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On each student's Record of Achievement (the summary page of all your HSC marks included in your HSC documents), they will receive 3 columns: an Examination Mark, an Assessment Mark, and a HSC Mark . The last column (HSC Mark) is just the average of the first two columns. The first two columns are actually aligned marks. These marks are derived from your raw external and internal marks described above.
If your Record of Achievement states you scored a 93 for Chemistry, this does not mean your raw exam mark was actually 93%. In most cases (especially for higher scaled subjects), your raw exam mark % is much lower than your reported HSC mark, which is an aligned mark. Your raw marks are what is used to calculate your aligned marks. Raw marks are marks which were actually scored in the exam paper, before any modification or process (e.g. scaling) is applied.
For each subject, each student will have 2 raw marks: their external raw exam mark (the actual mark scored in the external exam), and their moderated school assessment mark (the raw school assessment mark after the process of moderation is applied). Each of these 2 raw marks are then "aligned", producing your Examination Mark and Assessment Mark respectively.
Each year, HSC markers gather for each subject and talk about what the raw-mark cutoffs should be for the various performance bands. HSC markers would look at the achievements required in each Band by going back to the student outcomes, abilities required for Band 6, Band 5 etc for each exam. For example, they may decide for one particular hard year for Chemistry that a raw mark of 73 or above is Band 6, and 64 to 73 is Band 5, and 57 to 64 is Band 3 and so on. In recent years, the E4 cut-off for Maths Extension 2 was between 70 and 80 out of 120, meaning if your raw exam mark was greater than this (whatever it may be for a specific year), then you would achieve band E4.
These are the raw-mark cutoffs. Your aligned exam mark is derived from mapping your raw mark to these cut-off points. If your raw mark falls between these cut-off values, linear interpolation is used to calculate your final aligned mark. This is just a fancy way of saying for example: if the Band 6 cut-off is 83/100 and the Band 5 cut-off is 72/100, and your raw mark was 79/100, then your aligned mark would be ((79 - 72) / (83 - 72)) * 10 + 80 = (7 / 11) * 10 + 80 = 86.4. Remember, in terms of aligned marks, by definition: 90+ is Band 6, 80-90 is Band 5, 70-80 is Band 4, 60-70 is Band 3, 50-60 is Band 2, and 0-50 is Band 1. So the way to understand this particular example is that you are 7 out of 11 marks through Band 5 territory, therefore your aligned mark should reflect this.
The same process is applied to your moderated school assessment mark (read more on the internal assessment moderation process). For example, if your moderated school assessment mark is 76/100 for that same subject, then your aligned Assessment Mark would be ((76 - 72) / (83 - 72)) * 10 + 80 = (4 / 11) * 10 + 80 = 83.6.
This second mark is your aligned Assessment Mark, so you end up having 2 aligned marks. Along with your Exam Mark, these two marks are what is reported on your Record of Achievement. Your final HSC mark is the average of these two marks, so in this case the HSC mark is (83.6 + 86.4) / 2 = 85
Alignment is a measure of the quality of work done by a student in a subject. It is an absolute scale, meaning if the student meets the Band 6 criteria, he/she will score a Band 6 HSC mark. ATAR is fundamentally different as it is a relative scale. ATAR measures how well a student has done in relation to his/her peers. Therefore, while it is possible that everyone scores Band 6 HSC marks, it is impossible for everyone to get a 100 ATAR. For example, in 2008, we noticed a higher than usual number of Band 6 HSC marks being awarded. This does not affect the ATAR distribution but it does increase the number of All-rounder awards given out.
Whether alignment is important to you depends on what your objectives are. For the majority of students whose goal is to maximise their ATAR, the alignment process does not affect them because it has nothing to do with ATAR calculation. Alignment will determine what performance band your HSC marks fall into, they have no bearing on your ATAR. However both are derived from your raw school marks and raw external exam marks, so students who get high ATARs also get high aligned HSC marks.
Scaling and Subject selection (for those who need to choose subjects for year 11)
HSC Scaling statistics (including recent scaling reports and Tables published by the UAC)