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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 Form 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2011
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from            to          .
 Commission file number 001-32312
 Novelis Inc.
 (Exact name of registrant as specified in its charter)
 Canada(State or other jurisdiction of 
incorporation or organization)
    
    98-0442987(I.R.S. Employer
Identification Number)3560 Lenox Road, Suite 2000, 
Atlanta, GA(Address of principal executive
offices)
    
    30326(Zip Code)
 (404) 814-4200
 (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 None
Securities registered pursuant to Section 12(g) of the Act:
 None
 o þ
 o þ
 þ o
 o o
 o
  Large accelerated filer o   
    Accelerated filer o
    Non-accelerated filer þ
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE
None




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##### 



TABLE OF CONTENTS
 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET DATA


    
    
    3PART IItem 1.
    
    Business
    
    
    6Item 1A.
    
    Risk Factors
    
    
    19Item 1B.
    
    Unresolved Staff Comments
    
    
    28Item 2.
    
    Properties
    
    
    29Item 3.
    
    Legal Proceedings
    
    
    32PART IIItem 5.
    
    Market for Registrants Common Equity, Related Shareholder Matters and Issuer
Purchases of Equity Securities
    
    
    33Item 6.
    
    Selected Financial Data
    
    
    33Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    34Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    61Item 8.
    
    Financial Statements and Supplementary Data
    
    
    64Item 9.
    
    Changes In and Disagreements With Accountants On Accounting and Financial
Disclosure
    
    
    130Item 9A(T).
    
    Controls and Procedures
    
    
    130Item 9B.
    
    Other Information
    
    
    131PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    132Item 11.
    
    Executive Compensation
    
    
    137Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters
    
    
    148Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    148Item 14.
    
    Principal Accountant Fees and Services
    
    
    150PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    151EX-10.29EX-21.1EX-31.1EX-31.2EX-32.1EX-32.2
  2




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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET DATA
   
    
    relationships with, and financial and operating conditions of, our customers, suppliers
and other stakeholders;
    
    changes in the prices and availability of aluminum (or premiums associated with
aluminum prices) or other materials and raw materials we use;
    
    fluctuations in the supply of, and prices for, energy in the areas in which we maintain production facilities;
    
    our ability to access financing to fund current operations and for future capital requirements;
    
    the level of our indebtedness and our ability to generate cash;
    
    deterioration of our ratings by a credit rating agency;
    
    changes in the relative values of various currencies and the effectiveness of our currency hedging activities;
    
    union disputes and other employee relations issues;
    
    factors affecting our operations, such as litigation (including product liability
claims), environmental remediation and clean-up costs, labor relations and negotiations,
breakdown of equipment and other events;
    
    changes in general economic conditions, including deterioration in the global economy;
    
    changes in the fair value of derivative instruments or the failure of counterparties to
our derivative instruments to honor their agreements;
    
    the capacity and effectiveness of our metal hedging activities;
    
    availability of production capacity;
    
    impairment of our goodwill and other intangible assets;
 3




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
    
    loss of key management and other personnel, or an inability to attract such management and other personnel;
    
    risks relating to future acquisitions or divestitures;
    
    our inability to successfully implement our growth initiatives;
    
    changes in interest rates that have the effect of increasing the amounts we pay under
our new senior secured credit facilities, other financing agreements and our defined
benefit pension plans;
    
    risks relating to certain joint ventures and subsidiaries that we do not entirely control;
    
    the effect of new derivatives legislation on our ability to hedge risks associated with our business;
    
    competition from other aluminum rolled products producers as well as from substitute
materials such as steel, glass, plastic and composite materials;
    
    cyclical demand and pricing within the principal markets for our products as well as
seasonality in certain of our customers industries;
    
    economic, regulatory and political factors within the countries in which we operate or
sell our products, including changes in duties or tariffs; and
    
    changes in government regulations, particularly those affecting taxes and tax rates,
health care reform, climate change, environmental, health or safety compliance.
   4




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Exchange Rate Data
   Period
    
    At Period End
    
    Average Rate(A)
    
    High
    
    LowYear Ended December 31, 2006
    
    
    1.1652
    
    
    
    1.1310
    
    
    
    1.1726
    
    
    
    1.0955Three Months Ended March 31, 2007(B)
    
    
    1.1530
    
    
    
    1.1674
    
    
    
    1.1852
    
    
    
    1.1530April 1, 2007 Through May 15, 2007(B)
    
    
    1.0976
    
    
    
    1.1022
    
    
    
    1.1583
    
    
    
    1.0976May 16, 2007 Through March 31, 2008(B)
    
    
    1.0275
    
    
    
    1.0180
    
    
    
    1.1028
    
    
    
    0.9168Year Ended March 31, 2009
    
    
    1.2579
    
    
    
    1.1247
    
    
    
    1.2694
    
    
    
    0.9938Year Ended March 31, 2010
    
    
    1.0144
    
    
    
    1.0848
    
    
    
    1.1881
    
    
    
    1.0144Year Ended March 31, 2011
    
    
    0.9709
    
    
    
    1.0206
    
    
    
    1.0663
    
    
    
    0.9709
 
 (A)
    
    For periods after December 31, 2008, this represents the average of
the 16:00 GMT buying rates on the last day of each month during the
period. For periods before December 31, 2008, we used the average of
the 17:00 Greenwich Mean Time (GMT) (12:00 P.M. Eastern Standard Time)
on the last day of each month during the period.(B)
    
    See Note 1  Business and Summary of Significant Accounting Policies
(Acquisition of Novelis Common Stock) to our accompanying audited
consolidated financial statements.  Commonly Referenced Data
  5




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PART I
 
 Item 1. Business
 Overview
  Our History
 Organization and Description of Business
  Acquisition of Novelis Common Stock
  Amalgamation of AV Aluminum Inc. and Novelis Inc.
   Our Industry
   6




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
    
    hot mills that require sheet ingot, a rectangular slab of aluminum, as starter
material; and
    
    continuous casting mills that can convert molten metal directly into semi-finished
sheet.
     End-use Markets
  Packaging.
     7




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Transportation.
    Electronics.
 Architectural.
 Market Structure
    8




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Competition
  North America
    
    AsiaAlcoa, Inc. (Alcoa)
    
    AlcoaAleris International, Inc. (Aleris)
    
    Furukawa-Sky Aluminum Corp.Arco Aluminium, Inc.
    
    Kobe Steel Ltd.Norandal Aluminum
    
    Nanshan AluminumRio Tinto Alcan Inc.
    
    Sumitomo Light Metal Company, Ltd.Wise Metal Group LLC
    
    Southwest Aluminum Co. Ltd.
 Europe
    
    South AmericaAlcoa
    
    AlcoaAleris
    
    Companhia Brasileira de AlumínioHydro A.S.A.Rio Tinto Alcan Inc.
   Key Factors Affecting Supply and Demand
  Production Capacity.
 Alternative Technology.
 Trade.
 9




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Economic Growth.
  Substitution Trends.
  Downgauging.
 Seasonality.
 Our Business Strategy
  Operate as One Novelis  a Fully-integrated Global Company
   10




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Focus on Our Core Premium Products to Drive Enhanced Profitability
  Pursue Organic Growth Through Capital Investments in Emerging Growth Markets and
Debottlenecking Initiatives
    Sustainability
  Focus on Reducing our Costs
  11




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Our Operating Segments
  
    
    North America.Headquartered in Atlanta, GA, this segment manufactures aluminum sheet
and light gauge products and operates eleven plants, including two fully dedicated recycling
facilities, in two countries.
    
    Europe.Headquartered in Zurich, Switzerland, this segment manufactures aluminum sheet
and light gauge products and operates 13 plants, including one fully dedicated recycling
facility, in six countries.
    
    Asia.Headquartered in Seoul, South Korea, this segment manufactures aluminum sheet and
light gauge products and operates three plants in two countries.
    
    South America.South America operates two rolling plants along with one primary aluminum
smelter, a bauxite mine and a hydro-electric power plant as of March 31, 2011, all of which
are located in Brazil. South America manufactures aluminum rolled products, including can
stock, automotive and industrial sheet and light gauge for the beverage and food can,
construction and industrial, foil and other packaging and transportation end-use
applications.
  Year EndedSales in millions
    
    March 31,Shipments in kilotonnes
    
    2011
    
    2010
    
    2009ConsolidatedNet sales(A)
    
    $
    10,577
    
    
    $
    8,673
    
    
    $
    10,177Total shipments
    
    
    3,097
    
    
    
    2,854
    
    
    
    2,943North AmericaNet sales(B)
    
    $
    3,922
    
    
    $
    3,292
    
    
    $
    3,930Total shipments
    
    
    1,121
    
    
    
    1,063
    
    
    
    1,109EuropeNet sales(B)
    
    $
    3,589
    
    
    $
    2,975
    
    
    $
    3,718Total shipments
    
    
    976
    
    
    
    884
    
    
    
    1,009AsiaNet sales(B)
    
    $
    1,866
    
    
    $
    1,501
    
    
    $
    1,536Total shipments
    
    
    581
    
    
    
    534
    
    
    
    460South AmericaNet sales(B)
    
    $
    1,214
    
    
    $
    948
    
    
    $
    1,007Total shipments
    
    
    419
    
    
    
    373
    
    
    
    365
 
 (A)
    
    Consolidated Net sales include the results of our non-consolidated
affiliates on a proportionately consolidated basis, which is
consistent with the way we manage our business segments.(B)
    
    Net sales by segment includes intersegment sales. North America
  12




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Europe
   Asia
   South America
   13




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Financial Information About Geographic Areas
  Raw Materials and Suppliers
  Aluminum
  Primary Aluminum Sourcing.
 Primary Aluminum Production.
 Recycled Aluminum Products.
  Energy
   14




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##### Table of Contents



Others
  Our Customers
  Beverage and Food Cans
    
    TransportationAnheuser-Busch InBev
    
    Audi Worldwide CompanyAffiliates of Ball Corporation
    
    BMW Group InternationalCan-Pack S.A.
    
    Daimler AGVarious bottlers of the Coca-Cola System
    
    Ford Motor CompanyCrown Cork & Seal Company
    
    General MotorsRexam plc
    
    Hyundai Motor CompanyJaguar Land RoverVolvo Group
 Construction, Industrial and Other
    
    ElectronicsAgfa-Gevaert N.V.
    
    LGAmcor Limited
    
    SamsungKodak Polychrome Graphics GmbHLotte Aluminum Co. Ltd.Pactiv CorporationRyerson Inc.Tetra Pak Ltd.
   Year EndedMarch 31,2011
    
    2010
    
    2009Rexam
    
    
    15
    %
    
    
    16
    %
    
    
    17
    %Anheuser-Busch
    
    
    13
    %
    
    
    11
    %
    
    
    7
    %
 15




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Distribution and Backlog
  Year EndedMarch 31,2011
    
    2010
    
    2009Direct sales as a percentage of total net sales
    
    
    92
    %
    
    
    93
    %
    
    
    93
    %Distributor sales as a percentage of total net sales
    
    
    8
    %
    
    
    7
    %
    
    
    7
    %
 Direct Sales
   Distributors
  Backlog
  Research and Development
  Year EndedMarch 31,2011
    
    2010
    
    2009Research and development expenses
    
    $
    40
    
    
    $
    38
    
    
    $
    41
  16




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Our Employees
  North
    
    
    
    
    
    
    
    
    
    SouthEmployees
    
    America
    
    Europe
    
    Asia
    
    America
    
    TotalMarch 31, 2011
    
    
    3,100
    
    
    
    4,650
    
    
    
    1,500
    
    
    
    1,600
    
    
    
    10,850March 31, 2010
    
    
    2,900
    
    
    
    4,750
    
    
    
    1,500
    
    
    
    1,900
    
    
    
    11,050
   Intellectual Property
     Environment, Health and Safety
   17




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Available Information
  18




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Item 1A. Risk Factors
  Certain of our customers are significant to our revenues, and we could be adversely affected by
changes in the business or financial condition of these significant customers or by the loss of
their business.
  Our results and short term liquidity can be negatively impacted by timing differences between the
prices we pay under purchase contracts and metal prices we charge our customers.
   Our operations consume energy and our profitability and cash flows may decline if energy costs
were to rise, or if our energy supplies were interrupted.
  
    
    increases in costs of natural gas;
    
    significant increases in costs of supplied electricity or fuel oil related to
transportation;
    
    interruptions in energy supply due to equipment failure or other causes;
    
    the inability to extend energy supply contracts upon expiration on economical terms; and
    
    the inability to pass through energy costs in certain sales contracts.
  19




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A deterioration of our financial position or a downgrade of our ratings by a credit rating agency
could increase our borrowing costs and our business relationships could be adversely affected.
  Adverse changes in currency exchange rates could negatively affect our financial results or cash
flows and the competitiveness of our aluminum rolled products relative to other materials.
   Most of our facilities are staffed by a unionized workforce, and union disputes and other employee
relations issues could materially adversely affect our financial results.
  We could be adversely affected by disruptions of our operations.
  Our operations have been and will continue to be exposed to various business and other risks,
changes in conditions and events beyond our control in countries where we have operations or sell
products.
  20




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Economic conditions could negatively affect our financial condition and results of operations.
   Our results of operations, cash flows and liquidity could be adversely affected if we were unable
to purchase derivative instruments or if counterparties to our derivative instruments fail to
honor their agreements.
  New derivatives legislation could have an adverse impact on our ability to hedge risks associated
with our business and on the cost of our hedging activities.
  21




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During many operating periods, we utilize substantially all of our production capacity, which may
put us at a competitive disadvantage since we may be unable to take on additional volumes to meet
our customers needs or acquire new business. Therefore, we may lose future business to
competitors with available capacity.
  Our goodwill and other intangible assets could become impaired, which could require us to take
non-cash charges against earnings.
   As part of our ongoing evaluation of our operations, we may undertake additional restructuring
efforts in the future which could in some instances result in significant severance-related costs,
environmental remediation expenses and impairment and other restructuring charges.
  
    
    the relocation of our North American headquarters from Cleveland, Ohio to Atlanta,
Georgia;
    
    the shutdown of our Aratu facility located in Candeias, Brazil; and
    
    the cessation of foil rolling activities and part of the packaging business at our
facility located in Bridgnorth, U.K.
  We may not be able to successfully develop and implement new technology initiatives in a timely
manner.
  Loss of our key management and other personnel, or an inability to attract such management and
other personnel, could adversely impact our business.
  22




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Future acquisitions or divestitures may adversely affect our financial condition.
  Capital investments in debottlenecking or other organic growth initiatives may not produce the
returns we anticipate.
  We could be required to make unexpected contributions to our defined benefit pension plans as a
result of adverse changes in interest rates and the capital markets.
   We face risks relating to certain joint ventures and subsidiaries that we do not entirely control.
Our ability to access cash from these entities may be more restricted than if these entities were
wholly-owned subsidiaries.
  Hindalco and its interests as equity holder may conflict with the interests of the holders of our
senior notes in the future.
  23




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If we are unable to obtain sufficient quantities of primary aluminum, recycled aluminum, sheet
ingot and other raw materials used in the production of our products, our ability to produce and
deliver products or to manufacture products on a timely basis could be adversely affected.
    We face significant price and other forms of competition from other aluminum rolled products
producers, which could hurt our results of operations and cash flows.
    The end-use markets for certain of our products are highly competitive and customers are willing
to accept substitutes for our products.
  24




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The seasonal nature of some of our customers industries could have a negative effect on our
financial results and cash flows.
  We are subject to a broad range of environmental, health and safety laws and regulations, and we
may be exposed to substantial environmental, health and safety costs and liabilities.
      25




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We may be exposed to significant legal proceedings or investigations.
  Product liability claims against us could result in significant costs or negatively impact our
reputation and could adversely affect our business results and financial condition.
  We may be affected by global climate change or by legal, regulatory, or market responses to such
change.
  We may see increased costs arising from health care reform.
  Income tax payments may ultimately differ from amounts currently recorded by the Company. Future
tax law changes may materially increase the Companys prospective income tax expense.
  26




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If we fail to maintain effective internal control over financial reporting, we may have material
misstatements in our financial statements and we may not be able to report our financial results
in a timely manner.
  Our substantial indebtedness could adversely affect our business.
  
    
    limiting our ability to borrow additional amounts for working capital, capital
expenditures or other general corporate purposes;
    
    increasing our vulnerability to general adverse economic and industry conditions,
including volatility in LME prices;
    
    limiting our ability to capitalize on business opportunities and to react to competitive
pressures and adverse changes in government regulation; and
    
    limiting our ability or increasing the costs to refinance indebtedness.
 The covenants in our senior secured credit facilities and the indentures governing our Senior
Notes impose operating and financial restrictions on us.
  
    
    incur additional debt and provide additional guarantees;
    
    pay dividends and make other restricted payments, including certain investments;
    
    create or permit certain liens;
    
    make certain asset sales;
    
    use the proceeds from the sales of assets and subsidiary stock;
    
    create or permit restrictions on the ability of our restricted subsidiaries to pay
dividends or make other distributions to us;
    
    engage in certain transactions with affiliates;
 27




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
    
    enter into sale and leaseback transactions; and
    
    consolidate, merge or transfer all or substantially all of our assets or the assets of
our restricted subsidiaries.
   
 Item 1B. Unresolved Staff Comments
  28




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Item 2. Properties
  Operating
    
    
    ResearchFacilities
    
    
    FacilitiesNorth America
    
    
    11
    
    
    
    3Europe
    
    
    13
    
    
    
    3South America
    
    
    3
    
    
    
    Asia
    
    
    3
    
    
    
    1Total
    
    
    30
    
    
    
    7
  North America
 Location
    
    Plant Processes
    
    Major End-Use MarketsBerea, Kentucky
    
    Recycling
    
    Recycled ingotBurnaby, British Columbia
    
    Finishing
    
    Foil containersFairmont, West Virginia
    
    Cold rolling, finishing
    
    Foil, HVAC materialGreensboro, Georgia
    
    Recycling
    
    Recycled ingotKingston, Ontario
    
    Cold rolling, finishing
    
    Automotive, construction/industrialRussellville, Kentucky(A)
    
    Hot rolling, cold rolling, finishing, recycling
    
    Can stockOswego, New York
    
    Novelis Fusion(tm) casting, hot
rolling, cold rolling, recycling, brazing,
finishing
    
    Can stock,
construction/industrial,
semi-finished coilSaguenay, Quebec
    
    Continuous casting, recycling
    
    Semi-finished coilTerre Haute, Indiana
    
    Cold rolling, finishing
    
    FoilToronto, Ontario
    
    Finishing
    
    Foil, foil containersWarren, Ohio
    
    Coating
    
    Can end stock
 
 (A)
    
    We own 40% of the outstanding common shares of Logan Aluminum Inc.
(Logan), but we have made subsequent equipment investments such that
our portion of Logans total machine hours has provided us
approximately 55% of Logans total production.    29




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##### Table of Contents



Europe
 Location
    
    Plant Processes
    
    Major End-Use MarketsBerlin, Germany
    
    Converting
    
    PackagingBresso, Italy
    
    Finishing, painting
    
    Painted sheet, architecturalBridgnorth, U.K.(A)
    
    Foil rolling, finishing, converting
    
    Foil, packagingDudelange, Luxembourg
    
    Continuous casting, foil rolling, finishing
    
    FoilGöttingen, Germany
    
    Cold rolling, finishing, painting
    
    Can end, can tab, food can,
lithographic, painted sheetLatchford, U.K.
    
    Recycling
    
    Sheet ingot from recycled metalLudenscheid, Germany
    
    Foil rolling, finishing, converting
    
    Foil, packagingNachterstedt, Germany
    
    Cold rolling, finishing, painting
    
    Automotive, can end,
industrial, painted sheet,
architecturalNorf, Germany(B)
    
    Hot rolling, cold rolling
    
    Can stock, foilstock, feeder
stock for finishing operationsOhle, Germany
    
    Cold rolling, finishing, converting
    
    Foil, packagingPieve, Italy
    
    Continuous casting, cold rolling, finishing
    
    Coil for Bresso, industrialRugles, France
    
    Continuous casting, foil rolling, finishing
    
    FoilSierre, Switzerland(C)
    
    Novelis Fusion(tm) casting, hot
rolling, cold rolling, finishing
    
    Automotive sheet, industrial
 
 (A)
    
    On March 1, 2011, we announced the sale of our printed confectionery foil packaging
business at Bridgnorth, UK. The transaction is associated with the previously
announced closure of the Bridgnorth aluminum foil rolling and laminating activities,
which ceased operations at the end of April 2011.(B)
    
    Operated as a 50/50 joint venture between us and Hydro Aluminum Deutschland GmbH (Hydro).(C)
    
    We have entered into an agreement with Rio Tinto Alcan pursuant to which Rio Tinto Alcan
retains access to the plate production capacity, which represents a significant portion
of the total production capacity of the Sierre hot mill.    30




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Asia
 Location
    
    Plant Processes
    
    Major End-Use MarketsBukit Raja, Malaysia(A)
    
    Continuous casting, cold rolling, coating
    
    Construction/industrial,
heavy and light gauge
foilsUlsan, Korea(B)
    
    Novelis Fusion(tm) casting, hot
rolling, cold rolling, recycling, finishing
    
    Can stock,
construction/industrial,
electronics, foilstock,
and recycled materialYeongju, Korea(C)
    
    Hot rolling, cold rolling, recycling, finishing
    
    Can stock,
construction/industrial,
electronics, foilstock
and recycled material
 
 (A)
    
    Ownership of the Bukit Raja plant corresponds to our 59% equity interest in Aluminium Company of Malaysia Berhad.(B)
    
    We hold a 68% equity interest in the Ulsan plant.(C)
    
    We hold a 68% equity interest in the Yeongju plant.     South America
 Location
    
    Plant Processes
    
    Major End-Use MarketsPindamonhangaba, Brazil
    
    Hot rolling, cold
rolling, recycling,
finishing
    
    Construction/industrial, can
stock, foilstock, recycled
ingotUtinga, Brazil
    
    Foil rolling, finishing
    
    FoilOuro Preto, Brazil(A)
    
    Smelting
    
    Primary aluminum (sheet ingot
and billets)Aratu, Brazil(B)
    
    Smelting
    
    Primary aluminum (sheet ingot)
 
 (A)
    
    In May 2009, we ceased the production of commercial grade alumina at our Ouro Preto facility in Brazil.(B)
    
    In December 2010, we closed our Aratu facility in Brazil. 31




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Item 3. Legal Proceedings
  32




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##### Table of Contents



PART II
 
 Item 5. Market for Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
    
 Item 6. Selected Financial Data
   May 16,
    
    
    
    April 1,
    
    
    Three2007
    
    
    
    2007
    
    
    MonthsYear Ended
    
    
    Through
    
    
    
    Through
    
    
    Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,
    
    
    
    May 15,
    
    
    March 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2009
    
    
    2008(A)
    
    
    
    2007(A)
    
    
    2007(B)
    
    
    2006Successor
    
    
    Successor
    
    
    Successor
    
    
    Successor
    
    
    
    Predecessor
    
    
    Predecessor
    
    
    PredecessorNet sales
    
    $
    10,577
    
    
    $
    8,673
    
    
    $
    10,177
    
    
    $
    9,965
    
    
    
    $
    1,281
    
    
    $
    2,630
    
    
    $
    9,849Net income (loss)
attributable to our
common
shareholder(C)
    
    $
    116
    
    
    $
    405
    
    
    $
    (1,910
    )
    
    $
    (53
    )
    
    
    $
    (97
    )
    
    $
    (64
    )
    
    $
    (275
    )Return of capital
per common share(D)
    
    $
    1,700,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.20
 March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,
    
    
    
    March 31,
    
    
    December 31,2011
    
    
    2010
    
    
    2009
    
    
    2008
    
    
    
    2007
    
    
    2006Successor
    
    
    Successor
    
    
    Successor
    
    
    Successor
    
    
    
    Predecessor
    
    
    PredecessorTotal assets(A)
    
    $
    8,296
    
    
    $
    7,762
    
    
    $
    7,567
    
    
    $
    10,737
    
    
    
    $
    5,970
    
    
    $
    5,792Long-term debt (including
current portion)
    
    $
    4,086
    
    
    $
    2,596
    
    
    $
    2,559
    
    
    $
    2,575
    
    
    
    $
    2,300
    
    
    $
    2,302Short-term borrowings
    
    $
    17
    
    
    $
    75
    
    
    $
    264
    
    
    $
    115
    
    
    
    $
    245
    
    
    $
    133Cash and cash equivalents
    
    $
    311
    
    
    $
    437
    
    
    $
    248
    
    
    $
    326
    
    
    
    $
    128
    
    
    $
    73Shareholders/invested equity
    
    $
    445
    
    
    $
    1,869
    
    
    $
    1,419
    
    
    $
    3,490
    
    
    
    $
    175
    
    
    $
    195
 
 (A)
    
    On May 15, 2007, the Company was acquired by Hindalco through its indirect
wholly-owned subsidiary. Our acquisition by Hindalco was recorded in accordance with
Staff Accounting Bulletin No. 103, Push Down Basis of Accounting Required in Certain
Limited Circumstances(SAB 103). In the accompanying consolidated balance sheets,
the consideration and related costs paid by Hindalco in connection with the
acquisition have been pushed down to us and have been allocated to the assets
acquired and liabilities assumed in accordance with Financial Accounting Standards
Board (FASB) Statement No. 141, 33




---



##### Table of Contents



Business Combinations(FASB 141), the applicable accounting standard at the
Arrangement date. Due to the impact of push down accounting, the Companys selected
financial data for the year ended March 31, 2008 are presented in two distinct
periods to indicate the application of two different bases of accounting between the
periods presented: (1) the period up to, and including, the acquisition date (April
1, 2007 through May 15, 2007, labeled Predecessor) and (2) the period after that
date (May 16, 2007 through March 31, 2008, labeled Successor). The table above
includes a black line division which indicates that the Predecessor and Successor
reporting entities shown are not comparable.The consideration paid by Hindalco to acquire Novelis has been pushed down to us and
allocated to the assets acquired and liabilities assumed based on our estimates of
fair value, using methodologies and assumptions that we believe are reasonable. This
allocation of fair value results in additional charges or income to our
post-acquisition consolidated statements of operations.(B)
    
    On June 26, 2007, our board of directors approved the change of our fiscal year end
to March 31 from December 31. On June 28, 2007, we filed a Transition Report on Form
10-Q for the three month period ended March 31, 2007 with the United States
Securities and Exchange Commission (SEC) pursuant to Rule 13a-10 under the
Securities Exchange Act of 1934 for transition period reporting.(C)
    
    Net income (loss) attributable to our common shareholder for the year ended March
31, 2009 includes non-cash pre-tax impairment charges of $1.5 billion, and certain
non-recurring expenses that were incurred related to the acquisition by Hindalco.
The three months ended March 31, 2007 and the period May 16, 2007 through March 31,
2008 each include $32 million of sales transaction fees. The period May 16, 2007
through March 31, 2008 also includes $45 million of stock compensation expense
related to the Arrangement.(D)
    
    On December 17, 2010, we paid $1.7 billion to our shareholder as a return of capital. 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW AND REFERENCES
   BACKGROUND AND BASIS OF PRESENTATION
 Acquisition of Novelis Common Stock
  34




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##### Table of Contents



Amalgamation of AV Aluminum Inc. and Novelis Inc.
   HIGHLIGHTS
  
    
    Net sales for fiscal 2011 were $10.6 billion, an increase of 22% compared to net sales
of $8.7 billion reported for fiscal 2010. Shipments of flat rolled products totaled 2,969
kt in fiscal 2011, an increase of 10% compared to shipments of 2,708 kt in fiscal 2010,
which reflects strong demand across all our regions in fiscal 2011. Additionally, average
London Metal Exchange (LME) aluminum prices for fiscal 2011 increased 21% as compared to
fiscal 2010.
    
    We reported a pre-tax income of $243 million for fiscal 2011, which includes $84
million of loss on extinguishment of our debt and $64 million of unrealized losses on
derivatives. Current year results also include $34 million of restructuring expenses. Net
income attributable to our common shareholder for fiscal 2011 was $116 million.
    
    We reported pre-tax income of $727 million for fiscal 2010, which includes $578 million
of unrealized gains on derivatives. Prior year results also include $14 million of
restructuring expenses. Net income attributable to our common shareholder for fiscal 2010
was $405 million.
    
    Operating cash flow for fiscal 2011 was strong and we ended the year with $1.1 billion
of liquidity and $311 million of cash on hand at March 31, 2011. We had $1.0 billion of
liquidity and $437 million of cash on hand as of March 31, 2010. Our relatively stable
liquidity and cash position were attained in light of refinancing transactions to raise
$4.8 billion in debt funding and returning $1.7 billion in capital to our shareholder.
 BUSINESS AND INDUSTRY CLIMATE
  35




---



##### Table of Contents



Key Sales and Shipment Trends
 (In millions, except Shipments which are in kt)
 Year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    YearThree Months Ended
    
    
    Ended
    
    
    Three Months Ended
    
    
    EndedJune 30,
    
    
    Sept 30,
    
    
    Dec 31,
    
    
    March 31,
    
    
    March 31,
    
    
    June 30,
    
    
    Sept 30,
    
    
    Dec 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2009
    
    
    2009
    
    
    2010
    
    
    2010
    
    
    2010
    
    
    2010
    
    
    2010
    
    
    2011
    
    
    2011(Successor)Net sales
    
    $
    1,960
    
    
    $
    2,181
    
    
    $
    2,112
    
    
    $
    2,420
    
    
    $
    8,673
    
    
    $
    2,533
    
    
    $
    2,524
    
    
    $
    2,560
    
    
    $
    2,960
    
    
    $
    10,577% increase (decrease) in
net sales versus
comparable previous year
period
    
    
    (37
    )%
    
    
    (26
    )%
    
    
    (3
    )%
    
    
    25
    %
    
    
    (15
    )%
    
    
    29
    %
    
    
    16
    %
    
    
    21
    %
    
    
    22
    %
    
    
    22
    %Rolled product shipments:North America
    
    
    254
    
    
    
    258
    
    
    
    243
    
    
    
    274
    
    
    
    1,029
    
    
    
    278
    
    
    
    285
    
    
    
    262
    
    
    
    280
    
    
    
    1,105Europe
    
    
    185
    
    
    
    203
    
    
    
    188
    
    
    
    227
    
    
    
    803
    
    
    
    232
    
    
    
    227
    
    
    
    208
    
    
    
    240
    
    
    
    907Asia
    
    
    130
    
    
    
    139
    
    
    
    134
    
    
    
    129
    
    
    
    532
    
    
    
    146
    
    
    
    134
    
    
    
    148
    
    
    
    152
    
    
    
    580South America
    
    
    81
    
    
    
    93
    
    
    
    84
    
    
    
    86
    
    
    
    344
    
    
    
    90
    
    
    
    91
    
    
    
    97
    
    
    
    99
    
    
    
    377Total
    
    
    650
    
    
    
    693
    
    
    
    649
    
    
    
    716
    
    
    
    2,708
    
    
    
    746
    
    
    
    737
    
    
    
    715
    
    
    
    771
    
    
    
    2,969Beverage and food cans
    
    
    396
    
    
    
    407
    
    
    
    371
    
    
    
    406
    
    
    
    1,580
    
    
    
    425
    
    
    
    429
    
    
    
    424
    
    
    
    453
    
    
    
    1,731All other rolled products
    
    
    254
    
    
    
    286
    
    
    
    278
    
    
    
    310
    
    
    
    1,128
    
    
    
    321
    
    
    
    308
    
    
    
    291
    
    
    
    318
    
    
    
    1,238Total
    
    
    650
    
    
    
    693
    
    
    
    649
    
    
    
    716
    
    
    
    2,708
    
    
    
    746
    
    
    
    737
    
    
    
    715
    
    
    
    771
    
    
    
    2,969Percentage increase (decrease) in rolled products shipments versus comparable previous year period:North America
    
    
    (11
    )%
    
    
    (12
    )%
    
    
    
    %
    
    
    11
    %
    
    
    (4
    )%
    
    
    9
    %
    
    
    10
    %
    
    
    8
    %
    
    
    2
    %
    
    
    7
    %Europe
    
    
    (32
    )%
    
    
    (20
    )%
    
    
    (5
    )%
    
    
    21
    %
    
    
    (12
    )%
    
    
    25
    %
    
    
    12
    %
    
    
    11
    %
    
    
    6
    %
    
    
    13
    %Asia
    
    
    (2
    )%
    
    
    14
    %
    
    
    26
    %
    
    
    50
    %
    
    
    19
    %
    
    
    12
    %
    
    
    (4
    )%
    
    
    10
    %
    
    
    18
    %
    
    
    9
    %South America
    
    
    (7
    )%
    
    
    7
    %
    
    
    (3
    )%
    
    
    1
    %
    
    
    (1
    )%
    
    
    11
    %
    
    
    (2
    )%
    
    
    15
    %
    
    
    15
    %
    
    
    10
    %Total
    
    
    (16
    )%
    
    
    (8
    )%
    
    
    3
    %
    
    
    18
    %
    
    
    (2
    )%
    
    
    15
    %
    
    
    6
    %
    
    
    10
    %
    
    
    8
    %
    
    
    10
    %Beverage and food cans
    
    
    (5
    )%
    
    
    (2
    )%
    
    
    2
    %
    
    
    12
    %
    
    
    1
    %
    
    
    7
    %
    
    
    5
    %
    
    
    14
    %
    
    
    12
    %
    
    
    10
    %All other rolled products
    
    
    (29
    )%
    
    
    (16
    )%
    
    
    3
    %
    
    
    27
    %
    
    
    (7
    )%
    
    
    26
    %
    
    
    8
    %
    
    
    5
    %
    
    
    3
    %
    
    
    10
    %Total
    
    
    (16
    )%
    
    
    (8
    )%
    
    
    3
    %
    
    
    18
    %
    
    
    (2
    )%
    
    
    15
    %
    
    
    6
    %
    
    
    10
    %
    
    
    8
    %
    
    
    10
    %
 Business Model and Key Concepts
 Conversion Business Model
    36




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##### Table of Contents



LME
  Percent ChangeYear Ended
    
    Year EndedMarch 31, 2011
    
    March 31, 2010Year Ended March 31,
    
    versus
    
    versusLondon Metal Exchange Prices
    
    2011
    
    2010
    
    2009
    
    March 31, 2010
    
    March 31, 2009Aluminum (per metric tonne, and
presented in U.S. dollars):Closing cash price as of beginning of
period
    
    $
    2,288
    
    
    $
    1,366
    
    
    $
    2,935
    
    
    
    67
    %
    
    
    (53
    )%Average cash price during period
    
    $
    2,257
    
    
    $
    1,866
    
    
    $
    2,227
    
    
    
    21
    %
    
    
    (16
    )%Closing cash price as of end of period
    
    $
    2,600
    
    
    $
    2,288
    
    
    $
    1,366
    
    
    
    14
    %
    
    
    67
    %
  Metal Derivative Instruments
    Metal Price Ceilings
   37




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##### Table of Contents



Foreign Exchange Impact
  Exchange Rate as of
    
    Average Exchange RateMarch 31,
    
    Year Ended March 31,2011
    
    2010
    
    2009
    
    2011
    
    2010
    
    2009U.S. dollar per Euro
    
    
    1.419
    
    
    
    1.353
    
    
    
    1.328
    
    
    
    1.325
    
    
    
    1.414
    
    
    
    1.411Brazilian real per U.S. dollar
    
    
    1.627
    
    
    
    1.784
    
    
    
    2.301
    
    
    
    1.718
    
    
    
    1.861
    
    
    
    1.982South Korean won per U.S. dollar
    
    
    1,107
    
    
    
    1,131
    
    
    
    1,337
    
    
    
    1,151
    
    
    
    1,213
    
    
    
    1,221Canadian dollar per U.S. dollar
    
    
    0.971
    
    
    
    1.014
    
    
    
    1.258
    
    
    
    1.021
    
    
    
    1.085
    
    
    
    1.134
      38




---



##### Table of Contents



Results of Operations
 Year Ended March 31, 2011 Compared with the Year Ended March 31, 2010
     
    
    $64 million of losses on unrealized derivatives for the year ended March 31, 2011
compared to $578 million of gains for the year ended March 31, 2010
    
    $84 million of loss on early extinguishment of debt related to the refinancing of our
Term Loan facility, our 7.25% Notes and our 11.5% Notes during the year ended March 31,
2011
    
    $34 million of net restructuring charges for the year ended March 31, 2011 primarily as
a result of the move of our North American headquarters to Atlanta, Georgia and the
announced shutdowns of our Bridgnorth, UK and Aratu, Brazil facilities, as compared to $14
million of restructuring charges for the same period in the prior year
    
    foreign exchange gains of $1 million as compared to gains of $15 million in the same
period in the prior year.
  Segment Review
   39




---



##### Table of Contents



Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    SouthYear Ended March 31, 2011
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,922
    
    
    $
    3,589
    
    
    $
    1,866
    
    
    $
    1,214
    
    
    $
    (14
    )
    
    $
    10,577Shipments:Rolled products
    
    
    1,105
    
    
    
    907
    
    
    
    580
    
    
    
    377
    
    
    
    
    
    
    
    2,969Ingot products
    
    
    16
    
    
    
    69
    
    
    
    1
    
    
    
    42
    
    
    
    
    
    
    
    128Total shipments
    
    
    1,121
    
    
    
    976
    
    
    
    581
    
    
    
    419
    
    
    
    
    
    
    
    3,097
 Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    SouthYear Ended March 31, 2010
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,292
    
    
    $
    2,975
    
    
    $
    1,501
    
    
    $
    948
    
    
    $
    (43
    )
    
    $
    8,673Shipments:Rolled products
    
    
    1,029
    
    
    
    803
    
    
    
    532
    
    
    
    344
    
    
    
    
    
    
    
    2,708Ingot products
    
    
    34
    
    
    
    81
    
    
    
    2
    
    
    
    29
    
    
    
    
    
    
    
    146Total shipments
    
    
    1,063
    
    
    
    884
    
    
    
    534
    
    
    
    373
    
    
    
    
    
    
    
    2,854
  North
    
    
    
    
    
    
    
    
    
    
    SouthChanges in Segment Income
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    TotalSegment income  year ended March 31, 2010
    
    $
    292
    
    
    $
    212
    
    
    $
    154
    
    
    $
    97
    
    
    $
    755Volume
    
    
    59
    
    
    
    64
    
    
    
    22
    
    
    
    24
    
    
    
    169Conversion premium and product mix
    
    
    26
    
    
    
    22
    
    
    
    36
    
    
    
    36
    
    
    
    120Conversion costs(A)
    
    
    51
    
    
    
    (15
    )
    
    
    (21
    )
    
    
    8
    
    
    
    23Metal price lag
    
    
    (7
    )
    
    
    42
    
    
    
    15
    
    
    
    11
    
    
    
    61Foreign exchange
    
    
    (20
    )
    
    
    (16
    )
    
    
    29
    
    
    
    (21
    )
    
    
    (28
    )Primary metal production
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    5Other changes(B)
    
    
    (19
    )
    
    
    4
    
    
    
    (10
    )
    
    
    (8
    )
    
    
    (33
    )Segment income  year ended March 31, 2011
    
    $
    382
    
    
    $
    313
    
    
    $
    225
    
    
    $
    152
    
    
    $
    1,072
 
 (A)
    
    Conversion costs include expenses incurred in production such as direct and indirect
labor, energy, freight, scrap usage, alloys and hardeners, coatings, alumina, melt loss, the
incremental benefit of used beverage cans (UBCs) and other alternative scrap metal costs.
Fluctuations in this component reflect cost efficiencies during the period as well as cost
inflation (deflation).(B)
    
    Other changes include selling, general & administrative costs and research and development
for all segments and certain other items which impact one or more regions, including such
items as the impact of purchase accounting and metal price ceiling contracts. Significant
fluctuations in these items are discussed below. 40




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##### Table of Contents



North America
    Europe
    Asia
    41




---



##### Table of Contents



South America
    Reconciliation of segment results to Net income attributable to our common shareholder
  Year Ended March 31,2011
    
    
    2010North America
    
    $
    382
    
    
    $
    292Europe
    
    
    313
    
    
    
    212Asia
    
    
    225
    
    
    
    154South America
    
    
    152
    
    
    
    97Total Segment income
    
    
    1,072
    
    
    
    755Depreciation and amortization
    
    
    (404
    )
    
    
    (384
    )Interest expense and amortization of debt issuance costs
    
    
    (207
    )
    
    
    (175
    )Interest income
    
    
    13
    
    
    
    11Unrealized gains (losses) on change in fair value of derivative instruments, net
    
    
    (64
    )
    
    
    578Realized gains on derivative instruments not included in segment income
    
    
    5
    
    
    
    Adjustment to eliminate proportional consolidation
    
    
    (45
    )
    
    
    (52
    )Loss on extinguishment of debt
    
    
    (84
    )
    
    
    Restructuring charges, net
    
    
    (34
    )
    
    
    (14
    )Other costs, net
    
    
    (9
    )
    
    
    8Income (loss) before income taxes
    
    
    243
    
    
    
    727Income tax provision (benefit)
    
    
    83
    
    
    
    262Net income (loss)
    
    
    160
    
    
    
    465Net income (loss) attributable to noncontrolling interests
    
    
    44
    
    
    
    60Net income (loss) attributable to our common shareholder
    
    $
    116
    
    
    $
    405
     42




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##### Table of Contents




    
    Our functional currency in Brazil is the U.S. dollar where the company holds significant
U.S. dollar denominated debt. As the value of the local currency strengthens or weakens
against the U.S. dollar, unrealized gains or losses are created for tax purposes, while the
underlying gains or losses are not recorded in our income statement.
    
    We have significant net deferred tax liabilities in Brazil that are remeasured to account
for currency fluctuations as the taxes are payable in local currency.
    
    Our income is taxed at various statutory tax rates in varying jurisdictions. Applying the
corresponding amounts of income and loss to the various tax rates results in differences
when compared to our Canadian statutory tax rate.
    
    We record increases and decreases to valuation allowances primarily related to tax losses
in certain jurisdictions where we believe it is more likely than not that we will not be
able to utilize those losses.
   43




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##### Table of Contents



Year Ended March 31, 2010 Compared with the Year Ended March 31, 2009
    Segment Review
   Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    SouthYear Ended March 31, 2010
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,292
    
    
    $
    2,975
    
    
    $
    1,501
    
    
    $
    948
    
    
    $
    (43
    )
    
    $
    8,673Shipments (kt)Rolled products
    
    
    1,029
    
    
    
    803
    
    
    
    532
    
    
    
    344
    
    
    
    
    
    
    
    2,708Ingot products
    
    
    34
    
    
    
    81
    
    
    
    2
    
    
    
    29
    
    
    
    
    
    
    
    146Total shipments
    
    
    1,063
    
    
    
    884
    
    
    
    534
    
    
    
    373
    
    
    
    
    
    
    
    2,854
 44




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##### Table of Contents



Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    SouthYear Ended March 31, 2009
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,930
    
    
    $
    3,718
    
    
    $
    1,536
    
    
    $
    1,007
    
    
    $
    (14
    )
    
    $
    10,177Shipments (kt)Rolled products
    
    
    1,067
    
    
    
    910
    
    
    
    447
    
    
    
    346
    
    
    
    
    
    
    
    2,770Ingot products
    
    
    42
    
    
    
    99
    
    
    
    13
    
    
    
    19
    
    
    
    
    
    
    
    173Total shipments
    
    
    1,109
    
    
    
    1,009
    
    
    
    460
    
    
    
    365
    
    
    
    
    
    
    
    2,943
  North
    
    
    
    
    
    
    
    
    
    
    SouthChanges in Segment Income
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    TotalSegment income  year ended
March 31, 2009
    
    $
    60
    
    
    $
    214
    
    
    $
    79
    
    
    $
    132
    
    
    $
    485Volume:Rolled products
    
    
    (26
    )
    
    
    (104
    )
    
    
    34
    
    
    
    2
    
    
    
    (94
    )Other
    
    
    4
    
    
    
    2
    
    
    
    (2
    )
    
    
    2
    
    
    
    6Conversion premium and product mix
    
    
    78
    
    
    
    58
    
    
    
    40
    
    
    
    54
    
    
    
    230Conversion costs(A)
    
    
    75
    
    
    
    54
    
    
    
    40
    
    
    
    6
    
    
    
    175Metal price lag
    
    
    73
    
    
    
    (49
    )
    
    
    (82
    )
    
    
    3
    
    
    
    (55
    )Foreign exchange
    
    
    27
    
    
    
    27
    
    
    
    48
    
    
    
    (30
    )
    
    
    72Other changes(B)
    
    
    1
    
    
    
    10
    
    
    
    (3
    )
    
    
    (72
    )
    
    
    (64
    )Segment income  year ended
March 31, 2010
    
    $
    292
    
    
    $
    212
    
    
    $
    154
    
    
    $
    97
    
    
    $
    755
 
 (A)
    
    Conversion costs include expenses incurred in production such as
direct and indirect labor, energy, freight, scrap usage, alloys and
hardeners, coatings, alumina and melt loss. Fluctuations in this
component reflect cost efficiencies during the period as well as cost
inflation (deflation).(B)
    
    Other changes include selling, general & administrative costs and
research and development for all segments and certain other items
which impact one or more regions, including such items as the impact
of purchase accounting and metal price ceiling contracts. Significant
fluctuations in these items are discussed below. North America
     45




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Europe
     Asia
     46




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##### Table of Contents



South America
    Reconciliation of segment results to Net income
  Year Ended March 31,2010
    
    
    2009North America
    
    $
    292
    
    
    $
    60Europe
    
    
    212
    
    
    
    214Asia
    
    
    154
    
    
    
    79South America
    
    
    97
    
    
    
    132Total Segment income
    
    
    755
    
    
    
    485Depreciation and amortization
    
    
    (384
    )
    
    
    (439
    )Interest expense and amortization of debt issuance costs
    
    
    (175
    )
    
    
    (182
    )Interest income
    
    
    11
    
    
    
    14Unrealized gains (losses) on change in fair value of derivative instruments, net
    
    
    578
    
    
    
    (519
    )Impairment of goodwill
    
    
    
    
    
    
    (1,340
    )Gain on extinguishment of debt
    
    
    
    
    
    
    122Restructuring charges, net
    
    
    (14
    )
    
    
    (95
    )Adjustment to eliminate proportional consolidation
    
    
    (52
    )
    
    
    (225
    )Other costs, net
    
    
    8
    
    
    
    11Income (loss) before income taxes
    
    
    727
    
    
    
    (2,168
    )Income tax provision (benefit)
    
    
    262
    
    
    
    (246
    )Net income (loss)
    
    
    465
    
    
    
    (1,922
    )Net income (loss) attributable to noncontrolling interests
    
    
    60
    
    
    
    (12
    )Net income (loss) attributable to our common shareholder
    
    $
    405
    
    
    $
    (1,910
    )
   47




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
    
    Our functional currency in Canada and Brazil is the U.S. dollar and the company holds
significant U.S. dollar denominated debt in these locations. As the value of the local
currencies strengthens and weakens against the U.S. dollar, unrealized gains or losses are
created in those locations for tax purposes, while the underlying gains or losses are not
recorded in our income statement.
    
    During fiscal 2009, Canadian legislation was enacted allowing us to elect to determine
our Canadian taxable income in U.S. dollars. Our election was effective April 1, 2008, and
such U.S. dollar taxable gains and losses no longer exist in Canada as of that date.
    
    We have significant net deferred tax liabilities in Brazil that are remeasured to account
for currency fluctuations as the taxes are payable in local currency.
    
    Our income is taxed at various statutory tax rates in varying jurisdictions. Applying the
corresponding amounts of income and loss to the various tax rates results in differences
when compared to our Canadian statutory tax rate.
    
    We record increases and decreases to valuation allowances primarily related to tax losses
in certain jurisdictions where we believe it is more likely than not that we will not be
able to utilize those losses.
 48




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Liquidity and Capital Resources
  Available Liquidity
  March 31,2011
    
    
    2010Cash and cash equivalents
    
    $
    311
    
    
    $
    437Overdrafts
    
    
    (17
    )
    
    
    (14
    )Availability under the ABL facility
    
    
    767
    
    
    
    603Total estimated liquidity
    
    $
    1,061
    
    
    $
    1,026
  Free cash flow
  49




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##### Table of Contents



Change2011
    
    
    2010Year Ended March 31,
    
    
    versus
    
    
    versus2011
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net cash provided by (used in)
operating activities
    
    $
    454
    
    
    $
    844
    
    
    $
    (220
    )
    
    $
    (390
    )
    
    $
    1,064Net cash provided by (used in)
investing activities
    
    
    (113
    )
    
    
    (484
    )
    
    
    (127
    )
    
    
    371
    
    
    
    (357
    )Less: Proceeds from sales of assets
    
    
    (31
    )
    
    
    (5
    )
    
    
    (5
    )
    
    
    (26
    )
    
    
    Free cash flow
    
    $
    310
    
    
    $
    355
    
    
    $
    (352
    )
    
    $
    (45
    )
    
    $
    707Ending cash and cash equivalents
    
    $
    311
    
    
    $
    437
    
    
    $
    248
    
    
    $
    (126
    )
    
    $
    189
   Operating Activities
     50




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##### Table of Contents



Investing Activities
  Change2011
    
    
    2010Year Ended March 31,
    
    
    versus
    
    
    versus2011
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Capital expenditures
    
    $
    (234
    )
    
    $
    (101
    )
    
    $
    (145
    )
    
    $
    (133
    )
    
    $
    44Net proceeds (outflow) from settlement of derivative instruments
    
    
    91
    
    
    
    (395
    )
    
    
    (24
    )
    
    
    486
    
    
    
    (371
    )Proceeds from sales of assets
    
    
    31
    
    
    
    5
    
    
    
    5
    
    
    
    26
    
    
    
    Changes to investment in and advances to non-consolidated affiliates
    
    
    
    
    
    
    3
    
    
    
    20
    
    
    
    (3
    )
    
    
    (17
    )Proceeds (outflow) from related parties loans receivable, net
    
    
    (1
    )
    
    
    4
    
    
    
    17
    
    
    
    (5
    )
    
    
    (13
    )Net cash used in investing activities
    
    $
    (113
    )
    
    $
    (484
    )
    
    $
    (127
    )
    
    $
    371
    
    
    $
    (357
    )
     Financing Activities
  Change2011
    
    
    2010Year Ended March 31,
    
    
    versus
    
    
    versus2011
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Proceeds from issuance of debt, third parties
    
    $
    3,985
    
    
    $
    177
    
    
    $
    263
    
    
    $
    3,808
    
    
    $
    (86
    )Proceeds from issuance of debt, related parties
    
    
    
    
    
    
    4
    
    
    
    91
    
    
    
    (4
    )
    
    
    (87
    )Principal repayments, third parties
    
    
    (2,489
    )
    
    
    (67
    )
    
    
    (235
    )
    
    
    (2,422
    )
    
    
    168Principal repayments, related parties
    
    
    
    
    
    
    (95
    )
    
    
    
    
    
    
    95
    
    
    
    (95
    )Short-term borrowings, net
    
    
    (56
    )
    
    
    (193
    )
    
    
    176
    
    
    
    137
    
    
    
    (369
    )Return of capital to our common shareholder
    
    
    (1,700
    )
    
    
    
    
    
    
    
    
    
    
    (1,700
    )
    
    
    Dividends, noncontrolling interest
    
    
    (18
    )
    
    
    (13
    )
    
    
    (6
    )
    
    
    (5
    )
    
    
    (7
    )Debt issuance costs
    
    
    (193
    )
    
    
    (1
    )
    
    
    (3
    )
    
    
    (192
    )
    
    
    2Net cash provided by (used in) financing activities
    
    $
    (471
    )
    
    $
    (188
    )
    
    $
    286
    
    
    $
    (283
    )
    
    $
    (474
    )
  51




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OFF-BALANCE SHEET ARRANGEMENTS
  
    
    any obligation under certain derivative instruments;
    
    any obligation under certain guarantees or contracts;
    
    a retained or contingent interest in assets transferred to an unconsolidated entity or
similar entity or similar arrangement that serves as credit, liquidity or market risk
support to that entity for such assets and
    
    any obligation under a material variable interest held by the registrant in an
unconsolidated entity that provides financing, liquidity, market risk or credit risk support
to the registrant, or engages in leasing, hedging or research and development services with
the registrant.
  Derivative Instruments
  Guarantees of Indebtedness
  52




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Maximum
    
    LiabilityPotential Future
    
    CarryingPayment
    
    ValueWholly-owned Subsidiaries
    
    $
    134
    
    
    $
    63
  Other Arrangements
 Forfaiting of Trade Receivables
  Factoring of Trade Receivables
  Summary Disclosures of Forfaited and Factored Financial Amounts
  Year EndedMarch 31,2011
    
    2010
    
    2009Receivables forfaited
    
    $
    396
    
    
    $
    423
    
    
    $
    570Receivables factored
    
    $
    77
    
    
    $
    149
    
    
    $
    70Forfaiting expense
    
    $
    1
    
    
    $
    2
    
    
    $
    5Factoring expense
    
    $
    1
    
    
    $
    1
    
    
    $
    1
 March 31,2011
    
    2010Forfaited receivables outstanding
    
    $
    52
    
    
    $
    83Factored receivables outstanding
    
    $
    8
    
    
    $
    34
 Other
  CONTRACTUAL OBLIGATIONS
  53




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Less Than
    
    
    
    
    
    
    
    
    
    
    More ThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsDebt(A)
    
    $
    4,078
    
    
    $
    16
    
    
    $
    32
    
    
    $
    106
    
    
    $
    3,924Interest on long-term debt(B)
    
    
    2,354
    
    
    
    285
    
    
    
    856
    
    
    
    757
    
    
    
    456Capital leases(C)
    
    
    63
    
    
    
    8
    
    
    
    14
    
    
    
    14
    
    
    
    27Operating leases(D)
    
    
    138
    
    
    
    24
    
    
    
    38
    
    
    
    32
    
    
    
    44Purchase obligations(E)
    
    
    8,377
    
    
    
    3,759
    
    
    
    2,934
    
    
    
    1,186
    
    
    
    498Unfunded pension plan benefits(F)
    
    
    161
    
    
    
    13
    
    
    
    28
    
    
    
    31
    
    
    
    89Other post-employment benefits(F)
    
    
    125
    
    
    
    8
    
    
    
    18
    
    
    
    23
    
    
    
    76Funded pension plans(F)
    
    
    49
    
    
    
    49
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    15,345
    
    
    $
    4,162
    
    
    $
    3,920
    
    
    $
    2,149
    
    
    $
    5,114
 
 (A)
    
    Includes only principal payments on our Senior Notes, term loans,
revolving credit facilities and notes payable to banks and others.
These amounts exclude payments under capital lease obligations.(B)
    
    Interest on our fixed rate debt is estimated using the stated interest
rate. Interest on our variable-rate debt is estimated using the rate
in effect as of March 31, 2011 and includes the effect of current
interest rate swap agreements. Actual future interest payments may
differ from these amounts based on changes in floating interest rates
or other factors or events. These amounts include an estimate for
unused commitment fees. Excluded from these amounts are interest
related to capital lease obligations, the amortization of debt
issuance and other costs related to indebtedness.(C)
    
    Includes both principal and interest components of future minimum
capital lease payments. Excluded from these amounts are insurance,
taxes and maintenance associated with the property.(D)
    
    Includes the minimum lease payments for non-cancelable leases for
property and equipment used in our operations. We do not have any
operating leases with contingent rents. Excluded from these amounts
are insurance, taxes and maintenance associated with the properties
and equipment.(E)
    
    Includes agreements to purchase goods (including raw materials and
capital expenditures) and services that are enforceable and legally
binding on us, and that specify all significant terms. Some of our raw
material purchase contracts have minimum annual volume requirements.
In these cases, we estimate our future purchase obligations using
annual minimum volumes and costs per unit that are in effect as of
March 31, 2011. Due to volatility in the cost of our raw materials,
actual amounts paid in the future may differ from these amounts.
Excluded from these amounts are the impact of any derivative
instruments and any early contract termination fees, such as those
typically present in energy contracts.(F)
    
    Obligations for postretirement benefit plans are estimated based on
actuarial estimates using benefit assumptions for, among other
factors, discount rates, rates of compensation increases and
healthcare cost trends. Payments for unfunded pension plan benefits
and other post-employment benefits are estimated through 2020. For
funded pension plans, estimating the requirements beyond fiscal 2012
is not practical, as it depends on the performance of the plans
investments, among other factors. RETURN OF CAPITAL
   ENVIRONMENT, HEALTH AND SAFETY
  54




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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   Derivative Financial Instruments
     55




---



##### Table of Contents



Impairment of Goodwill
  March 31, 2011North America
    
    $
    288Europe
    
    
    181South America
    
    
    142$
    611
     56




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##### Table of Contents



Equity Investments
   Impairment of Intangible Assets
 Property, Plant and Equipment.
 Impairment of Long Lived Assets
    57




---



##### Table of Contents



Pension and Other Postretirement Plans
 Compensation  Retirement Benefits (ASC 715).
      58




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Income Taxes
   Income Taxes
  Assessment of Loss Contingencies
   RECENTLY ISSUED ACCOUNTING STANDARDS
  NON-GAAP FINANCIAL MEASURES
  59




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##### Table of Contents




    
    does not reflect the companys cash expenditures or requirements for capital expenditures or capital commitments;
    
    does not reflect changes in, or cash requirements for, the companys working capital needs;
    
    does not reflect any costs related to the current or future replacement of assets being depreciated and amortized.
  
    
    as a measure of operating performance to assist us in comparing our operating
performance on a consistent basis because it removes the impact of items not directly
resulting from our core operations;
    
    for planning purposes, including the preparation of our internal annual operating budgets and financial projections;
    
    to evaluate the performance and effectiveness of our operational strategies; and
    
    as a basis to calculate incentive compensation payments for our key employees.
  60




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    Commodity Price Risks
  Aluminum
    Sensitivities
  Energy
  61




---



##### Table of Contents



Sensitivities
  Change in
    
    Change inPrice
    
    Fair ValueElectricity
    
    
    (10
    )%
    
    $
    (1
    )Natural Gas
    
    
    (10
    )%
    
    
    (3
    )
 Foreign Currency Exchange Risks
     62




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##### Table of Contents



Sensitivities
  Change in
    
    Change inExchange Rate
    
    Fair ValueCurrency measured against the U.S. dollarBrazilian real
    
    
    (10
    )%
    
    $
    (41
    )Euro
    
    
    10
    %
    
    
    (24
    )Korean won
    
    
    (10
    )%
    
    
    (18
    )Canadian dollar
    
    
    (10
    )%
    
    
    (5
    )British pound
    
    
    (10
    )%
    
    
    (7
    )Swiss franc
    
    
    (10
    )%
    
    
    (11
    )
 Interest Rate Risks
   Sensitivities
  Change in
    
    Change inRate
    
    Fair ValueInterest Rate ContractsNorth America
    
    (100) bps
    
    $
    (2
    )
 63




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##### Table of Contents



Item 8.   Financial Statements and Supplementary Data
 TABLE OF CONTENTS
 Report of Independent Registered Public Accounting Firm
    
    
    65Consolidated Statements of Operations
    
    
    66Consolidated Balance Sheets
    
    
    67Consolidated Statements of Cash Flows
    
    
    68Consolidated Statements of Shareholders Equity
    
    
    69Consolidated Statements of Comprehensive Income (Loss)
    
    
    70Notes to the Consolidated Financial Statements
    
    
    71
 64




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
  Internal Control  Integrated Framework
    
 65




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##### Table of Contents



Novelis Inc.    CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions)
 Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Net sales
    
    $
    10,577
    
    
    $
    8,673
    
    
    $
    10,177Cost of goods sold (exclusive of depreciation and amortization)
    
    
    9,227
    
    
    
    7,213
    
    
    
    9,276Selling, general and administrative expenses
    
    
    375
    
    
    
    337
    
    
    
    294Depreciation and amortization
    
    
    404
    
    
    
    384
    
    
    
    439Research and development expenses
    
    
    40
    
    
    
    38
    
    
    
    41Interest expense and amortization of debt issuance costs
    
    
    207
    
    
    
    175
    
    
    
    182Interest income
    
    
    (13
    )
    
    
    (11
    )
    
    
    (14
    )(Gain) loss on change in fair value of derivative instruments, net
    
    
    (43
    )
    
    
    (194
    )
    
    
    556Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    1,340(Gain) loss on extinguishment of debt
    
    
    84
    
    
    
    
    
    
    
    (122
    )Restructuring charges, net
    
    
    34
    
    
    
    14
    
    
    
    95Equity in net loss of non-consolidated affiliates
    
    
    12
    
    
    
    15
    
    
    
    172Other (income) expenses, net
    
    
    7
    
    
    
    (25
    )
    
    
    8610,334
    
    
    
    7,946
    
    
    
    12,345Income (loss) before income taxes
    
    
    243
    
    
    
    727
    
    
    
    (2,168
    )Income tax provision (benefit)
    
    
    83
    
    
    
    262
    
    
    
    (246
    )Net income (loss)
    
    
    160
    
    
    
    465
    
    
    
    (1,922
    )Net income (loss) attributable to noncontrolling interests
    
    
    44
    
    
    
    60
    
    
    
    (12
    )Net income (loss) attributable to our common shareholder
    
    $
    116
    
    
    $
    405
    
    
    $
    (1,910
    )
  66




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Novelis Inc.
 
 CONSOLIDATED BALANCE SHEETS(In millions, except number of shares)
 March 31,2011
    
    
    2010ASSETSCurrent assetsCash and cash equivalents
    
    $
    311
    
    
    $
    437Accounts receivable (net of allowances of $7 and $4 as of March 31, 2011 and 2010, respectively) third parties
    
    
    1,480
    
    
    
    1,143 related parties
    
    
    28
    
    
    
    24Inventories, net
    
    
    1,338
    
    
    
    1,083Prepaid expenses and other current assets
    
    
    50
    
    
    
    39Fair value of derivative instruments
    
    
    165
    
    
    
    197Deferred income tax assets
    
    
    39
    
    
    
    12Total current assets
    
    
    3,411
    
    
    
    2,935Property, plant and equipment, net
    
    
    2,543
    
    
    
    2,632Goodwill
    
    
    611
    
    
    
    611Intangible assets, net
    
    
    707
    
    
    
    749Investment in and advances to non-consolidated affiliates
    
    
    743
    
    
    
    709Fair value of derivative instruments, net of current portion
    
    
    17
    
    
    
    7Deferred income tax assets
    
    
    52
    
    
    
    5Other long-term assets third parties
    
    
    193
    
    
    
    93 related parties
    
    
    19
    
    
    
    21Total assets
    
    $
    8,296
    
    
    $
    7,762LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    21
    
    
    $
    116Short-term borrowings
    
    
    17
    
    
    
    75Accounts payable third parties
    
    
    1,378
    
    
    
    1,076 related parties
    
    
    50
    
    
    
    53Fair value of derivative instruments
    
    
    82
    
    
    
    110Accrued expenses and other current liabilities
    
    
    568
    
    
    
    436Deferred income tax liabilities
    
    
    43
    
    
    
    34Total current liabilities
    
    
    2,159
    
    
    
    1,900Long-term debt, net of current portion
    
    
    4,065
    
    
    
    2,480Deferred income tax liabilities
    
    
    552
    
    
    
    497Accrued postretirement benefits
    
    
    526
    
    
    
    499Other long-term liabilities
    
    
    359
    
    
    
    3767,661
    
    
    
    5,752Commitments and contingenciesShareholders equityCommon stock, no par value; unlimited number of shares authorized; 1,000 shares issued and
outstanding as of March 31, 2011 and 2010, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,830
    
    
    
    3,530Accumulated deficit
    
    
    (1,442
    )
    
    
    (1,558
    )Accumulated other comprehensive income (loss)
    
    
    57
    
    
    
    (103
    )Total equity of our common shareholder
    
    
    445
    
    
    
    1,869Noncontrolling interests
    
    
    190
    
    
    
    141Total equity
    
    
    635
    
    
    
    2,010Total liabilities and equity
    
    $
    8,296
    
    
    $
    7,762
  67




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##### Table of Contents



Novelis Inc.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions)
 Year EndedMarch 31,2011
    
    
    2010
    
    
    2009OPERATING ACTIVITIESNet income (loss)
    
    $
    160
    
    
    $
    465
    
    
    $
    (1,922
    )Adjustments to determine net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    404
    
    
    
    384
    
    
    
    439(Gain) loss on change in fair value of derivative instruments, net
    
    
    (43
    )
    
    
    (194
    )
    
    
    556(Gain) loss on extinguishment of debt
    
    
    84
    
    
    
    
    
    
    
    (122
    )Non-cash restructuring charges, net
    
    
    5
    
    
    
    2
    
    
    
    22Deferred income taxes
    
    
    (45
    )
    
    
    229
    
    
    
    (331
    )Write-off and amortization of fair value adjustments, net
    
    
    4
    
    
    
    (134
    )
    
    
    (233
    )Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    1,340Equity in net loss of non-consolidated affiliates
    
    
    12
    
    
    
    15
    
    
    
    172Foreign exchange remeasurement on debt
    
    
    
    
    
    
    (20
    )
    
    
    26(Gain) loss on sale of assets
    
    
    (4
    )
    
    
    1
    
    
    
    Gain on reversal of accrued legal claim
    
    
    
    
    
    
    (3
    )
    
    
    (26
    )Other, net
    
    
    2
    
    
    
    10
    
    
    
    8Changes in assets and liabilities (net of effects from acquisitions and divestitures):Accounts receivable
    
    
    (295
    )
    
    
    (46
    )
    
    
    73Inventories
    
    
    (218
    )
    
    
    (264
    )
    
    
    466Accounts payable
    
    
    263
    
    
    
    311
    
    
    
    (643
    )Other current assets
    
    
    (8
    )
    
    
    14
    
    
    
    (6
    )Other current liabilities
    
    
    134
    
    
    
    47
    
    
    
    (63
    )Other noncurrent assets
    
    
    (6
    )
    
    
    (15
    )
    
    
    17Other noncurrent liabilities
    
    
    5
    
    
    
    42
    
    
    
    7Net cash provided by (used in) operating activities
    
    
    454
    
    
    
    844
    
    
    
    (220
    )INVESTING ACTIVITIESCapital expenditures
    
    
    (234
    )
    
    
    (101
    )
    
    
    (145
    )Proceeds from sales of assets third parties
    
    
    21
    
    
    
    5
    
    
    
    5 related parties
    
    
    10
    
    
    
    
    
    
    
    Changes to investment in and advances to non-consolidated affiliates
    
    
    
    
    
    
    3
    
    
    
    20Proceeds from related party loans receivable, net
    
    
    (1
    )
    
    
    4
    
    
    
    17Net proceeds from settlement of derivative instruments
    
    
    91
    
    
    
    (395
    )
    
    
    (24
    )Net cash used in investing activities
    
    
    (113
    )
    
    
    (484
    )
    
    
    (127
    )FINANCING ACTIVITIESProceeds from issuance of debt third parties
    
    
    3,985
    
    
    
    177
    
    
    
    263 related parties
    
    
    
    
    
    
    4
    
    
    
    91Principal repayments third parties
    
    
    (2,489
    )
    
    
    (67
    )
    
    
    (235
    ) related parties
    
    
    
    
    
    
    (95
    )
    
    
    Short-term borrowings, net
    
    
    (56
    )
    
    
    (193
    )
    
    
    176Return of capital to our common shareholder
    
    
    (1,700
    )
    
    
    
    
    
    
    Dividends, noncontrolling interest
    
    
    (18
    )
    
    
    (13
    )
    
    
    (6
    )Debt issuance costs
    
    
    (193
    )
    
    
    (1
    )
    
    
    (3
    )Net cash provided by (used in) financing activities
    
    
    (471
    )
    
    
    (188
    )
    
    
    286Net increase (decrease) in cash and cash equivalents
    
    
    (130
    )
    
    
    172
    
    
    
    (61
    )Effect of exchange rate changes on cash balances held in foreign currencies
    
    
    4
    
    
    
    17
    
    
    
    (17
    )Cash and cash equivalents  beginning of period
    
    
    437
    
    
    
    248
    
    
    
    326Cash and cash equivalents  end of period
    
    $
    311
    
    
    $
    437
    
    
    $
    248
  68




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##### Table of Contents



Novelis Inc.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY(In millions, except number of shares)
 Equity of our Common ShareholderAccumulatedRetained
    
    
    OtherAdditional
    
    
    Earnings/
    
    
    Comprehensive
    
    
    Non-Common Stock
    
    
    Paid-in
    
    
    (Accumulated
    
    
    Income (Loss)
    
    
    Controlling
    
    
    TotalShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit)
    
    
    (AOCI)
    
    
    Interests
    
    
    EquityBalance as of March 31, 2008
    
    
    1,398,583
    
    
    
    
    
    
    $
    3,497
    
    
    $
    (53
    )
    
    $
    46
    
    
    $
    149
    
    
    $
    3,639Fiscal 2009 Activity:Net income attributable to our common
shareholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,910
    )
    
    
    
    
    
    
    
    
    
    
    (1,910
    )Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    (12
    )Forgiveness of interest on
intercompany note
    
    
    9,347
    
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23Payment of income taxes by AV Metals
on behalf of Novelis, Inc.
    
    
    4,116
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10Currency translation adjustment, net
of tax of $ in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (122
    )
    
    
    (41
    )
    
    
    (163
    )Change in fair value of effective
portion of hedges, net of tax benefit
of $11 included in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )Postretirement benefit plans:Change in pension and other benefits,
net of tax provision of $31 included
in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (53
    )
    
    
    
    
    
    
    (53
    )Noncontrolling interests cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )Balance as of March 31, 2009
    
    
    1,412,046
    
    
    
    
    
    
    
    3,530
    
    
    
    (1,963
    )
    
    
    (148
    )
    
    
    90
    
    
    
    1,509Fiscal 2010 Activity:Net income attributable to our common
shareholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    405Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    60Share consolidation
    
    
    (1,411,046
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Currency translation adjustment, net
of tax of $ in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54
    
    
    
    21
    
    
    
    75Change in fair value of effective
portion of hedges, net of tax benefit
of $5 included in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Postretirement benefit plans:Change in pension and other benefits,
net of tax provision of $10 included
in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )Noncontrolling interests cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30
    )
    
    
    (30
    )Balance as of March 31, 2010
    
    
    1,000
    
    
    
    
    
    
    
    3,530
    
    
    
    (1,558
    )
    
    
    (103
    )
    
    
    141
    
    
    
    2,010Fiscal 2011 Activity:Net income attributable to our common
shareholder
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116Net income attributable to
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    44Currency translation adjustment, net
of tax provision of $6 in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    111
    
    
    
    6
    
    
    
    117Change in fair value of effective
portion of hedges, net of tax
provision of $27 included in AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    49Postretirement benefit plans:Change in pension and other benefits,
net of tax benefit of $3 included in
AOCI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Return of capital to our common
shareholder
    
    
    
    
    
    
    
    
    
    
    (1,700
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Noncontrolling interests cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (1
    )Balance as of March 31, 2011
    
    
    1,000
    
    
    $
    
    
    
    $
    1,830
    
    
    $
    (1,442
    )
    
    $
    57
    
    
    $
    190
    
    
    $
    635
  69




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##### Table of Contents



Novelis Inc.
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(In millions)
 Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Net income (loss) attributable to our
common shareholder
    
    $
    116
    
    
    $
    405
    
    
    $
    (1,910
    )Other comprehensive income (loss):Currency translation adjustment
    
    
    117
    
    
    
    54
    
    
    
    (122
    )Change in fair value of effective portion of
hedges, net
    
    
    76
    
    
    
    (13
    )
    
    
    (30
    )Postretirement benefit plans:Change in pension and other benefits
    
    
    (3
    )
    
    
    9
    
    
    
    (84
    )Other comprehensive income (loss) before
income tax effect
    
    
    190
    
    
    
    50
    
    
    
    (236
    )Income tax provision (benefit) related to
items of other comprehensive income (loss)
    
    
    30
    
    
    
    5
    
    
    
    (42
    )Other comprehensive income (loss), net of tax
    
    
    160
    
    
    
    45
    
    
    
    (194
    )Comprehensive income (loss) attributable to
our common shareholder
    
    
    276
    
    
    
    450
    
    
    
    (2,104
    )Net income (loss) attributable to
noncontrolling interests
    
    
    44
    
    
    
    60
    
    
    
    (12
    )Other comprehensive income (loss):Currency translation adjustment
    
    
    6
    
    
    
    21
    
    
    
    (41
    )Other comprehensive income (loss), net of tax
    
    
    6
    
    
    
    21
    
    
    
    (41
    )Comprehensive income (loss) attributable to
noncontrolling interests
    
    
    50
    
    
    
    81
    
    
    
    (53
    )Comprehensive income (loss)
    
    $
    326
    
    
    $
    531
    
    
    $
    (2,157
    )
  70




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##### Table of Contents



Novelis Inc.
 
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 1.
    
    BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Organization and Description of Business
  Acquisition of Novelis Common Stock
  Amalgamation of AV Aluminum Inc. and Novelis Inc.
    Consolidation Policy
  71




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Use of Estimates and Assumptions
  Risks and Uncertainties
  Laws and regulations
   72




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Materials and labor
   73




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Geographic markets
  Other risks and uncertainties
  Reclassifications and adjustments
     Revenue recognition
  74




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Cost of goods sold (exclusive of depreciation and amortization)
  Selling, general and administrative expenses
  Cash and cash equivalents
   Accounts receivable
   75




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Derivative Instruments
        Inventories
  76




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Property, plant and equipment
   YearsBuildings
    
    
    30 to 40Leasehold improvements
    
    
    7 to 20Machinery and equipment
    
    
    2 to 25Furniture, fixtures and equipment
    
    
    3 to 10Equipment under capital lease obligations
    
    
    6 to 15
    Leases.
 Goodwill
    77




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Long-Lived Assets and Other Intangible Assets
     Investment in and Advances to Non-Consolidated Affiliates
  Guarantees
  Financing Costs and Interest Income
  Fair Value of Financial Instruments
 Fair Value Measurements and Disclosures Financial Instruments
 78




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Pensions and Postretirement Benefits
    Noncontrolling Interests in Consolidated Affiliates
 Consolidations Transition Related to FASB Statement No. 160, Noncontrolling
Interests in Consolidated Financial Statements  an amendment of ARB No. 51, and No. 164,
Not-for-Profit Entities: Mergers and Acquisitions
   Environmental Liabilities
  79




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Litigation Reserves
  Income Taxes
   Share-Based Compensation
 Compensation Stock Compensation
   80




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Foreign Currency Translation
   Research and Development
  Restructuring Activities
 Exit
or Disposal Cost Obligations
 Customer Directed Derivatives
  Recently Adopted Accounting Standards
 Consolidations: Improvements to Financial Reporting by Enterprises Involved with
Variable Interest Entities. Transfers and Servicing: Accounting for Transfers of Financial Assets
 Recently Issued Accounting Standards
  81




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2.   RESTRUCTURING PROGRAMS
  North
    
    
    
    
    
    
    South
    
    
    
    
    
    
    RestructuringEurope
    
    
    America
    
    
    Asia
    
    
    America
    
    
    Corporate
    
    
    ReservesBalance as of March 31, 2008
    
    $
    20
    
    
    $
    4
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    24Fiscal 2009 Activity:Provisions, net
    
    
    53
    
    
    
    16
    
    
    
    1
    
    
    
    2
    
    
    
    1
    
    
    
    73Cash payments
    
    
    (8
    )
    
    
    (5
    )
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )Impact of exchange rate changes
    
    
    (4
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Balance as of March 31, 2009
    
    
    61
    
    
    
    16
    
    
    
    
    
    
    
    2
    
    
    
    1
    
    
    
    80Fiscal 2010 Activity:Provisions, net
    
    
    8
    
    
    
    5
    
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    12Cash payments
    
    
    (46
    )
    
    
    (11
    )
    
    
    
    
    
    
    (2
    )
    
    
    (1
    )
    
    
    (60
    )Impact of exchange rate changes
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    6Balance as of March 31, 2010
    
    
    28
    
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38Fiscal 2011 Activity:Provisions, net
    
    
    17
    
    
    
    13
    
    
    
    
    
    
    
    5
    
    
    
    5
    
    
    
    40Cash payments
    
    
    (10
    )
    
    
    (17
    )
    
    
    
    
    
    
    (1
    )
    
    
    (2
    )
    
    
    (30
    )Impact of exchange rate changes
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Balance as of March 31, 2011
    
    $
    37
    
    
    $
    6
    
    
    $
    
    
    
    $
    4
    
    
    $
    3
    
    
    $
    50
  Europe
      82




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Year EndedMarch 31,2010
    
    
    2009Severance related costs
    
    $
    (2
    )
    
    $
    20Environmental remediation expense
    
    
    1
    
    
    
    20Fixed asset impairments(A)
    
    
    
    
    
    
    12Write-down of parts, supplies and scrap(A)
    
    
    2
    
    
    
    8Reduction of reserve associated with unfavorable contract(A)
    
    
    
    
    
    
    (3
    )Other exit costs
    
    
    2
    
    
    
    3$
    3
    
    
    $
    60
 
 (A)
    
    These non-cash items are not included in the restructuring
provision table above but have been reflected as reductions to the
respective balance sheet accounts.  North America
   South America
  83




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Asia
  Corporate
  3.   ACCOUNTS RECEIVABLE
  March 31,2011
    
    
    2010Trade accounts receivable
    
    $
    1,413
    
    
    $
    1,080Other accounts receivable
    
    
    74
    
    
    
    67Accounts receivable  third parties
    
    
    1,487
    
    
    
    1,147Allowance for doubtful accounts  third parties
    
    
    (7
    )
    
    
    (4
    )1,480
    
    
    
    1,143Other accounts receivable  related parties
    
    
    28
    
    
    
    24Accounts receivable, net
    
    $
    1,508
    
    
    $
    1,167
 Allowance for Doubtful Accounts
   Balance at
    
    Additions
    
    Accounts
    
    ForeignBeginning
    
    Charged to
    
    Recovered/
    
    Exchange
    
    Balance atof Period
    
    Expense
    
    (Written-Off)
    
    and Other
    
    End of PeriodYear Ended March 31, 2009
    
    $
    1
    
    
    $
    2
    
    
    $
    (1
    )
    
    $
    
    
    
    $
    2Year Ended March 31, 2010
    
    $
    2
    
    
    $
    2
    
    
    $
    (1
    )
    
    $
    1
    
    
    $
    4Year Ended March 31, 2011
    
    $
    4
    
    
    $
    2
    
    
    $
    (1
    )
    
    $
    2
    
    
    $
    7
 Forfaiting and Factoring of Trade Receivables
  84




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Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Summary Disclosures of Financial Amounts
  Year EndedMarch 31,2011
    
    2010
    
    2009Receivables forfaited
    
    $
    396
    
    
    $
    423
    
    
    $
    570Receivables factored
    
    $
    77
    
    
    $
    149
    
    
    $
    70Forfaiting expense
    
    $
    1
    
    
    $
    2
    
    
    $
    5Factoring expense
    
    $
    1
    
    
    $
    1
    
    
    $
    1
 March 31,2011
    
    2010Forfaited receivables outstanding
    
    $
    52
    
    
    $
    83Factored receivables outstanding
    
    $
    8
    
    
    $
    34
 4.   INVENTORIES
  March 31,2011
    
    
    2010Finished goods
    
    $
    293
    
    
    $
    270Work in process
    
    
    529
    
    
    
    431Raw materials
    
    
    414
    
    
    
    295Supplies
    
    
    109
    
    
    
    931,345
    
    
    
    1,089Allowances
    
    
    (7
    )
    
    
    (6
    )Inventories
    
    $
    1,338
    
    
    $
    1,083
 5.   PROPERTY, PLANT AND EQUIPMENT
  March 31,2011
    
    
    2010Land and property rights
    
    $
    228
    
    
    $
    227Buildings
    
    
    816
    
    
    
    781Machinery and equipment
    
    
    2,787
    
    
    
    2,6453,831
    
    
    
    3,653Accumulated depreciation and amortization
    
    
    (1,441
    )
    
    
    (1,074
    )2,390
    
    
    
    2,579Construction in progress
    
    
    153
    
    
    
    53Property, plant and equipment, net
    
    $
    2,543
    
    
    $
    2,632
 85




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Depreciation expense related to property, plant and equipment
    
    $
    357
    
    
    $
    336
    
    
    $
    398
 Asset impairments
  Leases
   Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Rent expense
    
    $
    26
    
    
    $
    24
    
    
    $
    25
  Operating
    
    
    Capital LeaseYear Ending March 31,
    
    Leases
    
    
    Obligations2012
    
    $
    24
    
    
    $
    82013
    
    
    20
    
    
    
    72014
    
    
    18
    
    
    
    72015
    
    
    17
    
    
    
    72016
    
    
    15
    
    
    
    7Thereafter
    
    
    44
    
    
    
    28Total minimum lease payments
    
    $
    138
    
    
    
    64Less: interest portion on capital lease
    
    
    
    
    
    
    15Principal obligation on capital leases
    
    
    
    
    
    $
    49
 86




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   March 31,2011
    
    
    2010Assets under capital lease obligations:Buildings
    
    $
    11
    
    
    $
    10Machinery and equipment
    
    
    78
    
    
    
    6789
    
    
    
    77Accumulated amortization
    
    
    (44
    )
    
    
    (29
    )$
    45
    
    
    $
    48
 Sale of assets
  Asset Retirement Obligations
  Balance atBeginning
    
    
    
    
    
    
    
    
    
    Balance atof Period
    
    Accretion
    
    Other
    
    End of PeriodYear Ended March 31, 2009
    
    $
    16
    
    
    $
    1
    
    
    $
    (1
    )
    
    $
    16Year Ended March 31, 2010
    
    $
    16
    
    
    $
    1
    
    
    $
    
    
    
    $
    17Year Ended March 31, 2011
    
    $
    17
    
    
    $
    1
    
    
    $
    (2
    )
    
    $
    16
 6.   GOODWILL AND INTANGIBLE ASSETS
  March 31, 2011Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    CarryingAmount(A)
    
    
    Impairment
    
    
    ValueNorth America
    
    $
    1,148
    
    
    $
    (860
    )
    
    $
    288Europe
    
    
    511
    
    
    
    (330
    )
    
    
    181South America
    
    
    292
    
    
    
    (150
    )
    
    
    142$
    1,951
    
    
    $
    (1,340
    )
    
    $
    611
 March 31, 2010Gross
    
    
    
    
    
    
    
    
    
    
    NetCarrying
    
    
    
    
    
    
    Accumulated
    
    
    CarryingAmount(A)
    
    
    Adjustments(B)
    
    
    Impairment
    
    
    ValueNorth America
    
    $
    1,148
    
    
    $
    
    
    
    $
    (860
    )
    
    $
    288Europe
    
    
    511
    
    
    
    
    
    
    
    (330
    )
    
    
    181South America
    
    
    263
    
    
    
    29
    
    
    
    (150
    )
    
    
    142$
    1,922
    
    
    $
    29
    
    
    $
    (1,340
    )
    
    $
    611
 
 (A)
    
    Represents goodwill balance, net of prior period accumulated adjustments and excluding accumulated impairments.(B)
    
    During the second quarter of fiscal 2010, we identified an immaterial error in our consolidated annual and
interim financial statements included in previously filed Forms 10-Q and Forms 10-K for fiscal 2009. The error
related to deferred income taxes recorded in connection with purchase accounting in South America. As of and
for the year ended March 31, 2010, the impact of the correction was an increase to goodwill of $29 million, an
increase to deferred tax liabilities of $25 million and a reduction of our income tax expense of $4 million. 87




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Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  March 31, 2011
    
    
    March 31, 2010Weighted
    
    
    Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetAverage
    
    
    Carrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingLife
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountTradenames
    
    20 years
    
    $
    145
    
    
    $
    (28
    )
    
    $
    117
    
    
    $
    140
    
    
    $
    (20
    )
    
    $
    120Technology and software
    
    13 years
    
    
    210
    
    
    
    (72
    )
    
    
    138
    
    
    
    206
    
    
    
    (57
    )
    
    
    149Customer-related intangible assets
    
    20 years
    
    
    475
    
    
    
    (92
    )
    
    
    383
    
    
    
    464
    
    
    
    (67
    )
    
    
    397Favorable energy supply contract
    
    9.5 years
    
    
    123
    
    
    
    (54
    )
    
    
    69
    
    
    
    124
    
    
    
    (42
    )
    
    
    82Other favorable contracts
    
    3.3 years
    
    
    16
    
    
    
    (16
    )
    
    
    
    
    
    
    15
    
    
    
    (14
    )
    
    
    116.9 years
    
    $
    969
    
    
    $
    (262
    )
    
    $
    707
    
    
    $
    949
    
    
    $
    (200
    )
    
    $
    749
   Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Total Amortization expense related to intangible assets
    
    $
    60
    
    
    $
    66
    
    
    $
    59Less: Amortization expense related to intangible assets included in Cost of goods sold
(exclusive of depreciation and amortization)(A)
    
    
    (13
    )
    
    
    (18
    )
    
    
    (18
    )Amortization expense related to intangible assets included in Depreciation and amortization
    
    $
    47
    
    
    $
    48
    
    
    $
    41
 
 (A)
    
    Relates to amortization of favorable energy and other supply contracts.  Fiscal Year Ending March 31,2012
    
    $
    612013
    
    
    602014
    
    
    592015
    
    
    592016
    
    
    59
 88




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 7. CONSOLIDATION OF VARIABLE INTEREST ENTITIES
      March 31,
    
    
    March 31,2011
    
    
    2010AssetsCurrent assetsCash and cash equivalents
    
    $
    1
    
    
    $
    3Accounts receivable
    
    
    27
    
    
    
    29Inventories, net
    
    
    36
    
    
    
    31Prepaid expenses and other current assets
    
    
    
    
    
    
    1Total current assets
    
    
    64
    
    
    
    64Property, plant and equipment, net
    
    
    13
    
    
    
    10Goodwill
    
    
    12
    
    
    
    12Deferred income taxes
    
    
    52
    
    
    
    41Other long-term assets
    
    
    3
    
    
    
    3Total assets
    
    $
    144
    
    
    $
    130LiabilitiesCurrent liabilitiesAccounts payable
    
    $
    26
    
    
    $
    23Accrued expenses and other current liabilities
    
    
    11
    
    
    
    12Total current liabilities
    
    
    37
    
    
    
    35Accrued postretirement benefits
    
    
    120
    
    
    
    97Other long-term liabilities
    
    
    2
    
    
    
    3Total liabilities
    
    $
    159
    
    
    $
    135
 89




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 8. INVESTMENT IN AND ADVANCES TO NON-CONSOLIDATED AFFILIATES AND RELATED PARTY TRANSACTIONS
  OwnershipAffiliate Name
    
    Ownership Structure
    
    PercentageAluminium Norf GmbH
    
    Corporation
    
    
    50
    %Consorcio Candonga
    
    Unincorporated Joint Venture
    
    
    50
    %MiniMRF LLC
    
    Limited Liability Company
    
    
    50
    %
  March 31,2011
    
    
    2010Assets:Current assets
    
    $
    80
    
    
    $
    82Non-current assets
    
    
    889
    
    
    
    856Total assets
    
    $
    969
    
    
    $
    938Liabilities:Current liabilities
    
    $
    63
    
    
    $
    61Non-current liabilities
    
    
    163
    
    
    
    168Total liabilities
    
    
    226
    
    
    
    229Equity:Novelis equity investment
    
    
    743
    
    
    
    709Total liabilities and equity
    
    $
    969
    
    
    $
    938
  Year Ended
March 31,2011
    
    
    2010
    
    
    2009Net sales
    
    $
    229
    
    
    $
    242
    
    
    $
    277Costs, expenses and
provision for taxes
on income
    
    
    241
    
    
    
    257
    
    
    
    289Impairment charge
    
    
    
    
    
    
    
    
    
    
    160Net income (loss)
    
    $
    (12
    )
    
    $
    (15
    )
    
    $
    (172
    )Purchase of tolling
services from
Aluminium Norf GmbH
(Norf)
    
    $
    229
    
    
    $
    241
    
    
    $
    257
  90




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  March 31,2011
    
    
    2010Accounts receivable
    
    $
    28
    
    
    $
    24Other long-term receivables
    
    $
    19
    
    
    $
    21Accounts payable
    
    $
    50
    
    
    $
    53
  9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
  March 31,2011
    
    
    2010Accrued compensation and benefits
    
    $
    199
    
    
    $
    165Accrued interest payable
    
    
    64
    
    
    
    15Accrued income taxes
    
    
    35
    
    
    
    25Other current liabilities
    
    
    270
    
    
    
    231Accrued expenses and other current liabilities
    
    $
    568
    
    
    $
    436
 91




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 10. DEBT
  March 31, 2011
    
    
    March 31, 2010Unamortized
    
    
    
    
    
    
    
    
    
    
    UnamortizedInterest
    
    
    
    
    
    
    Fair Value
    
    
    Carrying
    
    
    
    
    
    
    Fair Value
    
    
    CarryingRates(A)
    
    
    Principal
    
    
    Adjustments(B)
    
    
    Value
    
    
    Principal
    
    
    Adjustments(B)
    
    
    ValueThird party debt:Short term borrowings
    
    
    2.43
    %
    
    $
    17
    
    
    $
    
    
    
    $
    17
    
    
    $
    75
    
    
    $
    
    
    
    $
    75Novelis Inc.Floating rate Term Loan Facility, due March
2017
    
    
    4.00
    %
    
    
    1,496
    
    
    
    (38
    )
    
    
    1,458
    
    
    
    
    
    
    
    
    
    
    
    Floating rate Term Loan Facility, due July 2014
    
    
    
    %(C)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292
    
    
    
    
    
    
    
    2928.375% Senior Notes, due December 2017
    
    
    8.375
    %
    
    
    1,100
    
    
    
    
    
    
    
    1,100
    
    
    
    
    
    
    
    
    
    
    
    8.75% Senior Notes, due December 2020
    
    
    8.75
    %
    
    
    1,400
    
    
    
    (1
    )
    
    
    1,399
    
    
    
    
    
    
    
    
    
    
    
    11.5% Senior Notes, due February 2015
    
    
    
    %(C)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    185
    
    
    
    (3
    )
    
    
    1827.25% Senior Notes, due February 2015
    
    
    7.25
    %(C)
    
    
    74
    
    
    
    3
    
    
    
    77
    
    
    
    1,124
    
    
    
    41
    
    
    
    1,165Novelis CorporationFloating rate Term Loan Facility, due July 2014
    
    
    
    %(C)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    859
    
    
    
    (46
    )
    
    
    813Novelis Switzerland S.A.Capital lease obligation, due December 2019
(Swiss francs (CHF) 46 million)
    
    
    7.50
    %
    
    
    48
    
    
    
    (3
    )
    
    
    45
    
    
    
    45
    
    
    
    (3
    )
    
    
    42Capital lease obligation, due August 2011 (CHF
1 million)
    
    
    2.49
    %
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    1Novelis BrazilBNDES loans, due December 2018 through March
2019
    
    
    5.50
    %
    
    
    5
    
    
    
    (2
    )
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    Novelis Korea LimitedBank loan, due October 2010
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100OtherOther debt, due December 2011 through November
2015
    
    
    4.16
    %
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    1Total debt  third parties
    
    
    
    
    
    
    4,144
    
    
    
    (41
    )
    
    
    4,103
    
    
    
    2,682
    
    
    
    (11
    )
    
    
    2,671Less: Short term borrowings
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )
    
    
    (75
    )
    
    
    
    
    
    
    (75
    )Current portion of long term debt
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (21
    )
    
    
    (116
    )
    
    
    
    
    
    
    (116
    )Long-term debt, net of current portion 
third parties:
    
    
    
    
    
    $
    4,106
    
    
    $
    (41
    )
    
    $
    4,065
    
    
    $
    2,491
    
    
    $
    (11
    )
    
    $
    2,480
 
 (A)
    
    Interest rates are as of March 31, 2011 and exclude the effects of
related interest rate swaps and accretion/amortization of fair value
adjustments as a result of the Arrangement, the debt exchange
completed in fiscal 2009 and the Refinancing completed in December
2010.(B)
    
    Debt existing at the time of the Arrangement was recorded at fair
value. Additional floating rate Term Loan with a face value of $220
million issued in March 2009 was recorded at a fair value of $165
million. 11.5% Senior Notes with a face value of $185 million issued
in August 2009 were recorded at a fair value of $181 million. In
connection with the refinancing transaction of our prior secured term
loan with the 2010 Term Loan Facility, a portion of these
historical fair value adjustments were allocated to the 2010 Term Loan
Facility, and subsequently to the amended 2011 Term Loan Facility.(C)
    
    On December 17, 2010, we completed a series of refinancing
transactions which resulted in the repayment of the total principal
amount of the floating rate Term Loan Facility due July 2014, the
total outstanding principal amount of the 11.5% Senior Notes due
February 2015 and $1.05 billion of aggregate principal amount of 7.25%
Senior Notes due 2015. See Refinancing below for additional
discussion. 92




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Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  AmountWithin one year
    
    $
    382 years
    
    
    203 years
    
    
    214 years
    
    
    965 years
    
    
    21Thereafter
    
    
    3,948Total
    
    $
    4,144
 Refinancing
     Debt
  93




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2017 Notes and 2020 Notes
      New Senior Secured Credit Facilities
  94




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Total NetPeriod
    
    Leverage RatioMarch 30, 2011 through March 31, 2012
    
    4.75 to 1.0April 1, 2012 through March 31, 2013
    
    4.50 to 1.0April 1, 2013 through March 31, 2014
    
    4.375 to 1.0April 1, 2014 through March 31, 2015
    
    4.25 to 1.0April 1, 2015 and thereafter
    
    4.0 to 1.0
  BNDES Loans
  Short-Term Borrowings and Lines of Credit
   95




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Interest Rate Swaps
   Capital Lease Obligations
   11. SHARE-BASED COMPENSATION
  
    
    The Novelis Long-Term Incentive Plan FY 2009  FY 2012 (2009 LTIP) was authorized in
June 2008. Under the 2009 LTIP, phantom stock appreciation rights (SARs) were granted to
certain of our executive officers and key employees.
    
    The Novelis Long-Term Incentive Plan FY 2010  FY 2013 (2010 LTIP) was authorized in
June 2009. Under the 2010 LTIP, SARs were granted to certain of our executive officers and
key employees.
    
    The Novelis Long-Term Incentive Plan FY 2011- FY 2014 (2011 LTIP) was authorized in May
2010. The 2011 LTIP provides for SARs and phantom restricted stock units (RSUs).
    96




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Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Year Ended
March 31,2011
    
    
    2010
    
    
    2009Novelis Long-Term Incentive Plan 2009
    
    $
    4
    
    
    $
    6
    
    
    $
    Novelis Long-Term Incentive Plan 2010
    
    
    9
    
    
    
    3
    
    
    
    Novelis Long-Term Incentive Plan 2011
    
    
    5
    
    
    
    
    
    
    
    $
    18
    
    
    $
    9
    
    
    $
    
  AggregateGrant Date Fair
    
    
    IntrinsicNumber of
    
    
    Value
    
    
    Value (USD in2011 LTIP
    
    RSUs
    
    
    (in Indian Rupees)
    
    
    millions)RSUs outstanding as of March 31, 2010
    
    
    
    
    
    
    
    
    
    $
    Granted
    
    
    918,301
    
    
    
    148.77
    
    
    
    3Forfeited/Cancelled
    
    
    (12,244
    )
    
    
    147.10RSUs outstanding as of March 31, 2011
    
    
    906,057
    
    
    
    148.79
    
    
    $
    4
 Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    Value (USD in2011 LTIP
    
    SARs
    
    
    (in Indian Rupees)
    
    
    (In years)
    
    
    millions)SARs outstanding as of March 31, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Granted
    
    
    7,213,839
    
    
    
    148.77Forfeited/Cancelled
    
    
    (96,187
    )
    
    
    147.10SARs outstanding as of March 31, 2011
    
    
    7,117,652
    
    
    
    148.79
    
    
    
    6.15
    
    
    $
    10
 Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    Value (USD in2010 LTIP
    
    SARs
    
    
    (in Indian Rupees)
    
    
    (In years)
    
    
    millions)SARs outstanding as of March 31, 2010
    
    
    13,680,431
    
    
    
    87.68
    
    
    
    6.24
    
    
    $
    29Granted
    
    
    32,278
    
    
    
    125.33Exercised
    
    
    (2,002,387
    )
    
    
    86.18Forfeited/Cancelled
    
    
    (657,831
    )
    
    
    85.79SARs outstanding as of March 31, 2011
    
    
    11,052,491
    
    
    
    88.46
    
    
    
    5.24
    
    
    $
    25
 Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    Value (USD in2009 LTIP
    
    SARs
    
    
    (in Indian Rupees)
    
    
    (In years)
    
    
    millions)SARs outstanding as of March 31, 2010
    
    
    11,371,399
    
    
    
    60.50
    
    
    
    5.25
    
    
    $
    18Exercised
    
    
    (1,690,380
    )
    
    
    60.50Forfeited/Cancelled
    
    
    (736,197
    )
    
    
    60.50SARs outstanding as of March 31, 2011
    
    
    8,944,822
    
    
    
    60.50
    
    
    
    4.22
    
    
    $
    14
  97




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2011 LTIP
    
    2010 LTIP
    
    2009 LTIPRisk-free interest rate
    
    7.61 - 7.91%
    
    7.63 - 7.93%
    
    7.65 - 7.95%Dividend yield
    
    0.65%
    
    0.65%
    
    0.65%Volatility
    
    49.43%
    
    52.31%
    
    54.34%Time interval (in years)
    
    0.004
    
    0.004
    
    0.004
   12. POSTRETIREMENT BENEFIT PLANS
   Employer Contributions to Plans
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Funded pension plans
    
    $
    41
    
    
    $
    50
    
    
    $
    29Unfunded pension plans
    
    
    13
    
    
    
    11
    
    
    
    16Savings and defined contribution pension plans
    
    
    18
    
    
    
    16
    
    
    
    16Total contributions
    
    $
    72
    
    
    $
    77
    
    
    $
    61
  Investment Policy and Asset Allocation
  98




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Allocation inAggregate as ofTarget
    
    
    March 31,Asset Category
    
    Allocation Ranges
    
    
    2011
    
    
    2010Equity securities
    
    
    35 - 60
    %
    
    
    50
    %
    
    
    51
    %Debt securities
    
    
    35 - 55
    %
    
    
    39
    %
    
    
    40
    %Real estate
    
    
    0 - 25
    %
    
    
    4
    %
    
    
    4
    %Other
    
    
    0 - 15
    %
    
    
    7
    %
    
    
    5
    %
 Benefit Obligations, Fair Value of Plan Assets, Funded Status and Amounts Recognized in
Financial Statements
  Pension BenefitsYear Ended
March 31,2011
    
    
    2010
    
    
    2009Benefit obligation at beginning of period
    
    $
    1,154
    
    
    $
    945
    
    
    $
    991Service cost
    
    
    36
    
    
    
    35
    
    
    
    38Interest cost
    
    
    64
    
    
    
    61
    
    
    
    57Members contributions
    
    
    5
    
    
    
    5
    
    
    
    9Benefits paid
    
    
    (45
    )
    
    
    (40
    )
    
    
    (39
    )Amendments
    
    
    1
    
    
    
    1
    
    
    
    Transfers/mergers
    
    
    (6
    )
    
    
    4
    
    
    
    48Curtailments/termination benefits
    
    
    
    
    
    
    1
    
    
    
    (2
    )Actuarial (gains) losses
    
    
    23
    
    
    
    107
    
    
    
    (33
    )Currency (gains) losses
    
    
    43
    
    
    
    35
    
    
    
    (124
    )Benefit obligation at end of period
    
    $
    1,275
    
    
    $
    1,154
    
    
    $
    945Benefit obligation of funded plans
    
    $
    1,101
    
    
    $
    976
    
    
    $
    787Benefit obligation of unfunded plans
    
    
    174
    
    
    
    178
    
    
    
    158Benefit obligation at end of period
    
    $
    1,275
    
    
    $
    1,154
    
    
    $
    945
 Other BenefitsYear EndedMarch 31,2011
    
    
    2010
    
    
    2009Benefit obligation at beginning of period
    
    $
    167
    
    
    $
    162
    
    
    $
    171Service cost
    
    
    7
    
    
    
    6
    
    
    
    7Interest cost
    
    
    10
    
    
    
    10
    
    
    
    10Benefits paid
    
    
    (7
    )
    
    
    (7
    )
    
    
    (7
    )Curtailments/termination benefits
    
    
    
    
    
    
    
    
    
    
    (3
    )Actuarial (gains) losses
    
    
    18
    
    
    
    (6
    )
    
    
    (14
    )Currency (gains) losses
    
    
    1
    
    
    
    2
    
    
    
    (2
    )Benefit obligation at end of period
    
    $
    196
    
    
    $
    167
    
    
    $
    162Benefit obligation of funded plans
    
    $
    
    
    
    $
    
    
    
    $
    Benefit obligation of unfunded plans
    
    
    196
    
    
    
    167
    
    
    
    162Benefit obligation at end of period
    
    $
    196
    
    
    $
    167
    
    
    $
    162
 99




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Pension BenefitsYear Ended
March 31,2011
    
    
    2010
    
    
    2009Change in fair value of plan assetsFair value of plan assets at beginning of period
    
    $
    805
    
    
    $
    598
    
    
    $
    724Actual return on plan assets
    
    
    81
    
    
    
    147
    
    
    
    (102
    )Members contributions
    
    
    5
    
    
    
    5
    
    
    
    9Benefits paid
    
    
    (45
    )
    
    
    (40
    )
    
    
    (39
    )Company contributions
    
    
    54
    
    
    
    62
    
    
    
    45Transfers/mergers
    
    
    (6
    )
    
    
    4
    
    
    
    49Currency gains (losses)
    
    
    33
    
    
    
    29
    
    
    
    (88
    )Fair value of plan assets at end of period
    
    $
    927
    
    
    $
    805
    
    
    $
    598
 March 31,2011
    
    
    2010Pension
    
    
    Other
    
    
    Pension
    
    
    OtherBenefits
    
    
    Benefits
    
    
    Benefits
    
    
    BenefitsFunded statusFunded Status at end of period:Assets less the benefit obligation of
funded plans
    
    $
    (174
    )
    
    $
    
    
    
    $
    (171
    )
    
    $
    Benefit obligation of unfunded plans
    
    
    (174
    )
    
    
    (196
    )
    
    
    (178
    )
    
    
    (167
    )$
    (348
    )
    
    $
    (196
    )
    
    $
    (349
    )
    
    $
    (167
    )As included on consolidated balance sheetAccrued expenses and other current
liabilities
    
    $
    11
    
    
    $
    8
    
    
    $
    (12
    )
    
    $
    (7
    )Accrued postretirement benefits
    
    
    337
    
    
    
    188
    
    
    
    (337
    )
    
    
    (160
    )$
    348
    
    
    $
    196
    
    
    $
    (349
    )
    
    $
    (167
    )
  March 31,2011
    
    
    2010Pension
    
    
    Other
    
    
    Pension
    
    
    OtherBenefits
    
    
    Benefits
    
    
    Benefits
    
    
    BenefitsNet actuarial loss
    
    $
    100
    
    
    $
    19
    
    
    $
    111
    
    
    $
    1Prior service cost (credit)
    
    
    (5
    )
    
    
    
    
    
    
    (6
    )
    
    
    Total postretirement
amounts recognized in
Accumulated other
comprehensive loss
(income)
    
    $
    95
    
    
    $
    19
    
    
    $
    105
    
    
    $
    1
  100




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Accumulated Benefit Obligation in Excess of Plan Assets
  March 31,2011
    
    
    2010Projected benefit obligation
    
    $
    1,014
    
    
    $
    940Accumulated benefit obligation
    
    $
    918
    
    
    $
    847Fair value of plan assets
    
    $
    698
    
    
    $
    615
 Future Benefit Payments
  Pension Benefits
    
    
    Other Benefits2012
    
    $
    42
    
    
    $
    82013
    
    
    48
    
    
    
    92014
    
    
    53
    
    
    
    92015
    
    
    58
    
    
    
    112016
    
    
    63
    
    
    
    122017 through 2020
    
    
    399
    
    
    
    76Total
    
    $
    663
    
    
    $
    125
 Components of Net Periodic Benefit Cost
  Year EndedMarch 31,Pension Benefits
    
    2011
    
    
    2010
    
    
    2009Net periodic benefit costService cost
    
    $
    36
    
    
    $
    35
    
    
    $
    38Interest cost
    
    
    64
    
    
    
    61
    
    
    
    57Expected return on assets
    
    
    (56
    )
    
    
    (43
    )
    
    
    (50
    )Amortization actuarial losses
    
    
    11
    
    
    
    12
    
    
    
     prior service cost
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )Curtailment/settlement losses
    
    
    
    
    
    
    1
    
    
    
    (1
    )Net periodic benefit cost
    
    
    54
    
    
    
    65
    
    
    
    43Proportionate share of non-consolidated
affiliates deferred pension costs, net of
tax
    
    
    3
    
    
    
    1
    
    
    
    4Total net periodic benefit costs recognized
    
    $
    57
    
    
    $
    66
    
    
    $
    47
 101




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Year EndedMarch 31,Other Benefits
    
    2011
    
    
    2010
    
    
    2009Net periodic benefit costService cost
    
    $
    7
    
    
    $
    6
    
    
    $
    7Interest cost
    
    
    9
    
    
    
    10
    
    
    
    10Amortization actuarial losses
    
    
    
    
    
    
    1
    
    
    
    2Curtailment/termination benefits
    
    
    
    
    
    
    
    
    
    
    (3
    )Total net periodic benefit
costs recognized
    
    $
    16
    
    
    $
    17
    
    
    $
    16
 Actuarial Assumptions and Sensitivity Analysis
  Year EndedMarch 31,Pension Benefits
    
    2011
    
    
    2010
    
    
    2009Weighted average
assumptions used to determine 
benefit obligationsDiscount rate
    
    
    5.3
    %
    
    
    5.5
    %
    
    
    6.0
    %Average compensation growth
    
    
    3.3
    %
    
    
    3.6
    %
    
    
    3.6
    %Weighted average assumptions
used to determine net periodic 
benefit costDiscount rate
    
    
    5.5
    %
    
    
    6.1
    %
    
    
    5.9
    %Average compensation growth
    
    
    3.6
    %
    
    
    3.4
    %
    
    
    3.6
    %Expected return on plan assets
    
    
    6.8
    %
    
    
    6.7
    %
    
    
    6.9
    %
 Year EndedMarch 31,Other Benefits
    
    2011
    
    
    2010
    
    
    2009Weighted average
assumptions used to
determine benefit
obligationsDiscount rate
    
    
    5.2
    %
    
    
    5.6
    %
    
    
    6.2
    %Average compensation growth
    
    
    3.9
    %
    
    
    3.9
    %
    
    
    3.9
    %Weighted average assumptions
used to determine net 
periodic benefit costDiscount rate
    
    
    5.6
    %
    
    
    6.2
    %
    
    
    6.1
    %Average compensation growth
    
    
    3.9
    %
    
    
    4.0
    %
    
    
    3.9
    %
   102




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   1% Increase
    
    
    1% DecreaseSensitivity AnalysisEffect on service and interest costs
    
    $
    2
    
    
    $
    (2
    )Effect on benefit obligation
    
    $
    17
    
    
    $
    (15
    )
  Fair Value of Plan Assets
  US Pension Plan Assets
 March 31, 2011
    
    
    March 31, 2010Fair Value Measurements Using
    
    
    Fair Value Measurements UsingLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalLarge Cap Equity
    
    $
    
    
    
    $
    149
    
    
    $
    
    
    
    $
    149
    
    
    $
    
    
    
    $
    127
    
    
    $
    
    
    
    $
    127Small/Mid Cap Equity
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    41
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    35International Equity
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    86
    
    
    
    
    
    
    
    77
    
    
    
    
    
    
    
    77Fixed Income
    
    
    
    
    
    
    186
    
    
    
    
    
    
    
    186
    
    
    
    
    
    
    
    166
    
    
    
    
    
    
    
    166Total
    
    $
    
    
    
    $
    462
    
    
    $
    
    
    
    $
    462
    
    
    $
    
    
    
    $
    405
    
    
    $
    
    
    
    $
    405
 Foreign Pension Plan Assets
 March 31, 2011
    
    
    March 31, 2010Fair Value Measurements Using
    
    
    Fair Value Measurements UsingLevel 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalEquity
    
    $
    138
    
    
    $
    53
    
    
    $
    
    
    
    $
    191
    
    
    $
    119
    
    
    $
    47
    
    
    $
    
    
    
    $
    166Fixed Income
    
    
    16
    
    
    
    156
    
    
    
    
    
    
    
    172
    
    
    
    15
    
    
    
    146
    
    
    
    
    
    
    
    161Real Estate
    
    
    5
    
    
    
    31
    
    
    
    
    
    
    
    36
    
    
    
    3
    
    
    
    27
    
    
    
    
    
    
    
    30Cash
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    34
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Other
    
    
    8
    
    
    
    24
    
    
    
    
    
    
    
    32
    
    
    
    9
    
    
    
    21
    
    
    
    
    
    
    
    30Total
    
    $
    201
    
    
    $
    264
    
    
    $
    
    
    
    $
    465
    
    
    $
    159
    
    
    $
    241
    
    
    $
    
    
    
    $
    400
 103




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 13. CURRENCY LOSSES (GAINS)
  Year Ended
March 31,2011
    
    
    2010
    
    
    2009Net gain on change in fair value of currency derivative
instruments(A)
    
    $
    (40
    )
    
    $
    (72
    )
    
    $
    (21
    )Net (gain) loss on remeasurement and transaction gains or losses(B)
    
    
    (1
    )
    
    
    (15
    )
    
    
    98Net currency (gain) loss
    
    $
    (41
    )
    
    $
    (87
    )
    
    $
    77
 
 (A)
    
    Included in (Gain) loss on change in fair value of derivative instruments, net.(B)
    
    Included in Other (income) expenses, net.  Year Ended
March 31,2011
    
    
    2010
    
    
    2009Cumulative currency translation adjustment  beginning of period
    
    $
    (3
    )
    
    $
    (78
    )
    
    $
    85Effect of changes in exchange rates
    
    
    117
    
    
    
    75
    
    
    
    (163
    )Cumulative currency translation adjustment  end of period
    
    $
    114
    
    
    $
    (3
    )
    
    $
    (78
    )
 104




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 14.
    
    FINANCIAL INSTRUMENTS AND COMMODITY CONTRACTS
  March 31, 2011Assets
    
    
    Liabilities
    
    
    Net Fair ValueCurrent
    
    
    Noncurrent
    
    
    Current
    
    
    Noncurrent(A)
    
    
    Assets/(Liabilities)Derivatives designated as hedging instruments:Cash flow hedgesCurrency exchange contracts
    
    $
    43
    
    
    $
    10
    
    
    $
    (1
    )
    
    $
    
    
    
    $
    52Interest rate swaps
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Aluminum contracts
    
    
    44
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44Fair value hedgeAluminum contracts
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Total derivatives designated as hedging instruments
    
    
    96
    
    
    
    10
    
    
    
    (1
    )
    
    
    
    
    
    
    105Derivatives not designated as hedging instruments:Aluminum contracts
    
    
    54
    
    
    
    5
    
    
    
    (49
    )
    
    
    
    
    
    
    10Currency exchange contracts
    
    
    15
    
    
    
    2
    
    
    
    (19
    )
    
    
    (1
    )
    
    
    (3
    )Interest rate swaps
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (4
    )Electricity swap
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (23
    )
    
    
    (29
    )Energy contracts
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Total derivatives not designated as hedging
instruments
    
    
    69
    
    
    
    7
    
    
    
    (81
    )
    
    
    (24
    )
    
    
    (29
    )Total derivative fair value
    
    $
    165
    
    
    $
    17
    
    
    $
    (82
    )
    
    $
    (24
    )
    
    $
    76
 March 31, 2010Assets
    
    
    Liabilities
    
    
    Net Fair ValueCurrent
    
    
    Noncurrent
    
    
    Current
    
    
    Noncurrent(A)
    
    
    Assets/(Liabilities)Derivatives designated as hedging instruments:Cash flow hedgesCurrency exchange contracts
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (21
    )
    
    $
    (21
    )Interest rate swaps
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (1
    )
    
    
    (7
    )Electricity swap
    
    
    
    
    
    
    
    
    
    
    (8
    )
    
    
    (27
    )
    
    
    (35
    )Total derivatives designated as hedging instruments
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (49
    )
    
    
    (63
    )Derivatives not designated as hedging instruments:Aluminum contracts
    
    
    149
    
    
    
    6
    
    
    
    (80
    )
    
    
    
    
    
    
    75Currency exchange contracts
    
    
    48
    
    
    
    1
    
    
    
    (10
    )
    
    
    (1
    )
    
    
    38Energy contracts
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (6
    )Total derivatives not designated as hedging
instruments
    
    
    197
    
    
    
    7
    
    
    
    (96
    )
    
    
    (1
    )
    
    
    107Total derivative fair value
    
    $
    197
    
    
    $
    7
    
    
    $
    (110
    )
    
    $
    (50
    )
    
    $
    44
 
 (A)
    
    The noncurrent portions of derivative liabilities are included in Other long-term
liabilities in the accompanying consolidated balance sheets. Aluminum
    105




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   March 31,2011
    
    
    2010Hedge TypeLong (Short)Cash Flow
    
    
    183
    
    
    
    Fair Value
    
    
    25
    
    
    
    Not Designated
    
    
    (146
    )
    
    
    55Total
    
    
    62
    
    
    
    55
 Energy
   Interest Rate
   Foreign Currency
    106




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Other
    Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Derivative Instruments Not Designated as HedgesAluminum contracts
    
    $
    5
    
    
    $
    123
    
    
    $
    (561
    )Currency exchange contracts
    
    
    34
    
    
    
    72
    
    
    
    21Interest Rate swaps
    
    
    (5
    )
    
    
    
    
    
    
    Electricity swap
    
    
    7
    
    
    
    6
    
    
    
    13Energy contracts
    
    
    (4
    )
    
    
    (7
    )
    
    
    (29
    )Gain (loss) recognized
    
    
    37
    
    
    
    194
    
    
    
    (556
    )Derivative Instruments Designated as HedgesCash flow hedgesAluminum contracts(A)
    
    
    
    
    
    
    
    
    
    
    Currency exchange contracts (B)
    
    
    6
    
    
    
    
    
    
    
    Interest Rate Swaps
    
    
    
    
    
    
    
    
    
    
    Fair Value hedgesAluminum contracts
    
    
    4
    
    
    
    
    
    
    
    Fixed priced firm sales commitments (A)
    
    
    (4
    )
    
    
    
    
    
    
    Gain recognized
    
    
    6
    
    
    
    
    
    
    
    Gain (loss) on change in fair value of derivative instruments, net
    
    $
    43
    
    
    $
    194
    
    
    $
    (556
    )
 
 (A)
    
    Less than $1 million of ineffectiveness exists in both cash flow and fair value hedging
relationships involving aluminum derivatives.(B)
    
    Amount represents excluded forward market premium/discount and hedging relationship
ineffectiveness. 107




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Realized gains (losses) included in segment income
    
    $
    102
    
    
    $
    (385
    )
    
    $
    (41
    )Realized gain on other derivatives not in segment income
    
    
    5
    
    
    
    1
    
    
    
    4Unrealized gains (losses)
    
    
    (64
    )
    
    
    578
    
    
    
    (519
    )Gain (loss) on change in fair value of derivative instruments, net
    
    $
    43
    
    
    $
    194
    
    
    $
    (556
    )
  Amount of Gain or (Loss)Recognized inAmount of Gain or (Loss)
    
    
    
    
    Amount of Gain or (Loss)
    
    
    Income/(Expense) onRecognized in OCI on
    
    
    Location of Gain or
    
    Reclassified from
    
    
    Derivative (Ineffective PortionDerivatives in Cash Flow
    
    
    Derivative
    
    
    (Loss)
    
    AOCI into Income/(Expense)
    
    
    and Amount Excluded from(Effective Portion)
    
    
    Reclassified from
    
    (Effective Portion)

    
    
    Effectiveness Testing)Year Ended
    
    
    Accumulated OCI
    
    Year Ended
    
    
    Year EndedMarch 31,
    
    
    into Earnings
    
    March 31,
    
    
    March 31,Hedging Relationships
    
    
    2011
    
    
    2010
    
    
    2009
    
    
    (Effective Portion)
    
    2011
    
    
    2010
    
    
    2009
    
    
    2011
    
    
    2010
    
    
    2009Electricity swap
    
    $
    12
    
    
    $
    (13
    )
    
    $
    (20
    )
    
    (Gain) loss on derivative instruments, net
    
    $
    7
    
    
    $
    5
    
    
    $
    13
    
    
    $
    
    
    
    $
    1
    
    
    $
    Aluminum contracts
    
    
    41
    
    
    
    
    
    
    
    
    
    
    Cost of goods sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest rate swaps
    
    
    1
    
    
    
    5
    
    
    
    3
    
    
    Interest expense and amortization of debt issuance costs(A)
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    Currency exchange contracts
    
    
    24
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization; Cost of
goods sold; Selling, general and administrative expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    Total
    
    $
    78
    
    
    $
    (8
    )
    
    $
    (17
    )
    
    
    
    $
    2
    
    
    $
    5
    
    
    $
    13
    
    
    $
    1
    
    
    $
    1
    
    
    $
    
 
 (A)
    
    All AOCI related to interest rate swaps was released upon refinancing and
de-designation. Gains or losses are released through (Gain) loss on derivative instruments,
net. 15.
    
    FAIR VALUE OF ASSETS AND LIABILITIES
      108




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Derivative Contracts
      March 31,2011
    
    
    2010Assets
    
    
    Liabilities
    
    
    Assets
    
    
    LiabilitiesLevel 2Aluminum contracts
    
    $
    111
    
    
    $
    (48
    )
    
    $
    151
    
    
    $
    (76
    )Currency exchange contracts
    
    
    70
    
    
    
    (21
    )
    
    
    49
    
    
    
    (32
    )Electricity swap
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Energy contracts
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (6
    )Interest rate swaps
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    (7
    )Total Level 2 Instruments
    
    
    181
    
    
    
    (76
    )
    
    
    200
    
    
    
    (121
    )Level 3Aluminum contracts
    
    
    1
    
    
    
    (1
    )
    
    
    4
    
    
    
    (4
    )Currency exchange contracts
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Electricity swap
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    (35
    )Total Level 3 Instruments
    
    
    1
    
    
    
    (30
    )
    
    
    4
    
    
    
    (39
    )Total
    
    $
    182
    
    
    $
    (106
    )
    
    $
    204
    
    
    $
    (160
    )
  109




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Level 3DerivativeInstruments(A)Balance as of March 31, 2009
    
    $
    (44
    )Net realized/unrealized (losses) included in earnings(B)
    
    
    5Net realized/unrealized (losses) included in Other comprehensive income (loss)(C)
    
    
    (17
    )Net purchases, issuances and settlements
    
    
    (5
    )Net transfers from Level 3 to Level 2
    
    
    26Balance as of March 31, 2010
    
    
    (35
    )Net realized/unrealized (losses) included in earnings(B)
    
    
    7Net realized/unrealized (losses) included in Other comprehensive income (loss)(C)
    
    
    6Net purchases, issuances and settlements
    
    
    (7
    )Net transfers from Level 3 to Level 2
    
    
    Balance as of March 31, 2011
    
    $
    (29
    )
 
 (A)
    
    Represents derivative assets net of derivative liabilities.(B)
    
    Included in (Gain) loss on change in fair value of derivative instruments, net.(C)
    
    Included in Change in fair value of effective portion of hedges, net. Financial Instruments Not Recorded at Fair Value
  March 31,2011
    
    
    2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueAssetsLong-term
receivables from
related parties
    
    $
    19
    
    
    $
    19
    
    
    $
    21
    
    
    $
    21LiabilitiesTotal debt  third
parties (excluding
short term
borrowings)
    
    $
    4,086
    
    
    $
    4,370
    
    
    $
    2,596
    
    
    $
    2,432
 110




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 16.
    
    OTHER (INCOME) EXPENSES, NET
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Net (gain) loss on currency
remeasurement and transaction gains or
losses
    
    $
    (1
    )
    
    $
    (15
    )
    
    $
    98Gain on reversal of accrued legal claims(A)
    
    
    
    
    
    
    (3
    )
    
    
    (26
    )(Gain) loss on Brazilian tax litigation
    
    
    3
    
    
    
    (6
    )
    
    
    9(Gain) loss on sale of assets, net
    
    
    (4
    )
    
    
    1
    
    
    
    Other, net
    
    
    9
    
    
    
    (2
    )
    
    
    5Other (income) expenses, net
    
    $
    7
    
    
    $
    (25
    )
    
    $
    86
 
 (A)
    
    We recognized a $26 million gain on the reversal of a previously
recorded legal accrual upon settlement during the year ended
March 31, 2009. 17.
    
    INCOME TAXES
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Domestic (Canada)
    
    $
    (181
    )
    
    $
    (38
    )
    
    $
    (15
    )Foreign (all other countries)
    
    
    436
    
    
    
    780
    
    
    
    (1,981
    )Pre-tax income (loss) before
equity in net (income) loss
of non-consolidated
affiliates
    
    $
    255
    
    
    $
    742
    
    
    $
    (1,996
    )
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Current provision (benefit):Domestic (Canada)
    
    $
    16
    
    
    $
    (24
    )
    
    $
    7Foreign (all other countries)
    
    
    112
    
    
    
    58
    
    
    
    78Total current
    
    
    128
    
    
    
    34
    
    
    
    85Deferred provision (benefit):Domestic (Canada)
    
    
    (6
    )
    
    
    
    
    
    
    Foreign (all other countries)
    
    
    (39
    )
    
    
    228
    
    
    
    (331
    )Total deferred
    
    
    (45
    )
    
    
    228
    
    
    
    (331
    )Income tax provision (benefit)
    
    $
    83
    
    
    $
    262
    
    
    $
    (246
    )
 111




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Pre-tax income (loss) before equity
in net (income) loss on non-consolidated
affiliates
    
    $
    255
    
    
    $
    742
    
    
    $
    (1,996
    )Canadian Statutory tax rate
    
    
    29
    %
    
    
    30
    %
    
    
    31
    %Provision (benefit) at the Canadian
statutory rate
    
    $
    74
    
    
    $
    223
    
    
    $
    (619
    )Increase (decrease) for taxes on income
(loss) resulting from:Non-deductible goodwill impairment
    
    
    
    
    
    
    
    
    
    
    415Exchange translation items
    
    
    
    
    
    
    19
    
    
    
    (4
    )Exchange remeasurement of deferred
income taxes
    
    
    20
    
    
    
    38
    
    
    
    (48
    )Change in valuation allowances
    
    
    1
    
    
    
    (3
    )
    
    
    61Tax credits and other allowances
    
    
    (5
    )
    
    
    (4
    )
    
    
    (8
    )Expense (income) items not subject to tax
    
    
    (9
    )
    
    
    1
    
    
    
    3Dividends not subject to tax
    
    
    (15
    )
    
    
    
    
    
    
    Enacted tax rate changes
    
    
    8
    
    
    
    7
    
    
    
    (7
    )Tax rate differences on foreign earnings
    
    
    (6
    )
    
    
    (9
    )
    
    
    (33
    )Uncertain tax positions
    
    
    6
    
    
    
    (10
    )
    
    
    2Other, net
    
    
    9
    
    
    
    
    
    
    
    (8
    )Income tax provision (benefit)
    
    $
    83
    
    
    $
    262
    
    
    $
    (246
    )Effective tax rate
    
    
    33
    %
    
    
    35
    %
    
    
    12
    %
 Income Taxes
   112




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Deferred Income Taxes
   March 31,2011
    
    
    2010Deferred income tax assets:Provisions not currently deductible for tax
purposes
    
    $
    216
    
    
    $
    221Tax losses/benefit carryforwards, net
    
    
    355
    
    
    
    404Depreciation and amortization
    
    
    93
    
    
    
    86Other assets
    
    
    35
    
    
    
    21Total deferred income tax assets
    
    
    699
    
    
    
    732Less: valuation allowance
    
    
    (239
    )
    
    
    (223
    )Net deferred income tax assets
    
    $
    460
    
    
    $
    509Deferred income tax liabilities:Depreciation and amortization
    
    $
    727
    
    
    $
    824Inventory valuation reserves
    
    
    119
    
    
    
    97Monetary exchange gains, net
    
    
    85
    
    
    
    73Other liabilities
    
    
    33
    
    
    
    29Total deferred income tax liabilities
    
    $
    964
    
    
    $
    1,023Net deferred income tax liabilities
    
    $
    504
    
    
    $
    514
     113




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
   Tax Uncertainties
       Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Beginning balance
    
    $
    39
    
    
    $
    51
    
    
    $
    61Additions based on tax positions related to the
current period
    
    
    4
    
    
    
    4
    
    
    
    1Additions based on tax positions of prior years
    
    
    3
    
    
    
    7
    
    
    
    3Reductions based on tax positions of prior years
    
    
    
    
    
    
    
    
    
    
    (3
    )Settlements
    
    
    
    
    
    
    (1
    )
    
    
    (4
    )Statute lapses
    
    
    (3
    )
    
    
    (23
    )
    
    
    (1
    )Foreign exchange
    
    
    2
    
    
    
    1
    
    
    
    (6
    )Ending Balance
    
    $
    45
    
    
    $
    39
    
    
    $
    51
 114




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Income Taxes Payable
  18.
    
    COMMITMENTS AND CONTINGENCIES
  Legal Proceedings
 Coca-Cola Lawsuit.
 Environmental Matters
   115




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
    Brazil Tax Matters
   116




---



##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Guarantees of Indebtedness
    Maximum
    
    LiabilityPotential
    
    CarryingType of Entity
    
    Future Payment
    
    ValueWholly-owned subsidiaries
    
    $
    134
    
    
    $
    63
  19.
    
    SEGMENT, GEOGRAPHICAL AREA, MAJOR CUSTOMER AND MAJOR SUPPLIER INFORMATION
 Segment Information
   
    
    North America.Headquartered in Atlanta, Georgia, this segment manufactures aluminum
sheet and light gauge products and operates eleven plants, including two fully dedicated
recycling facilities, in two countries.
    
    Europe.Headquartered in Zurich, Switzerland, this segment manufactures aluminum sheet
and light gauge products and operates 13 plants, including one recycling facility, in six
countries.
    
    Asia.Headquartered in Seoul, South Korea, this segment manufactures aluminum sheet and
light gauge products and operates three plants in two countries.
    
    South America.Headquartered in Sao Paulo, Brazil, this segment comprises bauxite
mining, smelting operations, power generation, carbon products, aluminum sheet and light
gauge products and operates three plants in Brazil.
   117




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Adjustment to eliminate proportional consolidation.
   Selected Segment Financial Information
 Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    South
    
    
    Other andYear Ended March 31, 2011
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,922
    
    
    $
    3,589
    
    
    $
    1,866
    
    
    $
    1,214
    
    
    $
    (14
    )
    
    $
    10,577Write-off and amortization of fair value
adjustments
    
    
    (7
    )
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (9
    )Depreciation and amortization
    
    
    168
    
    
    
    141
    
    
    
    56
    
    
    
    80
    
    
    
    (41
    )
    
    
    404Income tax provision (benefit)
    
    
    3
    
    
    
    1
    
    
    
    27
    
    
    
    44
    
    
    
    8
    
    
    
    83Capital expenditures
    
    
    61
    
    
    
    73
    
    
    
    37
    
    
    
    81
    
    
    
    (18
    )
    
    
    234Total assets as of March 31, 2011
    
    $
    2,683
    
    
    $
    3,170
    
    
    $
    1,015
    
    
    $
    1,481
    
    
    $
    (53
    )
    
    $
    8,296
 Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    South
    
    
    Other andYear Ended March 31, 2010
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,292
    
    
    $
    2,975
    
    
    $
    1,501
    
    
    $
    948
    
    
    $
    (43
    )
    
    $
    8,673Write-off and amortization of fair value
adjustments
    
    
    128
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    134Depreciation and amortization
    
    
    162
    
    
    
    153
    
    
    
    48
    
    
    
    64
    
    
    
    (43
    )
    
    
    384Income tax provision (benefit)
    
    
    116
    
    
    
    73
    
    
    
    31
    
    
    
    69
    
    
    
    (27
    )
    
    
    262Capital expenditures
    
    
    38
    
    
    
    48
    
    
    
    15
    
    
    
    18
    
    
    
    (18
    )
    
    
    101Total assets as of March 31, 2010
    
    $
    2,726
    
    
    $
    2,870
    
    
    $
    965
    
    
    $
    1,344
    
    
    $
    (143
    )
    
    $
    7,762
 Selected Operating Results
    
    North
    
    
    
    
    
    
    
    
    
    
    South
    
    
    Other andYear Ended March 31, 2009
    
    America
    
    
    Europe
    
    
    Asia
    
    
    America
    
    
    Eliminations
    
    
    TotalNet sales
    
    $
    3,930
    
    
    $
    3,718
    
    
    $
    1,536
    
    
    $
    1,007
    
    
    $
    (14
    )
    
    $
    10,177Write-off and amortization of
fair value adjustments
    
    
    218
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    233Depreciation and amortization
    
    
    166
    
    
    
    226
    
    
    
    50
    
    
    
    72
    
    
    
    (75
    )
    
    
    439Income tax provision (benefit)
    
    
    (156
    )
    
    
    (13
    )
    
    
    (8
    )
    
    
    (62
    )
    
    
    (7
    )
    
    
    (246
    )Capital expenditures
    
    
    42
    
    
    
    76
    
    
    
    20
    
    
    
    25
    
    
    
    (18
    )
    
    
    145Total assets as of March 31, 2009
    
    $
    2,973
    
    
    $
    2,750
    
    
    $
    732
    
    
    $
    1,296
    
    
    $
    (184
    )
    
    $
    7,567
 118




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009North America
    
    $
    382
    
    
    $
    292
    
    
    $
    60Europe
    
    
    313
    
    
    
    212
    
    
    
    214Asia
    
    
    225
    
    
    
    154
    
    
    
    79South America
    
    
    152
    
    
    
    97
    
    
    
    132Depreciation and amortization
    
    
    (404
    )
    
    
    (384
    )
    
    
    (439
    )Interest expense and amortization of debt issuance costs
    
    
    (207
    )
    
    
    (175
    )
    
    
    (182
    )Interest income
    
    
    13
    
    
    
    11
    
    
    
    14Unrealized gains on change in fair value of derivative instruments, net
    
    
    (64
    )
    
    
    578
    
    
    
    (519
    )Realized gains (losses) on derivative instruments not included in
segment income(A)
    
    
    5
    
    
    
    
    
    
    
    Adjustment to eliminate proportional consolidation(B)
    
    
    (45
    )
    
    
    (52
    )
    
    
    (225
    )Impairment of goodwill
    
    
    
    
    
    
    
    
    
    
    (1,340
    )Gain (loss) on extinguishment of debt
    
    
    (84
    )
    
    
    
    
    
    
    122Restructuring charges, net
    
    
    (34
    )
    
    
    (14
    )
    
    
    (95
    )Other costs, net
    
    
    (9
    )
    
    
    8
    
    
    
    11Income (loss) before income taxes
    
    
    243
    
    
    
    727
    
    
    
    (2,168
    )Income tax provision (benefit)
    
    
    83
    
    
    
    262
    
    
    
    (246
    )Net income (loss)
    
    
    160
    
    
    
    465
    
    
    
    (1,922
    )Net income (loss) attributable to noncontrolling interests
    
    
    44
    
    
    
    60
    
    
    
    (12
    )Net income (loss) attributable to our common shareholder
    
    $
    116
    
    
    $
    405
    
    
    $
    (1,910
    )
 
 (A)
    
    Realized gains on derivative instruments not included in segment
income represents realized gains on foreign currency derivatives
related to capital expenditures for our previously announced expansion
in South America.(B)
    
    The financial information for our segments includes the segment income
of our non-consolidated affiliates on a proportionately consolidated
basis, which is consistent with the way we manage our business
segments. However, under US GAAP, these non-consolidated affiliates
are accounted for using the equity method of accounting. Therefore, in
order to reconcile the financial information for the segments shown in
the tables above to the relevant US GAAP-based measures, we must
include our proportion of the remaining income statement items that
are not included in segment income above. See Note 8  Investment in
and Advances to Non-Consolidated Affiliates and Related Party
Transactions for further information about these non-consolidated
affiliates. 119




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Geographical Area Information
  Year EndedMarch 31,2011
    
    
    2010
    
    
    2009Net sales:United States
    
    $
    3,737
    
    
    $
    3,134
    
    
    $
    3,685Asia and Other Pacific
    
    
    1,866
    
    
    
    1,481
    
    
    
    1,536Brazil
    
    
    1,214
    
    
    
    947
    
    
    
    1,006Canada
    
    
    182
    
    
    
    152
    
    
    
    243Germany
    
    
    2,483
    
    
    
    2,041
    
    
    
    2,439United Kingdom
    
    
    178
    
    
    
    165
    
    
    
    347Other Europe
    
    
    917
    
    
    
    753
    
    
    
    921Total Net sales
    
    $
    10,577
    
    
    $
    8,673
    
    
    $
    10,177
 March 31,2011
    
    
    2010Long-lived assets:United States
    
    $
    1,341
    
    
    $
    1,449Asia and Other Pacific
    
    
    411
    
    
    
    421Brazil
    
    
    630
    
    
    
    625Canada
    
    
    126
    
    
    
    135Germany
    
    
    364
    
    
    
    384United Kingdom
    
    
    45
    
    
    
    52Other Europe
    
    
    332
    
    
    
    315Total long-lived assets
    
    $
    3,249
    
    
    $
    3,381
 Information about Major Customers and Primary Supplier
  Year EndedMarch 31,2011
    
    2010
    
    2009Rexam
    
    
    15
    %
    
    
    16
    %
    
    
    17
    %Anheuser-Busch
    
    
    13
    %
    
    
    11
    %
    
    
    7
    %
 120




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Year EndedMarch 31,2011
    
    2010
    
    2009Purchases from
Alcan as a
percentage of total
combined metal
purchases in
kt(A)(B)
    
    
    33
    %
    
    
    38
    %
    
    
    37
    %
 
 (A)
    
    One kilotonne (kt) is 1,000 metric tonnes. One metric tonne is equivalent to 2,204.6 pounds. 20.
    
    SUPPLEMENTAL INFORMATION
  March 31,2011
    
    
    2010Currency translation adjustment
    
    $
    102
    
    
    $
    (8
    )Fair value of effective portion of hedges
    
    
    22
    
    
    
    (27
    )Pension and other benefits
    
    
    (67
    )
    
    
    (68
    )AOCI
    
    $
    57
    
    
    $
    (103
    )
 Year EndedMarch 31,2011
    
    2010
    
    2009Supplemental
disclosures of cash
flow information:Interest paid
    
    $
    134
    
    
    $
    158
    
    
    $
    169Income taxes paid
    
    
    115
    
    
    
    50
    
    
    
    65Return of capital
    
    
    1,700
    
    
    
    
    
    
    
    
 121




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 21.
    
    QUARTERLY RESULTS
  (Unaudited)Quarter EndedJune 30,
    
    
    September 30,
    
    
    December 31,
    
    
    March 31,2010
    
    
    2010
    
    
    2010
    
    
    2011Net sales
    
    $
    2,533
    
    
    $
    2,524
    
    
    $
    2,560
    
    
    $
    2,960Cost of goods sold (exclusive of depreciation and amortization)
    
    
    2,208
    
    
    
    2,188
    
    
    
    2,232
    
    
    
    2,599Selling, general and administrative expenses
    
    
    81
    
    
    
    97
    
    
    
    94
    
    
    
    103Depreciation and amortization
    
    
    103
    
    
    
    104
    
    
    
    100
    
    
    
    97Research and development expenses
    
    
    9
    
    
    
    9
    
    
    
    9
    
    
    
    13Interest expense and amortization of debt issuance costs
    
    
    39
    
    
    
    40
    
    
    
    46
    
    
    
    82Interest income
    
    
    (3
    )
    
    
    (3
    )
    
    
    (4
    )
    
    
    (3
    )(Gain) loss on change in fair value of derivative instruments, net
    
    
    6
    
    
    
    (34
    )
    
    
    (30
    )
    
    
    15Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    74
    
    
    
    10Restructuring charges, net
    
    
    6
    
    
    
    9
    
    
    
    20
    
    
    
    (1
    )Equity in net loss of non-consolidated affiliates
    
    
    3
    
    
    
    3
    
    
    
    5
    
    
    
    1Other (income) expenses, net
    
    
    7
    
    
    
    (18
    )
    
    
    16
    
    
    
    2Income tax provision (benefit)
    
    
    15
    
    
    
    56
    
    
    
    33
    
    
    
    (21
    )Net income (loss)
    
    
    59
    
    
    
    73
    
    
    
    (35
    )
    
    
    63Net income attributable to noncontrolling interests
    
    
    9
    
    
    
    11
    
    
    
    11
    
    
    
    13Net income (loss) attributable to our common shareholder
    
    $
    50
    
    
    $
    62
    
    
    $
    (46
    )
    
    $
    50
 (Unaudited)Quarter EndedJune 30,
    
    
    September 30,
    
    
    December 31,
    
    
    March 31,2009
    
    
    2009
    
    
    2009
    
    
    2010Net sales
    
    $
    1,960
    
    
    $
    2,181
    
    
    $
    2,112
    
    
    $
    2,420Cost of goods sold (exclusive of depreciation and amortization)
    
    
    1,537
    
    
    
    1,734
    
    
    
    1,795
    
    
    
    2,147Selling, general and administrative expenses
    
    
    74
    
    
    
    77
    
    
    
    92
    
    
    
    94Depreciation and amortization
    
    
    100
    
    
    
    92
    
    
    
    93
    
    
    
    99Research and development expenses
    
    
    8
    
    
    
    9
    
    
    
    10
    
    
    
    11Interest expense and amortization of debt issuance costs
    
    
    43
    
    
    
    44
    
    
    
    44
    
    
    
    44Interest income
    
    
    (3
    )
    
    
    (3
    )
    
    
    (2
    )
    
    
    (3
    )Gain on change in fair value of derivative instruments, net
    
    
    (72
    )
    
    
    (80
    )
    
    
    (40
    )
    
    
    (2
    )Restructuring charges, net
    
    
    3
    
    
    
    3
    
    
    
    1
    
    
    
    7Equity in net (income) loss of non-consolidated affiliates
    
    
    10
    
    
    
    10
    
    
    
    (8
    )
    
    
    3Other (income) expenses, net
    
    
    (13
    )
    
    
    (6
    )
    
    
    (2
    )
    
    
    (4
    )Income tax provision (benefit)
    
    
    112
    
    
    
    87
    
    
    
    48
    
    
    
    15Net income
    
    
    161
    
    
    
    214
    
    
    
    81
    
    
    
    9Net income attributable to noncontrolling interests
    
    
    18
    
    
    
    19
    
    
    
    13
    
    
    
    10Net income (loss) attributable to our common shareholder
    
    $
    143
    
    
    $
    195
    
    
    $
    68
    
    
    $
    (1
    )
 122




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 22.
    
    SUPPLEMENTAL GUARANTOR INFORMATION
   NOVELIS INC.
 CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
 Year Ended March 31, 2011Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    1,048
    
    
    $
    8,515
    
    
    $
    3,118
    
    
    $
    (2,104
    )
    
    $
    10,577Cost of goods sold (exclusive of
depreciation and amortization)
    
    
    1,006
    
    
    
    7,512
    
    
    
    2,813
    
    
    
    (2,104
    )
    
    
    9,227Selling, general and administrative expenses
    
    
    40
    
    
    
    272
    
    
    
    63
    
    
    
    
    
    
    
    375Depreciation and amortization
    
    
    5
    
    
    
    306
    
    
    
    93
    
    
    
    
    
    
    
    404Research and development expenses
    
    
    28
    
    
    
    10
    
    
    
    2
    
    
    
    
    
    
    
    40Interest expense and amortization of debt
issuance costs
    
    
    177
    
    
    
    85
    
    
    
    4
    
    
    
    (59
    )
    
    
    207Interest income
    
    
    (58
    )
    
    
    (13
    )
    
    
    (1
    )
    
    
    59
    
    
    
    (13
    )Gain on change in fair value of derivative
instruments, net
    
    
    1
    
    
    
    (49
    )
    
    
    5
    
    
    
    
    
    
    
    (43
    )Loss on extinguishment of debt
    
    
    33
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    84Restructuring charges, net
    
    
    3
    
    
    
    28
    
    
    
    3
    
    
    
    
    
    
    
    34Equity in net (income) loss of
non-consolidated affiliates
    
    
    (289
    )
    
    
    12
    
    
    
    
    
    
    
    289
    
    
    
    12Other (income) expenses, net
    
    
    (24
    )
    
    
    50
    
    
    
    (19
    )
    
    
    
    
    
    
    7922
    
    
    
    8,264
    
    
    
    2,963
    
    
    
    (1,815
    )
    
    
    10,334Income (loss) before income taxes
    
    
    126
    
    
    
    251
    
    
    
    155
    
    
    
    (289
    )
    
    
    243Income tax provision
    
    
    10
    
    
    
    41
    
    
    
    32
    
    
    
    
    
    
    
    83Net income (loss)
    
    
    116
    
    
    
    210
    
    
    
    123
    
    
    
    (289
    )
    
    
    160Net income attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    
    
    
    
    44Net income (loss) attributable to our
common shareholder
    
    $
    116
    
    
    $
    210
    
    
    $
    79
    
    
    $
    (289
    )
    
    $
    116
 123




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 NOVELIS INC.
 CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
 Year Ended March 31, 2010Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    849
    
    
    $
    6,906
    
    
    $
    2,468
    
    
    $
    (1,550
    )
    
    $
    8,673Cost of goods sold (exclusive of
depreciation and amortization)
    
    
    772
    
    
    
    5,850
    
    
    
    2,141
    
    
    
    (1,550
    )
    
    
    7,213Selling, general and administrative expenses
    
    
    51
    
    
    
    226
    
    
    
    60
    
    
    
    
    
    
    
    337Depreciation and amortization
    
    
    4
    
    
    
    289
    
    
    
    91
    
    
    
    
    
    
    
    384Research and development expenses
    
    
    26
    
    
    
    11
    
    
    
    1
    
    
    
    
    
    
    
    38Interest expense and amortization of debt
issuance costs
    
    
    114
    
    
    
    117
    
    
    
    8
    
    
    
    (64
    )
    
    
    175Interest income
    
    
    (63
    )
    
    
    (10
    )
    
    
    (2
    )
    
    
    64
    
    
    
    (11
    )Gain on change in fair value of derivative
instruments, net
    
    
    (5
    )
    
    
    (165
    )
    
    
    (24
    )
    
    
    
    
    
    
    (194
    )Restructuring charges, net
    
    
    
    
    
    
    8
    
    
    
    6
    
    
    
    
    
    
    
    14Equity in net (income) loss of
non-consolidated affiliates
    
    
    (396
    )
    
    
    15
    
    
    
    
    
    
    
    396
    
    
    
    15Other (income) expenses, net
    
    
    (34
    )
    
    
    46
    
    
    
    (37
    )
    
    
    
    
    
    
    (25
    )469
    
    
    
    6,387
    
    
    
    2,244
    
    
    
    (1,154
    )
    
    
    7,946Income (loss) before income taxes
    
    
    380
    
    
    
    519
    
    
    
    224
    
    
    
    (396
    )
    
    
    727Income tax provision (benefit)
    
    
    (25
    )
    
    
    249
    
    
    
    38
    
    
    
    
    
    
    
    262Net income (loss)
    
    
    405
    
    
    
    270
    
    
    
    186
    
    
    
    (396
    )
    
    
    465Net income attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Net income (loss) attributable to our
common shareholder
    
    $
    405
    
    
    $
    270
    
    
    $
    126
    
    
    $
    (396
    )
    
    $
    405
 124




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 NOVELIS INC.
 CONSOLIDATING STATEMENT OF OPERATIONS
(In millions)
 Year Ended March 31, 2009Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    $
    1,186
    
    
    $
    8,421
    
    
    $
    2,647
    
    
    $
    (2,077
    )
    
    $
    10,177Cost of goods sold (exclusive of
depreciation and amortization)
    
    
    1,182
    
    
    
    7,704
    
    
    
    2,467
    
    
    
    (2,077
    )
    
    
    9,276Selling, general and administrative expenses
    
    
    9
    
    
    
    217
    
    
    
    68
    
    
    
    
    
    
    
    294Depreciation and amortization
    
    
    16
    
    
    
    328
    
    
    
    95
    
    
    
    
    
    
    
    439Research and development expenses
    
    
    29
    
    
    
    10
    
    
    
    2
    
    
    
    
    
    
    
    41Interest expense and amortization of debt
issuance costs
    
    
    114
    
    
    
    134
    
    
    
    23
    
    
    
    (89
    )
    
    
    182Interest income
    
    
    (78
    )
    
    
    (15
    )
    
    
    (10
    )
    
    
    89
    
    
    
    (14
    )Loss on change in fair value of derivative
instruments, net
    
    
    5
    
    
    
    511
    
    
    
    40
    
    
    
    
    
    
    
    556Impairment of goodwill
    
    
    
    
    
    
    1,340
    
    
    
    
    
    
    
    
    
    
    
    1,340Gain on extinguishment of debt, net
    
    
    (67
    )
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    (122
    )Restructuring charges, net
    
    
    5
    
    
    
    74
    
    
    
    16
    
    
    
    
    
    
    
    95Equity in net (income) loss of
non-consolidated affiliates
    
    
    1,890
    
    
    
    172
    
    
    
    
    
    
    
    (1,890
    )
    
    
    172Other (income) expenses, net
    
    
    (14
    )
    
    
    11
    
    
    
    89
    
    
    
    
    
    
    
    863,091
    
    
    
    10,431
    
    
    
    2,790
    
    
    
    (3,967
    )
    
    
    12,345Income (loss) before income taxes
    
    
    (1,905
    )
    
    
    (2,010
    )
    
    
    (143
    )
    
    
    1,890
    
    
    
    (2,168
    )Income tax provision (benefit)
    
    
    5
    
    
    
    (237
    )
    
    
    (14
    )
    
    
    
    
    
    
    (246
    )Net income (loss)
    
    
    (1,910
    )
    
    
    (1,773
    )
    
    
    (129
    )
    
    
    1,890
    
    
    
    (1,922
    )Net loss attributable to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )Net loss attributable to our common
shareholder
    
    $
    (1,910
    )
    
    $
    (1,773
    )
    
    $
    (117
    )
    
    $
    1,890
    
    
    $
    (1,910
    )
 125




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 CONSOLIDATING BALANCE SHEET

(In millions)
 As of March 31, 2011Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assetsCash and cash equivalents
    
    $
    1
    
    
    $
    225
    
    
    $
    85
    
    
    $
    
    
    
    $
    311Accounts receivable, net of allowances third parties
    
    
    31
    
    
    
    920
    
    
    
    529
    
    
    
    
    
    
    
    1,480 related parties
    
    
    640
    
    
    
    319
    
    
    
    89
    
    
    
    (1,020
    )
    
    
    28Inventories
    
    
    60
    
    
    
    961
    
    
    
    317
    
    
    
    
    
    
    
    1,338Prepaid expenses and other current assets
    
    
    2
    
    
    
    40
    
    
    
    8
    
    
    
    
    
    
    
    50Fair value of derivative instruments
    
    
    5
    
    
    
    140
    
    
    
    30
    
    
    
    (10
    )
    
    
    165Deferred income tax assets
    
    
    
    
    
    
    37
    
    
    
    2
    
    
    
    
    
    
    
    39Total current assets
    
    
    739
    
    
    
    2,642
    
    
    
    1,060
    
    
    
    (1,030
    )
    
    
    3,411Property, plant and equipment, net
    
    
    136
    
    
    
    1,898
    
    
    
    509
    
    
    
    
    
    
    
    2,543Goodwill
    
    
    
    
    
    
    600
    
    
    
    11
    
    
    
    
    
    
    
    611Intangible assets, net
    
    
    15
    
    
    
    699
    
    
    
    (7
    )
    
    
    
    
    
    
    707Investments in and advances to non-consolidated affiliates
    
    
    1,273
    
    
    
    743
    
    
    
    
    
    
    
    (1,273
    )
    
    
    743Fair value of derivative instruments, net of current portion
    
    
    
    
    
    
    16
    
    
    
    3
    
    
    
    (2
    )
    
    
    17Deferred income tax assets
    
    
    
    
    
    
    39
    
    
    
    13
    
    
    
    
    
    
    
    52Other long-term assets
    
    
    2,768
    
    
    
    195
    
    
    
    68
    
    
    
    (2,819
    )
    
    
    212Total assets
    
    $
    4,931
    
    
    $
    6,832
    
    
    $
    1,657
    
    
    $
    (5,124
    )
    
    $
    8,296LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    15
    
    
    $
    5
    
    
    $
    1
    
    
    $
    
    
    
    $
    21Short-term borrowings third parties
    
    
    
    
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    17 related parties
    
    
    22
    
    
    
    334
    
    
    
    20
    
    
    
    (376
    )
    
    
    Accounts payable third parties
    
    
    73
    
    
    
    812
    
    
    
    493
    
    
    
    
    
    
    
    1,378 related parties
    
    
    78
    
    
    
    438
    
    
    
    175
    
    
    
    (641
    )
    
    
    50Fair value of derivative instruments
    
    
    4
    
    
    
    73
    
    
    
    17
    
    
    
    (12
    )
    
    
    82Accrued expenses and other current liabilities
    
    
    119
    
    
    
    332
    
    
    
    119
    
    
    
    (2
    )
    
    
    568Deferred income tax liabilities
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    43Total current liabilities
    
    
    311
    
    
    
    2,037
    
    
    
    842
    
    
    
    (1,031
    )
    
    
    2,159Long-term debt, net of current portion third parties
    
    
    4,019
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    4,065 related parties
    
    
    97
    
    
    
    2,644
    
    
    
    77
    
    
    
    (2,818
    )
    
    
    Deferred income tax liabilities
    
    
    
    
    
    
    542
    
    
    
    10
    
    
    
    
    
    
    
    552Accrued postretirement benefits
    
    
    40
    
    
    
    344
    
    
    
    142
    
    
    
    
    
    
    
    526Other long-term liabilities
    
    
    19
    
    
    
    336
    
    
    
    6
    
    
    
    (2
    )
    
    
    3594,486
    
    
    
    5,949
    
    
    
    1,077
    
    
    
    (3,851
    )
    
    
    7,661Commitments and contingenciesShareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,830
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,830Retained earnings (accumulated deficit)
    
    
    (1,442
    )
    
    
    892
    
    
    
    434
    
    
    
    (1,326
    )
    
    
    (1,442
    )Accumulated other comprehensive income (loss)
    
    
    57
    
    
    
    (9
    )
    
    
    (44
    )
    
    
    53
    
    
    
    57Total equity of our common shareholder
    
    
    445
    
    
    
    883
    
    
    
    390
    
    
    
    (1,273
    )
    
    
    445Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    
    
    
    
    190Total equity
    
    
    445
    
    
    
    883
    
    
    
    580
    
    
    
    (1,273
    )
    
    
    635Total liabilities and equity
    
    $
    4,931
    
    
    $
    6,832
    
    
    $
    1,657
    
    
    $
    (5,124
    )
    
    $
    8,296
 126




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 NOVELIS INC.
 CONSOLIDATING BALANCE SHEET
(In millions)
 As of March 31, 2010Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedASSETSCurrent assetsCash and cash equivalents
    
    $
    22
    
    
    $
    266
    
    
    $
    149
    
    
    $
    
    
    
    $
    437Accounts receivable, net of allowances third parties
    
    
    24
    
    
    
    747
    
    
    
    372
    
    
    
    
    
    
    
    1,143 related parties
    
    
    695
    
    
    
    312
    
    
    
    62
    
    
    
    (1,045
    )
    
    
    24Inventories
    
    
    47
    
    
    
    770
    
    
    
    266
    
    
    
    
    
    
    
    1,083Prepaid expenses and other current assets
    
    
    2
    
    
    
    28
    
    
    
    9
    
    
    
    
    
    
    
    39Fair value of derivative instruments
    
    
    5
    
    
    
    161
    
    
    
    43
    
    
    
    (12
    )
    
    
    197Deferred income tax assets
    
    
    
    
    
    
    7
    
    
    
    5
    
    
    
    
    
    
    
    12Total current assets
    
    
    795
    
    
    
    2,291
    
    
    
    906
    
    
    
    (1,057
    )
    
    
    2,935Property, plant and equipment, net
    
    
    138
    
    
    
    1,976
    
    
    
    518
    
    
    
    
    
    
    
    2,632Goodwill
    
    
    
    
    
    
    600
    
    
    
    11
    
    
    
    
    
    
    
    611Intangible assets, net
    
    
    6
    
    
    
    740
    
    
    
    3
    
    
    
    
    
    
    
    749Investments in and advances to non-consolidated affiliates
    
    
    1,998
    
    
    
    708
    
    
    
    1
    
    
    
    (1,998
    )
    
    
    709Fair value of derivative instruments, net of current portion
    
    
    
    
    
    
    7
    
    
    
    2
    
    
    
    (2
    )
    
    
    7Deferred income tax assets
    
    
    1
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    5Other long-term assets
    
    
    976
    
    
    
    199
    
    
    
    78
    
    
    
    (1,139
    )
    
    
    114Total assets
    
    $
    3,914
    
    
    $
    6,524
    
    
    $
    1,520
    
    
    $
    (4,196
    )
    
    $
    7,762LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    3
    
    
    $
    13
    
    
    $
    100
    
    
    $
    
    
    
    $
    116Short-term borrowings third parties
    
    
    
    
    
    
    61
    
    
    
    14
    
    
    
    
    
    
    
    75 related parties
    
    
    41
    
    
    
    457
    
    
    
    21
    
    
    
    (519
    )
    
    
    Accounts payable third parties
    
    
    58
    
    
    
    600
    
    
    
    418
    
    
    
    
    
    
    
    1,076 related parties
    
    
    62
    
    
    
    350
    
    
    
    166
    
    
    
    (525
    )
    
    
    53Fair value of derivative instruments
    
    
    7
    
    
    
    102
    
    
    
    13
    
    
    
    (12
    )
    
    
    110Accrued expenses and other current liabilities
    
    
    52
    
    
    
    279
    
    
    
    106
    
    
    
    (1
    )
    
    
    436Deferred income tax liabilities
    
    
    
    
    
    
    33
    
    
    
    1
    
    
    
    
    
    
    
    34Total current liabilities
    
    
    223
    
    
    
    1,895
    
    
    
    839
    
    
    
    (1,057
    )
    
    
    1,900Long-term debt, net of current portion third parties
    
    
    1,635
    
    
    
    844
    
    
    
    1
    
    
    
    
    
    
    
    2,480 related parties
    
    
    115
    
    
    
    929
    
    
    
    94
    
    
    
    (1,138
    )
    
    
    Deferred income tax liabilities
    
    
    
    
    
    
    485
    
    
    
    12
    
    
    
    
    
    
    
    497Accrued postretirement benefits
    
    
    31
    
    
    
    349
    
    
    
    119
    
    
    
    
    
    
    
    499Other long-term liabilities
    
    
    41
    
    
    
    333
    
    
    
    5
    
    
    
    (3
    )
    
    
    3762,045
    
    
    
    4,835
    
    
    
    1,070
    
    
    
    (2,198
    )
    
    
    5,752Commitments and contingenciesShareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid-in capital
    
    
    3,530
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,530Retained earnings (accumulated deficit)
    
    
    (1,558
    )
    
    
    1,818
    
    
    
    349
    
    
    
    (2,167
    )
    
    
    (1,558
    )Accumulated other comprehensive income (loss)
    
    
    (103
    )
    
    
    (129
    )
    
    
    (40
    )
    
    
    169
    
    
    
    (103
    )Total equity of our common shareholder
    
    
    1,869
    
    
    
    1,689
    
    
    
    309
    
    
    
    (1,998
    )
    
    
    1,869Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    141Total equity
    
    
    1,869
    
    
    
    1,689
    
    
    
    450
    
    
    
    (1,998
    )
    
    
    2,010Total liabilities and equity
    
    $
    3,914
    
    
    $
    6,524
    
    
    $
    1,520
    
    
    $
    (4,196
    )
    
    $
    7,762
 127




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 NOVELIS INC.
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In millions)
 Year Ended March 31, 2011Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities
    
    $
    (520
    )
    
    $
    (626
    )
    
    $
    99
    
    
    $
    1,501
    
    
    $
    454INVESTING ACTIVITIESCapital expenditures
    
    
    (21
    )
    
    
    (162
    )
    
    
    (51
    )
    
    
    
    
    
    
    (234
    )Proceeds from sales of assets
    
    
    
    
    
    
    29
    
    
    
    2
    
    
    
    
    
    
    
    31Changes to investment in and advances to non-consolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Proceeds from loans receivable, net  related parties
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )Net proceeds from settlement of derivative instruments
    
    
    (5
    )
    
    
    80
    
    
    
    16
    
    
    
    
    
    
    
    91Net cash provided by (used in) investing activities
    
    
    (26
    )
    
    
    (54
    )
    
    
    (33
    )
    
    
    
    
    
    
    (113
    )FINANCING ACTIVITIESProceeds from issuance of debt third parties
    
    
    3,985
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,985 related parties
    
    
    
    
    
    
    1,681
    
    
    
    
    
    
    
    (1,681
    )
    
    
    Principal repayments third parties
    
    
    (1,530
    )
    
    
    (859
    )
    
    
    (100
    )
    
    
    
    
    
    
    (2,489
    ) related parties
    
    
    (18
    )
    
    
    
    
    
    
    (18
    )
    
    
    36
    
    
    
    Short-term borrowings, net third parties
    
    
    
    
    
    
    (58
    )
    
    
    2
    
    
    
    
    
    
    
    (56
    ) related parties
    
    
    (19
    )
    
    
    (124
    )
    
    
    (1
    )
    
    
    144
    
    
    
    Return of capital
    
    
    (1,700
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Dividends noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    
    
    
    
    (18
    )Debt issuance costs
    
    
    (193
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193
    )Net cash provided by (used in) financing activities
    
    
    525
    
    
    
    640
    
    
    
    (135
    )
    
    
    (1,501
    )
    
    
    (471
    )Net increase in cash and cash equivalents
    
    
    (21
    )
    
    
    (40
    )
    
    
    (69
    )
    
    
    
    
    
    
    (130
    )Effect of exchange rate changes on cash balances held in foreign currencies
    
    
    
    
    
    
    (1
    )
    
    
    5
    
    
    
    
    
    
    
    4Cash and cash equivalents  beginning of period
    
    
    22
    
    
    
    266
    
    
    
    149
    
    
    
    
    
    
    
    437Cash and cash equivalents  end of period
    
    $
    1
    
    
    $
    225
    
    
    $
    85
    
    
    $
    
    
    
    $
    311
 128




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##### Table of Contents



Novelis Inc.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 NOVELIS INC.
 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In millions)
 Year Ended March 31, 2010Non-Parent
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIESNet cash provided by (used in) operating activities
    
    $
    (16
    )
    
    $
    564
    
    
    $
    296
    
    
    $
    
    
    
    $
    844INVESTING ACTIVITIESCapital expenditures
    
    
    (7
    )
    
    
    (66
    )
    
    
    (28
    )
    
    
    
    
    
    
    (101
    )Proceeds from sales of assets
    
    
    
    
    
    
    1
    
    
    
    4
    
    
    
    
    
    
    
    5Changes to investment in and advances to non-consolidated affiliates
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    3Proceeds from loans receivable, net  related parties
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4Net proceeds from settlement of derivative instruments
    
    
    (3
    )
    
    
    (285
    )
    
    
    (107
    )
    
    
    
    
    
    
    (395
    )Net cash provided by (used in) investing activities
    
    
    (10
    )
    
    
    (343
    )
    
    
    (131
    )
    
    
    
    
    
    
    (484
    )FINANCING ACTIVITIESProceeds from issuance of debt third parties
    
    
    177
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    177 related parties
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Principal repayments third parties
    
    
    (3
    )
    
    
    (13
    )
    
    
    (51
    )
    
    
    
    
    
    
    (67
    ) related parties
    
    
    (166
    )
    
    
    (76
    )
    
    
    (12
    )
    
    
    159
    
    
    
    (95
    )Short-term borrowings, net third parties
    
    
    
    
    
    
    (172
    )
    
    
    (21
    )
    
    
    
    
    
    
    (193
    ) related parties
    
    
    34
    
    
    
    127
    
    
    
    (2
    )
    
    
    (159
    )
    
    
    Dividends noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    (13
    )Debt issuance costs
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Net cash provided by (used in) financing activities
    
    
    45
    
    
    
    (134
    )
    
    
    (99
    )
    
    
    
    
    
    
    (188
    )Net increase in cash and cash equivalents
    
    
    19
    
    
    
    87
    
    
    
    66
    
    
    
    
    
    
    
    172Effect of exchange rate changes on cash balances held in foreign currencies
    
    
    
    
    
    
    4
    
    
    
    13
    
    
    
    
    
    
    
    17Cash and cash equivalents  beginning of period
    
    
    3
    
    
    
    175
    
    
    
    70
    
    
    
    
    
    
    
    248Cash and cash equivalents  end of period
    
    $
    22
    
    
    $
    266
    
    
    $
    149
    
    
    $
    
    
    
    $
    437
 129




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##### Table of Contents



Item 9.
    
    Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A(T).
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Managements Report on Internal Control over Financial Reporting
  
    
    Pertain to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with GAAP, and that receipts and
expenditures of the Company are being made only in accordance with authorizations of
management and directors of the Company; and
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a material effect on
the Companys consolidated financial statements.
  Internal Control
 Integrated Framework.
 130




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
  131




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
 Our Directors
  Name
    
    Director Since
    
    Age
    
    PositionKumar Mangalam Birla
    
    May 15, 2007
    
    
    43
    
    
    Chairman of the BoardAskaran Agarwala(B)
    
    May 15, 2007
    
    
    77
    
    
    DirectorD. Bhattacharya(A)(B)
    
    May 15, 2007
    
    
    62
    
    
    Director and Vice Chairman of the BoardClarence J. Chandran(A)(B)
    
    January 6, 2005
    
    
    62
    
    
    DirectorDonald A. Stewart(A)
    
    May 15, 2007
    
    
    64
    
    
    Director
 
  (A)
    
    Member of our Audit Committee.(B)
    
    Member of our Compensation Committee. Mr. Kumar Mangalam Birla
 Askaran Agarwala
 Mr. Debnaryan Bhattacharya
 132




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##### Table of Contents



Clarence J. Chandran
 Donald A. Stewart
 Our Executive Officers
  Name
    
    Age
    
    PositionPhilip Martens
    
    
    51
    
    
    President and Chief Executive OfficerSteven Fisher
    
    
    40
    
    
    Senior Vice President and Chief Financial OfficerAlexandre Almeida
    
    
    47
    
    
    Senior Vice President and President, Novelis South AmericaJean-Marc Germain
    
    
    45
    
    
    Senior Vice President and President, Novelis North AmericaAntonio Tadeu Coelho Nardocci
    
    
    53
    
    
    Senior Vice President and President, Novelis EuropeThomas Walpole
    
    
    56
    
    
    Senior Vice President, Global Manufacturing Excellence, and
President, Novelis AsiaEric Drummond
    
    
    51
    
    
    Senior Vice President and Chief People OfficerNicholas Madden
    
    
    54
    
    
    Vice President and Chief Procurement OfficerErwin Mayr
    
    
    41
    
    
    Senior Vice President and Chief Strategy and Commercial OfficerRandal Miller
    
    
    48
    
    
    Vice President, TreasurerRobert Nelson
    
    
    54
    
    
    Vice President, Controller and Chief Accounting OfficerLeslie J. Parrette, Jr.
    
    
    49
    
    
    Senior Vice President, General Counsel, Compliance Officer and
Corporate Secretary
 Philip Martens
 Steven Fisher
 133




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##### Table of Contents



Alexandre Almeida
 Jean-Marc Germain
 Antonio Tadeu Coelho Nardocci
 Thomas Walpole
 Eric Drummond
 Nicholas Madden
 Erwin Mayr
 Randal P. Miller
 134




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##### Table of Contents



Robert Nelson
 Leslie J. Parrette, Jr.
 Karen Renner
 Board of Directors and Corporate Governance Matters
   Novelis Board of Directors
   135




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##### Table of Contents



Corporate Governance
  Committees of Our Board of Directors
   Audit Committee and Financial Experts
   
    
    evaluating and compensating our independent registered public accounting firm;
    
    making recommendations to the Board of Directors and shareholders relating to the
appointment, retention and termination of our independent registered public accounting firm;
    
    discussing with our independent registered public accounting firm their qualifications
and independence from management;
    
    reviewing with our independent registered public accounting firm the scope and results of
their audit;
    
    pre-approving all audit and permissible non-audit services to be performed by our
independent registered public accounting firm;
    
    reviewing areas of potential significant financial risk and the steps taken to monitor
and manage such exposures;
    
    overseeing the financial reporting process and discussing with management and our
independent registered public accounting firm the interim and annual financial statements
that we file with the SEC; and
    
    reviewing and monitoring our accounting principles, accounting policies and disclosure,
internal control over financial reporting and disclosure controls and procedures.
 Compensation Committee
  136




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##### Table of Contents



Code of Conduct and Guidelines for Ethical Behavior
  
 Item 11.
    
    Executive Compensation
  Named Executive Officer
    
    TitlePhilip Martens
    
    President and Chief Executive OfficerSteven Fisher
    
    Senior Vice President and Chief Financial OfficerTadeu Nardocci
    
    Senior Vice President and President of Novelis EuropeErwin Mayr
    
    Senior Vice President and Chief Strategy and Commercial OfficerJean-Marc Germain
    
    Senior Vice President and President of Novelis North America
 Compensation Committee and Role of Management
       137




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##### Table of Contents



Objectives and Design of Our Compensation Program
  
    
    Provide Total Cash and Total Direct Compensation Opportunities That Are Competitive with
Similar Positions at Comparable Companies: To enable us to attract, motivate and retain
qualified executives, total cash compensation (base pay and annual short-term incentives) and
total direct compensation opportunities for each executive (base pay, annual short-term
incentives and long-term incentives) are targeted at levels to be competitive with similar
positions at comparable companies.
    
    A Substantial Portion of Total Direct Compensation Should Be at Risk Because It Is
Performance-Based: We believe executives should be rewarded for their performance.
Consequently, a substantial portion of an executives total direct compensation should be at
risk, with amounts actually paid dependent on performance against pre-established objectives
for the individual and the Company. The portion of an individuals total direct compensation
that is based upon these performance objectives should increase as the individuals business
responsibilities increase.
    
    A Substantial Portion of Total Direct Compensation Should be Delivered in the Form of
Long-Term Performance Based Awards: We believe a long-term stake in the sustained
performance of Novelis effectively aligns executive and shareholder interests and provides
motivation for enhancing shareholder value.
  Key Elements of Our Compensation Program
 th
 Base Pay
 Short-Term (Annual) Incentives
 138




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##### Table of Contents



2011 AIP
 ActualTarget
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    PerformanceBonus
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    As a Percentage ofas Percentage of
    
    Performance
    
    Performance
    
    Targeted
    
    Actual
    
    TargetName
    
    Salary
    
    Objective
    
    Weighting
    
    Performance (A)
    
    Performance (A)
    
    PerformancePhilip Martens
    
    
    120%
    (E)
    
    EBITDA(B)
    
    
    40
    %
    
    
    369,000
    
    
    
    468,000
    
    
    
    126.8
    %Cash Flow (C)
    
    
    40
    %
    
    
    369,000
    
    
    
    621,188
    
    
    
    168.3
    %EHS (D)
    
    
    10
    %
    
    
    92,250
    
    
    
    92,035
    
    
    
    99.8
    %Individual
    
    
    10
    %
    
    
    92,250
    
    
    
    184,500
    
    
    
    200.0
    %Steven Fisher
    
    
    75
    %
    
    EBITDA(B)
    
    
    40
    %
    
    
    140,400
    
    
    
    178,068
    
    
    
    126.8
    %Cash Flow (C)
    
    
    40
    %
    
    
    140,400
    
    
    
    236,355
    
    
    
    168.3
    %EHS (D)
    
    
    10
    %
    
    
    35,100
    
    
    
    35,018
    
    
    
    99.8
    %Individual
    
    
    10
    %
    
    
    35,100
    
    
    
    42,120
    
    
    
    120.0
    %Tadeau Nardocci
    
    
    65
    %
    
    EBITDA(B)
    
    
    40
    %
    
    
    109,100
    
    
    
    138,371
    
    
    
    126.8
    %Cash Flow (C)
    
    
    40
    %
    
    
    109,100
    
    
    
    183,663
    
    
    
    168.3
    %EHS (D)
    
    
    10
    %
    
    
    27,275
    
    
    
    27,211
    
    
    
    99.8
    %Individual
    
    
    10
    %
    
    
    27,275
    
    
    
    27,275
    
    
    
    100.0
    %Erwin Mayr
    
    
    50
    %
    
    EBITDA (B)
    
    
    40
    %
    
    
    94,182
    
    
    
    119,450
    
    
    
    126.8
    %Cash Flow (C)
    
    
    40
    %
    
    
    94,182
    
    
    
    158,549
    
    
    
    168.3
    %EHS (D)
    
    
    10
    %
    
    
    23,546
    
    
    
    23,491
    
    
    
    99.8
    %Individual
    
    
    10
    %
    
    
    23,546
    
    
    
    28,255
    
    
    
    120.0
    %Jean-Marc Germain
    
    
    65
    %
    
    EBITDA (B)
    
    
    40
    %
    
    
    104,098
    
    
    
    132,026
    
    
    
    126.8
    %Cash Flow (C)
    
    
    40
    %
    
    
    104,098
    
    
    
    175,241
    
    
    
  168.3
    %EHS (D)
    
    
    10
    %
    
    
    26,024
    
    
    
    25,964
    
    
    
    99.8
    %Individual
    
    
    10
    %
    
    
    26,024
    
    
    
    52,049
    
    
    
    200.0
    %
 
  (A)
    
    All amounts earned in currencies other than U.S dollars are reflected
in this table and in the entire Compensation Discussion and Analysis
as U.S. Dollars as adjusted by the average of all month-end exchange
rates for the period April 1, 2010  March 31, 2011.(B)
    
    EBITDA refers to our normalized operating EBITDA and is calculated
by removing the following three items from Operating EBITDA (or
Segment Income as reported in our external US GAAP financial
statements): the impact from timing differences in the pass-through
of metal price changes to our customers, net of realized derivative
instruments; the impact from re-measuring to current exchange rates
any monetary assets and liabilities which are denominated in a
currency other than the functional currency of the reporting unit, net
of realized derivative instruments; and the impact from purchase
accounting amortizations, primarily related to the asset basis step-up
and contracts which were adjusted to fair value on the date Novelis
was acquired by Hindalco.(C)
    
    Cash Flow refers to our operating free cash flow and is defined as
(1) operating EBITDA (2) minus capital expenditures (3) plus (minus)
net cash inflows (outflows) for working capital and other
assets/liabilities. For the Company-wide metric, we also include net
cash inflows (outflows) for (4) interest, (5) taxes, (6) dividends,
(7) corporate expenses, (8) restructuring charges and (9) proceeds
from asset sales.(D)
    
    EHS refers to our recordable case rates, lost time injury and
illness case rates and certain strategic EHS initiatives. The
recordable case rate establishes targets for reducing the level of
workplace accidents resulting in an injury requiring more than first
aid treatment. The lost time injury and illness case rate establishes
targets for reducing the level of workplace injuries or illnesses
resulting in lost time of one shift or more. The strategic EHS
initiatives establish targets for the completion of environmental
initiatives that lead to significant reductions in water emissions,
energy or waste aligned with site specific issues, and, establish
targets for the completion of occupational health and safety 139




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##### Table of Contents



initiatives that reduce site specific risks and exposures.(E)
    
    Mr. Martens received an AIP bonus for 9 months at
110% of target and 3
months at 120% of target. The change coincided with his promotion from
Chief Operating Officer to Chief Executive Officer. Long-Term Incentives
       2011 LTIP
 2011 LTIP
    
    Number of
    
    Number ofApproved
    
    SARs
    
    RSUsName
    
    Grant ($)
    
    Granted (A)
    
    GrantedPhilip Martens
    
    
    2,500,000
    
    
    
    1,253,082
    
    
    
    159,517Steven Fisher
    
    
    577,500
    
    
    
    289,462
    
    
    
    36,849Tadeu Nardocci
    
    
    577,500
    
    
    
    289,462
    
    
    
    36,849Erwin Mayr
    
    
    300,000
    
    
    
    150,370
    
    
    
    19,142Jean-Marc Germain
    
    
    577,500
    
    
    
    289,462
    
    
    
    36,849
 
  (A)
    
    Target Operating EBITDA for fiscal 2011 was exceeded and 25% of the
SARs will fully vest on May 25, 2011 for fiscal 2011. 140




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##### Table of Contents



Employee Benefits
 Employment-Related Agreements
 Employment Agreements See Summary
Compensation Table below for details.
 Change in Control Agreements See Potential Payments Upon Termination or Change in Control
below for details.
 Severance Compensation Agreements See Potential Payments Upon Termination or Change in Control below for details.
 Retention Agreements
 July 1,
    
    July 1,2011 ($)
    
    2012 ($)Steven Fisher
    
    
    75,000
    
    
    
    75,000Tadeu Nardocci
    
    
    72,847
    
    
    
    72,847
    (A)Erwin Mayr
    
    
    73,199
    
    
    
    73,199
    (A)Jean-Marc Germain
    
    
    54,000
    
    
    
    54,000
 
  (A)
    
    These amounts represent BRL 125,000 for Mr. Nardocci and CHF 73,250 for Mr. Mayr,
converted to USD. 141




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##### Table of Contents



See Outstanding Equity Awards as of March
31, 2011 Table below for details.
 Compensation Risk Assessment
  Compensation Committee Report
   
    
    Mr. Clarence J. Chandran, Chairman
    
    Mr. Debnarayan Bhattacharya
    
    Mr. Askaran Agarwala
 Summary Compensation Table
  Non-EquityIncentive
    
    Change inStock
    
    Option
    
    Plan
    
    Pension
    
    All OtherSalary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    Value
    
    CompensationName and Principal Position
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    Total ($)Philip Martens,
    
    
    2011
    
    
    
    755,000
    
    
    
    
    
    
    
    500,000
    (A)
    
    
    2,000,000
    (B)
    
    
    1,365,723
    (C)
    
    
    
    
    
    
    128,802
    (D)
    
    
    4,749,525President and
    
    
    2010
    
    
    
    670,833
    
    
    
    
    
    
    
    
    
    
    
    2,000,000
    
    
    
    1,123,775
    
    
    
    
    
    
    
    338,350
    
    
    
    4,132,958Chief Executive OfficerSteven Fisher,
    
    
    2011
    
    
    
    463,500
    
    
    
    
    
    
    
    115,500
    (A)
    
    
    462,000
    (B)
    
    
    491,561
    (C)
    
    
    
    
    
    
    160,555
    (D)
    
    
    1,693,116Senior Vice President and
    
    
    2010
    
    
    
    450,000
    
    
    
    
    
    
    
    180,000
    
    
    
    525,000
    
    
    
    911,982
    
    
    
    
    
    
    
    75,428
    
    
    
    2,142,410Chief Financial Officer
    
    
    2009
    
    
    
    425,000
    
    
    
    
    
    
    
    42,370
    
    
    
    500,000
    
    
    
    46,575
    
    
    
    
    
    
    
    67,657
    
    
    
    1,081,602Tadeu Nardocci,
    
    
    2011
    
    
    
    417,558
    
    
    
    
    
    
    
    115,500
    (A)
    
    
    462,000
    (B)
    
    
    376,520
    (C)
    
    
    
    
    
    
    1,064,622
    (D)
    
    
    2,436,200Senior Vice President and
    
    
    2010
    
    
    
    457,779
    (E)
    
    
    
    
    
    
    154,020
    
    
    
    525,000
    
    
    
    611,149
    
    
    
    
    
    
    
    353,327
    
    
    
    2,101,275President of Novelis EuropeErwin Mayr, Senior Vice
    
    
    2011
    
    
    
    468,602
    
    
    
    
    
    
    
    60,000
    (A)
    
    
    240,000
    (B)
    
    
    329,745
    (C)
    
    
    46,836
    (F)
    
    
    737,805
    (D)
    
    
    1,882,988President and Chief Strategy
and Commercial OfficerJean-Marc Germain, Senior Vice
    
    
    2011
    
    
    
    381,531
    
    
    
    
    
    
    
    115,500
    (A)
    
    
    462,000
    (B)
    
    
    385,280
    (C)
    
    
    88,297
    (G)
    
    
    433,836
    (D)
    
    
    1,866,444President and
President of
    
    
    2010
    
    
    
    325,044
    
    
    
    
    
    
    
    130,000
    
    
    
    525,000
    
    
    
    542,142
    
    
    
    40,886
    
    
    
    86,333
    
    
    
    1,649,405Novelis North America
    
    
    2009
    
    
    
    318,625
    
    
    
    
    
    
    
    40,140
    
    
    
    500,000
    
    
    
    15,422
    
    
    
    24,847
    
    
    
    126,681
    
    
    
    1,025,715
 
 (A)
    
    This amount reflects the grant date fair value of the RSUs granted under the 2011 LTIP.(B)
    
    This amount reflects the grant date fair value of the SARs granted under the 2011 LTIP. Fair value is calculated using the Black-Scholes
value on the date of grant of $1.596 per SAR.(C)
    
    This amount reflects the cash award earned under the 2011 AIP. 142




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##### Table of Contents



(D)
    
    The amounts shown in the All Other Compensation Column reflect the values from the table below.(E)
    
    This amount represents base salary and a cash payout of vacation days not utilized at the end of Mr. Nardoccis Brazilian employment
contract.(F)
    
    Since our spin-off from Alcan in 2005, we have continued to participate in Alcans two pension plans in Switzerland: (1) Pensionskasse Alcan
Schweiz (defined benefit plan) and (2) Erganzungskasse Alcan Schweiz (supplemental defined contribution plan). The defined benefit plan is
computed based on a participants final earnings (up to a limit and less a coordination amount) and service up to 45 years. The defined
contribution plan only recognized earnings in excess of the defined benefit plan earnings limit. The amount shown in the Summary Compensation
Table represents the aggregate change in actuarial present value of the named executive officers accumulated benefit under the defined benefit
plan during fiscal year 2011. Assumptions used in the calculation of these amounts are included in Note 12 to our audited consolidated
financial statements for the year ended March 31, 2011.(G)
    
    U.S. based executives hired before January 1, 2005 participate in the Novelis Pension Plan and the Novelis Supplemental Executive Retirement
Plan (Novelis SERP). The Novelis Pension Plan is a defined benefit pension plan based on the participants final earning (up to the IRS limit)
and service up to 35 years. The Novelis SERP has the same formula as the Novelis Penson Plan, but only covers earnings in excess of the IRS
compensation limit. Mr. Germain is a participant in both the Novelis Pension Plan and the Novelis SERP. The amount shown in the Summary
Compensation Table represents the aggregate change in actuarial present value of the named executive officers accumulated benefit under these
plans during fiscal year 2011. Assumptions used in the calculation of these amounts are included in Note 12 to our audited consolidated
financial statements for the year ended March 31, 2011. CompanyContribution to
    
    
    
    
    
    
    
    
    
    
    
    
    
    OtherDefined
    
    
    
    
    
    
    
    
    
    Relocation and
    
    Perquisites andContribution
    
    Group
    
    Retention
    
    Housing Related
    
    PersonalPlans
    
    Life
    
    Payments
    
    Payments
    
    Benefits
    
    TotalName
    
    ($)
    
    Insurance ($) (B)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Philip Martens
    
    
    81,625
    (A)
    
    
    3,233
    
    
    
    
    
    
    
    5,519
    (C)
    
    
    38,425
    (D)
    
    
    128,802Steven Fisher
    
    
    51,278
    (A)
    
    
    1,423
    
    
    
    75,000
    (E)
    
    
    
    
    
    
    32,854
    (F)
    
    
    160,555Tadeu Nardocci
    
    
    101,590
    (G)
    
    
    2,280
    
    
    
    74,731
    (H)
    
    
    874,102
    (I)
    
    
    11,919
    (J)
    
    
    1,064,622Erwin Mayr
    
    
    51,775
    (K)
    
    
    389
    
    
    
    73,199
    (L)
    
    
    556,277
    (M)
    
    
    56,165
    (N)
    
    
    737,805Jean-Marc Germain
    
    
    11,873
    (A)
    
    
    1,081
    
    
    
    54,000
    (E)
    
    
    343,520
    (O)
    
    
    23,362
    (P)
    
    
    433,836
 
 (A)
    
    All U.S. based executives are eligible to participate in our qualified and non-qualified savings plans. We match up to 4.5% of pay to our
qualified plan (up to the IRS compensation limit; $245,000 for calendar year 2011) for participants who contribute 6% of pay or more to the
plan. U.S. based executives hired on or after January 1, 2005 are also eligible to share in our discretionary contributions. Discretionary
contributions are first made to the qualified plan (up to the IRS compensation limit) and any excess amounts are made to our non-qualified
supplemental defined contribution plan. For fiscal 2011, we made a discretionary contribution equal to 5% of pay. Mr. Martens and Mr. Fisher
are the only named executive officers eligible for a discretionary contribution for the period. See the Non-Qualified Deferred Compensation
table below for more information.(B)
    
    Executives are entitled to participate in life insurance benefits on the same basis as other employees. Our named executive officers are
entitled to additional Company-paid life insurance of 1.5 times salary.(C)
    
    This amount represents taxable moving expenses.(D)
    
    This amount includes executive flex allowance, tax assistance and car allowance, each of which individually had an aggregate incremental cost
less than $25,000.(E)
    
    This amount represents first payment under the July 1, 2009 retention arrangement.(F)
    
    This amount includes executive flex allowance and car allowance, each of which individually had an aggregate incremental cost less than $25,000.(G)
    
    All Brazil employees are eligible to participate in a defined contribution pension plan. Employees may voluntarily contribute from 0-12% of
base salary. Independent of any employee contribution, the Company will contribute 0.7% of base pay up to 1 plan unit ($1,735 in 2011) and 14%
(10% if hired on or after July 1, 2003) of pay in excess of 1 plan unit. Mr. Nardocci was the only named executive eligible for the Brazil
Pension Plan.(H)
    
    This amount represents the first payment under the July 1, 2009 retention arrangement (BRL 125,000 paid on Swiss payroll using exchange rate
1BRL=CHF 0.5982672).(I)
    
    This amount includes $92,935 housing allowance, $11,656 vacation premium, $38,326 expatriate premium, $160,915 goods and services adjustment,
$14,195 Brazilian taxes on home sale and $556,075 relating to estimated tax gross up payments. The tax gross up payments include personal
income tax and are not final. The final actual balance of the tax gross up amount, adjusted against his tax at source, will be equalized by
the Swiss tax authorities at a later time. The amount of Mr. Nardoccis tax obligation is currently under consideration before the Swiss tax
authorities.(J)
    
    This amount includes car allowance, health care expenses, lunch premium, accident insurance and home security, each of which individually had
an aggregate incremental cost less than $25,000.(K)
    
    This amount represents the Companys contribution to our Swiss supplemental defined contribution plan (Erganzungskasse Alcan Schweiz).(L)
    
    This amount represents the first payment under the July 1, 2009 retention arrangement (CHF 73,250 paid on Swiss payroll).(M)
    
    This amount includes $88,819 housing and temporary housing allowance, $315,596 tax gross up payment adjusted against hypothetical tax, $86,221
relocation allowance and $65,642 expat premium.(N)
    
    This amount represents child tuition reimbursement.(O)
    
    This amount includes $200,188 relocation bonus and $143,332 in relocation expenses.(P)
    
    This amount includes executive flex allowance and car allowance, each of which individually had an aggregate incremental cost less than $25,000. 143




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##### Table of Contents



Grants of Plan-Based Awards in Fiscal 2011
  All Other Stock
    
    All Other OptionEstimated Future Payout
    
    Awards: Number of
    
    Awards: Number of
    
    Exercise or BaseUnder Non-Equity
    
    Shares of Stock or
    
    Securities
    
    Price of Option
    
    Grant Date FairIncentive Plan Awards (A)
    
    Units
    
    Underlying Options
    
    Awards
    
    Value of Stock andThreshold
    
    Target
    
    Maximum
    
    (#)
    
    (#)
    
    ($/Sh)
    
    Option AwardsName
    
    Grant Date
    
    ($)
    
    ($)
    
    ($)
    
    (B)
    
    (C)
    
    (D)
    
    (E)Philip Martens
    
    
    5/25/2010
    
    
    
    
    
    
    
    922,500
    
    
    
    1,845,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,253,082
    
    
    
    3.13
    
    
    
    2,000,0005/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,517
    
    
    
    
    
    
    
    3.13
    
    
    
    500,000Steven Fisher
    
    
    5/25/2010
    
    
    
    
    
    
    
    351,000
    
    
    
    702,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    
    462,0005/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,849
    
    
    
    
    
    
    
    3.13
    
    
    
    115,500Tadeu Nardocci
    
    
    5/25/2010
    
    
    
    
    
    
    
    272,750
    
    
    
    545,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    
    462,0005/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,849
    
    
    
    
    
    
    
    3.13
    
    
    
    115,500Erwin Mayr
    
    
    5/25/2010
    
    
    
    
    
    
    
    235,455
    
    
    
    470,910
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,370
    
    
    
    3.13
    
    
    
    240,0005/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,142
    
    
    
    
    
    
    
    3.13
    
    
    
    60,000Jean-Marc Germain
    
    
    5/25/2010
    
    
    
    
    
    
    
    260,244
    
    
    
    520,488
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    
    462,0005/25/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,849
    
    
    
    
    
    
    
    3.13
    
    
    
    115,500
 
 (A)
    
    These amounts reflect the cash awards under our 2011 AIP. See the Summary Compensation Table for actual results.(B)
    
    These amounts represent the number of RSUs granted under the 2011 LTIP.(C)
    
    These amounts represent the number of SARs granted under the 2011 LTIP.(D)
    
    As of grant date INR 147.10, exchange rate 1USD=INR 46.93. Per plan rules based on 5 day average of closing
price of Hindalco shares on NSE and 5 day average RBI FX rate.(E)
    
    These amounts are reflected in the Summary Compensation Table. Outstanding Equity Awards as of March 31, 2011
 OPTION AWARDS
    
    STOCK AWARDSNumber of
    
    Number ofSecurities
    
    SecuritiesUnderlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Number of Shares
    
    Market Value ofUnexercised
    
    Unexercised
    
    
    
    
    
    
    
    
    
    or Units of Stock
    
    Shares or Units ofOptions
    
    Options
    
    Option Exercise
    
    
    
    
    
    That Have Not
    
    Stock That Have(#)
    
    (#)
    
    Price
    
    Option Expiration
    
    Vested
    
    Not VestedName
    
    Exercisable
    
    Unexercisable
    
    ($) (A)
    
    Date
    
    (#)
    
    ($)Philip Martens
    
    
    
    
    
    
    1,253,082
    
    
    
    3.13
    
    
    May 25, 2017(B)
    
    
    159,517
    (E)
    
    
    749,393
    
    
    
    1,755,004
    
    
    
    1.79
    
    
    June 25, 2016(C)
    
    
    
    
    
    
    Steven Fisher
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    May 25, 2017(B)
    
    
    140,516
    (F)
    
    
    533,112
    
    
    
    460,688
    
    
    
    1.79
    
    
    June 25, 2016(C)
    
    
    
    
    
    
    219,629
    
    
    
    439,258
    
    
    
    1.24
    
    
    June 25, 2015(D)
    
    
    
    
    
    
    Tadeu Nardocci
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    May 25, 2017(B)
    
    
    125,553
    (G)
    
    
    481,15253,563
    
    
    
    460,688
    
    
    
    1.79
    
    
    June 25, 2016(C)
    
    
    
    
    
    
    
    
    
    
    307,481
    
    
    
    1.24
    
    
    June 25, 2015(D)
    
    
    
    
    
    
    Erwin Mayr
    
    
    
    
    
    
    150,370
    
    
    
    3.13
    
    
    May 25, 2017(B)
    
    
    111,642
    (H)
    
    
    411,14952,650
    
    
    
    157,950
    
    
    
    1.79
    
    
    June 25, 2016(C)
    
    
    
    
    
    
    83,459
    
    
    
    166,918
    
    
    
    1.24
    
    
    June 25, 2015(D)
    
    
    
    
    
    
    Jean-Marc Germain
    
    
    
    
    
    
    289,462
    
    
    
    3.13
    
    
    May 25, 2017(B)
    
    
    111,720
    (I)
    
    
    433,112153,563
    
    
    
    460,688
    
    
    
    1.79
    
    
    June 25, 2016(C)
    
    
    
    
    
    
    219,629
    
    
    
    439,258
    
    
    
    1.24
    
    
    June 25, 2015(D)
    
    
    
    
    
    
    
 
 (A)
    
    The exercise price is based on the market value of one Hindalco share on the date of grant, converted to US$.(B)
    
    SARs granted under the 2011 LTIP.(C)
    
    SARs granted under the 2010 LTIP.(D)
    
    SARs granted under the 2009 LTIP.(E)
    
    RSUs granted under the 2011 LTIP.(F)
    
    Consists of 36,849 RSUs granted under the 2011 LTIP and 103,667 phantom restricted shares (payable in cash)
under the executives retention agreement. 144




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##### Table of Contents



(G)
    
    Consists of 36,849 RSUs granted under the 2011 LTIP and 88,704 phantom restricted shares (payable in cash)
under the executives retention agreement.(H)
    
    Consists of 19,142 RSUs granted under the 2011 LTIP and 92,500 phantom restricted shares (payable in cash)
under the executives retention agreement.(I)
    
    Consists of 36,849 RSUs granted under the 2011 LTIP and 74,871 phantom restricted shares (payable in cash)
under the executives retention agreement. Option Exercises and Stock Vested in Fiscal Year 2011
  Option Awards
    
    Stock AwardsNumber of
    
    
    
    
    
    Number ofShares
    
    Value
    
    Shares
    
    ValueAcquired on
    
    Realized on
    
    Acquired on
    
    Realized onExercise or
    
    Exercise or
    
    Vesting or
    
    Vesting orName
    
    Cancellation
    
    Cancellation ($)
    
    Cancellation
    
    Cancellation ($)Philip Martens
    
    
    585,001
    
    
    
    910,853
    
    
    
    
    
    
    
    Steven Fisher
    
    
    153,563
    
    
    
    341,811
    
    
    
    
    
    
    
    Tadeu Nardocci
    
    
    253,740
    
    
    
    435,037
    
    
    
    
    
    
    
    Erwin Mayr
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jean-Marc Germain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Pension Benefits in Fiscal 2011
  Number of
    
    Present
    
    PaymentsYears of
    
    Value of
    
    DuringCredited
    
    Accumulated
    
    LastName
    
    Plan Name (A)
    
    Service
    
    Benefit ($)(B)
    
    Fiscal YearErwin Mayr
    
    Pensionskasse Alcan Schweiz
    
    
    9.000
    
    
    
    184,321
    
    
    
    Jean-Marc Germain
    
    Novelis Pension Plan
    
    
    4.250
    
    
    
    81,190
    
    
    
    Novelis SERP
    
    
    4.250
    
    
    
    95,533
    
    
    
    
 
 (A)
    
    See the footnotes to the Summary Compensation Table for a description of these plans.(B)
    
    See Note 12 to our audited consolidated financial statements for the year ended March 31, 2011, for a discussion of the
assumptions used in the calculation of these amounts.  Years of Service10
    
    15
    
    20
    
    25
    
    30
    
    35U.S. Pension Plan
    
    
    17
    %
    
    
    25
    %
    
    
    34
    %
    
    
    42
    %
    
    
    51
    %
    
    
    59
    %Swiss Pension Plan
    
    
    16
    %
    
    
    24
    %
    
    
    32
    %
    
    
    40
    %
    
    
    48
    %
    
    
    56
    %
 145




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Non-Qualified Deferred Compensation
  Elective
    
    Registrant
    
    Aggregate
    
    Aggregate
    
    AggregateContributions in
    
    Contributions in
    
    Earnings in
    
    Withdrawals/
    
    Balance at LastLast Fiscal Year
    
    Last Fiscal Year
    
    Last Fiscal Year
    
    Distributions
    
    Fiscal Year EndName
    
    ($)
    
    ($) (A)
    
    ($) (A)
    
    ($)
    
    ($) (B)Philip Martens
    
    
    
    
    
    
    55,500
    
    
    
    812
    
    
    
    
    
    
    
    68,942Steven Fisher
    
    
    
    
    
    
    27,575
    
    
    
    1,689
    
    
    
    
    
    
    
    76,894
 
 (A)
    
    Contributions, but not Earnings are included in the Summary Compensation Table above.(B)
    
    Of the balance at the end of the fiscal year, $68,042 for Mr. Martens and $73,243 for Mr. Fisher was previously reported as compensation in previous years. Potential Payments Upon Termination or Change in Control
  Termination byUs withoutCause or byExecutive forGood Reason inTermination by
    
    Connection withVoluntary
    
    Us without
    
    Change inTermination by
    
    Cause ($)
    
    Control ($)
    
    Death orName
    
    Type of Payment
    
    Executive ($)
    
    (C) (D)
    
    (E) (F)
    
    Disability($)Philip Martens
    
    Short-Term Incentive Pay (A)
    
    
    922,500
    
    
    
    922,500
    
    
    
    922,500
    
    
    
    922,500Long-Term Incentive Plan (B)
    
    
    
    
    
    
    
    
    
    
    7,358,805
    
    
    
    7,358,805Severance
    
    
    
    
    
    
    3,485,000
    
    
    
    3,485,000
    
    
    
    Retirement plans
    
    
    
    
    
    
    88,925
    
    
    
    88,925
    
    
    
    Lump sum cash payment for continuation of health coverage (G)
    
    
    
    
    
    
    29,348
    
    
    
    29,348
    
    
    
    Continued group life insurance coverage (H)
    
    
    
    
    
    
    7,135
    
    
    
    7,135
    
    
    
    Tax Gross Up
    
    
    
    
    
    
    
    
    
    
    
    (I)
    
    
    Total
    
    
    922,500
    
    
    
    4,532,908
    
    
    
    11,891,713
    
    
    
    8,281,305Steven Fisher
    
    Short-Term Incentive Pay (A)
    
    
    351,000
    
    
    
    351,000
    
    
    
    351,000
    
    
    
    351,000Long-Term Incentive Plan (B)
    
    
    410,714
    
    
    
    410,714
    
    
    
    3,445,210
    
    
    
    3,445,210Severance
    
    
    
    
    
    
    702,000
    
    
    
    1,638,000
    
    
    
    Retirement plans
    
    
    
    
    
    
    51,975
    
    
    
    51,975
    
    
    
    Lump sum cash payment for continuation of health coverage (G)
    
    
    
    
    
    
    29,348
    
    
    
    29,348
    
    
    
    Continued group life insurance coverage (H)
    
    
    
    
    
    
    3,544
    
    
    
    3,544
    
    
    
    Total
    
    
    761,714
    
    
    
    1,548,581
    
    
    
    5,519,077
    
    
    
    3,796,210Tadeu Nardocci
    
    Short-Term Incentive Pay (A)
    
    
    272,750
    
    
    
    272,750
    
    
    
    272,750
    
    
    
    272,750Long-Term Incentive Plan (B)
    
    
    148,417
    
    
    
    148,417
    
    
    
    2,884,525
    
    
    
    2,884,525Severance
    
    
    
    
    
    
    629,423
    
    
    
    1,384,730
    
    
    
    Retirement plans
    
    
    
    
    
    
    101,590
    
    
    
    101,590
    
    
    
    Lump sum cash payment for continuation of health coverage (G)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Continued group life insurance coverage (H)
    
    
    
    
    
    
    2,280
    
    
    
    2,280
    
    
    
    Total
    
    
    421,167
    
    
    
    1,154,460
    
    
    
    4,645,875
    
    
    
    3,157,275
 146




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##### Table of Contents



Termination byUs withoutCause or byExecutive forGood Reason inTermination by
    
    Connection withVoluntary
    
    Us without
    
    Change inTermination by
    
    Cause ($)
    
    Control ($)
    
    Death orName
    
    Type of Payment
    
    Executive ($)
    
    (C) (D)
    
    (E) (F)
    
    Disability($)Erwin Mayr
    
    Short-Term Incentive Pay (A)
    
    
    235,455
    
    
    
    235,455
    
    
    
    235,455
    
    
    
    235,455Long-Term Incentive Plan (B)
    
    
    301,959
    
    
    
    301,959
    
    
    
    1,672,492
    
    
    
    1,672,492Severance
    
    
    
    
    
    
    470,910
    
    
    
    1,059,548
    
    
    
    Retirement plans
    
    
    
    
    
    
    87,272
    
    
    
    87,272
    
    
    
    Lump sum cash payment for continuation of health coverage (G)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Continued group life insurance coverage (H)
    
    
    
    
    
    
    1,556
    
    
    
    1,556
    
    
    
    Total
    
    
    537,414
    
    
    
    1,097,152
    
    
    
    3,056,323
    
    
    
    1,907,947Jean-Marc Germain
    
    Short-Term Incentive Pay (A)
    
    
    260,244
    
    
    
    260,244
    
    
    
    260,244
    
    
    
    260,244Long-Term Incentive Plan (B)
    
    
    836,220
    
    
    
    836,220
    
    
    
    3,770,717
    
    
    
    3,770,717Severance
    
    
    
    
    
    
    600,563
    
    
    
    1,321,238
    
    
    
    Retirement plans
    
    
    
    
    
    
    86,741
    
    
    
    86,741
    
    
    
    Lump sum cash payment for continuation of health coverage (G)
    
    
    
    
    
    
    29,348
    
    
    
    29,348
    
    
    
    Continued group life insurance coverage (H)
    
    
    
    
    
    
    2,778
    
    
    
    2,778
    
    
    
    Total
    
    
    1,096,464
    
    
    
    1,815,894
    
    
    
    5,471,066
    
    
    
    4,030,960
 
 (A)
    
    These amounts represent 100% of the executives AIP opportunity for the fiscal year.(B)
    
    These amounts reflect the estimated value of the SARs and
RSUs granted pursuant to our long-term incentive
plans. In the case of a change in control of the Company, death or disability, any outstanding unvested SARs
and RSUs would be fully vested.(C)
    
    These amounts would be paid pursuant to the executives severance compensation agreement (or employment
agreement in the case of Mr. Martens). Except for the retirement and life insurance benefits, these amounts
would be paid in a single lump sum following termination of employment. The retirement benefit represents one
additional year of benefit accrual or contribution credit, as applicable. The life insurance benefit represents
the estimate value of coverage for one additional year.(D)
    
    Termination for cause means (i) the executives conviction of any crime (whether or not involving the Company)
constituting a felony in the applicable jurisdiction; (ii) willful and material violation of the Companys
policies, including, but not limited to, those relating to sexual harassment and confidential information; (iii)
willful misconduct in the performance of the executives duties for the Company; or (iv) willful failure or
refusal to perform the executives material duties and responsibilities which is not remedied within ten days
after written demand from the board of directors to remedy such failure or refusal.(E)
    
    Under the executives change in control agreement, these amounts would be paid to the executive if his
employment is terminated without cause, or he resigns for good reason, within 24 months of a change of control.
Except for the retirement and life insurance benefits, these amounts would be paid in a single lump sum
following termination of employment. The retirement benefit represents one additional year of benefit accrual
or contribution credit, as applicable. The life insurance benefit represents the estimate value of coverage for
one additional year.(F)
    
    See footnote (D) above for definition of cause. Termination for good reason means (i) a material reduction
in the executives position, duties, reporting relationships, responsibilities, authority, or status with the
Company; (ii) a reduction in the executives base salary and target short term and long term incentive
opportunities in effect on the date hereof or as the same may be increased from time to time ; or (iii) a
failure of the Company to comply with its obligations under the change in control agreement. A change in
control means the first to occur of any of the following events: (i) any person or entity (excluding any
person or entity affiliated with the Aditya Birla Group) is or becomes the beneficial owner, directly or
indirectly through any parent entity of the Company or otherwise, of securities of the Company (not including in
the securities beneficially owned by such person or entity any securities acquired directly from the Company or
its affiliates, other than in connection with the acquisition by the Company or its affiliates of a business)
representing 35% or more of either the then outstanding shares of common stock of the Company or the combined
voting power of the Companys then outstanding securities; or (ii) the majority of the members of the Board of
Directors of the Company is replaced during any 12-month period by directors whose appointment or election is
not endorsed by a majority of the members of the Board prior to the date of the appointment or election; or
(iii) the consummation of a merger or consolidation of the Company with any other entity not affiliated with the
Aditya Birla Group, other than (a) a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, 50% or more of the combined voting power of the voting securities of the
Company or such surviving entity or any parent thereof outstanding immediately after such merger or
consolidation, or (b) a merger or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person or entity is or becomes the beneficial owner, directly or indirectly, of
securities of the Company (not including in the securities beneficially owned by such person or entity any
securities acquired directly from the Company or its affiliates, other than in connection with the acquisition
by the Company or its affiliates of a business) representing 50% or more of either the then outstanding shares
of common stock of the Company or the combined voting power of the Companys then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution; or (v) the sale or
disposition of all or substantially all of the Companys assets, other than a sale or disposition by the Company
of all or substantially all of its assets to a member of the Aditya Birla Group. 147




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##### Table of Contents



(G)
    
    This amount is intended to assist the executive in paying post-employment health coverage and is equal to 12
months times the COBRA premium rate, grossed up for applicable taxes using an assumed tax rate of 40%. This
amount would be paid in a single lump sum following termination of employment.(H)
    
    This amount represents the estimated value of one additional year of coverage under our group life insurance plan.(I)
    
    Under Mr. Martens change in control agreement, the Company is required to reimburse him for any excise tax
liability under Section 4999 of the U.S. Internal Revenue Code. We do not believe any such excise tax liability
would have been imposed under Section 4999 had a change in control occurred on March 31, 2011.(J)
    
    In the event of a Company initiated Termination for Cause, unvested SARs will lapse and employee will
forfeit any vested SARs. All RSUs and Short-Term Incentive awards will be forfeited. Director Compensation for Fiscal 2011
   Fees Earned orName
    
    Paid in Cash ($)Kumar Mangalam Birla
    
    
    D. Bhattacharya
    
    
    155,000Askaran K. Agarwala
    
    
    150,000Clarence J. Chandran
    
    
    155,000Donald A. Stewart
    
    
    
 Compensation Committee Interlocks and Insider Participation
  
    
    a member of the Committee (or other board committee performing equivalent functions or, in
the absence of any such committee, the entire board of directors) of another entity, one of
whose executive officers served on our Committee;
    
    a director of another entity, one of whose executive officers served on our Committee; or
    
    a member of the Committee (or other board committee performing equivalent functions or, in
the absence of any such committee, the entire board of directors) of another entity, one of
whose executive officers served as one of our directors.
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
   
 Item 13. Certain Relationships and Related Transactions and Director Independence
  148




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149




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
  Year Ended
    
    
    Year EndedMarch 31,
    
    
    March 31,2011
    
    
    2010Audit fees(1)
    
    $
    7,285,374
    
    
    $
    5,304,000Audit-Related Fees(2)
    
    
    5,000
    
    
    
    209,500Tax Fees(3)
    
    
    222,200
    
    
    
    529,300All Other Fees
    
    
    59,500
    
    
    
    71,500Total
    
    $
    7,572,074
    
    
    $
    6,114,300
 
 (1)
    
    Represent fees for professional services rendered and expenses incurred for the audit of the
Companys annual financial statements, review of financial statements included in the Companys
Form 10-Qs and services that are normally provided by PricewaterhouseCoopers LLP in connection
with statutory and regulatory filings or engagements for those fiscal periods. In FY 2011 this
fee also included services rendered in connection with hedge accounting and the debt refinancing.(2)
    
    Represent fees for assurance related services that are reasonably related to the performance of
the audit or review of our consolidated financial statements and are not reported under Audit
Fees. These services include certain advisory services related to internal controls in FY 2010.(3)
    
    Represent fees for services related to transfer pricing studies and review of our U.S. tax returns. Pre-Approval of Audit and Permissible Non-Audit Services
  150




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 1. Financial Statement Schedules
  2. Exhibits
 ExhibitNo.
    Description2.1
    
    Arrangement Agreement by and among Hindalco Industries Limited, AV Aluminum Inc.
and Novelis Inc., dated as of February 10, 2007 (incorporated by reference to
Exhibit 2.1 to our Current Report on Form 8-K filed on February 13, 2007 (File No.
001-32312))3.1
    
    Restated Certificate and Articles of Incorporation of Novelis Inc. (incorporated by
reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 7, 2005
(File No. 001-32312))3.2
    
    Restated Certificate and Articles of Amalgamation of Novelis Inc. (incorporated by
reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on November 10,
2010 (File No. 001-32312))3.3
    
    Novelis Inc. Amended and Restated Bylaws, adopted as of July 24, 2008 (incorporated
by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on July 25,
2008 (File No. 001-32312))4.1
    
    Specimen Certificate of Novelis Inc. Common Shares (incorporated by reference to
Exhibit 4.2 to our Registration Statement on Form 10-12B filed on December 27, 2004
(File No. 001-32312))4.2
    
    Indenture, relating to the 7.25% Senior Notes due 2015, dated as of February 3,
2005, between the Company, the guarantors named on the signature pages thereto and
The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to
Exhibit 4.1 to our Current Report on Form 8-K filed on February 3, 2005 (File No.
001-32312))4.3
    
    Form of Note for 7.25% Senior Notes due 2015 (incorporated by reference to Exhibit
4.1 to our Registration Statement on Form S-4 filed on August 3, 2005 (File No.
333-127139))4.4
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, between the
Company, Novelis Finances USA LLC, Novelis South America Holdings LLC, Aluminum
Upstream Holdings LLC and the Bank of New York Trust Company, N.A., as trustee,
dated as of November 29, 2006 (incorporated by reference to Exhibit 4.6 to our
Post-Effective Amendment No. 1 to our Registration Statement on Form S-4
Registration Statement filed on December 1, 2006 (File No. 333-127139))4.5
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis No. 1 Limited Partnership, and the Bank of New York Trust Company,
N.A., as trustee, dated as of May 14, 2007 (incorporated by reference to Exhibit
4.7 to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.6
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis Luxembourg SA, and The Bank of New York Mellon Trust Company,
N.A., as trustee, dated as of January 29, 2008 (incorporated by reference to
Exhibit 4.8 to our Annual Report on Form 10-K filed on June 29, 2009 (File No.
001-32312))4.7
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Bellona-Trading Internacional, Sociedade Unipessoal, LDA, and The Bank of
New York Mellon Trust Company, N.A., as trustee, dated as of June 26, 2008
(incorporated by reference to Exhibit 4.9 to our Annual Report on Form 10-K filed
on June 29, 2009 (File No. 001-32312))4.8
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis Services Limited, and The Bank of New York Mellon Trust Company
N.A., as trustee, dated as of July 10, 2008 (incorporated by reference to Exhibit
4.10 to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.9
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis PAE SAS, and The Bank of New York Mellon Trust Company N.A., as
trustee, dated as of September 16, 2008 (incorporated by reference to Exhibit 4.11
to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.10
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and The Bank of New York Trust Company N.A., as trustee, dated as of
September 28, 2010 (incorporated by reference to Exhibit 4.1 to our Quarterly
Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312))4.11
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and The Bank of New York Trust Company N.A., as trustee, dated as of
September 29, 2010 (incorporated by reference to Exhibit 4.3 to our Quarterly
Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312))4.12
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis North America Holdings Inc., Novelis Acquisitions LLC and The Bank
of New York Mellon Trust Company, N.A., as trustee, dated as of December 14, 2010
(incorporated by reference to Exhibit 4.5 to our Quarterly Report on Form 10-Q
filed on February 8, 2011 (File No. 001-32312))4.13
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and the Bank of New York
 151




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##### Table of Contents



ExhibitNo.
    DescriptionMellon Trust Company, as trustee, dated as of
December 17, 2010 (incorporated by reference to Exhibit 4.6 to our Current Report
on Form 8-K filed on December 17, 2010 (File No. 001-32312))4.14
    
    Indenture, relating to the 8.375% Senior Notes due 2017, dated as of December 17,
2010, between Novelis Inc., the guarantors named on the signature pages thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.1 to our Current Report on Form 8-K filed on December 17,
2010 (File No. 001-32312))4.15
    
    Indenture, relating to the 8.75% Senior Notes due 2020, dated as of December 17,
2010, between Novelis Inc., the guarantors named on the signature pages thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K filed on December 17,
2010 (File No. 001-32312))4.16
    
    Form of 8.375% Senior Note due 2017 (incorporated by reference to Exhibit 4.3 to
our Current Report on Form 8-K filed on December 17, 2010 (File No. 001-32312))4.17
    
    Form of 8.75% Senior Note due 2020 (incorporated by reference to Exhibit 4.4 to our
Current Report on Form 8-K filed on December 17, 2010 (File No. 001-32312))10.1
    
    $800 million asset-based lending credit facility dated as of December 17, 2010
among Novelis Inc., as Parent Borrower, Novelis Corporation, Novelis PAE
Corporation, Novelis Brand LLC, Novelis South America Holdings LLC, Aluminum
Upstream Holdings LLC, as U.S. Borrowers, Novelis UK Limited, AV Metals Inc., and
the other loan parties from time to time party thereto, the lenders from time to
time party thereto, the Collateral Agent, Bank of America, N.A., as Issuing Bank,
U.S. Swingline Lender and Administrative Agent, The Royal Bank of Scotland plc, as
European Swingline Lender, and the other parties from time to time party thereto
(incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q
filed on February 8, 2011 (File No. 001-32312))10.2
    
    $1.5 billion term loan facility dated as of December 17, 2010 among Novelis Inc.,
as Borrower, AV Metals Inc., as Holdings, and the other guarantors party thereto,
with the lenders party thereto, Bank of America, N.A., as administrative agent,
JPMorgan Chase Bank, N.A., as syndication agent, Citibank, N.A., The Royal Bank of
Scotland PLC and UBS AG, Stamford Branch, as co-documentation agents, and Merrill
Lynch, Pierce, Fenner and Smith Incorporated and J.P. Morgan Securities LLC, as
joint lead arrangers and Merrill Lynch, Pierce, Fenner and Smith Incorporated, J.P.
Morgan Securities LLC, Citigroup Global Markets Inc., RBS Securities Inc. and UBS
Securities LLC, as joint bookrunners (incorporated by reference to Exhibit 10.2 to
our Quarterly Report on Form 10-Q filed on February 8, 2011 (File No. 001-32312))10.3
    
    Amendment No. 1 to Credit Agreement, dated as of March 10, 2011, among Novelis
Inc., as borrower, AV Metals Inc., as holdings, and the other loan parties party
thereto, the lenders party thereto, Bank of America, N.A., as administrative agent,
and Merrill Lynch, Pierce, Fenner and Smith Incorporated, Citigroup Global Markets
Inc. and UBS Securities LLC, as joint lead arrangers and joint bookrunners
(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed
on March 14, 2011 (File No. 001-32312))10.4
    
    Intercreditor Agreement dated as of December 17, 2010 by and among Novelis Inc.,
Novelis Corporation, Novelis PAE Corporation, Novelis Brand LLC, Novelis South
America Holdings LLC, Aluminum Upstream Holdings LLC, Novelis UK Limited, AV Metals
Inc., and the subsidiary guarantors party thereto, as grantors, Bank of America,
N.A., as revolving credit administrative agent, revolving credit collateral agent,
Term Loan administrative agent, and Term Loan collateral agent (incorporated by
reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed on February 8,
2011 (File No. 001-32312))10.5
    
    Security Agreement made by Novelis Inc., as Parent Borrower, Novelis Corporation,
Novelis PAE Corporation, Novelis Brand LLC, Novelis South America Holdings LLC,
Aluminum Upstream Holdings LLC, as U.S. Borrowers and the guarantors from time to
time party thereto in favor of Bank of America, N.A., as collateral agent dated as
of December 17, 2010 (incorporated by reference to Exhibit 10.4 to our Quarterly
Report on Form 10-Q filed on February 8, 2011) (File No. 001-32312))10.6
    
    Security Agreement made by Novelis Inc., as the Borrower and the guarantors from
time to time party thereto in favor of Bank of America, N.A., as collateral agent
dated as of December 17, 2010 (incorporated by reference to Exhibit 10.5 to our
Quarterly Report on Form 10-Q filed on February 8, 2011) (File No. 001-32312))10.7**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of re-melt aluminum ingot (incorporated by
reference to Exhibit 10.6 to our Annual Report on Form 10-K filed on June 19, 2008
(File No. 001-32312))10.8**
    
    Amended and Restated Molten Metal Supply Agreement between Novelis Inc., as
Purchaser, and Alcan Inc., as Supplier, for the supply of molten metal to
Purchasers Saguenay Works facility) (incorporated by reference to Exhibit 10.7 to
our Annual Report on Form 10-K filed on June 19, 2008 (File No. 001-32312))10.9**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of sheet ingot in North America
(incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed
on June 19, 2008 ) (File No. 001-32312))10.10**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of sheet ingot in Europe (incorporated by
reference to Exhibit 10.9 to our Annual Report on Form 10-K filed on June 19, 2008
) (File No. 001-32312))10.11*
    
    Employment Arrangement between Steven Fisher and Novelis Inc. (incorporated by
reference to our Current Report on Form 8-K filed on May 21, 2007 and our Current
Report on Form 8-K/A filed on August 15, 2007 (File No. 001-32312))10.12*
    
    Letter Agreement, dated October 20, 2006, by and between Novelis Inc. and Thomas
Walpole (incorporated by
 152




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##### Table of Contents



ExhibitNo.
    Descriptionreference to Exhibit 10.1 to our Current Report on Form
8-K filed on October 26, 2006 (File No. 001-32312))10.13*
    
    Form of Change in Control Agreement between Novelis Inc. and certain executive
officers (incorporated by reference to Exhibit 99.1 to our Current Report on Form
8-K filed on September 27, 2006 (File No. 001-32312))10.14*
    
    Form of Change in Control Agreement between Novelis Inc. and certain executive
officers and key employees (incorporated by reference to Exhibit 99.2 to our
Current Report on Form 8-K filed on September 27, 2006 (File No. 001-32312))10.15*
    
    Form of Indemnity Agreement between Novelis Inc. and Members of the Board of
Directors of Novelis Inc. (incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on May 21, 2007 (File No. 001-32312))10.16*
    
    Form of Indemnity Agreement between Novelis Inc. and certain executive officers
dated as of June 27, 2007 (incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on June 28, 2007(File No. 001-32312))10.17*
    
    Employment Agreement of Jean-Marc Germain dated as of April 28, 2008 (incorporated
by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on August
14, 2008 (File No. 001-32312))10.18*
    
    Form of Novelis Long-Term Incentive Plan for Fiscal 2009-2012 (incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on August 14,
2008 (File No. 001-32312))10.19*
    
    Employment Agreement of Alexandre Moreira Martins de Almeida dated as of August 8,
2008 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form
10-Q filed on November 10, 2008 (File No. 001-32312))10.20*
    
    Amended Novelis Long-Term Incentive Plan for Fiscal 2009-2012 (incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on February
17, 2009 (File No. 001-32312))10.21*
    
    Employment Agreement of Philip Martens, dated as of April 11, 2009 (incorporated by
reference to Exhibit 10.36 to our Annual Report on Form 10-K filed on June 29, 2009
(File No. 001-32312))10.22*
    
    Novelis 2011 Long-term Incentive Plan (incorporated by reference to Exhibit 10.1 to
our Current Report on Form 8-K filed on May 18, 2010 (File No. 001-32312))10.23*
    
    Novelis 2011 Annual Incentive Plan (incorporated by reference to Exhibit 10.2 to
our Current Report on Form 8-K filed on May 18, 2010 (File No. 001-32312))10.24*
    
    Form Change in Control Agreement (incorporated by reference to Exhibit 10.3 to our
Current Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.25*
    
    Form Severance Agreement (incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.26*
    

Termination
of Employment Agreement between Novelis AG and Arnaud deWeert, dated
June 26, 2009 (Incorporated by reference to Exhibit 10.5 to our
Current Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.27*
    
    Change in Control Agreement between Novelis and Philip Martens, dated April 16,
2009 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form
10-Q filed on August 3, 2009 (File No. 001-32312))10.28*
    
    Employment Agreement between Novelis Inc. and Antonio Tadeu Coelho Nardocci dated
September 4, 2009 (incorporated by reference to Exhibit 10.1 to our Current Report
on Form 8-K/A filed on September 9, 2009 (File No. 001-32312))10.29*
    

Employment
Agreement of Erwin Mayr, dated as of September 17, 200910.30
    
    Registration Rights Agreement relating to the 8.375% Senior Notes due 2017, dated
as of December 17, 2010 among the Company, the guarantors named on the signature
pages thereto and Citigroup Global Markets Inc., as representative of the initial
purchasers (incorporated by reference to Exhibit 10.1 to our Current Report on Form
8-K filed on December 17, 2010 (File No. 001-32312))10.31
    
    Registration Rights Agreement relating to the 8.75% Notes Senior Notes due 2020,
dated as of December 17, 2010 among the Company, the guarantors named on the
signature pages thereto and Citigroup Global Markets Inc., as representative of the
initial purchasers (incorporated by reference to Exhibit 10.2 to our Current Report
on Form 8-K filed on December 17, 2010 (File No. 001-32312))21.1
    
    List of subsidiaries of Novelis Inc.31.1
    
    Section 302 Certification of Principal Executive Officer31.2
    
    Section 302 Certification of Principal Financial Officer32.1
    
    Section 906 Certification of Principal Executive Officer32.2
    
    Section 906 Certification of Principal Financial Officer
 
 *
    
    Indicates a management contract or compensatory plan or arrangement.**
    
    Confidential treatment requested for certain portions of this
Exhibit, which portions have been omitted and filed separately with
the Securities and Exchange Commission. 153




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##### Table of Contents



SIGNATURES
  NOVELIS INC.By:
    /s/  Philip MartensName:
    Philip MartensTitle:
    President and Chief Executive Officer   /s/ Philip Martens

Philip Martens
    
    (Principal Executive Officer)
    
    Date: May 26, 2011/s/ Steven Fisher

Steven Fisher
    
    (Principal Financial Officer)
    
    Date: May 26, 2011/s/ Robert Nelson

Robert Nelson
    
    (Principal Accounting Officer)
    
    Date: May 26, 2011/s/ Kumar Mangalam Birla

Kumar Mangalam Birla
    
    (Chairman of the Board of Directors)
    
    Date: May 26, 2011/s/ Askaran Agarwala

Askaran Agarwala
    
    (Director)
    
    Date: May 26, 2011/s/ Debnarayan Bhattacharya

Debnarayan Bhattacharya
    
    (Director)
    
    Date: May 26, 2011/s/ Clarence J. Chandran

Clarence J. Chandran
    
    (Director)
    
    Date: May 26, 2011/s/ Donald A. Stewart

Donald A. Stewart
    
    (Director)
    
    Date: May 26, 2011
 154




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    Description2.1
    
    Arrangement Agreement by and among Hindalco Industries Limited, AV Aluminum Inc.
and Novelis Inc., dated as of February 10, 2007 (incorporated by reference to
Exhibit 2.1 to our Current Report on Form 8-K filed on February 13, 2007 (File No.
001-32312))3.1
    
    Restated Certificate and Articles of Incorporation of Novelis Inc. (incorporated by
reference to Exhibit 3.1 to our Current Report on Form 8-K filed on January 7, 2005
(File No. 001-32312))3.2
    
    Restated Certificate and Articles of Amalgamation of Novelis Inc. (incorporated by
reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on November 10,
2010 (File No. 001-32312))3.3
    
    Novelis Inc. Amended and Restated Bylaws, adopted as of July 24, 2008 (incorporated
by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on July 25,
2008 (File No. 001-32312))4.1
    
    Specimen Certificate of Novelis Inc. Common Shares (incorporated by reference to
Exhibit 4.2 to our Registration Statement on Form 10-12B filed on December 27, 2004
(File No. 001-32312))4.2
    
    Indenture, relating to the 7.25% Senior Notes due 2015, dated as of February 3,
2005, between the Company, the guarantors named on the signature pages thereto and
The Bank of New York Trust Company, N.A., as trustee (incorporated by reference to
Exhibit 4.1 to our Current Report on Form 8-K filed on February 3, 2005 (File No.
001-32312))4.3
    
    Form of Note for 7.25% Senior Notes due 2015 (incorporated by reference to Exhibit
4.1 to our Registration Statement on Form S-4 filed on August 3, 2005 (File No.
333-127139))4.4
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, between the
Company, Novelis Finances USA LLC, Novelis South America Holdings LLC, Aluminum
Upstream Holdings LLC and the Bank of New York Trust Company, N.A., as trustee,
dated as of November 29, 2006 (incorporated by reference to Exhibit 4.6 to our
Post-Effective Amendment No. 1 to our Registration Statement on Form S-4
Registration Statement filed on December 1, 2006 (File No. 333-127139))4.5
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis No. 1 Limited Partnership, and the Bank of New York Trust Company,
N.A., as trustee, dated as of May 14, 2007 (incorporated by reference to Exhibit
4.7 to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.6
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis Luxembourg SA, and The Bank of New York Mellon Trust Company,
N.A., as trustee, dated as of January 29, 2008 (incorporated by reference to
Exhibit 4.8 to our Annual Report on Form 10-K filed on June 29, 2009 (File No.
001-32312))4.7
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Bellona-Trading Internacional, Sociedade Unipessoal, LDA, and The Bank of
New York Mellon Trust Company, N.A., as trustee, dated as of June 26, 2008
(incorporated by reference to Exhibit 4.9 to our Annual Report on Form 10-K filed
on June 29, 2009 (File No. 001-32312))4.8
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis Services Limited, and The Bank of New York Mellon Trust Company
N.A., as trustee, dated as of July 10, 2008 (incorporated by reference to Exhibit
4.10 to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.9
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis PAE SAS, and The Bank of New York Mellon Trust Company N.A., as
trustee, dated as of September 16, 2008 (incorporated by reference to Exhibit 4.11
to our Annual Report on Form 10-K filed on June 29, 2009 (File No. 001-32312))4.10
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and The Bank of New York Trust Company N.A., as trustee, dated as of
September 28, 2010 (incorporated by reference to Exhibit 4.1 to our Quarterly
Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312))4.11
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and The Bank of New York Trust Company N.A., as trustee, dated as of
September 29, 2010 (incorporated by reference to Exhibit 4.3 to our Quarterly
Report on Form 10-Q filed on November 10, 2010 (File No. 001-32312))4.12
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company, Novelis North America Holdings Inc., Novelis Acquisitions LLC and The Bank
of New York Mellon Trust Company, N.A., as trustee, dated as of December 14, 2010
(incorporated by reference to Exhibit 4.5 to our Quarterly Report on Form 10-Q
filed on February 8, 2011 (File No. 001-32312))4.13
    
    Supplemental Indenture, relating to the 7.25% Senior Notes due 2015, among the
Company and the Bank of New York Mellon Trust Company, as trustee, dated as of
December 17, 2010 (incorporated by reference to Exhibit 4.6 to our Current Report
on Form 8-K filed on December 17, 2010 (File No. 001-32312))4.14
    
    Indenture, relating to the 8.375% Senior Notes due 2017, dated as of December 17,
2010, between Novelis Inc., the guarantors named on the signature pages thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.1 to our Current Report on Form 8-K filed on December 17,
2010 (File No. 001-32312))4.15
    
    Indenture, relating to the 8.75% Senior Notes due 2020, dated as of December 17,
2010, between Novelis Inc., the guarantors named on the signature pages thereto and
The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K filed on December 17,
2010 (File No. 001-32312))
 155




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##### Table of Contents



ExhibitNo.
    Description4.16
    
    Form of 8.375% Senior Note due 2017 (incorporated by reference to Exhibit 4.3 to
our Current Report on Form 8-K filed on December 17, 2010 (File No. 001-32312))4.17
    
    Form of 8.75% Senior Note due 2020 (incorporated by reference to Exhibit 4.4 to our
Current Report on Form 8-K filed on December 17, 2010 (File No. 001-32312))10.1
    
    $800 million asset-based lending credit facility dated as of December 17, 2010
among Novelis Inc., as Parent Borrower, Novelis Corporation, Novelis PAE
Corporation, Novelis Brand LLC, Novelis South America Holdings LLC, Aluminum
Upstream Holdings LLC, as U.S. Borrowers, Novelis UK Limited, AV Metals Inc., and
the other loan parties from time to time party thereto, the lenders from time to
time party thereto, the Collateral Agent, Bank of America, N.A., as Issuing Bank,
U.S. Swingline Lender and Administrative Agent, The Royal Bank of Scotland plc, as
European Swingline Lender, and the other parties from time to time party thereto
(incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q
filed on February 8, 2011 (File No. 001-32312))10.2
    
    $1.5 billion term loan facility dated as of December 17, 2010 among Novelis Inc.,
as Borrower, AV Metals Inc., as Holdings, and the other guarantors party thereto,
with the lenders party thereto, Bank of America, N.A., as administrative agent,
JPMorgan Chase Bank, N.A., as syndication agent, Citibank, N.A., The Royal Bank of
Scotland PLC and UBS AG, Stamford Branch, as co-documentation agents, and Merrill
Lynch, Pierce, Fenner and Smith Incorporated and J.P. Morgan Securities LLC, as
joint lead arrangers and Merrill Lynch, Pierce, Fenner and Smith Incorporated, J.P.
Morgan Securities LLC, Citigroup Global Markets Inc., RBS Securities Inc. and UBS
Securities LLC, as joint bookrunners (incorporated by reference to Exhibit 10.2 to
our Quarterly Report on Form 10-Q filed on February 8, 2011 (File No. 001-32312))10.3
    
    Amendment No. 1 to Credit Agreement, dated as of March 10, 2011, among Novelis
Inc., as borrower, AV Metals Inc., as holdings, and the other loan parties party
thereto, the lenders party thereto, Bank of America, N.A., as administrative agent,
and Merrill Lynch, Pierce, Fenner and Smith Incorporated, Citigroup Global Markets
Inc. and UBS Securities LLC, as joint lead arrangers and joint bookrunners
(incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed
on March 14, 2011 (File No. 001-32312))10.4
    
    Intercreditor Agreement dated as of December 17, 2010 by and among Novelis Inc.,
Novelis Corporation, Novelis PAE Corporation, Novelis Brand LLC, Novelis South
America Holdings LLC, Aluminum Upstream Holdings LLC, Novelis UK Limited, AV Metals
Inc., and the subsidiary guarantors party thereto, as grantors, Bank of America,
N.A., as revolving credit administrative agent, revolving credit collateral agent,
Term Loan administrative agent, and Term Loan collateral agent (incorporated by
reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q filed on February 8,
2011 (File No. 001-32312))10.5
    
    Security Agreement made by Novelis Inc., as Parent Borrower, Novelis Corporation,
Novelis PAE Corporation, Novelis Brand LLC, Novelis South America Holdings LLC,
Aluminum Upstream Holdings LLC, as U.S. Borrowers and the guarantors from time to
time party thereto in favor of Bank of America, N.A., as collateral agent dated as
of December 17, 2010 (incorporated by reference to Exhibit 10.4 to our Quarterly
Report on Form 10-Q filed on February 8, 2011) (File No. 001-32312))10.6
    
    Security Agreement made by Novelis Inc., as the Borrower and the guarantors from
time to time party thereto in favor of Bank of America, N.A., as collateral agent
dated as of December 17, 2010 (incorporated by reference to Exhibit 10.5 to our
Quarterly Report on Form 10-Q filed on February 8, 2011) (File No. 001-32312))10.7**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of re-melt aluminum ingot (incorporated by
reference to Exhibit 10.6 to our Annual Report on Form 10-K filed on June 19, 2008
(File No. 001-32312))10.8**
    
    Amended and Restated Molten Metal Supply Agreement between Novelis Inc., as
Purchaser, and Alcan Inc., as Supplier, for the supply of molten metal to
Purchasers Saguenay Works facility) (incorporated by reference to Exhibit 10.7 to
our Annual Report on Form 10-K filed on June 19, 2008 (File No. 001-32312))10.9**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of sheet ingot in North America
(incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K filed
on June 19, 2008 ) (File No. 001-32312))10.10**
    
    Amended and Restated Metal Supply Agreement between Novelis Inc., as Purchaser, and
Alcan Inc., as Supplier, for the supply of sheet ingot in Europe (incorporated by
reference to Exhibit 10.9 to our Annual Report on Form 10-K filed on June 19, 2008
) (File No. 001-32312))10.11*
    
    Employment Arrangement between Steven Fisher and Novelis Inc. (incorporated by
reference to our Current Report on Form 8-K filed on May 21, 2007 and our Current
Report on Form 8-K/A filed on August 15, 2007 (File No. 001-32312))10.12*
    
    Letter Agreement, dated October 20, 2006, by and between Novelis Inc. and Thomas
Walpole (incorporated by reference to Exhibit 10.1 to our Current Report on Form
8-K filed on October 26, 2006 (File No. 001-32312))10.13*
    
    Form of Change in Control Agreement between Novelis Inc. and certain executive
officers (incorporated by reference to Exhibit 99.1 to our Current Report on Form
8-K filed on September 27, 2006 (File No. 001-32312))10.14*
    
    Form of Change in Control Agreement between Novelis Inc. and certain executive
officers and key employees (incorporated by reference to Exhibit 99.2 to our
Current Report on Form 8-K filed on September 27, 2006 (File No. 001-32312))10.15*
    
    Form of Indemnity Agreement between Novelis Inc. and Members of the Board of
Directors of Novelis Inc. (incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on May 21, 2007 (File No. 001-32312))
 156




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##### Table of Contents



ExhibitNo.
    
    Description10.16*
    
    
    Form of Indemnity Agreement between Novelis Inc. and certain executive officers
dated as of June 27, 2007 (incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K filed on June 28, 2007(File No. 001-32312))10.17*
    
    
    Employment Agreement of Jean-Marc Germain dated as of April 28, 2008 (incorporated
by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on August
14, 2008 (File No. 001-32312))10.18*
    
    
    Form of Novelis Long-Term Incentive Plan for Fiscal 2009-2012 (incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on August 14,
2008 (File No. 001-32312))10.19*
    
    
    Employment Agreement of Alexandre Moreira Martins de Almeida dated as of August 8,
2008 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form
10-Q filed on November 10, 2008 (File No. 001-32312))10.20*
    
    
    Amended Novelis Long-Term Incentive Plan for Fiscal 2009-2012 (incorporated by
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on February
17, 2009 (File No. 001-32312))10.21*
    
    
    Employment Agreement of Philip Martens, dated as of April 11, 2009 (incorporated by
reference to Exhibit 10.36 to our Annual Report on Form 10-K filed on June 29, 2009
(File No. 001-32312))10.22*
    
    
    Novelis 2011 Long-term Incentive Plan (incorporated by reference to Exhibit 10.1 to
our Current Report on Form 8-K filed on May 18, 2010 (File No. 001-32312))10.23*
    
    
    Novelis 2011 Annual Incentive Plan (incorporated by reference to Exhibit 10.2 to
our Current Report on Form 8-K filed on May 18, 2010 (File No. 001-32312))10.24*
    
    
    Form Change in Control Agreement (incorporated by reference to Exhibit 10.3 to our
Current Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.25*
    
    
    Form Severance Agreement (incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.26*
    
    
Termination
of Employment Agreement between Novelis AG and Arnaud deWeert, dated
June 26, 2009 (Incorporated by reference to Exhibit 10.5 to our
Current Report on Form 8-K filed on July 1, 2009 (File No. 001-32312))10.27*
    
    
    Change in Control Agreement between Novelis and Philip Martens, dated April 16,
2009 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form
10-Q filed on August 3, 2009 (File No. 001-32312))10.28*
    
    
    Employment Agreement between Novelis Inc. and Antonio Tadeu Coelho Nardocci dated
September 4, 2009 (incorporated by reference to Exhibit 10.1 to our Current Report
on Form 8-K/A filed on September 9, 2009 (File No. 001-32312))10.29*
    
        
Employment
Agreement of Erwin Mayr, dated as of September 17, 200910.30
    
    
    Registration Rights Agreement relating to the 8.375% Senior Notes due 2017, dated
as of December 17, 2010 among the Company, the guarantors named on the signature
pages thereto and Citigroup Global Markets Inc., as representative of the initial
purchasers (incorporated by reference to Exhibit 10.1 to our Current Report on Form
8-K filed on December 17, 2010 (File No. 001-32312))10.31
    
    
    Registration Rights Agreement relating to the 8.75% Notes Senior Notes due 2020,
dated as of December 17, 2010 among the Company, the guarantors named on the
signature pages thereto and Citigroup Global Markets Inc., as representative of the
initial purchasers (incorporated by reference to Exhibit 10.2 to our Current Report
on Form 8-K filed on December 17, 2010 (File No. 001-32312))21.1
    
    
    List of subsidiaries of Novelis Inc.31.1
    
    
    Section 302 Certification of Principal Executive Officer31.2
    
    
    Section 302 Certification of Principal Financial Officer32.1
    
    
    Section 906 Certification of Principal Executive Officer32.2
    
    
    Section 906 Certification of Principal Financial Officer
 
 *
    
    Indicates a management contract or compensatory plan or arrangement.**
    
    Confidential treatment requested for certain portions of this
Exhibit, which portions have been omitted and filed separately with
the Securities and Exchange Commission. 157