You are here » Home » Companies » Company Overview » National Aluminium Company Ltd

National Aluminium Company Ltd.

BSE: 532234 Sector: Metals & Mining
NSE: NATIONALUM ISIN Code: INE139A01034
BSE LIVE 15:55 | 19 Sep 80.45 -1.70
(-2.07%)
OPEN

83.25

HIGH

83.40

LOW

80.20

NSE 15:58 | 19 Sep 80.45 -1.80
(-2.19%)
OPEN

82.80

HIGH

83.30

LOW

80.25

OPEN 83.25
PREVIOUS CLOSE 82.15
VOLUME 769610
52-Week high 85.40
52-Week low 42.95
P/E 22.54
Mkt Cap.(Rs cr) 15,550
Buy Price 0.00
Buy Qty 0.00
Sell Price 80.45
Sell Qty 1371.00
OPEN 83.25
CLOSE 82.15
VOLUME 769610
52-Week high 85.40
52-Week low 42.95
P/E 22.54
Mkt Cap.(Rs cr) 15,550
Buy Price 0.00
Buy Qty 0.00
Sell Price 80.45
Sell Qty 1371.00

National Aluminium Company Ltd. (NATIONALUM) - Director Report

Company director report

Dear Members

Your Directors have great pleasure in presenting before you the 35th AnnualReport of your Company together with the audited financial statements and Auditors' Reportfor the financial year ended 31st March 2016.

You will be happy to know that despite sluggish market conditions your Company hasachieved several milestones during the year under report as detailed below:

PERFORMANCE HIGHLIGHTS

Physical Performance

Mines achieved the highest ever bauxite transportation of 63.4 lakh MT as against 57.42lakh tonnes achieved during the previous year registering 10% growth.

Alumina Refinery achieved the highest ever alumina hydrate production of 19.53 lakh MTas against 18.51 lakh MT achieved in previous year registering 6% growth.

Steam Generation Plant (SGP) at Alumina Refinery achieved the highest ever net powergeneration of 438 Million Units (MU) surpassing previous best of 433 MU achieved lastyear.

Aluminium Smelter achieved cast metal production of 3.72 lakh MT against 3.27 lakh MTin previous year registering 14% growth. Smelter achieved the highest ever production ofWire Rod of 1.01

lakh MT surpassing previous best of 96070 MT in previous year. Tee Ingot production of48636 MT has been the highest ever since inception surpassing previous best of 39803 MTduring 2014-15.

CPP achieved 'Net Power Generation' of 5841 MU as against 5131 MU in previous year.

The wind power generation during the year was 156 MU as against 175 MU generated duringthe previous year. The lower generation was due to restrictions in power evacuation.Similarly the solar power generation was 0.19 MU during the year as against 0.17 MUgenerated during the previous year.

Sales Performance Chemicals

Your Company achieved total chemical sale of 1219926 MT in 2015-16 compared to1224643 MT achieved during 2014-15. This includes Calcined Alumina Export of 1174224MT made during 201516 as compared to 1184595 MT export made during 2014-15.

Metal

The total metal sales during 2015-16 was 372424 MT as compared to 326079 MT during2014-15. Total metal sale consists of domestic sale of 277753 MT and export of 94671MT. The domestic sale includes Wire Rod sale of 101444 MT which is the highest ever saleof Wire Rods made since inception surpassing the previous best of 96070 MT achievedduring 2014-15.

Out of total Domestic metal sales of 277753 MT sale of 187081 MT was effected fromSmelter plant at Angul and 90672 MT was effected from eleven stockyards located atKolkata Baddi Jaipur Faridabad Bhiwandi Silvassa Bangalore Chennai Vizag Vadodaraand Delhi. Export orders are booked through e-tendering system to our registeredcustomers. During the year under report your Company exported Aluminium Metal andCalcined Alumina in the international market to various overseas destinations includingSingapore Malaysia Korea Taiwan Bangladesh Thailand Bahrain China Egypt IranIndonesia UAE etc.

Initiatives were taken to register new customers on a continuous basis for sale of ourproducts in the international market by promptly responding to prospective customerenquiries periodically publishing notice(s) for Global Invitation for registration ofInternational customers in various National & Internationaljournals/magazines/newspapers and proactive interactions with new customers during variousInternational conferences/seminars/exhibitions. There is thus a constant drive to expandthe customer base and explore new overseas destinations for export of the products of theCompany.

Financial Performance

You will be pleased to know that despite severe sluggish market conditions yourCompany achieved a Profit After Tax of Rs.731 crores during the year as compared toRs.1322 crores during the previous year.

The details of financial performance are given below:

Summary of Financial Result

Particulars 2015-16 2014-15
Revenue from Operations(Net) 6816 7383
Other Income 537 672
Total Income 7353 8055
Cost of materials consumed 1104 1031
Power & Fuel 1865 1802
Employee benefits Expenses 1361 1378
Other Expenses 1549 1465
Depreciation & amortisation expenses 424 414
Total Expenses 6303 6090
Profit before Exceptional items 1050 1965
Add: Exceptional items (Income) 53 148
Profit Before Tax 1103 2113
Tax Expenses 372 791
Profit After Tax 731 1322

Dividend and Appropriations

Your Board has recommended a final dividend of ' 0.75 per share (15% on the equityshares of ' 5/- each) for the financial year 2015-16

in addition to the interim dividend of ' 1.25 per share (25% on equity share of ' 5/-each) already paid in March 2016. The total dividend payout for the financial year2015-16 works out to ' 515.45 crore as against ' 451.02 crore for the previous year. Thefinal dividend will be paid after approval in the Annual General Meeting.

It is proposed not to transfer any amount to the General Reserve. The Balance of '114.50 crores in the Profit & Loss Account after appropriations is proposed to beretained in the Profit & Loss Account. The dividend for the year 2015-16 was declaredin line with the DPE Guidelines.

MoU Performance

Based on financial performance and achievement of other parameters laid down yourCompany is likely to be rated "Excellent" as per the Memorandum of Understanding(MoU) signed by your Company with the Government of India for the financial year 2015-16.

Raw Material Securitisation

• Both South Block & Central & North Mining Leases were extended uptoMarch 2020 by State Government which were operating under deemed extension condition& IBM Guideline on cutoff grade of bauxite was implemented during the year.

• Your Company could achieve better securitization of mining assets due toallocation of Pottangi Bauxite Mine having reserves of about 80 Million Tonnes and Utkal-D& Utkal-E Coal Blocks having about 200 Million Tonnes of coal reserves.

NEW INITIATIVES

Business Development

• Orders have been placed in Jan 2016 for wind power projects of 50 MW and 50.4MW in Rajasthan & Maharashtra respectively.

• A JV Company was formed with GACL on 04. 12. 2015 to set up 2.7 lakh TPA causticsoda plant along with 100 MW captive power plant at Dahej in Gujarat.

• Company has plans to set up 20 MW solar power plant in Madhya Pradesh and 50 MWeach solar and wind power plants at suitable locations in India.

• Company has signed an MoU with Iranian Mines & Mining Industries Development& Renovation Organization (IMIDRO) a State owned Company of Iran on 23.05.2016 forbusiness co-operation and collaboration.

Research & Development

• R&D Co-operation Agreement was entered into with Aluminium Pechiney (RioTinto Alcan) in July 2015 and development of AP2XN technology to reduce the electricityconsumption in pots has been taken up as the first project.

• R&D agreement was signed with Chalieco China in December 2015 forseparation of iron concentrate from Red Mud and extraction of Gallium from Bayer Liquor.

HUMAN RESOURCES MANAGEMENT

Presidential Directives on SC/ST reservation

The Company has scrupulously complied with the Presidential Directives and otherGovernment instructions and statutory provisions in the matter of reservation andconcessions for different categories.

As on 31/03/2016 out of 7100 employees (including Trainees) on the Company's rollthere were 1162 (16.37%) SCs 1286 (18.11%) STs 783 (11.03%) OBCs and 83 (1.17%) Personswith Disabilities. The total number of lady employees in the organization stands at 355.Every third employee in the Company belongs either to SC or ST category.

Industrial Relations

The year saw continuation of the excellent overall industrial relation situation in theCompany which helped in achieving major milestones in performance during the year underreport. Work culture and discipline improved remarkably during the year. The policy ofparticipative management starting from shop floor level to Apex level continued to be themain stay of the IR policy of the Company.

SA 8000:2008

As a step towards creating and maintaining decent work place your Company continues toimplement SA 8000:2008 Standard. Further Company is in the process to upgrade andimplement the SA standard from 2008 version to 2014 (New) Version.

All Units including Corporate Office have been re-certified to SA 8000

Standard as on date and the certificates will be renewed whenever they fall due.

HR Audit

For evaluating the effectiveness and performance of Human Resource Department regardingHR Policies Systems and Procedures your Company conducted HR Audit at Corporate Officein first phase and will be continued in other Units also.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

You will be pleased to know that your Company has spent an amount of ' 27.17 croresduring the year under report against stipulation of ' 26.24 crores as per applicableprovisions of the Companies Act 2013.

The CSR projects are identified based on recommendation of District Administrationinternal assessment in periphery areas directly by the Company or through Nalco Foundationas well as feedbacks received from stakeholders.

The focus of the projects are mainly towards Education Skill development Health careand Sanitation providing safe drinking water Pollution control environmental measuresand Rural development. Notable initiatives taken during the year under CSR activities are;

• Continued sponsoring of 655 children from tribal dominated areas for theireducation.

• Continued the operation of 4 Mobile Medical Vans at M&R Complex Damanjodithrough Wockhardt Foundation and 3 Mobile Medical Vans at S&P Complex Angul throughLions Club apart from one van is being used exclusively for OPD purpose.

• To encourage poor and meritorious girl students under BPL category to continuetheir study financial assistance @ Rs.6000/- per annum was provided to meet the expenseson account of uniform and study materials under "Nalcora Aliali Jhia"(Nalco Ki Ladli) scheme to 82 nos. of girl students (50 from M&R Complex Damanjodiand 32 from S&P Complex Angul) starting from class-VIII to class-X.

• Provided 10 lakh drinking water pouches and 250 nos. temporary toilets duringNabakalebar-2015 at Puri.

• Joined the National movement of Swachh Bharat and is fully committed for itssuccess.

• Under Swachh Vidyalaya Abhiyan your Company has successfully completedconstruction of 354 toilets in 202 MHRD allotted schools

VISIT OF PARLIAMENTARY COMMITTEES

The following Parliamentary Committees visited your Company during the year underreport:

• Parliamentary Committee on Welfare of SCs/STs between 7th to 10thJune 2015.

• Committee on Sub-Ordination Legislation Rajya Sabha on 25th October2015.

• Standing Committee on Coal & Steel visited Kolkata on 20thJanuary 2016.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion & Analysis report in line with Regulation 34(3) readwithSchedule-V of the SEBI (LODR) Regulations 2015 is placed at Annexure-II to this report.

The report also contains:

(a) various initiatives undertaken to further business development.

(b) the details of risk management initiatives the details in respect of adequacy ofinternal financial controls with reference to the financial statements.

(c) various initiatives taken up in the field of Environment Management at differentunits of your Company.

COMPUTERIZATION ACTIVITIES

Your Company continued its efforts in taking advantage of latest developments in theInformation Technology by suitably using them in the day to day functioning of theCompany. In that direction the

Company has taken various steps as detailed below:

After centralizing almost all its data and applications viz Procurement InventoryManagement Finance and Accounting Marketing and Sales and Human Resource Management onthe SAP platform the Company has now centralized the remaining applications primarily inthe area of employee establishment in the legacy environment. This ensures uniformity inbusiness logics followed across the enterprise. Further plans have been initiated toimplement analytics as decision support tools.

Digitization of documents and records has been taken up at various Offices and Units asa preparatory step for implementing digital document management system.

The network which is the backbone of IT has been revamped to a large extent with 10Gbps backbone and 1 Gbps access technology and advanced routing sequestering and queuingtechnologies resulting in efficient and fast throughput across the network. For computinginfrastructure that is nearing completion of life cycle action is underway for replacingwith current and scalable technology. Focus is towards use of standard platforms in lieuof proprietary platforms and use of virtualization in servers to leverage the flexibilityof virtualized server provisioning. Disaster recovery coverage is now being extended toall the applications and services. Plans are afoot for providing wider coverage ofWireless connectivity to provide higher flexibility in working.

The Company has taken steps to reinforce and secure its IT infrastructure and ecosystemby appointing a Consultant to assess the IT ecosystem and formulate appropriate ITSecurity Policy and framework to implement an effective Information Security ManagementSystem leading to ISO 27001 certification. This will be an assurance to all stake holderstransacting digitally with the Company.

Current roadmap of activities includes digital office for document storage andretrieval as well as work flow automation social platforms for inhouse as well as forpublic. Knowledge Management will also be a key area of activity. The e-governanceprocesses cover in-house services to employees and services like online applicationsystems for recruitments to the general public. Providing bill tracking facilities forvendors and material tracking for customers is also on the anvil.

TOTAL QUALITY MANAGEMENT

Your Company has taken following major initiatives during the year under report:

Business Excellence Initiative

The Business Excellence (BE) initiative aligned with European Foundation of QualityManagement (EFQM) Business Excellence Model 2013 was launched in the organisation andbased on the approach plan approved at Corporate Office implementation process was rolledout in the Alumina Refinery from July 2015 onwards.

External assessment by independent assessors deputed by CII was successfully conductedon 14th & 15th Oct.'15. Based on the recommendations of theexternal assessors and review by the award committee Alumina Refinery was conferred withthe award "BE Star Recognition as Leader in Process Industry category for Excellencein Operations Management".

Integrated Management System

Recertification audits and periodic Surveillance Audits were conducted successfully atall the units and offices for the three international Management Systems Standards i.e.ISO 9001 ISO 14001 & OHSAS 18001. As on 31.03.2016 all the units and offices coveredin the above three Management Systems under the Integrated Management System areoperating with valid Certification status.

Energy Management System

During the year all the three units i.e. CPP Smelter & Alumina Refinery

covered under Perform Achieve & Target (PAT) successfully went through thescheduled Recertification and periodic Surveillance Audits for ISO 50001. In the processCPP was recertified to ISO 50001. As a consequence as on 31.03.2016 all the three unitsare operating with valid ISO 50001 certificates.

Perform Achieve & Target (PAT) Cycle-I

During this year for both the Designated Consumers (DCs) i.e. S&P Complex andM&R Complex have achieved target set. S&P Complex achieved normalisation factorof 5.109 TOE/T against the Specific Energy Consumption (SEC) target of 5.199 TOE/T.M&R Complex achieved normalisation factor of 0.306 TOE/T against a SEC target of

0. 307 TOE/T.

Quality Circles and Kaizens

Improvements in the scheme for motivating Quality Circles & Kaizens were introducedduring the year which resulted in enhancement of Quality Circle and Kaizen activities asreflected below:

1. 38 Quality Circles from different units of the organisation completed total 50 QCprojects during the year.

ii. 14 Quality Circles from different units of Nalco were nominated to National QualityCircle Convention organised by QCFI at Chennai. Five QCs were placed in the top categoryi.e. "Par-Excellence".

iii. The All Odisha Quality Circle Convention was organised by Nalco for the twentiethtime in sequence on 22nd & 23rd April'15 at Bhubaneswar.

iv. 145 Kaizens were completed during the year.

5S implementation

Workplace Management System i.e. the widely-acclaimed 5S system was introduced inAlumina Refinery Mines Smelter & CPP to develop a few model areas. Smelter andAlumina Refinery have achieved substantial progress in the 1S and 2S steps in the modelareas identified by them while CPP and Mines have initiated 1S and 2S through handholdingsessions by the consultants.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

Your Company continued its efforts in promoting and implementing Official Language Act1963 and Official Language Rule 1976. Various initiatives taken during the year are;

• Hindi Fortnight/Hindi Weak/Hindi Day were observed at Corporate OfficeBhubaneswar M&R Complex Damanjodi and S&P Complex Angul. On these occasionsmany Hindi Competitions were organized separately for Hindi speaking employees and nonHindi speaking employees.

• Town Official Language Implementation Committee meetings were conducted at Anguland Bhubaneswar.

• Hindi workshop was organised during November 2015 at S&P Complex withfaculty Assistance of Dy. Director (Implementation) East Zone Deptt. of OfficialLanguages Govt. of India where 38 Nos. of employees and officers participated frommember offices of TOLIC Angul.

• Hindi Teaching Program was implemented at Corporate Office S&P Complex andM&R Complex and the employees who do not have working knowledge of Hindi werenominated for Praveen & Pragya courses under Hindi Teaching Scheme of Government ofIndia and

after passing the examinations incentives and cash awards were given as per rules.

• Website of Company www.nalcoindia.com is made Bilingual and being regularlyupdated both in Hindi and English.

• Faculty Assistance was provided by the Company on the subject "Unicode andTechnical Facilities in Computer and Mobile Phones in Hindi" in the Hindi Workshoporganised by National Insurance Company Ltd. Dhenkanal Prasar Bharati DoordarshanKendra Bhubaneswar East Coast Railway Bhubaneswar Oriental Insurance Co. Ltd. Cuttackand BSNL Bhubaneswar.

SPORTS

Your Company continued its efforts to promote sports in the region apart fromencouraging sports talent who participated in the National and International events byfelicitating them on the occasion of Utkal Divas celebration.

As a part of the promotion of sports your Company sponsored Nalco Cup State HockeyChampionship and Nalco Cup State Open Tennis Tournament.

Your Company also provided financial assistance for participating Wako World KickBoxing Championship held at Dublin and for organizing Blind Womens Cricket Tournament etc.

Your Company organized 5 Km India Mini Marathon on 24th January 2016 with 'I forIndia' slogan from Janata Maidan to Kalinga Stadium which was a huge success as more than16 thousand participants and 100 organizations and institutions participated which isconsidered to be biggest among the Mini Marathons organized throughout the country on thatdate.

VIGILANCE

Vigilance Department in your Company acts as an aid and co-operate with management invarious functions to pull down corruption and gear up transparency in the system. Withadvice of Central Vigilance Commission your Company has implemented IT for e-tenderinge-payments e-auction etc. Preventive vigilance activities of the department such assurprise checks sample tests regular inspections CTE type intensive examinations etc.were given utmost importance and short comings were brought to the notice of managementfor remedial action. Broad details of the Vigil Mechanism established in the Company aregiven below:

• NALCO has a well established vigilance organization in the Company headed by aChief Vigilance Officer (CVO) who is appointed on deputation from Govt. of India. Othervigilance officers who assist the CVO are selected on deputation basis in consultationwith and concurrence of CVO. NALCO has its vigilance set up at three locations i.e.Corporate Office Bhubaneswar S&P Complex Angul and M&R Complex Damanjodi.

• The vigilance functions are generally in the nature of preventive punitivesurveillance and detection.

The Vigilance Department functions in brief are;

• Investigating complaints

• Surprise Checks in sensitive areas

• Study of contract/purchase/sales files and Internal Audit Reports which are goodsource of information for vigilance cases

• Suggesting system improvements

• Circulation of CVC Circular / guidelines

• Giving vigilance clearances to various employees for various purposes viz. NOCfor issue of Passport Promotion Resignation/ Superannuation/Voluntary RetirementConferment of Award Foreign Assignment Deputation and appointment of officers to Boardlevel etc.

• Scrutiny of Property Returns

• Advising on rotation of officials in sensitive posts

• Advising CMD on vigilance matters and matters relating to disciplinaryprocedures

• Liasoning with CBI etc.

• Implementation of Integrity Pact

• Furnishing of various returns/reports to Ministry/CVC/CBI

• Assisting CVC in selection of Independent External Monitors (IEMs) for I.P(Integrity Pact)

• Assisting management in formulation/updation of various anticorruptionpolicies/measures

Whistle Blower Policy

The purpose of Whistle Blower Policy is to provide a framework to promote responsibleand secure whistle blowers to prohibit managerial personnel action. It protects employeeswishing to raise a concern about serious irregularities within the company. Nalco being apublic sector it is governed by the Whistle Blower Policy formulated by Govt. of India.Details of the Policy are available in Nalco website.

Fraud Reporting

No fraud has been reported by the Auditors under Section 143(12) of Companies Act 2013during the year under report. The Company has a Board approved Fraud Prevention Policy andthe same is placed in the website www.nalcoindia.com.

RIGHT TO INFORMATION

In order to promote transparency and accountability an appropriate mechanism has beenset up across your Company in line with 'Right to Information Act 2005. Your Company hasnominated CPIO/APIO/ Appellate Authorities at its Corporate Office Units and BranchOffices to provide required information to the citizens under the provisions of the Act.

LISTING IN STOCK EXCHANGES & PAYMENT OF LISTING FEES

The equity shares of your Company continued to be listed on BSE Limited and NationalStock Exchange of India Ltd. the premier stock exchanges of the country havingnationwide trading terminals. The listing fee for the year 2015-16 was paid to these stockexchanges on time. Your Company has executed fresh Listing Agreements with both the stockexchanges within the stipulated time as required under SEBI (LODR) Regulations 2015 whichcame into force on 01-12-2015.

Buyback of Shares

As you are aware the Board of Directors had recommended buyback of 644309628 equityshares of Rs.5/- each representing 25% of the total number of equity shares in the paid-upequity share capital of the Company subject to approval of shareholders of the Company.The shareholders of the Company had approved the proposal by passing a special resolutionthrough postal ballot on 14-07-2016. The buyback offer at a price of Rs.44/- per share foran aggregate consideration of Rs.2834.96 crores which would not exceed 25% of theaggregate of fully paid-up share capital and free reserves as per the audited accounts ofthe Company for the financial year ended 31-03-2015 being the latest audited financialstatement on the date of Board decision i.e. 25-05-2016. SEBI has sent its clearance forthe draft Letter of Offer with some observations on 22-08-2016. The whole exercise isexpected to be completed by the end of September 2016.

Services to Shareholders

The Company had its In-house Share Registry. Your Company appointed M/s KarvyComputershare Pvt. Ltd. Hyderabad as its Registrar and Share Transfer Agent (RTA) andaccordingly the In-house Share Registry operations of the Company have been shifted tothe RTA w.e.f. 08-02-2016.

Payment of Annual Custody/Issuer Fees to Depositories

Annual connectivity fees and custody fees/issuer fees for the year 201516 were paid toboth M/s National Securities Depository Ltd. and M/s Central Depository Services (India)Ltd. on time.

BUSINESS RESPONSIBILITY REPORT

In line with Regulation 34(2)(f) of SEBI (LODR) Regulations 2015 a BusinessResponsibility Report for 2015-16 describing various initiatives taken by the Company onsocial environmental and governance perspective is attached at Annexure-III whichforms part of this Annual Report.

Report on Sustainable Development

The fourth edition of Sustainable Development Report highlighting the sustainabilityaspects and the final MoU evaluation status was prepared as per the Global ReportingInitiative latest guidelines i.e. GRI G4

framework. The same was assessed by GRI Amsterdam and the GRI G4 Content Indexverification was successfully completed.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo as required to be disclosed under the Companies Act 2013 aregiven in the Annexure-IV to this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Your Directors' pursuant to the provisions of Section 134(3)(c) and 134(5) of theCompanies Act 2013 hereby confirm that;

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE

A report on Corporate Governance in line with Regulation 34 read with Schedule-V ofSEBI (LODR) Regulations 2015 and DPE guidelines is prepared and placed at Annexure-V tothis report.

The Statutory Auditors of the Company have issued a certificate on Corporate Governancewhich is appended to the Corporate Governance Report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Policy on Related Party Transactions has been approved by the Board and placed inthe Company's website which can be accessed at www.nalcoindia.com.

Your Directors draw the attention of the members to Note No. 53 of the financialstatements which sets out related party disclosures.

The details of contracts entered with Related Parties at arm's length basis during theyear under report are detailed in form AOC-2 which is attached at Annexure-VI tothis report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance of the provisions of the Act the Board of Directors have appointed thefollowing as Key Managerial Personnel:

• Dr. T.K. Chand Chairman-cum-Managing Director (w.e.f. 27.07.2015)

• Shri N.R. Mohanty Director (P&T)

• Shri K.C.Samal Director (Finance)

• Ms. Soma Mondal Director (Commercial)

• Shri VBalasubramanyamDirector (Production)

• Shri Basant Kumar Thakur Director (HR) w.e.f. 04.07.2016

• Shri K.N.Ravindra Executive Director - Company Secretary

• Shri Ansuman Das former CMD till 30-04-2015

• Shri S.C. Padhy Director (HR) (till 30-06-2016)

Declaration of Independence by Independent Directors

The Company has received declaration from the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (LODR) Regulations 2015.

Meetings of the Board

During the year nine Board meetings were held. For further details please refer toreport on Corporate Governance (Annexure-V) placed in this Annual Report.

Various Sub-committees of the Board

The details of various Sub-committees of the Board including Audit Committee theircomposition terms of reference details of meetings held are given in the CorporateGovernance Report attached to this report.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company in the prescribed Form MGT-9 is annexedherewith as Annexure-VII to this Report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under report:

• Details relating to deposits covered under Chapter V of the Act.

• Issue of equity shares with differential rights as to dividend voting orotherwise.

• Issue of shares sweat equity shares and ESOS to employees of the Company.

• Neither CMD nor the Whole-time Directors of the Company receive any commissionfrom the Company.

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

Your Directors also state that no disclosure or reporting is required in respect of thefollowing areas as they are exempted for Government Companies by Ministry of CorporateAffairs vide notification dated 5th June 2015.

• Company's policy on Director's appointment and remuneration including criteriafor determining Qualification Attributes Independence etc. as per Section 134 (3) (e)and Section 178(2) (3) & (4).

• Manner in which formal Annual Evaluation of performance of Board its Committeesand individual Directors has been carried out as per Section 134(p) read with Rule 8 (4)of Companies (Accounts) Rules.

• Ratio of remuneration of each Director to the median remuneration of theemployee and other prescribed details as per Section 197(12) read with Rule 5 of Companies(Appointment & Remuneration of Managerial Personnel) Rules.

Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013

Your Directors further state that during the year there were no cases filed under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

Particulars of loans guarantees and investments

Particulars of loans guarantees and investments form part of Note No. 11 1213 1418 and 19 respectively to the financial statements provided in the Annual Report.

Particulars of Joint Venture Companies and Associated Companies

Particulars regarding joint venture companies and associated companies form part ofNote 36 of the Financial Statements provided in the Annual Report.

Salient features of JV/Associate companies in Form AOC-1 forms integral part of theconsolidated financial statement of the Company.

Awards & Recognitions

Various awards & recognitions detailed below stand ample testimony for the overallgood work done by the Company during the year under report:

1. Engineering Export Promotion Council Eastern Region (EEPC)'s Gold Trophy as topexporter in the Large Enterprise category for its outstanding export performance duringthe year 2013-14.

2. Highest Export Award of Chemical & Allied Products Export Promotion Council(CAPEXIL) sponsored by Ministry of Commerce & Industry Govt of India for itsoutstanding export performance in Processed Mineral Category in succession since 1988.

3. M&R Complex Damanjodi was conferred with the National Energy Conservation Awardby Ministry of Power in recognition to its efforts in Energy Conservation in the AluminumSector for the year 2015.

4. Panchpatmali Bauxite Mines bagged the Pollution Control Excellence Award-2015instituted by Orissa State Pollution Control Board (OSPCB) for effective pollution controlmeasures and sound environment practices.

5. The Alumina Refinery of NALCO received the Kalinga Safety Award in the 'Gold'category at the Odisha State Safety Conclave - 2015.

6. For its initiative towards bringing 655 tribal children of Koraput district to themainstream education NALCO bagged OTV CSR Award 2015 under primary education category.

7. Performance Excellence Award instituted by the Indian Institution of IndustrialEngineering (IIIE).

8. The Alumina Refinery of NALCO bagged the prestigious Business Excellence StarRecognition Award of CII as the "Leader in Process Industries for Excellence inOperations Management".

9. The Captive Power Plant of NALCO was awarded for 'proactive climate change' fromState Pollution Control Board Odisha.

10. Best Mother Plant Award at the concluding ceremony of Odisha MSME InternationalTrade Fair organized at Bhubaneswar.

11. Panchaptmali Bauxite Mine bagged the 1st Prize in Afforestation and 2ndPrize in Top Soil Management in the concluding function of 18th Mine Environment &Mineral Conservation (ME&MC) Week 2015-16 under the aegis of Indian Bureau of MinesBhubaneswar Region.

12. Panchpatmali Bauxite Mine bagged First prizes in Health and Welfare Second prizesin training and overall performance during Odisha Metalliferrous Mines Week organised byDGMS.

13. Green Corporate Award in the Odisha Environment Congress.

COMMENTS OF COMPTROLLER AND AUDITOR GENERAL OF INDIA ON THE FINANCIAL STATEMENT OF THECOMPANY

You will be pleased to know that your Company has received 'Nil' comments from C&AGon the standalone financial statements of the Company. Further C&AG has also given'Nil' comment on the supplementary audit conducted by them on the consolidated financialstatements of the Company. Their comments are placed elsewhere in this Annual Report.

AUDITORS

Statutory Auditors

M/s. ABP & Associates and M/s Guha Nandi & Co. were appointed as JointStatutory Auditors of your Company by the Comptroller and Auditor General of India for thefinancial year 2015-16.

The report of the Statutory Auditors is enclosed to this report. The observations madein the Auditors' Report are self-explanatory and therefore do not call for any furthercomments.

Cost Auditors

As per Cost Audit Orders Cost Audit is applicable to the Company for the financialyear 2015-16. In terms of the provisions of Section 148 and all other applicableprovisions of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules2014 M/s. Tanmaya S Pradhan & Co. Sambalpur have been appointed as Cost Auditors forthe year 2015-16.

Your Company will submit its Cost Audit Report to the Ministry of Corporate Affairswithin the stipulated time period.

M/s Tanmay S. Pradhan & Co. has also been appointed as Cost Auditors for thefinancial year 2016-17.

Secretarial Auditor

In terms of Section 204 of the Act and Rules made there under M/s Saroj Ray &Associates Practicing Company Secretaries have been appointed as Secretarial Auditor ofthe Company. The report of the Secretarial Auditors together with the explanations of themanagement on the qualifying remarks of Secretarial Auditors is enclosed as Annexure-VIIIto this report.

Internal Auditors

Your Company appointed the following auditing firms for carrying out internal auditfunctions of your Company for the financial year 2015-16:

M/s Tej Raj & Pal for Corporate Office Bhubaneswar M/s SCM & Associates forS&P Complex Angul

M/s G.R. Kumar & Co. for M&R Complex Damanjodi & Port FacilitiesVisakhapatnam

M/s P Agarwal & Associates for Northen Regional Office New Delhi M/s DPSV &Associates for Eastern Regional Office Kolkata M/s Kumbhat & Co. for SouthernRegional Office Chennai M/s D S Sukla & Co. for Western Regional Office Mumbai

DIRECTORS

The following changes took place in the Board of Directors of your Company since thelast report:

Appointment

• S/Shri Dipankar Mahanta S Sankararaman Pravat Keshari Nayak Prof. DamodarAcharya and Maheswar Sahu were appointed as part-time non-official (Independent) Directorsw.e.f. 21.11.2015. • Shri Nikunja Bihari Dhal Joint Secretary Ministry of Mines wasappointed as Part-time Official Director w.e.f. 23.12.2015.

• Shri B. K. Thakur was appointed as Director (HR) of the Company w.e.f.04.07.2016.

Cessation

• Dr. Niranjan Kumar Singh Joint Secretary Ministry of Mines ceased to bePart-time Official Director on the Board of your Company w.e.f. 23.12.2015.

• Shri S. C. Padhy Director (HR) superannuated on 30.06.2016. Your directorswish to place on record their appreciation for the valuable

services rendered by Dr. Niranjan Kumar Singh and Shri S. C. Padhy during their tenureon the Board of your Company.

ACKNOWLEDGEMENT

The Board of Directors acknowledges with deep sense of gratitude for the guidance andco-operation received from Government of India particularly from Ministry of Mines andother Ministries / Departments of the Government of India Government of Odisha MahanadiCoalfields Ltd. Indian Railways other Government agencies and CPSEs.

The Board also expresses their sincere thanks to the Comptroller and Auditor General ofIndia the Principal Director of Commercial Audit & Ex-officio Member Audit BoardKolkata Statutory Auditors Cost Auditors Secretarial Auditors Internal AuditorsBankers and JV Partners business associates for the co-operation rendered by them. YourDirectors also acknowledge the support extended by the valued and esteemed domestic andinternational customers vendors solicitors and also look forward for maintaining suchmutually supportive business relationship in the coming years too.

The success of your Company is due to commitment hard work and dedicated efforts madeby all the employees at various levels and due to the active support and co-operationreceived from the Trade Unions & Officers' Associations during the year under report.

For and on behalf of Board of Directors
(k fi A
Place : Bhubaneswar (Dr.Tapan Kumar Chand)
Date : 27.08.2016 Chairman-cum-Managing Director