note 4 and 5(iv) regarding Gratuity and Leave encashment and readwith other Notes appearing in Schedule - 15 give the information required by the CompaniesAct, 1956 in the manner so required and give true and fair view :

a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2000and

b) In the case of Profit & Loss Account, of the Profit of the Company for the year ended on thatdate.

As required by the Manufacturing and other Companies ( Auditor�s Report ) Order, 1988, issued bythe Central Government and on basis of such checks as we considered appropriate and according tothe information and explanations given to us, we further report that :

1. (a) The Company has maintained proper records to show full particulars including quantitativedetails and situation of fixed Assets.

(b) The Fixed Assets of the Company have been physically verified during the year by theManagement and no material discrepancies between book records and physical inventoryhave been noticed.

2. The Fixed Assets of the Company have not been revalued during the year.

3. The stocks of finished goods, stores and spare parts of the Company have been physicallyverified by the Management during the year.

4. In our opinion, the procedures of physical verification of stocks followed by the Managementare reasonable and adequate in relation to the size of the Company and nature of thebusiness.

5. The discrepancies between the physical stocks and book stocks which have been properlydealt with in the Books of Account are not material.

6. In our opinion the valuation of stocks of finished goods, stores and spare parts has beenfair and proper in accordance with the normally accepted accounting principles and is onthe same basis as in the preceeding year.

Auditors� Report to the ShareholdersMinerals & Minerals Limited

9 29 29 29 29 2

7. The Company has not taken any loan, secured or unsecured, from the Companies, firms orother parties listed in the register maintained under Section 301. In terms of Sub-Section(6) of Section 370 of the Companies Act, 1956, provisions of the section are not applicableto a Company on or after 31st October, 1998.

8. The Company has not given any loan, secured or unsecured, to Companies, firms or otherparties listed in the Register maintained under Section 301. In terms of Sub-Section (6) ofSection 370 of the Companies Act, 1956, provisions of the Section are not applicable to aCompany on or after 31st October, 1998.

9. The Company has not made any loans or advances in the nature of loans to any party.Interest - free loans and advances in the nature of loans were given to the employees andsuch loans and advances in the nature of loans are being recovered as stipulated.

10. In our opinion there is adequate internal control procedure commensurate with the size ofthe Company and nature of the business for purchase of Bauxite, Stores and Spare Parts,Plants & Machinery, Equipment and other Assets and for the sale of Goods.

11. During the year no purchases have been made of Bauxite and Stores & Spare partsaggregating Rs.50,000 or more in value from any party listed in the Register maintainedunder Section 301 of the Companies Act, 1956.

12. The Company has a system of determining unserviceable or damaged goods and spareparts. We are advised that there was no such unserviceable or damaged goods or spareparts at the end of the year.

13. The Company has not accepted any deposit from the public.

14. The Company has maintained proper record of sale of scrap. As explained to us, theCompany has no by-product.

15. The paid up Capital of the Company at the commencement of the financial year did notexceed Rs.25 lacs or the average annual turnover for a period of three consecutive financialyears immediately preceding the financial year did not exceed Rs.2 Crores and as such weare not commenting on its internal audit system.

16. The Central Government has not prescribed maintenance of Cost records under Section 209(1) (d) of the Companies Act, 1956 for mining Bauxite.

17. The Company has regularly deposited Provident Fund, Employees� Pension fund dues andwas regular in depositing Employees� Deposit Linked Insurance dues during the year withappropriate authorities.

18. There was no amount outstanding on 31st March, 2000 in respect of undisputed IncomeTax, Wealth Tax, Sales Tax, Customs Duty or Excise Duty which were due as on 31st March,2000 for a period of more than six months from the date they became payable.

19. During the course of our examination of the books of account carried out in accordancewith the generally accepted auditing practice we have not come across any personal expenses

Auditors� Report (Contd.)Minerals & Minerals Limited

9 39 39 39 39 3

which have been charged to Profit & Loss Account, nor have we been informed of such casesby the Management.

20. The Company is not a sick industrial company within the meaning of clause (o) of sub-section 1 of section 3 of the Sick Industrial Companies ( Special Provision ) Act, 1985.

21. In respect of trading activities, viz. Bauxite, there was no damaged goods at the time ofphysical verification, as informed to us by the Management.

For G. BASU & CO. Chartered Accountants

Camp : Renukoot R.K.BHATTACHARYADated : The 22nd day of April, 2000 Partner

Auditors� Report (Contd.)Minerals & Minerals Limited

9 49 49 49 49 4

Balance Sheet as at 31st March, 2000(Rs. in Thousand)

A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s t A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tS c h e d u l eS c h e d u l eS c h e d u l eS c h e d u l eS c h e d u l e M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0 M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9

S O U R C E S O F F U N D SS O U R C E S O F F U N D SS O U R C E S O F F U N D SS O U R C E S O F F U N D SS O U R C E S O F F U N D SShareholders� Fund :Shareholders� Fund :Shareholders� Fund :Shareholders� Fund :Shareholders� Fund :Share Capital 1 3,50 3,50Reserves & Surplus 2 55,66 51,63

TOTAL 59 ,1659 ,1659 ,1659 ,1659 ,16 55 ,1355 ,1355 ,1355 ,1355 ,13

A P P L I C A T I O N O F F U N D SA P P L I C A T I O N O F F U N D SA P P L I C A T I O N O F F U N D SA P P L I C A T I O N O F F U N D SA P P L I C A T I O N O F F U N D SFixed Assets :Fixed Assets :Fixed Assets :Fixed Assets :Fixed Assets : 3Gross Block 1,17,93 1,17,93Less : Depreciation 1,08,99 1,06,24

8,94 11,69

Current Assets, Loans & Advances :Current Assets, Loans & Advances :Current Assets, Loans & Advances :Current Assets, Loans & Advances :Current Assets, Loans & Advances :Inventories 4 17,74 11,50Sundry Debtors 5 40,20 44,50Cash & Bank Balances 6 47 44Loans, Advances & Deposits 7 29,48 17,07

87,89 73,51

Less :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Current Liabilities and Provisions :Liabilities 8 21,96 18,32Provisions 9 15,71 11,75

37,67 30,07

Net Current Assets 50,22 43,44

TOTAL 59 ,1659 ,1659 ,1659 ,1659 ,16 55 ,1355 ,1355 ,1355 ,1355 ,13

Notes on Accounts 15

As per our report attached

For G. BASU & CO.Chartered Accountants

Directors : A.K.AGARWALAR.K.BHATTACHARYA N.K.BIRLA K.K.RATHIPartner Secretary

Camp : RenukootDated : The 22nd day of April, 2000

Minerals & Minerals Limited

9 59 59 59 59 5

Profit & Loss Account for the year ended 31st March, 2000

As per our report attached

For G. BASU & CO.Chartered Accountants

Directors :A. K. AGARWALAR. K. BHATTACHARYA N. K. BIRLA K. K. RATHIPartner Secretary

Camp : RenukootDated : The 22nd day of April, 2000

(Rs. in Thousand)F o r t h e y e a rF o r t h e y e a rF o r t h e y e a rF o r t h e y e a rF o r t h e y e a r F o r t h e y e a rF o r t h e y e a rF o r t h e y e a rF o r t h e y e a rF o r t h e y e a r

e n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s t e n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s te n d e d 3 1 s tS c h e d u l eS c h e d u l eS c h e d u l eS c h e d u l eS c h e d u l e M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0 M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9

I N C O M EI N C O M EI N C O M EI N C O M EI N C O M ESales (including net Transportation) 1,68,58 2,04,79Other Income 10 4 52Increase/(Decrease) in Stock 11 5,64 (2,43)

1,74,26 2,02,88

E X P E N D I T U R EE X P E N D I T U R EE X P E N D I T U R EE X P E N D I T U R EE X P E N D I T U R EBauxite Purchase 62,68 94,75Royalty 22,44 21,12Operation and Maintenance 12 13,88 19,59Payment to and provisions for Employees 13 60,22 41,85Administration and Others 14 4,26 9,34Depreciation 2,75 3,97Interest � 17

1,66,23 1,90,79

Profit before Taxation 8,03 12,09Provision for Taxation 4,00 5,45

4,03 6,64Add:Income Tax Provision for earlier year written back � 32

Profit after Taxation 4,03 6,96Balance brought forward from previous year 6,96 3,02

BALANCE AVAILABLE FOR APPROPRIATIONS 10,99 9,98

APPROPRIATIONSTransfer to General Reserve 6,96 3,02Balance Carried to Balance Sheet 4,03 6,96

10,99 9,98

Notes on Accounts 15

Minerals & Minerals Limited

9 69 69 69 69 6

Schedules(Rs. in Thousand)

A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s t A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tM a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0 M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9

S C H E D U L E - 1S C H E D U L E - 1S C H E D U L E - 1S C H E D U L E - 1S C H E D U L E - 1SHARE CAP ITALSHARE CAP ITALSHARE CAP ITALSHARE CAP ITALSHARE CAP ITALAuthorised :50,000 Ordinary Shares of Rs. 10/- each 5,00 5,00

Issued & Subscribed :35,006 Ordinary Shares of Rs. 10/- each fully paid-up(of the above shares 20,000 shares of Rs. 10/-each are allotted as fully paid-up pursuant to acontract without payment being received in cash.Entire share capital of the Company is held byHindalco Industries Limited, the Holding Companyand its Nominees) 3,50 3,50

3 ,503 ,503 ,503 ,503 ,50 3 ,5 03 ,5 03 ,5 03 ,5 03 ,5 0

S C H E D U L E - 2S C H E D U L E - 2S C H E D U L E - 2S C H E D U L E - 2S C H E D U L E - 2G E N E R A L R E S E R V EG E N E R A L R E S E R V EG E N E R A L R E S E R V EG E N E R A L R E S E R V EG E N E R A L R E S E R V EAs per last Balance Sheet 44,67 41,65

44,67 41,65

Add : Transferred from P&L A/C 6,96 3,02

51,63 44,67PROFIT & LOSS ACCOUNT - BALANCE 4,03 6,96

55 ,6655 ,6655 ,6655 ,6655 ,66 51 ,6351 ,6351 ,6351 ,6351 ,63

Minerals & Minerals Limited

9 79 79 79 79 7

S C H E D U L E - 3S C H E D U L E - 3S C H E D U L E - 3S C H E D U L E - 3S C H E D U L E - 3F I X E D A S S E T SF I X E D A S S E T SF I X E D A S S E T SF I X E D A S S E T SF I X E D A S S E T S (Rs. in Thousand)

DESCRIPTION GROSS VALUE DEPRECIATION NET VALUE

As at 31st Additions Less Sales/ Total upto Upto 31st Provided Less Total As at 31st As at 31stMarch,1999 during the adjustment 31st March March,1999 during the adjusted upto 31st March,2000 March,1999

year during 2000 year u/s. on sales or March,2000 as per as per lastthe year 205 (2) (b) adjustment Balance Sheet Balance Sheet

Land 4 � � 44444 � � � ����� 44444 4

Other Mineral Concession 1,00 � � 1,001 ,001 ,001 ,001 ,00 1,00 � � 1,001 ,001 ,001 ,001 ,00 ����� �

Building 2nd Class 5,07 � � 5,075 ,075 ,075 ,075 ,07 3,76 8 � 3,843 ,843 ,843 ,843 ,84 1 ,2 31 ,2 31 ,2 31 ,2 31 ,2 3 1,31

Plant & Machinery 52,09 � � 52,0952 ,0952 ,0952 ,0952 ,09 45,72 2,56 � 48,2848 ,2848 ,2848 ,2848 ,28 3 ,8 13 ,8 13 ,8 13 ,8 13 ,8 1 6,37

Ropeway Structures 47,82 � � 47,8247 ,8247 ,8247 ,8247 ,82 45,43 � � 45,4345 ,4345 ,4345 ,4345 ,43 2 ,3 92 ,3 92 ,3 92 ,3 92 ,3 9 2,39

Roads & Paths 18 � � 1 81 81 81 81 8 17 � � 1 71 71 71 71 7 11111 1

Tools & Implements 15 � � 1 51 51 51 51 5 14 � � 1 41 41 41 41 4 11111 1

Motor Car & Jeep 1,99 � � 1,991 ,991 ,991 ,991 ,99 1,90 � � 1,901 ,901 ,901 ,901 ,90 99999 9

Furniture & Fixtures 2,70 � � 2,702 ,702 ,702 ,702 ,70 1,58 11 � 1,691 ,691 ,691 ,691 ,69 1 ,0 11 ,0 11 ,0 11 ,0 11 ,0 1 1,12

Electric Installation 28 � � 2 82 82 82 82 8 26 � � 2 62 62 62 62 6 22222 2

Railway Siding 6,61 � � 6,616 ,616 ,616 ,616 ,61 6,28 � � 6,286 ,286 ,286 ,286 ,28 3 33 33 33 33 3 33

TOTAL 1,17,93 � � 1,17 ,931 ,17 ,931 ,17 ,931 ,17 ,931 ,17 ,93 1,06,24 2,75 � 1,08 ,991 ,08 ,991 ,08 ,991 ,08 ,991 ,08 ,99 8 ,9 48 ,9 48 ,9 48 ,9 48 ,9 4 11,69

Previous Year 1,19,72 10 1,89 1 ,17 ,931 ,17 ,931 ,17 ,931 ,17 ,931 ,17 ,93 1,04,10 3,97 1,83 1 ,06 ,241 ,06 ,241 ,06 ,241 ,06 ,241 ,06 ,24 11 ,6911 ,6911 ,6911 ,6911 ,69

Minerals & Minerals Limited

9 89 89 89 89 8

Schedules(Rs. in Thousand)

A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s t A s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tA s a t 3 1 s tM a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0M a r c h , 2 0 0 0 M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9M a r c h , 1 9 9 9

S C H E D U L E - 4S C H E D U L E - 4S C H E D U L E - 4S C H E D U L E - 4S C H E D U L E - 4INVENTORIESINVENTORIESINVENTORIESINVENTORIESINVENTORIES(As per inventories taken, valued and certified by the Management)Stores & Spares Parts 7,21 6,61Bauxite 10,53 4,89

17 ,7417 ,7417 ,7417 ,7417 ,74 11 ,5011 ,5011 ,5011 ,5011 ,50

S C H E D U L E - 5S C H E D U L E - 5S C H E D U L E - 5S C H E D U L E - 5S C H E D U L E - 5SUNDRY DEBTORSSUNDRY DEBTORSSUNDRY DEBTORSSUNDRY DEBTORSSUNDRY DEBTORS(Unsecured-Considered Good)Due from Holding Company (Upto six months) 40,20 44,50

S C H E D U L E - 6S C H E D U L E - 6S C H E D U L E - 6S C H E D U L E - 6S C H E D U L E - 6CASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCASH AND BANK BALANCESCash in hand 29 17With Scheduled Banks in Current Accounts 18 27

47 44S C H E D U L E - 7S C H E D U L E - 7S C H E D U L E - 7S C H E D U L E - 7S C H E D U L E - 7LOANS , ADVANCES & DEPOS ITSLOANS , ADVANCES & DEPOS ITSLOANS , ADVANCES & DEPOS ITSLOANS , ADVANCES & DEPOS ITSLOANS , ADVANCES & DEPOS ITS(Unsecured-Considered Good)Advances recoverable in cash or in kind or for value to be received 8,38 1,73Deposit with Railway & Others 58 58Advance payment of Income Tax 20,52 14,76

29,48 17,07

S C H E D U L E - 8S C H E D U L E - 8S C H E D U L E - 8S C H E D U L E - 8S C H E D U L E - 8CURRENT L IAB IL IT IESCURRENT L IAB IL IT IESCURRENT L IAB IL IT IESCURRENT L IAB IL IT IESCURRENT L IAB IL IT IESSundry Creditors, other than small scale undertakings 21,96 18,32

S C H E D U L E - 9S C H E D U L E - 9S C H E D U L E - 9S C H E D U L E - 9S C H E D U L E - 9P R O V I S I O N SP R O V I S I O N SP R O V I S I O N SP R O V I S I O N SP R O V I S I O N SFor Income Tax 15,71 11,75

F o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e d F o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e d3 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 0 3 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 9

S C H E D U L E - 1 0S C H E D U L E - 1 0S C H E D U L E - 1 0S C H E D U L E - 1 0S C H E D U L E - 1 0OTHER INCOMEOTHER INCOMEOTHER INCOMEOTHER INCOMEOTHER INCOMERent 4 4Liabilities no longer required written back � 3Profit on sale / discarded of Fixed Assets (Net) � 45

4 52

Minerals & Minerals Limited

9 99 99 99 99 9

(Rs. in Thousand)F o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e d F o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e dF o r t h e y e a r e n d e d

3 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 03 1 s t M a r c h , 2 0 0 0 3 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 93 1 s t M a r c h , 1 9 9 9S C H E D U L E - 1 1S C H E D U L E - 1 1S C H E D U L E - 1 1S C H E D U L E - 1 1S C H E D U L E - 1 1INCREASE/ (DECREASE) IN STOCKINCREASE/ ( DECREASE) IN STOCKINCREASE/ (DECREASE) IN STOCKINCREASE/ ( DECREASE) IN STOCKINCREASE/ (DECREASE) IN STOCKClosing Stock 10,53 4,89Opening Stock 4,89 7,32

5 ,645 ,645 ,645 ,645 ,64 ( 2 , 4 3 )( 2 , 4 3 )( 2 , 4 3 )( 2 , 4 3 )( 2 , 4 3 )S C H E D U L E - 1 2S C H E D U L E - 1 2S C H E D U L E - 1 2S C H E D U L E - 1 2S C H E D U L E - 1 2OPERAT ION AND MAINTENANCEOPERAT ION AND MAINTENANCEOPERAT ION AND MAINTENANCEOPERAT ION AND MAINTENANCEOPERAT ION AND MAINTENANCEStores Consumed 8,34 6,40Overburden Removal 1,42 10,02Water & Lighting 1,28 1,19Repairs & Maintenance and Renewals :Building � 20Machinery 2,81 1,74Others 3 4

2,84 1,98

13 ,8813 ,8813 ,8813 ,8813 ,88 19 ,5919 ,5919 ,5919 ,5919 ,59

S C H E D U L E - 1 3S C H E D U L E - 1 3S C H E D U L E - 1 3S C H E D U L E - 1 3S C H E D U L E - 1 3PPPPPAAAAAY M E N T S TY M E N T S TY M E N T S TY M E N T S TY M E N T S TO A N D P R O V I S I O N S F O R E M P LO A N D P R O V I S I O N S F O R E M P LO A N D P R O V I S I O N S F O R E M P LO A N D P R O V I S I O N S F O R E M P LO A N D P R O V I S I O N S F O R E M P LOOOOOY E E SY E E SY E E SY E E SY E E SSalaries, Wages, Bonus & Gratuity 52,58 36,13Provident Fund & Other Fund Contributions 4,73 3,70Staff Welfare Expenses 2,91 2,02

60 ,2260 ,2260 ,2260 ,2260 ,22 41 ,8541 ,8541 ,8541 ,8541 ,85

S C H E D U L E - 1 4S C H E D U L E - 1 4S C H E D U L E - 1 4S C H E D U L E - 1 4S C H E D U L E - 1 4ADMINISTRAT ION AND OTHERSADMINISTRAT ION AND OTHERSADMINISTRAT ION AND OTHERSADMINISTRAT ION AND OTHERSADMINISTRAT ION AND OTHERSRent 11 15Rates & Taxes 20 22Vehicle Expenses 37 37Insurance Charges 58 86Directors� Fees 1 1Land Compensation � 4,54Auditors� Remuneration :

Audit Fees 12 10For Tax Audit 6 6For Issuing Certificates 6 6Expenses 15 12

39 34

Miscellaneous Expenses 2,33 2,58Legal Expenses 27 27

4 ,264 ,264 ,264 ,264 ,26 9 ,3 49 ,3 49 ,3 49 ,3 49 ,3 4

SchedulesMinerals & Minerals Limited

1 0 01 0 01 0 01 0 01 0 0

S C H E D U L E - 1 5S C H E D U L E - 1 5S C H E D U L E - 1 5S C H E D U L E - 1 5S C H E D U L E - 1 5

NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS

1. Profit or Loss on sale of Stores remains adjusted in Stores consumed Account and not shown separately.

2. Stores Consumed and Wages debited to other Accounts amount to Rs.0.35 lacs (Rs.0.45 lacs ) and Rs.0.78 lacs (NIL) respectively.

3. Advance recoverable include balance due from officers NIL (Rs.0.09 lacs). Maximum balance due during the year Rs. 0.10 lacs( Rs.0.37 lacs).

4. Due to change in the method of accounting from cash basis to accrual basis for gratuity and leave encashment Rs. 9.99 lacs havebeen provided in the accounts (Rs. 6.72 lacs for prior years), based on actuarial valuation as on 31st March, 2000 withconsequential effect on the profit for the year.

5. SIGNIFICANT ACCOUNTING POLICIES :

i) FIXED ASSETS :Fixed Assets of the Company are stated at historical cost.

ii) DEPRECIATION :a) Depreciation on Fixed Assets as at 31.12.1986 continues to be provided at the rates prevailing at that time on Straight-line

Method pursuant to Circular No. 1/86 dated 21.5.1986 issued by the Department of Company Affairs, New Delhi.b) For Fixed Assets added from 1987 onwards depreciation has been provided on Straight-line Method at the rates specified in

Schedule �XIV� of the Companies Act,1956.c) For Fixed Assets added from 1988 onwards depreciation has been provided on Straight-line Method as altered vide Circular

No. G.S.R.756(E) dated 16th December,1993 in the Schedule �XIV� of the Companies Act,1956.

iii) INVENTORIES :(a) Stores & Spare parts are valued at cost.(b) Bauxite including purchased are valued at lower of cost or market value.

iv) RETIREMENT BENEFITS :Provision for Gratuity and Leave Encashment as per the Company Rules have been made on actuarial basis and included in thesalary and wages.

v) SALES :Sales have been shown including net transportation.

vi) RECOGNITION OF INCOME AND EXPENDITURE :Expenses are accounted for on the accrual basis.

Schedules

Minerals & Minerals Limited

1 0 11 0 11 0 11 0 11 0 1

6. Additional information pursuant to paragraphs 3 and 4 of Part II of Schedule VI to Companies Act,1956 (as amended).

a) Particulars in respect of Goods manufactured, Purchased, Stocks and Turnover.

i) Goods manufactured and purchased :(Rs. in Thousand)

Actual Production Purchases

1999-00 1998-99 1999-00 1998-99

Class of Goods Licensed Capacity Installed Capacity MT MT MT Value MT Value

Bauxite Not Applicable Not Applicable 55,015 52,060 18,758 62,68 29,581 94,75

ii) Stocks and Turnover : Quantity (in M.Tons ) Value

1999-00 1998-99 1999-00 1998-99

Opening Stock 1,997 2,383 4,89 7,32

Closing Stock 3,806 1,997 10,53 4,89

Bauxite Sales 71,964 82,027 168,58 204,79

iii) Purchased Bauxite included in Opening Stock :Closing Stock and Sales :

Opening Stock NIL 880 NIL 2,58

Closing Stock 8,92 NIL 2,98 NIL

Sales 17,866 30,461 59,70 97,33

7. Value of Stores including components and spares parts (all indigeneous) consumed amounts to Rs. 0.67 lacs (Rs. 0.28 lacs).

SchedulesS C H E D U L E - 1 5 ( C o n t d . )S C H E D U L E - 1 5 ( C o n t d . )S C H E D U L E - 1 5 ( C o n t d . )S C H E D U L E - 1 5 ( C o n t d . )S C H E D U L E - 1 5 ( C o n t d . )

Minerals & Minerals Limited

1 0 21 0 21 0 21 0 21 0 2

B A U X I T E M I N I N G

S C H E D U L E 1 5 S C H E D U L E 1 5 S C H E D U L E 1 5 S C H E D U L E 1 5 S C H E D U L E 1 5 ( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S ( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )

I .I .I .I .I . REGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILS

Registration No.

Balance Sheet DateDate Month Year

I I .I I .I I .I I .I I . CAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEAR (Amount in Rs. thousands)Public/Euro Issue Right Issue

Bonus Issue Private Placement

I I I .I I I .I I I .I I I .I I I . POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. thousands)Total Liabilities Total Assets

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSPaid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

APPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSNet Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

I VI VI VI VI V..... PERFORMANCE OF COMPANYPERFORMANCE OF COMPANYPERFORMANCE OF COMPANYPERFORMANCE OF COMPANYPERFORMANCE OF COMPANY (Amount in Rs. thousands)Turnover Total Expenditure

Profit (Loss) Before Tax Profit/(Loss) After Tax

EPS (in Rs.) Dividend %

VVVVV ..... GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

9. Figures for the previous year have been re-arranged where considered necessary.

As per our report annexed.For G. BASU & CO.Chartered Accountants

R. K. BHATTACHARYAPartnerCamp : Renukoot, Dist (Sonbhadra(U.P.), N. K. Birla A. K. AgarwalaDated : The 22nd day of April, 2000 Secretary K. K. Rathi

8. Balance Sheet Abstract and Company�s General Business Profile

8 7 5

3 1 0 3 2 0 0 00 3

N I L

N I L

N I L

N I L

9 6 . 8 3 9 6 . 8 3

3 . 5 0

N I L

5 5 . 6 6

N I L

8 . 9 4 N I L

5 0 . 2 2 N I L

N I L

1 6 8 . 5 8

+ 8 . 0 3

1 1 . 5 0

1 6 6 . 2 3

+ 4 . 0 3

N I L

State Code

Schedules

Directors:

Minerals & Minerals Limited

1 0 31 0 31 0 31 0 31 0 3

Directors� Report to the ShareholdersTTTTThe Directors present their Sixth Annual Report together with the Audited Balance Sheet as at

31st March, 2000 and the Profit & Loss Account for the year ended 31st March, 2000

1. FINANCIAL RESULTSDuring the year under review the financial results of the Company show a net Profit ofRs. 1,705/- (Previous year Loss Rs. 1,612/-).

2. DIVIDENDSNo dividend is being recommended for the year under review.

3. DIRECTORSIn accordance with the provisions of the Companies Act, 1956 and pursuant to the Articles ofAssociation of the Company, Shri S. B. Maheshwari, retires from the Board by rotation, andbeing eligible, offers himself for reappointment.

4. AUDITORSMessrs M. L. Sharma & Co., Chartered Accountants, the Auditors of the Company, retire andbeing eligible, offer themselves for reappointment.

5. PARTICULARS OF EMPLOYEESThe Company has no employee in the category specified under Section 217(2A) of the CompaniesAct, 1956.

6. ADDITIONAL INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.The Company is not engaged in any manufacturing activity and as such there are no particularsto disclose under the Companies (Disclosure of particulars in the report of Board of Directors)Rules, 1988 with regard to the conservation of energy or technology absorption etc.

7. ADDITIONAL INFORMATION REQUIRED UNDER THE NON-BANKING FINANCIAL COMPANIES(RESERVE BANK) DIRECTIONS, 1998.The relevant provisions, for disclosure in the directors� report, of Non-Banking FinancialCompanies (Reserve Bank) Directions, 1998 issued by the Reserve Bank of India are notapplicable as the Company is not having Net Owned Fund of Rs. 25 lacs and also not accepted/hold Public Deposit.

8. STATUS ON Y2K COMPLIANCENo software or hardware problems related to the Y2K were reported to have any effect on theCompany�s activities.

Directors : K. K. RATHIPlace : Renukoot, Dist. Sonbhadra (U.P.), R. K. KASLIWALDated : The 24th day of April, 2000. S. B. MAHESHWARI

Renukeshwar Investments & Finance Limited

1 0 41 0 41 0 41 0 41 0 4

WWWWWe have audited the attached Balance Sheet of Renukeshwar Investments & Finance Limited asat 31st March, 2000 and also the annexed Profit and Loss Account for the year ended on that date,and report that: -

1. We have obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our Audit.

2. In our opinion, proper books of account as required by the Companies Act, 1956 (as amended)have been kept by the Company so far as appears from our examination of those books.

3. The Balance Sheet and Profit & Loss Account are in agreement with books of account andcomply with the Accounting Standards referred to in sub-section (3C) of section 211 of theCompanies Act,1956.

4. In our opinion and to the best of our information and according to the explanations given to us,the said accounts read with notes as per Schedule �A� give the information required by theCompanies Act, 1956 (as amended) in the manner so required and give a true and fair view:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2000, and

(b) In the case of Profit & Loss Account, of the profit of the Company for the year ended31st March, 2000.

As required by the Manufacturing and other Companies (Auditor�s Report) Order, 1988 issued by theCompany Law Board in terms of Section 227(4A) of the Companies Act, 1956, in our opinion and onthe basis of such checks of the books and records as we considered appropriate and according to theinformation and explanations given to us during the course of the Audit, we further state that: -

i) The Company has not taken any loans, secured or unsecured from companies, firms or otherparties listed in the register maintained under section 301. In terms of sub section (6) of section370 of the Companies Act, 1956, provisions of the section are not applicable to a Company onor after 31st October, 1998.

ii) The Company has not given any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under section. In terms of sub section (6) of section 370of the Companies Act, 1956, provisions of the section are not applicable to a Company on orafter 31st October, 1998.

iii) In our opinion and according to the explanations and information given to us, internal controlprocedures are adequate and commensurate with the size and the nature of business of theCompany.

iv) The Company has not accepted any deposit from the public within the meaning of Section 58Aof the Companies Act, 1956 and Rules framed thereunder.

v) According to the information and explanations given to us and records examined by us, nopersonal expenses have been charged to revenue account.

vi) According to the information and explanations given to us no undisputed amounts payable inrespect of Income Tax, Sales Tax, Custom duty, Excise duty and Wealth Tax at the last date of thefinancial year were outstanding for the period of more than six months.

Auditors� Report to the ShareholdersRenukeshwar Investments & Finance Limited

1 0 51 0 51 0 51 0 51 0 5

vii) In our opinion and according to the information and explanations given to us, the Company�sbusiness is of dealing or trading in shares, securities, debentures and other investments andproper record of the transactions have been maintained by the Company.

viii) The Company has not granted any loans and advances on the basis of security by way of pledgeof shares, debentures and other securities.

ix) Other clauses of Manufacturing and other Companies (Auditor�s Report) Order, 1988 are notapplicable to the Company for the year under report.

A separate report has not been submitted to the Board of Directors of the Company under Non-Banking Financial Companies Auditor�s Report (Reserve Bank) Directions, 1998, as the Company isnot having Net Owned Fund of Rs. 25 Lacs and has also not accepted public deposit.

For M.L. Sharma & Co.Chartered Accountants

Camp : Renukoot, Dist. Sonbhadra (U.P.). C. H. BandiDate : The 24th day of April, 2000. Partner

Renukeshwar Investments & Finance Limited

1 0 61 0 61 0 61 0 61 0 6

Balance Sheet as at 31st March, 2000

Notes on Accounts Schedule �A�

As per our report annexedFor M. L. Sharma & Co.Chartered AccountantsC. H. BandiPartner

Directors : K. K. RATHIPlace : Renukoot, Dist. Sonbhadra (U.P.), R. K. KASLIWALDated : The 24th day of April, 2000. S. B. MAHESHWARI

As at LIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIES As at31st March, 31st March,

1999 2000(Rupees) (Rupees)

SHARE CAPITALSHARE CAPITALSHARE CAPITALSHARE CAPITALSHARE CAPITAL

AUTHORISED

9,50,000 95,000 Equity Shares of Rs. 10/- each 9,50,000

500 15% Redeemable cumulative50,000 Preference Shares of Rs. 100/- each 50,000

10,00,000 10,00,000

ISSUEDISSUEDISSUEDISSUEDISSUED, SUBSCRIBED & P, SUBSCRIBED & P, SUBSCRIBED & P, SUBSCRIBED & P, SUBSCRIBED & PAID UPAID UPAID UPAID UPAID UP

10,000 Equity Shares of Rs. 10/- each1,00,000 fully paid-up 1,00,000

150 15% Redeemable CumulativePreference Shares of Rs. 100/-

15,000 each fully paid-up 15,000

1,15,000 1,15,000

RESERVES AND SURPLUSRESERVES AND SURPLUSRESERVES AND SURPLUSRESERVES AND SURPLUSRESERVES AND SURPLUS4,654 Profit & Loss Account 5,703

CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES

2,150 Liabilities for expenses 2,000

1,21,804 1,22,703

As at ASSETSASSETSASSETSASSETSASSETS As at31st March, 31st March,

1999 2000(Rupees) (Rupees)

CURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCESCURRENT ASSETS, LOANS & ADVANCES

CURRENT ASSETSCash and Bank Balances :

643 Cash-in-hand 123

In Current Accounts with1,09,686 Scheduled Bank 16,226

In Fixed Deposit with� Scheduled Bank 95,000

111,349Interest accrued but not

� due on FD 2,165 113,514

LOANS AND ADVANCES(Unsecured Considered good)

2,405 Advance tax paid (Net of Provision) 1,749

MISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)

9,070 Preliminary Expenses 7,440

1,21,804 1,22,703

Renukeshwar Investments & Finance Limited

1 0 71 0 71 0 71 0 71 0 7

Profit & Loss Account for the year ended 31st March, 2000

Notes on Accounts Schedule �A�

As per our report annexedFor M. L. Sharma & Co.Chartered AccountantsC. H. Bandi Partner

Directors : K. K. RATHIPlace : Renukoot, Dist. Sonbhadra (U.P.), R. K. KASLIWALDated : The 24th day of April, 2000. S. B. MAHESHWARI

For the PPPPPARTICULARSARTICULARSARTICULARSARTICULARSARTICULARS For theyear ended year ended31st March, 31st March,

1999 2000(Rupees) (Rupees)

200 To Filing Fee 200

232 To Printing & Stationery 205

340 To Bank Charges 480

To Auditors� Remuneration

2,000 � Audit Fee 2,000

1,630 To Preliminary Expenses written off 1,630

� To Provision for Tax 656

� To Net profit carried down 1,049

4,402 6,220

1,612 To Net Loss Brought down �

4,654 To Profit carried to Balance Sheet 5,703

6,266 5,703

For the PPPPPARTICULARSARTICULARSARTICULARSARTICULARSARTICULARS For theyear ended year ended31st March, 31st March,

1999 2000(Rupees) (Rupees)

2,790 By Interest Income (Gross) 6,220(Tax deducted at source Rs. Nil)

1,612 By Net Loss carried down �

4,402 6,220

� By Net Profit brought down 1,049

6,266 By Profit brought forward from earlier year 4,654

6,266 5,703

Renukeshwar Investments & Finance Limited

1 0 81 0 81 0 81 0 81 0 8

SchedulesS C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �AAAAA�����N O T E S O N A C C O U N T SN O T E S O N A C C O U N T SN O T E S O N A C C O U N T SN O T E S O N A C C O U N T SN O T E S O N A C C O U N T S1. SIGNIFICANT ACCOUNTING POLICIES:

a) RECOGNITION OF INCOME AND EXPENDITURE

Income and expenditure are recognised on accrual basis.

b) CONTINGENT LIABILITIES

Contingent liabilities are not provided for in the Accounts.

2. Contingent liability in respect of arrears of dividend Rs. 11,404/- (Previous year Rs. 9,154/-) on 15% Redeemable Cumulative PreferenceShares has not been provided for.

3. Additional information pursuant to paras 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956 are not applicable.

4. Preliminary expenses are being written off proportionately over a period of ten years from the date of incorporation. For the year ended 31stMarch, 2000 a sum of Rs. 1,630/- (Previous year Rs. 1,630/-) has been debited to the Profit & Loss Account towards proportionate amount ofpreliminary expenses.

5. The Figures have been rounded off to the nearest rupee.

(Contd.)

Renukeshwar Investments & Finance Limited

1 0 91 0 91 0 91 0 91 0 9

S C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �AAAAA� � � � � ( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S ( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )

I .I .I .I .I . REGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILS

Registration No. State Code

Balance Sheet DateDate Month Year

I I .I I .I I .I I .I I . CAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEAR (Amount in Rs. Thousands)Public/Issue Right Issue

Bonus Issue Private Placement

I I I .I I I .I I I .I I I .I I I . POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs. Thousands)Total Liabilities Total Assets

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSPaid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

APPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSNet Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

I VI VI VI VI V..... PERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANY (Amount in Rs. Thousands)Turnover* Total Expenditure

Profit/(Loss) Before Tax Profit/(Loss) After Tax

EPS (in Rs.)** Dividend %

VVVVV ..... GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANYGENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY ***************

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

* Represents interest received from bank on Fixed Deposits.** Calculated for the year.*** Not Applicable to the Company.As per our report annexed.For M.L. SHARMA & Co.Chartered AccountantsC. H. BandiPartner

Directors : K. K. RATHIPlace : Renukoot, Dist. Sonbhadra (U.P.), R. K. KASLIWALDated : The 24th day of April, 2000. S. B. MAHESHWARI

6. Balance Sheet Abstract and Company�s General Business Profile

2 0 - 1 7 0 8 0

3 1 0 3 2 0 0 02 0

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1 2 3 1 2 3

1 1 5

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6

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1 1 3 7

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6

(+) 2

0 . 1 0

4

(+) 1

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Renukeshwar Investments & Finance Limited

1 1 01 1 01 1 01 1 01 1 0

Directors� Report to the ShareholdersTTTTThe Directors present their Sixth Annual Report together with the Audited Balance Sheet as at

31st March, 2000 and the Profit & Loss Account for the year ended on 31st March, 2000.

1. FINANCIAL RESULTSDuring the year under review the financial results of the Company show a net profit after taxRs. 33,19,665/- (Previous year Rs.4,57,171/-).

2. DIVIDENDSNo dividend is being recommended for the year under review.

3. DIRECTORSIn accordance with the provisions of the Companies Act, 1956 and pursuant to the Articles ofAssociation of the Company, Shri S.N. Sharma, retires from the Board by rotation, and beingeligible, offers himself for reappointment.

4. AUDITORSMessrs. M. L. Sharma & Co. Chartered Accountants, the Auditors of the Company, retire andbeing eligible, offer themselves for reappointment.

5. PARTICULARS OF EMPLOYEESThe Company has no employee in the category specified under Section 217(2A) of the CompaniesAct, 1956.

6. ADDITIONAL INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OFPARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988.The Company is not engaged in any manufacturing activity and as such there are no particularsto disclose under the Companies (Disclosure of particulars in the report of Board of Directors)Rules, 1988 with regard to the conservation of energy or technology absorption etc.

7. ADDITIONAL INFORMATION REQUIRED UNDER THE NON-BANKING FINANCIAL COMPANIES(RESERVE BANK) DIRECTIVES, 1998.The relevant provisions, for disclosure in the directors� report, of Non-Banking FinancialCompanies (Reserve Bank) Directions, 1998 issued by the Reserve Bank of India are notapplicable as the Company is not holding any public deposits.

8. STATUS ON Y2K COMPLIANCENo software or hardware problems related to the Y2K were reported to have any effect on theCompany�s activities.

Director:R.K. Kasliwal

Place: Renukoot, D.N. HimmatramkaDated: The 24th day April, 2000 S.N. Sharma

Renuka Investments & Finance Limited

1 1 11 1 11 1 11 1 11 1 1

WWWWWe have audited the attached Balance Sheet of Renuka Investments & Finance Limited as at31st March, 2000 and also the annexed Profit and Loss Account for the year ended on that date, andreport that:-

1. We have obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our Audit.

2. In our opinion, proper books of account as required by the Companies Act, 1956 (as amended)have been kept by the Company so far as appears from our examination of those books.

3. The Balance Sheet and Profit & Loss Account are in agreement with books of account andcomply with the Accounting Standards referred to in sub-section (3C) of section 211 of theCompanies Act,1956;

4. In our opinion and to the best of our information and according to the explanations given to us,the said accounts read with notes as per Schedule �A� give the information required by theCompanies Act, 1956 (as amended) in the manner so required and give a true and fair view:

(a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2000,and

(b) In the case of Profit & Loss Account, of the profit of the Company for the year ended31st March, 2000.

As required by the Manufacturing and other Companies (Auditor�s Report) Order, 1988 issued by theCompany Law Board in terms of Section 227 (4A) of the Companies Act, 1956, in our opinion andon the basis of such checks of the books and records as we considered appropriate and according tothe information and explanations given to us during the course of the Audit, we further state that:-

i) The Company has not taken any loans, secured or unsecured, from companies, firms or otherparties listed in the register maintained under section 301. In terms of sub section (6) of section370 of the Companies Act,1956, provisions of the section are not applicable to a Company onor after 31st October, 1998.

ii) The Company has not given any loans, secured or unsecured, to companies, firms or otherparties listed in the register maintained under section. In terms of sub section (6) of section 370of the Companies Act,1956, provisions of the section are not applicable to a Company on orafter 31st October, 1998.

iii) In our opinion and according to the explanations and information given to us, internal controlprocedures are adequate and commensurate with the size and the nature of business of theCompany.

iv) The Company has not accepted any deposit from the public within the meaning of Section 58 Aof the Companies Act, 1956 and Rules framed thereunder.

v) The Company has an internal audit system and in our opinion, the same is commensurate withthe size and nature of its business.

vi) According to the information and explanations given to us and records examined by us, nopersonal expenses have been charged to revenue account.

Auditors� Report to the ShareholdersRenuka Investments & Finance Limited

1 1 21 1 21 1 21 1 21 1 2

vii) According to the information and explanations given to us no undisputed amounts payable inrespect of Income Tax, Sales Tax, Custom duty, Excise duty and Wealth Tax at the last date of thefinancial year were outstanding for the period of more than six months.

viii) In our opinion and according to the information and explanations given to us, the Company�sbusiness is of dealing or trading in shares, securities, debentures and other investments andproper record of the transactions and contracts have been maintained by the Company.

ix) The Company has not granted any loans and advances on the basis of security by way of pledgeof shares, debentures and other securities.

x) Other clauses of Manufacturing and other Companies (Auditor�s Report) order, 1988 are notapplicable to the Company for the year under report.

As required under Non-Banking Financial Companies Auditors Report (Reserve Bank) Directions,1998,a separate report has been submitted to the Board of Directors of the Company on the mattersspecified in paragraphs 3 and 4 of the Directions.

For M.L.SHARMA & CO.Chartered Accountants

Place: P.O. Renukoot, Dist. Sonbhadra (U.P.) C.H. BandiDate : the 24th day of April, 2000. Partner

Renuka Investments & Finance Limited

1 1 31 1 31 1 31 1 31 1 3

Balance Sheet as at 31st March, 2000As At 31st LIABILITIESLIABILITIESLIABILITIESLIABILITIESLIABILITIES As At 31st

March, 1999 March,2000(Rupees) (Rupees)

SHARE CAPITALSHARE CAPITALSHARE CAPITALSHARE CAPITALSHARE CAPITALAUTHORISED

9,99,50,000 99,95,000 Equity shares of Rs. 10/- each 9,99,50,000

500 15% Redeemable Cumulative50,000 Preference shares of Rs. 100/- each 50,000

10,00,00,000 10,00,00,000

ISSUED, SUBSCRIBED & PAID UPISSUED, SUBSCRIBED & PAID UPISSUED, SUBSCRIBED & PAID UPISSUED, SUBSCRIBED & PAID UPISSUED, SUBSCRIBED & PAID UP92,50,000 Equity shares of Rs. 10/- each

9,25,00,000 fully paid up 9,25,00,000

150 15% Redeemable Cumulative Preference 15,000 shares of Rs. 100/- each fully paid up 15,000

9,25,15,000 9,25,15,000

RESERVES & SURPLUSRESERVES & SURPLUSRESERVES & SURPLUSRESERVES & SURPLUSRESERVES & SURPLUS

6,20,789 Profit & Loss Account 39,40,454

UNSECURED LOANSUNSECURED LOANSUNSECURED LOANSUNSECURED LOANSUNSECURED LOANS55,50,000 Loan from holding Co. - Hindalco Industries Limited 7,78,59,859

(Re-payable within one year Rs. NIL)

CURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONSCURRENT LIABILITIES & PROVISIONS

CURRENT LIABILITIES :71,73,528 Sundry Creditors 1,79,71,053

71,71,247 Liabilities for expenses 25,30,60217,10,450 Security Deposit 63,78,750

PROVISIONS:45,909 Provision for Income tax �

11,47,86,923 20,11,95,718

As At 31st ASSETSASSETSASSETSASSETSASSETS As At 31stMarch, 1999 March, 2000

(Rupees) (Rupees)

FIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETSFIXED ASSETS

4,36,966 Land 4,36,966Building 7,83,38,764

7,77,00,303 Less : Depreciation 19,15,383 7,64,23,381

I N V E S T M E N T SI N V E S T M E N T SI N V E S T M E N T SI N V E S T M E N T SI N V E S T M E N T SLONG TERM INVESTMENT (Quoted)LONG TERM INVESTMENT (Quoted)LONG TERM INVESTMENT (Quoted)LONG TERM INVESTMENT (Quoted)LONG TERM INVESTMENT (Quoted)26,02,805 Equity Shares of National

3,33,76,185 Aluminium Company Limited fully paid up 11,30,77,877(Aggregate Market value Rs. 12,81,88,146/-)

9,194 14.5% Non-Convertible RedeemableSecured Debentures of NationalAluminium Company Limited Rs. 1,000/-

� each fully paid up. 91,94,000(Aggregate Market value Rs. 93,08,189/-)

CURRENT ASSETS,CURRENT ASSETS,CURRENT ASSETS,CURRENT ASSETS,CURRENT ASSETS,LOANSLOANSLOANSLOANSLOANS &&&&& ADVANCESADVANCESADVANCESADVANCESADVANCES

A. CURRENT ASSETSReceivable from partiesa) Debts outstanding for a period

� exceeding six months 1,79,77536,526 b) Other debts 3,25,754 5,05,529

CASH AND BANK BALANCES2,113 Cash in hand 1,358

50,600 In Current Accounts with Scheduled Bank 36,207 30,50,610 Cheques in hand 8,74,181 9,11,746

B .B .B .B .B . Loans & Advances:Loans & Advances:Loans & Advances:Loans & Advances:Loans & Advances:(Unsecured considered good)

� Advance Income Tax (net of provision) 5,28,324� Advances 8,289

MISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITUREMISCELLANEOUS EXPENDITURE(To the extent not written offor adjusted)

133,620 Preliminary Expenses 109,606

11,47,86,923 20,11,95,718

Notes on Accounts Schedule �A�

As per our report annexedFor M. L. Sharma & Co.Chartered AccountantsC. H. BandiPartner

Directors : R. K. KASLIWALPlace : Renukoot, Dist. Sonbhadra (U.P.), D. C. KABRA D. N. HIMMATRAMKADated : The 24th day of April, 2000. Company Secretary S. N. SHARMA

Renuka Investments & Finance Limited

1 1 41 1 41 1 41 1 41 1 4

Profit & Loss Account for the year ended 31st March, 2000For the PARTICULARSPARTICULARSPARTICULARSPARTICULARSPARTICULARS For the

year ended year ended31st March, 31st March,

1999 2000(Rupees) (Rupees)

360 To Filing Fee 360

232 To Printing & Stationery 321

6,000 To Salary & Wages 6,000

590 To Bank Charges 510

To Auditor�s Remuneration :

2,000 Audit Fee 2,000

75,000 To Capital Enhancement Expenses �

22,596 To NSDL Custodian Charges 21,988

7,500 To Law Charges �

83,193 To Interest 24,66,016

� To Rates & Taxes 3,87,714

� To General Expenses 250

6,38,461 To Depreciation 12,76,922

24,014 To Preliminary Expenses written off 24,014

4,10,000 To Provision for Taxation 11,40,000

4,57,171 To Net profit carried down 33,19,665

1,727,117 86,45,760

6,20,789 To Profit carried to Balance Sheet 39,40,454

6,20,789 39,40,454

Notes on Accounts Schedule �A�

As per our report annexedFor M. L. Sharma & Co.Chartered AccountantsC. H. BandiPartner

Directors : R. K. KASLIWALPlace : Renukoot, Dist. Sonbhadra (U.P.), D. C. KABRA D. N. HIMMATRAMKADated : The 24th day of April, 2000. Company Secretary S. N. SHARMA

For the PARTICULARSPARTICULARSPARTICULARSPARTICULARSPARTICULARS For theyear ended year ended31st March, 31st March,

1999 2000(Rupees) (Rupees)

16,75,200 By Rent Received (Gross) 59,31,000

(Tax deducted at source Rs. 12,35,276/-)

(Previous year Rs. 3,35,040/-)

By Income from Investments:Income from Long term investments:

51,917 Interest Income (Gross) 13,18,518(Tax deducted at source Rs. 2,73,957)(Previous year Rs. 3,785/-)

� Dividend Received (Gross) 13,96,242

17,27,117 86,45,760

4,57,171 By Net Profit brought down 33,19,6651,63,618 By Profit brought forward from earlier year 6,20,789

6,20,789 39,40,454

Renuka Investments & Finance Limited

1 1 51 1 51 1 51 1 51 1 5

Schedule �A�NOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTSNOTES ON ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES:a) RECOGNITION OF INCOME AND EXPENDITURE

Income and expenditure are recognised on accrual basis.

b) FIXED ASSETSFixed Assets are stated at Cost less depreciation.

c) INVESTMENTSLong term Investments are stated at cost.

d) DEPRECIATIONDepreciation has been provided on Straight Line Method at the rate specified in Schedule XIV of the Companies Act, 1956.

e) CONTINGENT LIABILITIESContingent liabilities are not provided for in the Accounts.

2. Contingent liability in respect of arrears of dividend Rs. 11,403/- (Previous year Rs. 9,153/-) on 15% Redeemable CumulativePreference Shares has not been provided for.

3. Building represents rights to use and occupy an office space in a building at Mumbai for which the Company has invested Rs.702.27 Lacs in certain shares & debentures to be allotted in a company.

4. Additional information pursuant to paras 3, 4C and 4D of part II of Schedule VI of the Companies Act, 1956 are not applicable.

5. Preliminary expenses are being written off proportionately over a period of ten years from the date of incorporation. For the yearended 31st March,2000 a sum of Rs.24,014/- (Previous year Rs. 24,014/-) has been debited to the Profit & Loss Account towardsproportionate amount of preliminary expenses.

6. The Figures have been rounded off to the nearest rupee.

Renuka Investments & Finance Limited

1 1 61 1 61 1 61 1 61 1 6

S C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �S C H E D U L E �AAAAA�����N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S N O T E S O N A C C O U N T S ( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )( C o n t d . )

I .I .I .I .I . REGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILSREGISTRATION DETAILS

Registration No. State Code

Balance Sheet DateDate Month Year

I I .I I .I I .I I .I I . CAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEARCAPITAL RAISED DURING THE YEAR (Amount in Rs Thousands)Public Issue Right Issue

Bonus Issue Private Placement

I I I .I I I .I I I .I I I .I I I . POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDSPOSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (Amount in Rs Thousands)Total Liabilities Total Assets

SOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSSOURCES OF FUNDSPaid-up Capital Reserves & Surplus

Secured Loans Unsecured Loans

APPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSAPPLICATION OF FUNDSNet Fixed Assets Investments

Net Current Assets Misc. Expenditure

Accumulated Losses

I VI VI VI VI V..... PERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANYPERFORMANCE OF THE COMPANY (Amount in Rs Thousands)Turnover Total Expenditure

Profit (Loss) Before Tax Profit/(Loss) After Tax

EPS (in Rs.) Dividend %

VVVVV ..... GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY *GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY *GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY *GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY *GENERIC NAMES OF THREE PRINCIPAL PRODUCTS/SERVICES OF COMPANY *

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

Item Code No. (ITC Code)Product Description

* Not Applicable to the Company.As per our report annexed.For M.L. SHARMA & Co.Chartered AccountantsC. H. BandiPartner

Directors : R. K. KASLIWALPlace : Renukoot, Dist. Sonbhadra (U.P.), D. C. KABRA D. N. HIMMATRAMKADated : The 24th day of April, 2000. Company Secretary S. N. SHARMA

7 .7 .7 .7 .7 . Balance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business ProfileBalance Sheet Abstract and Company�s General Business Profile

2 0 - 1 7 0 8 1

3 1 0 3 2 0 0 02 0

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N I L

N I L

N I L

2 0 1 1 9 6 2 0 1 1 9 6

9 2 5 1 5

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3 9 4 0

7 7 8 6 0

7 6 8 6 0 1 2 2 2 7 2

(-) 2 4 9 2 7 1 1 0

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8 6 4 6

4 4 6 0

0 . 3 6

4 1 8 6

3 3 2 0

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Renuka Investments & Finance Limited