Directors Report of Hindalco Industries Ltd.

Mar 31, 2024

Management Discussion and Analysis

Overview:

The Board of Directors of Hindalco Industries Limited (“Your Company” or “the Company”) is pleased to present 65th (Sixty-Fifth) Annual Report and Fourth Integrated Annual Report of your Company along with Audited Financial Statements for the financial year ended 31 March 2024 (“year under review / FY 2023-24”).

 

Hindalco Industries Limited, the metals flagship of the Aditya Birla Group, is the world's largest aluminium rolling and recycling company, a major player in Copper and Specialty Alumina, and one of Asia's largest producers of primary aluminium. Our future-facing initiatives led us to be among the top 1% in the aluminium industry in the S&P Global Sustainability Yearbook 2024 for the third year in a row. Industry leaders are the top-performing companies in the Index.

In India, Hindalco’s aluminium manufacturing units cover the complete value chain, from bauxite mining, alumina refining, coal mining, captive power generation and aluminium smelting, to downstream value-addition of aluminium rolling, extruding, and foil making. Hindalco's copper division in India operates a world-class custom copper smelter with capability to manufacture copper rods.

Guided by its Purpose of building a Greener, Stronger, Smarter world, Hindalco provides innovative solutions that nurture a sustainable planet. Today, Hindalco’s global footprint spans 52 manufacturing plants across 10 countries.

Key Initiatives during the year 2023-24

Expansion Plans

Hindalco’s business model, with its strong focus on expanding the portfolio of downstream products in India, has increased current downstream capacity to 430 KT at the end of FY24. Further, downstream capacity is expected to reach around 600 KT by FY 2026. Today, Utkal Alumina has a capacity of 2.5 million MT after the completion of its recent debottlenecking expansion of 350 KT. Utkal Alumina remains among the most economical producers of alumina in the world.

With a focus on cost-optimisation specially in coal and alumina, Hindalco has enhanced operational efficiencies and lowered the overall cost of production. Factors such as Utkal Alumina’s low-cost alumina, better coal mix, and improved operational efficiencies contributed to Hindalco being able to reduce the overall cost of production across its India operations.

 

Hindalco’s wholly owned subsidiary Novelis is the leading producer of flat-rolled aluminium products and the world’s largest recycler of aluminium. Novelis delivers innovative solutions to customers in the beverage cans, automobile, aerospace, and high-end speciality markets, including foil packaging, certain transportation products, architectural, industrial, and consumer durables. Novelis operates an integrated network of technically advanced rolling and recycling facilities across North America, South America, Europe, and Asia. Novelis, which has recycling operations across the world, recycles over 82 billion used beverage cans a year.

In FY 2023-24, Hindalco delivered an outstanding financial and operational performance backed by the exceptional performance of its India and Novelis’ operations. This strong performance, despite macro-economic headwinds, was driven by higher volumes, better margins, strategic product mix, stability in operations and continued outstanding performance of its copper business in India.

On a consolidated basis, Hindalco continued to maintain its strong balance sheet in FY 2023-24, resulting in a 1.21x Net Debt-to-EBITDA at the end of the year against 1.39x in the previous year.

In line with its long-term growth strategy of organic expansions, Hindalco announced investments of around $2 billion for its India operations, largely focusing on downstream expansions over the next 3 to 5 years.

These investments will be spread across the Aluminium, Copper, and Specialty Alumina businesses and resource securitisation. To strengthen the supply chain and improve the quality of coal, the Company has acquired two captive coal mines in India. The Company’s intent is also to build a larger value-added product portfolio over the next few years to dissociate its business from the volatility of global aluminium prices.

Novelis launched a multi-year strategy to transform and improve the profitability of its business through significant investments in new capacity and capabilities across all operating regions. It remains committed to this strategy with $4.9 billion worth of organic growth expansion projects expected to be completed in the next 3 years.

Industry Analysis

i. Aluminium -

Industry Review & Outlook

In Calendar Year (‘CY’) 2023, the global economy grew by 3.2%. In the same year, the global production

of aluminium increased 3% Y-o-Y to ~71 million MT, while global consumption was flatfish at ~70 million MT due to inflation-led slowdown in demand. Hence, global markets were in a marginal surplus of 0.6 million MT in CY23. In a region-wise split in CY2023, production in China grew 4% Y-o-Y to 41.6 million MT, led by increases in Guangxi, Gansu, Sichuan, Yunnan, and Inner Mongolia. Aluminium consumption in China grew by 5% to ~43 million MT led by the sharp increase in demand for EVs and solar. However, the demand was subdued in the sectors of building and construction, and packaging. With consumption of ~43 million MT, and production of 41.6 million MT, China saw a deficit of ~1.4 million MT.

In the rest of the world, production of aluminium was flatfish Y-o-Y at ~29 million MT in CY2023. A major drop in production in Europe was offset by the increased production in Indonesia, Brazil, and India. While transport grew on account of pent-up demand, all other sectors like consumer durables, packaging, and construction saw headwinds. Hence, overall consumption declined by 4% Y-o-Y to ~29 million MT, leading to a significant surplus of ~2 million MT in CY2023. (See Figure 1 and 2)

Table 1: Global Production and Consumption (in million MT)
Particulars	CY 19	CY 20	CY 21	CY 22 |	CY 23
Production	63.3	64.7	67.4	68.8	70.7
Consumption	64.6	62.8	69.0	69.2	70.1
Metal Balance Surplus/(Deficit)	(1.3)	1.9	(1.6)	(0.4)	0.6

 

With global markets being in surplus, inventory levels increased to 9.7 million MT. In CY2023, the global prices of aluminium averaged at $2249/tonne as against $2703/tonne in CY2022.The graph here shows the pricing trend over the past 5 years:

 

The regional premiums also saw volatility during CY2023. The average spot Main Japanese Port (MJP), duty-paid European Rotterdam Ingot and US Midwest premium was $86/t, $274/t and $23 cents/lb respectively in CY2023, versus $99/t, $462/t and $30 cents/lb respectively in CY2022.

Domestic Consumption:

India Consumption: Domestic consumption saw significant improvement across all sectors. Domestic consumption is expected to grow by around 11% Y-o-Y in FY 2023-24 on account of market demand. However, import of aluminium continues to be a concern for domestic players. Overall imports, including scrap, touched ~2.7 million MT in FY 2023-24 from ~2.5 million MT in FY 2022-23.

The Table (table 2) shows the sector-wise change in domestic consumption of aluminium in FY 2023-24 vs previous year.

Sector	FY 2023-24/ FY 2022-23
Electrical	20 to 25%
Building and construction	5 to 10%
Automotive	5 to 10%
Industrial and Defence	10 to 15%
Print	(5%) to 5%
Packaging	(5%) to 5%
Consumer Durables	(5%) to 5%
Others	5 to 10%
Overall India Consumption	11%

China Demand Drivers:
Sectors	Demand Drivers
Transport	Significant aluminium demand due to rising EV sales in domestic and exports. In YTD April CY24, NEV production increased by 30%. EV exports increased by 21%.
Construction	Continued monetary stimulus aimed to stabilise demand
Packaging	Stable demand from food and pharmaceutical sectors, however,
Foil stock	demand for Can to see short-term headwinds.
Electrical	Sharp growth in solar installations. In Q1 CY24, solar installations grew by 36% to 46 GW.
Consumer durables	Stable domestic demand led by exports.

 

Table 3: Global Production and Consumption (in million MT)
Particulars	CY22	CY23
Production	24.7	25.6
Consumption	24.9	25.6
Metal Balance Surplus/(Deficit)	(0.2)	0

 

Outlook:

In CY2024, global GDP growth rate is likely to be around 3.2%, as per the IMF projections (IMF WEO, July 2024). US growth is projected to pick up from 2.5% in 2023 to 2.6% in 2024, due to continuing strong momentum. Activity in the Euro area to pick up from 0.5% growth in 2023 to 0.9% in 2024, as effects of the energy price shock subside and inflation falls, leading to stronger household consumption. Chinese growth is expected to moderate from 5.2% in 2023 to 4.6% in 2024, due to a drag from property sector. India remains a bright spot, with the forecast for FY 2025 at 7%. Overall, advanced economies are likely to grow by 1.7%, while emerging economies are likely to grow by 4.3%.

Overall, in CY2024, global primary aluminium demand is likely to experience a 3% growth to around 72 million MT. Global production is also expected to be around 72 million MT. Hence, the resultant market is likely to remain balanced. Production in the world, excluding China, is expected to increase ~2% to around 29-30 million MT. Primary aluminium supply in China has grown ~3% to ~43 million MT in CY2023. Consequently, inventories are likely to remain stable at around 9.7 million MT by the end of CY2024.

World Excluding China Demand Drivers:
Sectors	Demand Drivers
Transport	Government provides purchase incentives to buyers of EVs. Overall production of cars and commercial vehicle to be flattish
Construction and Consumer durables	To recover with reduction in interest rates
Packaging	Stable demand in Can
Foil stock

The Indian market is likely to see a steady growth across all sectors. Imports of aluminium products, including scrap, continue to remain a major concern for domestic aluminium producers. Over the past few years, the domestic rolled and foil products industries have seen an increase in imports at lower prices, especially from China and the FTA countries. The government has supported the aluminium industry by imposing Anti-Dumping Duty (‘ADD’) on imports of flat-rolled products from China. The foil industry has petitioned with the Government on imposing ADD on foil imports from China/Thailand to support the industry against unfair trade practices.

ii. Copper - Industry Review & Outlook

In CY23, overall global copper production grew ~3.6% to 25.6 million MT. Consumption also grew 2.8% Y-o-Y to 25.6 million MT, resulting in a balanced market.

In CY23 Chinese production increased 8.6% to 11.5 million MT, whereas consumption grew 7.7% to 14.6 million MT, resulting in a deficit of 3.1 million MT. Across the world, excluding China, production declined 0.3%, whereas consumption declined 3.0% Y-o-Y, resulting in a surplus of 3.1 million MT in CY23.

On a yearly basis, domestic demand for refined copper increased 10% to 817 KT in FY 2023-24 from 746 KT in FY 2022-23. Of this, the share of imports was 30% at 244 KT in FY 2023-24 versus 24% at 181 KT in FY 2023-24.

For the calendar year 2024, the annual benchmark treatment charge/refining charge (Tc/Rc) was settled at 80/8 (20.5 c/lb). This settlement reflects a notable decrease of ~ 9% compared to the CY2023 benchmark Tc/Rc of 88/8.8 (22.6 c/lb). For CY2024, the market is expected to be in deficit of ~ 440 KT.

Spot terms experienced a continuous decline due to a combination of disruptions in a large copper mine in Central America coupled with 4-5 new smelters being commissioned in Indonesia, India, and China during this year.

Outlook:

Global demand for refined copper is expected to increase ~2.5% in CY2024. China is expected to grow ~3.2% and the rest of world is expected to grow ~1.5%. Demand for refined copper in India is likely to be around 880 KT in FY 2024-25.

Tightness in the concentrate market is likely to continue for the next couple of years with resulting subdued Tc/Rc levels in the short to medium term. Maintenance shutdown planned by many Chinese smelters during Q1 FY25 may offer some short-term relief.

iii. Novelis - Global Flat Rolled Products (‘FRP’) - Industry Review & Outlook

Approximately a decade ago, Novelis launched a multi-year strategy to transform and improve the profitability of business through significant

investment in new capacity and capabilities. Novelis leveraged new capacity, global footprint, scale and solid customer relationships to drive volumes and capture favourable supply and demand market dynamics across all end-use markets. With growth in volumes combined with improved pricing, significant increase in scrap inputs, operational efficiencies and high-capacity utilisation rates, Novelis significantly improved the profitability of beverage packaging and specialties products and maintained high margins for automotive and aerospace products to increase total company adjusted EBITDA per tonne from $308 in fiscal 2016 to $510 in fiscal 2024 and turn a net loss of $38 million into $600 million in net income.

However, continuing inflation and geopolitical instability in Europe in fiscal 2023, led to increased global operating costs, including for energy, freight, labour, coatings, and alloys. While many of these operating cost pressures have lessened in recent months, some costs, including for labour and repairs, and maintenance, remain elevated. Elevated interest rates have also increased interest expense on variable interest rate loans. The challenging inflationary and geopolitical environment is negatively impacting near-term demand in some specialty end-markets, such as building and construction, which is more sensitive to inflation and interest rates. Such elevated costs and reduced demand will continue until economic conditions stabilise. Despite Novelis’ results being negatively impacted by higher costs, it was able to partially mitigate a portion of the higher inflationary cost impact through a combination of hedging, passing a portion of higher costs to customers, favourable pricing environments, and utilising recycled materials. Novelis also implemented cost control measures across global operations, including employment, professional services, and travel costs.

The global long-term demand for aluminium rolled products remains strong, driven by anticipated economic growth, material substitution, and sustainability considerations, including increased environmental awareness around PET plastics. However, reduced demand for Can sheet beginning in the second half of fiscal 2023 attributed to the beverage packaging industry reducing excess inventory as supply chains improved and markets adjusted to a more moderated level of beverage packaging demand following the COVID pandemic. Inventory levels across beverage packaging supply chain have now largely normalised.

Increasing customer preference for sustainable packaging options and package mix shift toward infinitely recyclable aluminium are driving higher demand for aluminium beverage packaging worldwide. To support growing demand for aluminium beverage packaging sheet in North America, Novelis broke ground on a 600 KT capacity greenfield rolling and recycling plant in Bay Minette, Alabama, in October 2022. Novelis’ plan is to allocate more than half of this plant's capacity to the production of beverage packaging sheet. Novelis continues to evaluate opportunities for additional capacity expansion across regions, where local Can sheet supply is insufficient to meet long-term demand growth.

Long-term demand will continue to grow for aluminium automotive sheet, which drives Novelis’ recently completed investments in automotive sheet finishing capacity in Guthrie, Kentucky, and Changzhou,

China. This demand has been primarily driven by the benefits that result from using lightweight aluminium in vehicle structures and components, as automakers respond to stricter government regulations regarding emissions and fuel economy, while maintaining or improving vehicle safety and performance. There is increased demand for aluminium in electric vehicles, as the metal’s lighter weight can result in extended battery range.

The long-term demand for building and construction and other specialty products is expected to grow due to increased customer preference for lightweight, sustainable materials. Demand for aluminium plate in Asia is to grow, driven by the development and expansion of industries serving aerospace, rail, and other technically demanding applications.

Demand for aerospace aluminium plate and sheet has strengthened as air-travel demand has recovered toward pre-COVID levels. In the longer-term, we believe significant aircraft industry order backlogs for key OEMs, including Airbus and Boeing, will translate into growth in the future and that our multi-year supply agreements have positioned us to benefit from future expected demand.

For a region-wise detailed business overview, please refer to the 10Kfiled by Novelis Inc. dated 6 May 2024 for the year ended 31 March 2024.

a. Hindalco Aluminium

Operational Overview:

The Company delivered a robust performance in its aluminium business in FY 2023-24 supported by higher volumes, lower operating costs, and better operational efficiencies. The production of primary aluminium stood at 1.331 million MT in FY 2023-24 versus 1.322 million Ml in the previous year. Overall alumina production stood at 3.665 million MT versus 3.525 million MT in FY 2022-23. Utkal Alumina recorded production of 2.450 million MT in FY 2023-24 and continues to be among the most economical and efficient alumina producers globally, providing strong support to most of Hindalco's India smelting facilities, leading to better cost optimisation and quality input material (alumina). The overall third-party sales of metal in all forms were at 1.372 million MT in FY 2023-24 against 11.350 million MT in FY 2022-23, up 2% Y-o-Y on account of higher downstream sales supported by market recovery this year. Production of aluminium VAP was higher by 5% Y-o-Y at 367 KT in FY 2023-24 vs 350 KT in the previous year. Third-party sales of aluminium VAP were higher by 5% at 370 KT in FY 2023-24 vs 354 KT in FY 2022-23.

Trends of total alumina production, and aluminium production and sales in the past 5 years is shown in the graph:

Financial Overview:

Aluminium Upstream

Revenue for Hindalco's aluminium upstream segment was down 2%, at 132,382* crore in FY 2023-24 from 133,010* crore in FY 2022-23 on account of lower average aluminium prices. EBITDA was up 9% at 19,161 crore versus 18,402 crore a year earlier supported by lower input costs. The EBITDA margins were at 28% in FY 2023-24, which continues to be one of the best in the industry.

* The above numbers are without elimination of Inter-segment revenue.

(1 crore)
Description	¦ FY 2023-24 |	FY 2022-23	% Change
Revenue	32,382	33,010	-2%
EBITDA	9,161	8,402	9%

Note: In the consolidated financial statements, within the aluminium segment, the significant entities are Hindalco and Utkal Alumina International Ltd. Utkal Alumina is a wholly owned subsidiary of Hindalco and supplies a substantial quantity of its production to Hindalco hence we have analysed the combined performance of Hindalco's aluminium business along with Utkal Alumina.

Aluminium Downstream

Revenue for Hindalco's aluminium downstream segment was 110,531* crore in FY 2023-24, down 4% Y-o-Y. EBITDA at 1573 crore was down 9% versus 1627 crore a year earlier due to lower realisations and unfavourable product mix.

* The above numbers are without elimination of Inter-segment revenue.

(1 crore)
Description	¦ FY 2023-24 |	FY 2022-23	% Change
Revenue	10,531	11,009	-4%
EBITDA	573	627	-9%

b. COPPER

Operational Overview:

The Copper business delivered its best-ever operational and financial performance during FY 2023-24. Production of copper cathode was 368 KT in FY 2023-24, down 10% from the previous year impacted by planned maintenance shutdowns in the initial quarters. Production of continuous cast rods* was at a record 488 KT in FY 2023-24 versus 409 KT in FY 2022-23.

Total copper metal sales in all forms were at a record 506 KT in FY 2023-24, up 15% compared to 439 KT in the previous year which was in-line with the market demand. The sales of copper VAP (Copper Rods) were at a record 389 KT in FY 2023-24, up by 12% Y-o-Y, versus 347 KT in the previous year. The share of VAP (Copper Cathode Rods) to total metal sales was 77% in FY 2023-24, from 79% in the previous year.

 

Financial Overview: Copper segment revenue for FY 2023-24 was at 149,321* crore (vs. 141,702* crore in FY 2022-23), up 18% on account of higher volumes in FY 2023-24. Copper business recorded an all-time high EBITDA of 12,616 crore (vs. 12,253 crore in FY 2022-23), up 16% Y-o-Y, on account of stable operations, higher domestic sales, and better Tc/Rc in FY 2023-24. * The above numbers are without elimination of Inter-segment revenue

(1 crore)

Description    ^FYEEBbEMfY 2022-23    % Change

Revenue    49,321    41,702    18%

EBITDA    2,616    2,253    16%

 

c. NOVELIS

Operational Overview:

Driven by its purpose of shaping a sustainable world together. Our ambition is to be the leading provider of low-carbon, sustainable aluminium solutions and to achieve a fully circular economy by partnering with our suppliers and customers in beverage packaging, automotive, aerospace, and specialties (a diverse market including building and construction; signage; foil and packaging; commercial transportation; and commercial and consumer products, among others) markets throughout North America, Europe, Asia, and South America. We have recycling operations in many of our plants to recycle both post-consumer and post-industrial aluminium.

In FY 2023-24, total shipments were down 3% over the past year, at 3.673 million MT. The decrease in shipments is mainly due to lower beverage packaging shipments driven by customer inventory reductions in the first half of the fiscal year as well as softer demand for specialties products in a weaker macro-economic environment, partially offset by higher automotive shipments on strong demand.

With customer inventory reductions complete, beverage packaging shipments increased sequentially each quarter of fiscal 2024 and demand continues to strengthen.

In FY 2023-24, the share of beverage can sheet shipments were 57%, automotive body sheet shipments were at 21%, and specialities and aerospace shipments were at 19% and 3%, respectively. Novelis leveraged its extensive recycling footprint and favourable market conditions to utilise 63% recycled content in its shipments in the reporting period.

Novelis operates in four key geographies: North America, Europe, Asia, and South America. In North America in FY 2023-24 total third party shipments were at 1,513 KT down from 1,515 KT in FY 2022-23, due to strong demand in beverage packaging and automotive end markets, offset by lower specialties end-market demand impacted by high inflation and interest rates. In Europe, the Novelis shipped 967 KT in FY 2023-24, a decline from 998 KT in FY 2022-23 due to weaker consumer demand in the beverage packaging and specialties markets, partially offset by stronger demand in the automotive end market. In Asia, Novelis shipped 623 KT of rolled products in FY 2023-24 versus 678 KT in the previous year, predominantly due to destocking of beverage packaging and weaker consumer demand. In South America, Novelis shipped 570 KT in FY 2023-24, down from 599 KT in the previous year, due to the impact of beverage packaging destocking across the supply chain in this region. In FY 2023-24, Novelis reported an overall EBITDA/tonne of $510 an increase from US$478/ tonne in the last year.

Financial Overview:

Novelis' net sales in FY 2023-24 were at $16.2 billion, down 12% from $18.5 billion in fiscal 2023, primarily driven by lower average aluminium prices and a 4% decrease in total shipments compared to the prior year. The decrease in aluminium prices was driven primarily by a 12% decrease in average LME prices compared to the prior year.

Net income from continuing operations (excluding Special Items) of $688 million, a decrease of 12% compared to $781 million in fiscal 2023. The decrease in net income is primarily due to lower beverage packaging and specialty shipments, less favourable metal benefit from recycling due to lower aluminium prices, higher employment costs, favourable inventory timing effect from capitalising high operating costs last year, and higher income tax provision, partially offset by higher pricing, including some cost pass-through to customers, higher automotive shipments, some settling of inflationary cost pressures including energy costs, and favourable foreign exchange. Novelis reported Adjusted EBITDA of $1.873 billion vs $1.811 billion, an increase of 3% Y-o-Y, driven by the same factors described above, excluding the unfavourable impact from a higher income tax provision in the current year.

($ million) Description ^QYE023E9 FY 2022-23 % Change Net Sales 16,210 18,486 -12% Adjusted EBITDA 1,873 1,811 3% Net Income/ (loss) w/o Exceptional 688 781 -12% Item* * Tax-effected special items may include restructuring & impairment, metal price lag, gain/loss on assets held for sale, loss on extinguishment of debt, loss/gain on sale of business.

FINANCIAL ANALYSIS AND OUTLOOK

The Standalone and Consolidated Financial Statements for the financial year ended 31 March 2024, have been prepared in accordance with the Companies Act, 2013 (‘the Act’), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’) and Indian Accounting Standards (‘IND AS’). The audited Standalone and Consolidated Financial Statement forms part of this Integrated Annual Report.

Statement of Profit & Loss

 

(J crore)
Â	Hindalco Standalone		Hindalco Consolidated
Description	FY 2023-24 |	FY 2022-23	FY 2023-24 |	FY 2022-23
Revenue from Operations	83,009	76,878	2,15,962	2,23,202
Earnings Before Interest, Tax and Depreciation (EBITDA)	Â		Â
Novelis*	Â		15,507	14,543
Aluminium (including Utkal)	Â		Â
Aluminium Upstream	Â		9,161	8,402
Aluminium Downstream	Â		573	627
Copper (including Dahej)	Â		2,616	2,253
Inter-segment Profit/ (Loss) Elimination (Net)	Â		(60)	414
Unallocable Income/ (Expense) - (Net) S GAAP Adjustments	Â		(2,069)	(2,108)
Total EBITDA	8,203	8,061	25,728	24,131
Depreciation S Amortisation (including impairment)	1,961	1,927	7,881	7,294
Finance Cost	1,268	1,300	3,858	3,646
Earning before Exceptional Items, Tax & Share in Profit/ (Loss) in Equity accounted Investments	4,974	4,834	13,989	13,191
Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax)	Â		2	9
Earning before Exceptional Items and Tax	4,974	4,834	13,991	13,200
Exceptional Income/ (Expenses) (Net)	21	41	21	41
Profit Before Tax (After Exceptional Items)	4,995	4,875	14,012	13,241
Tax Expense	1,298	1,549	3,857	3,144
Profit/ (Loss) After Tax	3,697	3,326	10,155	10,097
Other Comprehensive Income / (Loss)	2,245	1,702	1,930	7,460
Total Comprehensive Income	5,942	5,028	12,085	17,557
Basic EPS (') in 1	16.64	14.96	45.71	45.42
* As per US GAAP	Â	Â	Â	Â
Appropriations to Reserves:*	Â	Â	Â	(J crore)
Appropriations			FY 2023-24 |	FY 2022-23
Opening Balance in Retained Earnings and Other Comprehensive Income		Â	20,915	15,280
Total Comprehensive Income for the Current Year	Â	Â	5,942	5,028
Dividends paid	Â	Â	(667)	(890)
Hedging (Gain)/ Loss and cost of hedging transferred to non-financial assets		Â	(15)	-
Employee Share Based Transactions	Â	Â	(1)	(3)
Transferred to Debenture Redemption Fund	Â	Â	-	1,500
Closing Balance in Retained Earnings and Other Comprehensive Income		Â	26,174	20,915
* Standalone basis	Â	Â	Â	Â
Dividend	Â	Â	Â	Â
For the year ended 31 March 2024, the Board of Directors of your Company has recommended dividend of 1 3.50 per equity
share of face value of 1 1 /- each (previous year 1 3.00) to equity shareholders.			Â	Â

 

CONSOLIDATED FINANCIAL STATEMENTS

Revenue

Hindalco's consolidated revenue was down 3% at 12,15,962 crore in FY 2023-24 compared to 12,23,202 crore in FY 2022-23, largely influenced by lower global aluminium prices. The graphs below show the split of consolidated revenues by businesses in FY 2023-24 and the trend of revenues over the past five years.

 

EBITDA

Consolidated EBITDA for FY 2023-24 was up 7% to 125,728 crore from 124,131 crore in the previous year.

This was driven by higher EBITDA in the Aluminium Upstream and Copper businesses in India. The EBITDA margin in FY 2023-24 was at 11.9% compared to 10.8% in FY 2022-23. The graphs show the consolidated EBITDA split by businesses in FY 2023-24 and trends over the past 5 years.

 

Finance Cost

Finance cost was up 6% at ?3,858 crore in FY 2023-24 from ?3,646 crore in FY 2022-23 mainly due to increase in interest cost in Novelis.

Partially same has been offset due to capitalisation of borrowing costs higher by ?211 crore in FY 2023-24 on consolidated basis.

Depreciation and amortisation

(including net impairment loss/ (reversal) of non-current assets)

Depreciation and amortisation (including net impairment loss/(reversal) of non-current assets) increased to 17,881 crore in FY 2023-24 from 17,294 crore in FY 2022-23 led by impairment activities related to the closure of the Clayton facility in New Jersey, USA, amounting to 1177 crore for property, plant, and equipment, and 14 crore for Capital Work-in-Progress in FY 2023-24. Additionally, the impending closure of the Buckhannon facility in West Virginia, USA, led to an impairment of 1154 crore for property, plant, and equipment in the same period.

Profit/ (Loss) after tax

Profit After Tax (PAT) in FY 2023-24 was at 110,155 crore up 1% from 110,097 crore a year ago. The net profit margin in FY 2023-24 was at 4.7% versus 4.52% in FY 2022-23.

 

Consolidated Net Debt to EBITDA

The consolidated balance sheet continued to remain strong with the Net Debt to EBITDA at 1.21 times at the end of March 2024 versus 1.39 times at the end of March 2023. (Net Debt to EBITDA = Consolidated Business EBITDA/ Consolidated Net Debt)

 

Financing & Debt Redemption a) Redemption of Secured Non-Convertible Debentures	Â
Your Company has redeemed the following Unsecured, Listed, and Non-Convertible Debentures on its maturity date.
Date of Allotment Coupon Rate	Amount Date of Maturity
7.60% Unsecured, Listed, Rated, Redeemable, 18 January 2023 .. _ .... ’ Non-Convertible Debentures	700 crore 18 March 2023
The aforesaid debentures are listed on National Stock Exchange of India Limited.

 

b) Issue of Non-Convertible Debentures

During the year under review, your Company has not allotted any Unsecured, Rated, Listed, Redeemable, Non-Convertible Debentures.

 

Exceptional Income/ (Expense)

In FY 2023-24, total exceptional income was at 121 crore compared to 141 crore in FY 2022-23. This decline in exceptional income can be attributed to change in provision for expected cost of disposal of legacy ash lying in ash dykes/ponds, as per rules issued by the Ministry of Environment, Forest and Climate Change (MoEFCC). During the year ended 31 March 2024, in view of the regulatory approval received on closure of few ash dykes/ ponds, the company has reversed provision which is accounted as Exceptional Income.

Taxes

Provision for taxes was at 13,857 crore in FY 2023-24 against 13,144 crore in FY 2022-23. This decrease was due to higher profitability of the Company in FY 2023-24, and the Group's decision to retain the existing tax structure until utilising accumulated MAT Credit and deductions under Chapter VIA of the Income Tax Act. They re-measured the deferred tax liability for the future transition to the new tax regime, writing back 1427 crore of the net deferred tax liability and the company signed an MOU to sell land in Kalwa, Maharashtra, for 1595 crore, to be paid in instalments and 1.5% of project sales revenue. They recognised previously unrecognised capital losses of 1129 crore on Deferred Tax Assets due to expected future capital gains from this transaction.

Key Financial Ratios

i.    Debtors Turnover (Days)

The Consolidated Debtors Turnover Days on 31 March 2024 was 28 days compared to 30 days on 31 March 2023. This displays the Company’s consistency in managing its credit with customers and reflects the Company's strong financial position with respect to its customers. The Debtor Turnover (Days) is calculated as Average Debtors/Total Consolidated Sales x 365 days.

ii.    Inventory Turnover (Days)

The Consolidated Inventory Turnover Days on 31 March 2024 was at 71 days versus 71 days at the end of 31 March 2023. This indicates the Company's effective management of its inventory levels throughout the year. Inventory (days) is calculated by dividing the Average Inventory by Revenue from Operations x 365 days.

iii.    Interest Coverage Ratio

The Consolidated Net Interest Coverage Ratio on 31 March 2024 stands at 6.67 times compared to 6.62 times on 31 March 2023. This is higher from the previous year because of higher earnings (EBIT). This ratio reflects the Company's ability and strength to meet its interest obligations.

iv.    Current Ratio

The Consolidated Current/Liquidity Ratio as on 31 March 2024 stands at 1.48 times versus 1.51 times at the end of 31 March 2023 and is reflective of the

Company’s strengthening of liquidity or solvency position compared to the previous year.

v.    Debt to Equity Ratio

The Consolidated Debt-to-Equity Ratio as on 31 March 2024 is well below 1.0x, at 0.53x times compared to 0.64x times as on 31 March 2023. This is indicative of the Company's strong balance sheet and ability to meet its current short-term obligations.

vi.    Return on Net Worth (RoNW)

The Consolidated Return on Net Worth as on 31 March 2024 is 10.11%, compared to 11.67% on 31 March 2023. This decline was primarily because of growth in net worth being more than growth in PAT. This is calculated as Profit After Tax/Average Net Worth.

vii.    Operating Margins

The Consolidated Operating Margins for FY 2023-24 stands at 11.22% versus 10.25% in FY 2022-23 indicating higher operating profit in the reporting period compared to the previous year. Operating Margin is calculated as Operating Profit/Net Sales.

viii.    Net Profit Margins

The Consolidated Net Profit Margins as on 31 March 2024 stands at 4.7% compared to 4.52% as on 31 March 2023. The increase is on account of higher consolidated profits recorded during the reporting period. It is calculated as Net Profit/

Net Sales.

Consolidated Cash flow:

Cash generated from operations for Hindalco Consolidated stands at 124,056 crore in FY 2023-24 versus 119,208 crore in FY 2022-23.

The table below shows the comparative movement of cash flows:

 

(J crore)
Â	Â	Yearended	Â
Particulars		31/03/2024	31/03/2023
A.	CASH FLOW FROM OPERATING ACTIVITIES	Â
Operating Cashflow before working capital changes		24,787	22,445
Changes in working capital		1,944	(457)
Cash generated from operations before Tax		26,731	21,988
(Payment)/Refund of Direct Taxes		(2,675)	(2,733)
Net Cash generated/ (used) - Operating Activities - Continuing Operations		24,056	19,255
Net Cash Generated/ (Used) - Operating Activities - Discontinued Operations		-	(47)
Net Cash Generated/ (Used) - Operating Activities (a)		24,056	19,208
B.	CASH FLOW FROM INVESTMENT ACTIVITIES	Â
Net Capital Expenditure		(15,678)	(9,637)
Disposal of Investments in Subsidiaries (Net)/Business		-	24
(Purchase) / Sale of treasury instrument (Net)		1,899	(214)
Acquisition of business, net of cash acquired		-
Investment in equity accounted investees		(30)	(17)
Loans S Deposits (given) / received back (Net)		(1,023)	1,393
Interest and dividends received		585	479
Investment in Equity Shares at FVTOCI		(43)	(57)
Others		14	13
Net Cash Generated/ (Used) - Investing Activities - Continuing Operations		(14,276)	(8,016)
Net Cash Generated/ (Used) - Investing Activities (b)		(14,276)	(8,016)
C.	CASH FLOW FROM FINANCING ACTIVITIES	Â
Treasury shares acquired S Proceeds from Shares Issued by ESOP Trust		(99)	(125)
Net Debt inflows/Outflows		(6,139)	(5,485)
Interest S Finance Charges paid		(3,912)	(3,845)
Dividend Paid (including Dividend Distribution Tax)		(667)	(890)
Net Cash Generated/ (Used) - Financing Activities (c)		(10,817)	(10,450)
Net Increase/(decrease) in Cash and Cash Equivalents (a) +(b) + (c)		(1,037)	742

 

Standalone Performance

On Standalone basis, your Company registered a revenue of 183,009 crore for the fiscal year 2024 vs 176,878 crore in the previous year up 8% on account of higher volumes in FY24. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at 18,203 crore, up 2% compared to the last year, supported by higher volumes, better margins, strategic product mix, stability in operations, and continued outstanding performance of its copper business. Depreciation (including net impairment loss/ (reversal) of non-current assets) was up 2% at 11,961 crore in FY24 versus 11,927 crore in FY23. The Finance Cost was 2% lower at 11,268 crore in FY24 versus 11,300 crore in FY23. The reduction of 1131 crore in finance cost was due to pre-payment and repayment of debts made during the year. Additionally, interest capitalised during the financial year increased by 152 crore due to a rise in the average borrowing cost, which was 8.63% in FY 2023-24, up from 6.61% in the previous year. This reduction was partially offset by an increase of 1211 crore in finance cost for working capital loans. Profit before Tax (and Before Exceptional Items) stood at 14,974 crore, up 3% compared to the previous year due to higher EBITDA. Net Profit for FY24 stood at 13,697 crore as compared to 13,326 crore, up 11% Y-o-Y.

Business Outlook

Hindalco's relentless focus is on product innovation, better efficiencies, digitalisation, and organic expansions, with a diversified product mix and cost competitiveness. The Company's long-term strategic investments in Novelis and the India downstream expansion projects will strengthen its presence across the value chain.

Global long-term demand for aluminium rolled products remains strong, driven by positive economic growth outlook, material substitution, and sustainability considerations. However, reduced demand for Can sheet beginning in the second half of fiscal 2023 is attributed to the beverage packaging industry reducing excess inventory as supply chains improved and markets adjusted to a more moderated level of beverage packaging demand following the COVID pandemic. We believe inventory levels across the beverage packaging supply chain have now largely normalised, and demand for recyclable aluminium beverage packaging will grow at a globally (excluding China) 4% CAGR between 2023 to 2031, mainly driven by sustainability trends.

Demand for aluminium sheet across specialties markets, including electronics, electric vehicle battery enclosures, painted products, container foil, and building and construction markets also remains strong over the long term. This is due to increased customer preference

for lightweight, sustainable materials, despite current economic headwinds impacting near-term demand for building and construction and some industrial products.

The automotive segment is poised to display strong near-and long-term demand and is expected to grow at a CAGR of 7% between 2023 and 2028. This demand has been primarily driven by the benefits that result from using lightweight aluminium in vehicle structures and components, as automakers respond to stricter government regulations regarding emissions and fuel economy, while maintaining or improving vehicle safety and performance. We are also seeing increased demand for aluminium for electric vehicles, as aluminium’s lighter weight can result in extended battery range.

Requirement for aerospace aluminium plate and sheet has strengthened as demand for air travel has recovered towards pre-COVID levels. In the longer-term, we believe significant aviation industry order backlogs will translate into future growth and our multi-year supply agreements have positioned us to benefit from expected demand in future.

Continuing inflation and geopolitical instability in Europe in fiscal 2023 led to increased global operating costs, including energy, freight, labour, coatings, and alloys. While many of these operating cost pressures have moderated in recent months, some costs, including for labour and repairs, and maintenance, remain elevated. Elevated interest rates have also increased interest expense on our variable interest rate loans. The challenging inflationary and geopolitical environment is negatively impacting near-term demand in some specialty end-markets, such as building and construction, which is more sensitive to inflation and interest rates. We expect such elevated costs and reduced demand until economic conditions stabilise. Despite our results being negatively impacted by higher costs, we have been able to partially mitigate a portion of the higher inflationary cost impact through a combination of hedging, passing through a portion of the higher costs to customers, favourable pricing environments, and utilising recycled materials. We have also implemented cost control measures across our global operations, including a focus on employment, professional services, and travel costs. There is no assurance that we will continue to be able to mitigate these higher costs in the future.

Domestic copper demand is primarily fuelled by rods, a key downstream product in the copper industry. Hindalco has successfully increased its market share and met the rising domestic demand by expanding its copper value-added product (VAP) capacity, particularly through the production of rods and inner grooved tubes.

smelters. The team has been working to develop inhouse advance process control at Aditya smelter.

Aluminium downstream RD&T: HIC-Semifab team along with SMEs are continuing research on optimising the product quality and developing new products and applications. This year, the technology team successfully developed battery-grade aluminium foils, which are being evaluated by customers. New aluminium alloy plates for Aluminium-Air batteries were also developed in collaboration with ABSTC and Phinergy, Israel. The technology team continued to focus on reducing the dependence on premium aluminium imports by developing solutions such as peripheral coarse grain-controlled alloys, that exceed surface and performance targets. The team also delivered high performance material solutions for battery enclosures for use in electric vehicles and continued to develop new light weighting applications in the transport segment.

Copper RD&T: This year HIC-Copper along with ABSTC focused on new technology projects such as evaluation of e-waste recycling process technologies, Cu-Mg alloy rods for railways applications, and new copper Inner Grooved Tubes for air conditioning. Under sustainability initiatives, a novel process was created to extract nickel from effluent

 

In its commitment to strengthen its position as a sustainability leader in the industry, Hindalco has set strategic priorities and allocated capital to foster organic growth in India and Novelis. These initiatives also emphasise enhancing value through (ESG) practices.

Research, Development & Technology

The Company’s Research, Development & Technology (RD & T) activities are managed by dedicated technology teams at Hindalco Innovation Centres. The team’s main focus is the development and commercialisation of premium differentiated products, improving our competitive cost position and product quality through process improvements and new process technologies. To support these goals, we are managing a pipeline of short-term and long-term technology programmes at 4 Hindalco Innovation centres in collaboration with the Aditya Birla Group’s global research and development hub (The Aditya Birla Science and Technology Company), and external research institutes. The project portfolio addresses immediate needs for technologies, as well as the exploration of future opportunities.

This year, the technology team continued to make our processes greener and sustainable through value added products and applications. These initiatives helped our plants mitigate challenges of raw material quality, specific energy consumption, carbon footprint, cost effective management of waste, and recovery of value from by-products and waste products. Specific programmes such as CO₂ mineralisation with technology start-up Carbon 8 have been initiated. We continued our digitalisation programmes such as soft sensors, digital

twins, etc. These initiatives are helping operation teams improve process control and achieve desired process performance. Technical competencies developed by the Company will go a long way in quick absorption/ adoption technologies to elevate economic performance and improve our new product/ new application pipeline to address impending market opportunities.

Bauxite & Alumina RD&T: Hindalco Innovation Centre (HIC) Alumina at Belagavi continued to focus on bauxite ore & alumina refining processes and specialty alumina, hydrate products & their applications. This HIC is helping the Aditya Refinery Project team on basic technology engineering and evaluation of bauxite samples. This year, key projects on development of boehmite for battery separator applications, stearic-coated Superfine Hydrates, Bimodal Hydrates, were successfully developed and commercialised in collaboration with the operations and marketing teams. HIC collaborated with a start-up to develop a process for gallium extraction and purification from spent liquor generated during Bayer process. Gallium is a strategic metal, and a process to extract gallium was fulfilled on a request from the Ministry of Mines, Government of India.

Primary Aluminium RD&T: This year we initiated a project to set up a dedicated a Booster Section of 10 pots at Mahan smelter to demonstrate the novel HiPoT 400 kA pot design developed in collaboration with ABSTC. This booster section will help to evaluate and implement inhouse technology at Mahan and Aditya smelters to increase production capacity and reduce specific energy consumption. The technology team continued to implement a range of technology solutions, which includes next generation Cu-onsert & Cu-insert collector bars, at stream, which will be used to develop battery grade nickel compounds.

The Company also has series of collaborative programmes with IITs, CSIR labs, as well as national and international start-ups to build competencies in select areas and create long term value. These engagements along with in-house research has resulted in the doubling of patent applications and research publications in international journals and conferences.

Sustainability

At Hindalco, we strive to create value from revenue streams that benefit the planet and people. Our firm commitment to ESG is proven through the fact that we are among the top 1% in the aluminium industry in the S&P Global Sustainability Yearbook 2024 for the third year in a row. We've demonstrated our commitment to addressing critical sustainability issues by working closely with stakeholders across the value chain. This approach reflects our plan for mutual growth, thereby earning the trust of all partners in the process.

At Hindalco, sustainability is driven at the highest level through the Apex Sustainability Committee, chaired by our Managing Director. The committee ensures the

implementation and monitoring of sustainability initiatives across the organisation. Our task forces and ESG SPOCs from all functions work to implement sustainability initiatives at the grassroots. A roadmap to achieve Net Zero by 2050 has been established, and we're already making significant progress. We've installed 173 MW of renewable energy capacity, with plans to scale it up to 300 MW by 2026.

The Company aims to achieve overall water positivity by 2050, with a sub-target of making downstream and mining operations water-positive by 2030. Currently, 5 mines are certified for water positivity by DNV GL. To make our operations entirely water-positive, we have ramped up freshwater conservation efforts using water from treated rainwater sources and desalinated water in the copper business. To achieve Zero Waste to Landfill by 2050, Hindalco extracts value from the waste generated and amplifies its waste recycling. As Currently of date, 3 of Hindalco’s plants have been certified Zero Waste to Landfill by Bureau Veritas Industrial Services (India) Pvt. Ltd.

The Company is committed to protecting biodiversity and has developed BMPs for critical sites in collaboration with IUCN, aiming to achieve No Net Loss by 2050. Our industry-first Sustainable Mining Charter and KPIs under 7 thematic areas are the other crucial steps Hindalco has taken to make its mining vertical more sustainable. Hindalco's downstream operations (rolling, extrusions, and foils) and one refinery are now certified by the Aluminium Stewardship Initiative (ASI).

Hindalco engages with local communities to ensure mutual prosperity, which is achieved through programmes in education, healthcare, livelihood, infrastructure, and social reforms. The Company strongly believes in inclusive growth. This motivates Hindalco to deploy all resources necessary to bring about a positive change in the spaces in which it operates.

The initiatives and performance are detailed in the 'Our Capitals' section of this report.

Safety

As a responsible corporate, Hindalco’s top priorities are human health and safety. The health and safety policy has been implemented at all plants and mines through robust occupational health and safety management standards.

To achieve the goal of Zero Harm and a good safety performance, various programmes initiated in the past few years are being continued. New initiatives, especially those using digital tools, are being introduced. As all these programmes mature, the safety culture in the organisation is getting strengthened. Improvement in safety indices continued in FY’24 - with a 5% reduction in LTIFR (0.22) and an 18% reduction in LTISR (82.72) from last year.

Although, the reduction in high severity accidents is encouraging and there were no fatalities among employees, the Company lost one contract driver in a vehicle-related accident in the mines. Hindalco regrets this loss and will strive to ensure every measure is in place to avoid any type of harm to the organisation and the community.

Hindalco’s entire operations are audited every year, and all the businesses are set to meet the defined health and safety performance requirements and defined targets.

The initiative of leading cross-entity safety audits by business heads/cluster heads has been scaled up. In FY-24 all CEOs, COOs, Head MCOE, and Business heads have led at least one or more corporate cross-entity safety audits at various units and mines. Audits conducted under the leadership of business heads is an industry-first move, and clearly shows Hindalco’s commitment to safety and its goal of becoming a zero-harm organisation.

The behaviour-based safety programmes at Hindalco have created a milestone through reinforcement of safe behaviour and reduction in unsafe behaviour. A total of 8,40,945 Behaviour-based Safety Observations and Potential Injury Observations were reported, and 6,67,974 numbers liquidated across Hindalco, against a target reporting of BBSO & Potential Injury Observations of 7,21,512 - a 116% + achievement on reporting side.

Hindalco invested approximately 17,79,734.78 man-hours towards classroom and on-the -job safety training (including direct employees and contract workmen) this year, against a set target of 9,82,104 man-hours. The focus on on-the-job training resulted in a 181.22% increase in man-hours dedicated to training compared to the previous year.

Hindalco’s Apex Integrated Health Committee, which is led by a business head, has made all possible efforts related to health monitoring and improvement. This committee has supported the implementation of occupational health risk assessment and management procedures at all Hindalco sites.

Hindalco completed the Qualitative Exposure Assessment (QIEA) and Quantitative Exposure Assessment (QnEA) studies of all its manufacturing plants, and mines scheduled in FY 2023-24 and all recommended action points have been implemented.

All employee health data are recorded and monitored through PEHEL Software. This is also helping in giving the company a view of Health Risk Zones of employees.

In order to enable units to manage travel-related hazards, we introduced mobile apps to track journey risk

assessment in FY 2023-24. This app provides real-time updates on route conditions, weather forecasts, and potential risks, enabling travelers to make informed decisions and mitigate dangers before they arise.

Furthermore, the development of specialised software for audit and assurance streamlined safety processes, enhancing efficiency and accuracy in compliance management.

We also leveraged digital platforms for contractor safety management, centralisation of data, and communication to ensure uniformity in implementation of safety standards across plants/ mines. Additionally, remote monitoring technologies transformed confined space job safety by enabling real-time supervision and intervention, which minimised risks to workers, and improved overall safety outcomes.

A comprehensive software solution was introduced to generate monthly safety reports from units and mines, facilitating data aggregation, analysis, and visualisation to drive informed decision-making and proactive safety measures.

These digital initiatives marked significant strides in enhancing safety protocols, thus fostering a culture of prevention, and safeguarding the well-being of workers.

Human Capital

Hindalco has been recognised as one of the top 10 Best Workplaces in Health & Wellness for 2024 by the Great Place to Work (GPTW) Institute. Our high scores in health and wellness signifies our commitments to the collective wellbeing of our people

Shillim, our culture change movement, has been successful in achieving considerable change in mindsets and ways of working. Parallelly, through Parivartan and Tamrodaya interventions at manufacturing locations, we intent to reach the next level of excellence.

As part of our Shillim initiatives, 48000 plus Bhoomika cards were exchanged, and 278 boards were presented as of today. As part of My People Hour (Empowerment by Design)-1900 sessions were conducted, and 617 decisions were devolved. Hindalco is transforming its culture and capability at grassroot level, transitioning to a dynamic cross-functional way of working, focusing on efficiency, innovation, digitalisation, and sustainability.

Our engagement and agility scores in VIBES Survey 2023 have improved by 7% vis-a-vis scores achieved in VIBES 2021 Survey, demonstrating the impact and success of culture change interventions.

We attract and nurture talent by providing experiential learning across our business value chains, intertwining their journey with meaningful CSR experiences during onboarding and induction.

In line with our focus on gender diversity, over the last decade, the number of women in management positions has nearly tripled. Share of women in our workforce stands at 9.8% and 15% for Hindalco India operations and Novelis respectively.

Under the First 10 Best 10 (F10B10) initiative, we are grooming home-grown talent and future leaders for the metals and mining industry. Our emphasis on capability building offers specialised technical and functional career paths. In FY 2023-24, we witnessed approximately 15% internal career movement in management grade only, which is a positive indicator of the above approach.

This year, on Human Rights Day, we celebrated and created awareness across Hindalco, reinforcing our pledge to prioritise human rights in all our endeavours. We launched our Human Rights Due Diligence (HRDD) self-assessment tool across all our units and conducted external audits of the HRDD tool at our Odisha plants and Gare Palma Mines.

Internal Control Systems and Adequacy of Internal Financial Controls:

The Company has an internal control system commensurate with the size, scale, and complexity of its operations.

The aim of the internal control system is to manage business risks with a view to enhance shareholder value and safeguard the Company's assets. The Company has in place a robust mechanism for internal audits led by with a dedicated Assurance & Control Function comprising specialists. The Internal Auditor is duly appointed by the Audit Committee and Board., viz. M/s. Ernst & Young for the Aluminium & Copper businesses. The Audit Committee discusses audit plans and significant audit observations made by the internal auditor for necessary corrective actions.

Our internal financial control framework is designed to ensure the accuracy and reliability of our financial and other records. Plus, we have identified and documented key risks and controls for each process related to financial operations and reporting. An extensive programme of internal audits and management reviews supplement the process of the framework.

Disclosures in terms of the Provisions of the Companies Act, 2013 ("the Act") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) 2015 ("SEBI Listing Regulations")

 

(b) Reappointments
Name of the Director	Mr. Praveen Kumar Maheshwari [DIN: 00174361]	Mr. Satish Pai [DIN: 06646758]	Dr. Vikas Balia [DIN: 00424524]
Designation	Whole-time Director	Managing Director	Independent Director
Tenure	1 April 2024, until 31 March 2025	1 August 2024 until 31 December 2027	19 July 2024, until 18 July 2029
Type of Resolution	Ordinary		Special

 

A. Board of Directors (“Board”)

(i)    Meetings of the Board

During the year under review, six (6) Meetings of the Board of Directors were held. The details of the Meetings of the Board of Directors of the Company held and attended by the Directors during the financial year 2023-24 are given in the Report of Corporate Governance forming part of this Integrated Annual Report.

The maximum interval between any two Meetings did not exceed 120 days, as prescribed by the Act and the SEBI Listing Regulations.

(ii)    Board Constitution and Changes

As of 31 March 2024, the Board of Directors comprised 10 Directors (including 2 women Directors), 5 of which were Independent Directors,

3 were Non-Executive Directors (2 were Promoter Directors), Whole-time Director and a Managing Director.

Based on the recommendation of the Nomination and Remuneration Committee (“NRC”) and approval of the Board of Directors, the Shareholders accorded their approval on the below mentioned (a) appointments and (b) reappointments, respectively, on 20 March 2024, by way of Resolutions passed via postal ballot.

 

(a) Appointments
Name of the Director	Mr. Arun Adhikari DIN: 00591057]	Mr. Sushil Agarwal [DIN: 00060017]
Designation	Independent Director	Non-Executive Director
Tenure	1 May 2024, until 30 April 2029	With effect from 1 May 2024, liable to retire by rotation
Type of Resolution	Special	Ordinary

 

she meets the criteria of independence as laid out in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board.

Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

(iv) Board Evaluation

The Company believes that the process of performance evaluation at the Board level is pivotal to its Board engagement and effectiveness. The Company overhauled its Board Evaluation process during the year under review thereby with a comprehensive questionnaire comprising of subjective and objective questions thereby broadening the scope and parameters for

 

In the opinion of the Board, Mr. Arun Adhikari and Mr. Sushil Agarwal bring the required experience, integrity, expertise, and relevant proficiency to the Board, adding tremendous value in exercising their role effectively. The requisite declarations and eligibility confirmations under the provisions of the Act and SEBI Listing Regulations have been received from them for considering their appointment as Directors.

Resignations

During the year under review, Mr. Anant Maheshwari [DIN: 02963839], resigned as an Independent Director of your Company w.e.f. 18 October 2023, due to personal reasons.

The Board placed on record its sincere appreciation towards the valuable contribution made by Mr. Anant Maheshwari during his tenure.

Retirements

Board has decided not to fill the vacancy caused by the retirement of Mr. Askaran Agarwala [DIN: 00023684], a Director, who retires by rotation at the 65th Annual General Meeting and does not seek reappointment.

The Board placed on record its sincere appreciation towards the valuable contribution made by Mr. Askaran Agarwala during his tenure.

Retirement by Rotation

Mr. Kumar Mangalam Birla [DIN: 00012813], is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

Resolution seeking the reappointment of Mr. Kumar Mangalam Birla along with his brief profile, forms part of the Notice of the 65th Annual General Meeting.

(iii) Declaration of Independence

The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations, that he /

assessment. The revised criteria for Board Evaluation was duly approved by the NRC on 13 February 2024, according to which the Board conducted annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Committees and the Chairman of the Board as mandated under the Act and the SEBI Listing Regulations.

The evaluation criteria for the Board, Committees, Directors, Independent Directors, and Chairperson encompass an assessment of various aspects crucial for effective governance and decision-making within the Company. The Board evaluation is structured around various key areas including the aspects like Board Structure, Meetings, Functions, Sustainability, and Digital Strategy.

The evaluation criteria for Committees additionally focuses on their mandate, composition, effectiveness, contribution to board decisions and inclusivity.

Similarly, for all Directors including the Independent Directors, the evaluation criteria encompass their understanding of roles and responsibilities, the external knowledge and perspectives they bring to the table, active participation in discussions, continuous updation and preparation.

Additionally, specific criteria are included for Independent Directors and Chairpersons to evaluate their adherence to regulatory requirements and effectiveness in leading and fostering inclusive board dynamics, respectively.

The evaluation is conducted through an online mode in a confidential manner and the Directors provide their feedback by rating based on various metrics.

The inception of Board's evaluation process was approved by the Board in year 2014. Basis the framework the results of the evaluation was placed before the NRC and Board. The evaluation framework has been overhauled in February 2024, with the inclusion of a detailed assessment that indicates a proactive approach to adapting governance practices to cater to the need of the hour. Below is a highlight of structured overview of the changes and their implications:

Changes in Board Evaluation Process:

1.    Scale Revision: The evaluation scale has evolved from a 3-point scale (Completely Agree, Somewhat Agree, Disagree) to a more nuanced 5-point scale (Strongly Agree, Agree, Neutral, Disagree, Strongly Disagree). This change allows for finer distinctions in feedback, providing clearer insights into the Board's performance.

2.    Expanded Focus Areas: The evaluation now encompasses broader responsibilities:

a)    Board Composition and Inclusivity:

Ensuring diverse perspectives and skills.

b)    Effectiveness: How well the Board functions as a strategic entity.

3.    Additional Evaluation Criteria:

a)    Balancing Stakeholder Interests: Reflects a more stakeholder-centric approach.

b)    Strategic Guidance: Assessing the Board's role in setting and achieving strategic goals.

c)    Safeguarding Long-term Interests:

Emphasises sustainability and ethical considerations.

d)    Awareness of Legal Compliance:

Ensuring adherence to relevant laws and regulations.

Independent Directors' Performance Evaluation:

1.    Focused Criteria:

a)    Investment of Time: Understanding the company's unique needs through dedicated effort.

b)    External Perspective: Bringing external insights to board discussions.

c)    Expression of Opinion: Active participation and contribution in board deliberations.

2.    Descriptive Questions: Inclusion of open-ended questions allows for qualitative feedback and suggestions from Board members. This promotes continuous improvement in governance practices.

Implementation of Recommendations:

1.    Feedback: Recommendations from the Board members are discussed with the independent directors at their separate meeting and subsequently with the NRC and the Board, wherein the evaluation and suggestions

are considered.

2.    Actionable Steps: The company has taken steps to implement suggestions, demonstrating a commitment to evolving and strengthening governance processes.

B. Committees of the Board

The Board has constituted seven (7) committees, viz. Audit Committee, Corporate Social Responsibility Committee, Risk Management Environment Social and Governance (“RM&ESG”), Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, Prevention of Insider Trading, Finance Committee and is authorised to constitute other functional Committees, from time to time, depending on business needs.

Details with respect to the composition, terms of reference, number of meetings held, etc. of the above Committees are included in the Corporate Governance Report, which forms part of this Integrated Annual Report.

C.    Key Managerial Personnel (KMP)

In accordance with the provision of Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Key Managerial Personnel of your Company are:-

1.    Mr. Satish Pai, Managing Director;

2.    Mr. Praveen Kumar Maheshwari, Chief Financial Officer & Whole-time Director and

3.    Ms. Geetika Anand, Company Secretary.

During the year under review, there has been no change in the Key Managerial Personnel.

D.    Remuneration of Directors and Employees

The Managing Director’s goals are defined by the Company’s 3C (Customer, Care and Cost) + 2S (Safety & Sustainability, Systems & Processes) principle.

Customer centricity and product development is a focus area with dedicated objectives on sales and customer satisfaction. The cash and cost goals focus on profitability, cash flows, production and cost optimisation. The sustainability goals cover Hindalco’s performance in air, water, waste, biodiversity, climate management and overall ESG performance. System and process goals cover digitalisation, H R planning and driving culture. Performance evaluation is linked to the achievement of these goals. ESOPs are allocated based on performance, and vesting depends on the performance of the business in the preceding year.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure I to this Report. In accordance with the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees drawing remuneration in excess of the limits, set out in the aforesaid rules, forms part of this Report. In line with the provisions of Section 136(1) of the Act, the Report and Accounts, as set out therein, are being sent to all the Members of your Company, excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at [e-mail]

E.    Employee Stock Option Schemes and Share Based Employee Benefits:

Employee stock options is a conditional share plan for rewarding performance on pre-determined performance criteria and continued employment with the Company.

In terms of the provisions of applicable laws and pursuant to the approval of the Board and the Members of your Company, the N RC has duly implemented the following schemes:

a)    Hindalco Industries Limited Employee Stock Options Scheme 2013 (“Scheme 2013”)

b)    Employee Stock Option Scheme 2018 (“Scheme 2018”)

c)    Hindalco Industries Limited Employee Stock Option and Performance Stock Unit Scheme 2022 (“Scheme 2022”)

The above Schemes are in line with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SEBI SBEB Regulations”). The details as required to be disclosed under the SBEB Regulations can be accessed at www.hindalco.com

A certificate from the Secretarial Auditors, with respect to the implementation of the Company’s ESOS schemes in accordance with Regulation 13 of the SEBI SBEB Regulations, would be placed before the Shareholders at the ensuing Annual General Meeting. A copy of the same will also be available for inspection through electronic mode.

F.    Related Party Transactions

Ambit of related party and related party transactions (“RPTs”) has been expanded pursuant to the SEBI amendments from time to time. Accordingly, approval and disclosure requirements for RPTs have also been strengthened, within your organisation.

During the year under review, all contracts, arrangements, and transactions entered into by your Company with related parties were on an arm’s length basis and in the ordinary course of business. There were no material transactions with any related party as defined under Section 188 of the Act, read with the Companies (Meetings of Board and its Powers) Rules, 2014. All RPTs were approved by the Audit Committee and reviewed by it on a quarterly basis. Prior omnibus approval is obtained for RPTs that are repetitive in nature, entered in the ordinary course of business, and on an arm’s length basis.

The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act. Accordingly, the disclosure of RPTs as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for financial year 2023-24 and hence does not form part of this Report.

Pursuant to SEBI Listing Regulations, the resolution for seeking approval of the Shareholders on material RPTs for transactions to be entered in FY25 is being placed at the ensuing Annual General Meeting.

Details of RPTs entered into by your Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone / consolidated financial statements forms part of this Report.

In line with the requirements of the Act and the SEBI Listing Regulations, your Company has formulated a Policy on RPTs. The Policy is available on the Company’s website at www.hindalco.com

G.    Dividend Distribution Policy

In terms of Regulation 43A of the SEBI Listing Regulations, your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders’ of your Company. The policy sets out various factors, which are considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure II to this Report and is also available on the website of your Company at www.hindalco.com

H.    Subsidiary, Associates & Joint Venture Companies

Pursuant to the provisions of Section 129(3) of the Act, read with the Companies (Accounts) Rules, 2014 and in accordance with applicable accounting standards, statement containing the salient features of financial statements of your Company’s subsidiaries, associates and Joint Venture Companies are provided, in prescribed Form AOC-1 is annexed as Annexure III to this Report.

Your Company has adopted a policy on determination of material subsidiaries in line with the SEBI Listing Regulations. The policy aims to determine the material subsidiaries of your Company and to provide the governance framework for such subsidiaries.

Utkal Alumina International Limited and Novelis Inc. are material unlisted subsidiaries of your Company. Your Company does not have any material listed subsidiary.

In accordance with Section 136 of the Act, the audited financial statements, including the consolidated financial statements and related information of your Company and audited financial statements of your Company’s subsidiaries, joint ventures / associate companies, are available on our website, at www.hindalco.com

I.    Corporate Social Responsibility

In terms of the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee, chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. Yazdi Dandiwala, Independent Director, Mr. Sudhir Mital, Independent Director (w.e.f. 1 May 2024), Mr. Askaran Agarwala, Non-Executive Director and Mr. Satish Pai, Managing Director. Dr. (Mrs.) Pragnya Ram, Group Executive President, Group Head - CSR, Legacy Documentation & Archives & Corporate Communication is a permanent invitee to the Committee.

Your Company also has in place a CSR Policy and the same is available on the Company’s website at www.hindalco.com

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates.

Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighboring villages around plant locations. During the year, the Company has spent I 47.86 crore [Rupees Forty-seven crore and eighty six lakhs only] towards both Ongoing Projects and other than Ongoing Projects and has transferred I 47 crore [Rupees Forty seven crore only] to an unspent CSR account relating to Ongoing Projects.

The Annual Report on CSR activities is annexed as Annexure IV to this Report.

J.    Conservation of Energy, Technology and Foreign Exchange Earnings & Outgo

The particulars, as prescribed under Section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014, are annexed as Annexure V to the Directors’ Report, which forms part of this Report.

The details of the Foreign Exchange Earnings and Outgo are as follows:
Â	Â	[I crore]
Particulars	Forthe year ended 31 March 2024	For the year ended 31 March 2023
Foreign Exchange Earnings	18,018	17,319
Foreign Exchange Outgo	45,715	37,933

K. Risk Management

Pursuant to the requirement of Securities and Exchange Board of India (Listing and Disclosures Requirement) Regulations, 2015, the Company has constituted Risk Management and ESG Committee (‘RM & ESG’), which is mandated to review the risk management plan/process of your company. The Company has a Risk Management Policy in place and regularly reviewed by Risk Management and ESG Committee. The policy is applicable across all our operations and is uploaded on the website of the Company at www.hindalco.com.

We have an established risk governance framework that enables proactive decision-making and ensures the organisation remains resilient. At Apex level, we have the Board level RM&ESG, headed by one of the Board members and comprising Managing Director (‘MD’), Chief Financial Officer (‘CFO’) and Independent Directors as members. The invitee to these meetings are Chief Risk Officer (‘CRO’), Head of Treasury, Company Secretary, Head of Sustainability and business heads depending on the agenda matters. The committee meets every quarter and provides guidance and strategic direction for effective risk management, with oversight on risk exposure. Committee also ensures that appropriate methodology, processes, and systems are in place to evaluate and monitor risks associated with the business of the Company and reviews the adequacy of the risk management practices and actions deployed by the management for identification, assessment, mitigation, monitoring and reporting of key risks to the achievement of business objectives. We also have Risk Steering committee and Plant Risk committee comprising of various members such as direct reports of MD, plant heads, functional heads etc. These committees ensure identification, mitigation, and review of risks at various levels. Risk owners, Mitigation owners, Risk Champion and Risk coordinators are mapped for management of various risks at different levels.

Hindalco ERM framework incorporates guidelines from international frameworks including COSO and ISO 31000 and benchmark industry practices while also be tailored to

suit the business objectives of the company. The framework is fully integrated with our strategic priorities. Responsibility of ERM process implementation is with Central ERM team while accountability of managing risks is with the business.

The CRO is responsible for the functioning of enterprise risk management and heads the central risk management team. The latter is the custodian of the risk management process at all locations. To manage the risks at the grassroots we have an established team structure at cluster, site, and department levels. These teams are responsible for implementing risk mitigation plans and report to the Risk Management Head at regular intervals. The ERM process being data intensive, an advanced IT system has been deployed across the organisation for management of risks through real-time dashboards. The digital system supports risk analytics and helps in developing a uniform risk culture as the same ERM framework is used from identification to reporting and reviewing risks.

Risk management and compliance with risk procedures are a part of the Key Result Areas (KRAs) of senior management and is linked to their variable incentives.

The year has been disruptive for the global business environment, with the various Geo-political events,

Climate change, Supply chain disruption through Red Sea, increased vulnerabilities to Artificial intelligence to name a few. The Company remained vigilant of the ever changing macroeconomic, geopolitical situation, ESG landscape and global financial market sentiments to proactively manage risks in FY 2023-24. Identification and monitoring of Key risk indicators and mitigation plans has enabled us to become resilient to uncertainties and deliver the performance. The risk management framework is audited internally and externally during the Integrated Management System (IMS) audits. In addition, we regularly monitor and evaluate existing and emerging risks.

L. Vigil Mechanism

Your Company has in place a robust vigil mechanism for reporting genuine concerns through the Company’s whistle-blower Policy. Your Company has implemented a whistle-blower policy for Directors and employees to report concerns about unethical behaviour, actual or suspected fraud, or violations of your Company’s Code of Conduct. Adequate safeguards are provided against victimisation for those who avail the mechanism and direct access to the Chairperson of the Audit Committee is provided in exceptional cases.

The whistle-blower policy is available on your Company’s website at www.hindalco.com

M.    Nomination Policy and Executive Remuneration Policy / Philosophy

Your Company’s remuneration policy is directed towards rewarding performance based on the review of achievements. The remuneration policy aligns with existing industry practices, and there has been no change in the policy during the year.

The Remuneration Policy of your Company, formulated by the NRC of the Board, is annexed as Annexure VI to this Report and also available on your Company’s website at www.hindalco.com

We affirm that the remuneration paid to the Directors is in accordance with the terms laid out in the Nomination and Executive Remuneration Policy of the Company.

N.    Business Responsibility and Sustainability Report

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report [“BRSR”] forms part of this Integrated Annual Report. The report describes initiatives undertaken by the Company from an environmental, social and governance perspective. Further, SEBI vide its circular no. SEBI/HO/ CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July 2023, updated the format of BRSR to incorporate BRSR core, a subset of BRSR, indicating specific Key Performance Indicators (KPIs) under nine ESG attributes, which are subject to mandatory reasonable assurance by an independent assurance provider. In accordance with this requirement, the Company has appointed Bureau Veritas (India) Private Limited as the assurance provider for BRSR core.

O. Directors’ Responsibility Statement

Your Directors state that:

a)    in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures if any;

b)    accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the profit of your company for that period;

c)    proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d)    the annual accounts of your Company have been prepared on a ‘going concern’ basis;

e)    Your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f)    Your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

g)    Your Company has been in compliance with the applicable Secretarial Standards issued by the I nstitute of Company Secretaries of India.

P. Audit and Auditors: FY 2023-24
Statutory Auditor	+ M/s. Price Waterhouse & Co. Chartered Accountants LLP [Firm Registration No. 304026E/ E-300009] were appointed as the Statutory Auditors of your Company. + The report of the Statutory Auditors along with notes to financial statements for the FY 2023-24 is enclosed to this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Secretarial Auditor	+ In terms of provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, at its meeting held on 24 May 2023 had appointed M/s. Dilip Bharadiya & Associates, Company Secretaries [icsi Unique code:P2005MH09i600] to conduct Secretarial Audit for the FY 2023-24. + The report of the Secretarial Auditor is provided in Annexure VII, which does not contain any qualification, reservation, or adverse remark.
Â	+ The Secretarial Audit Report of its unlisted material subsidiary is annexed as Annexure VIIA to this Report.
Cost Auditor	+ M/s. R. Nanabhoy & Co., Cost Accountants [Firm Registration No. 000010] were reappointed as your Company’s Cost Auditor to conduct Cost Audit for the FY 2023-24. + The cost accounts and records of your Company are duly prepared and maintained by your Company as required under Section 148(1) of the Act pertaining to cost audit.
Internal Auditors	+ M/s. Ernst & Young LLP were appointed as your Company’s Internal Auditor to conduct Internal Audit of your Company for the FY 2023-24. + Internal Audit Reports are placed on half-yearly basis before the Audit Committee for their review.

 

Q. Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the SEBI. The Corporate Governance Report as stipulated under the SEBI Listing Regulations forms part of this Integrated Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations and M/s. Dilip Bharadiya & Associates, Company Secretaries, vide their certificate, have confirmed that your Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VIII to this Report.

R.    Particulars of Loans,

Guarantees and Investments

Details of Loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31 March 2024, forms part of the Notes to the financial statements provided in this Integrated Annual Report.

S.    Extract of Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return of the Company in Form MGT-7 for FY 2023-24, is available on the Company’s website at www.hindalco.com

T. Disclosures Pursuant to the “Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)

Act, 2013”

The Company has Zero Tolerance towards sexual harassment at the workplace. A detailed POSH Policy is in place as per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”).

The POSH Policy of the Company is available on the Company’s website at www.hindalco.com and all employees (permanent, contractual, temporary, trainees) as defined under the Act are covered by this Policy.

UNITS & MINES

+ Muri won Gold at National Awards for Manufacturing Competitiveness;

+ Muri won National Energy Conservation Award 2023;

+ Aditya won India Manufacturing Excellence Award (Platinum certificate of merit in manufacturing) from Frost & Sullivan;

+ Aditya won F&S Sustainability 4.0 award (Platinum certificate of merit in sustainability) from Frost & Sullivan;

+ Aditya won Platinum award in 'Best Application and uses of Digitalisation & Technology for Safety' from CII National EHS Circle;

The objective of this policy is to provide an effective complaint redressal mechanism in case of any occurrence of sexual harassment.

The Company has also set up an Internal Complaints (IC) Committee at all locations, duly constituted in compliance with the provisions of the POSH Act. Additionally, the Company conducts interactive sessions for all employees to build awareness about the policy and the provisions of the POSH Act.

During the year under review, the Company received ten (10) complaints of sexual harassment. Of these, six (6) complaints were investigated and resolved as per the provisions of the POSH Act, and investigations are continuing for the remaining four (4) complaints.

+ Aditya won Energy Management Leadership award from Clean Energy Ministerial platform of United Nations Industrial Development Organisation for leadership in energy management - 2023;

+ Aditya won State Pollution Control Excellence Award 2023 from Govt of Odisha - OSPCB;

+ Aditya won UNDP Mahatma Award for Biodiversity management from Mahatma Foundation;

+ Aditya won Performance Excellence Award for Best Manufacturing Practices at the IMC Ramkrishna Bajaj National Quality Awards (RBNQA);

+ Aditya's Five Quality Circle Teams won Gold Award in ICCQC'2023 - International convention on Quality Control Circles, Beijing - China - Nov'2023;

+ Aditya's Highest Export in 2020-21 & 2021-22 - Award of Certificate of Excellence for the year 2020-21 by Directorate of Export Promotion and Marketing, GOI;

+ Samri & Bagru Bauxite Mines awarded International Safety Award by British Safety Council, UK;

+ Bagru Mines won Gold award in National Award for Manufacturing Challenges assessment 2023 by International Research Institute for Manufacturing, India; + Samri Bauxite mines won Platinum award in sustainability excellence by FAME National award 2023;

+ Belagavi won CII National Award for Environment Best Practices 2023 for Most Innovative Environment Project; + Belagavi won Unnatha Suraksha Puraskara Safety Awards 2023 by National Safety Council, Karnataka Chapter;

+ Belagavi won India Manufacturing Excellence Award (IMEA) - 2023- Gold Award (861/1200);

+ Belagavi won Gold Award in F&S - Indian Manufacturing Excellence Award (IMEA) and 'Leaders Award' in F&S Sustainability 4.0;

+ Belagavi won Gold in India Green Manufacturing Challenge 2023 (IGMC) from International Research Institute for Manufacturing-India.

V. Other Disclosures:

In terms of the applicable provisions of the Act and the SEBI Listing Regulations, your Company additionally discloses that, during the year under review:

+ There was no change in the nature of business of your Company;

+ It has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on 31 March 2024, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

+ It has not issued any shares with differential voting rights; + It has not issued any sweat equity shares;

+ The following matter is pending before the Hon’ble National Company Law Appellate Tribunal (“NCLAT”) under Insolvency and Bankruptcy Code, 2016, wherein the Company has been arrayed as Respondent.

The details are mentioned below:

On 17 August 2021, PSA Nitrogen Limited filed Company Petition bearing no. C.P.(IB)-4082(MB)/2019 (“Company Petition”) before the Hon’ble National Company Law Tribunal (“NCLT”), Mumbai, under Section 9 of the Insolvency and Bankruptcy Code, 2016, arraying the Company as a Respondent. This petition was dismissed

for non-prosecution vide order of the NCLT dated 30 November 2021. Subsequently, two restoration applications filed by PSA Nitrogen Limited were also dismissed by orders of the NCLT dated 24 August 2022 and 24 January 2023.

PSA Nitrogen Limited then filed the present appeal [Company Appeal (AT) (Insolvency) No. 658 of 2023] before the Hon’ble NCLAT, challenging the dismissal of the restoration applications. This appeal is currently pending before the Hon’ble NCLAT.

+ There was no instance of one-time settlement with any bank or financial institution;

+ There were no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report;

+ There is no plan to revise the financial statements or Directors’ Report in respect of any previous financial year;

+ There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and your Company’s operations in future; + There were no frauds reported by the Auditors u/s 143(12) of the Act.

Appreciation

We would like to record by gratitude and appreciation to all our the stakeholders’, including the Central and State Government Authorities, Stock Exchanges, Financial Institutions, Analysts, Advisors, Local Communities, Customers, Vendors, Business Partners, Shareholders, and Investors forming part of the Hindalco family for their continued support during the year. Your faith and vote of confidence hold in good stead, and motivate us in pursuing greater opportunities, responsible growth and enhanced delivery on our strategy. Let us also take this opportunity to thank our employees, whose enthusiasm, energy, and zeal, help us progress along our vision. The contribution our people make is the base on which we build further and is integral to Hindalco’s high performing culture.

---

Mar 31, 2023

The Board of Directors of Hindalco Industries Limited ("Your Company" or "the Company") is pleased to present 64^th (Sixty-Fourth) Annual Report and Fourth Integrated Annual Report of your Company along with Audited Financial Statements for the financial year ended March 31, 2023 ("year under review / FY 2022-23").

Management Discussion and Analysis Overview

Hindalco Industries Limited, the metals flagship of the Aditya Birla Group, is the world''s largest aluminium rolling and recycling company, a major copper player, and one of Asia''s largest producers of primary aluminium. For the past three years, Hindalco has received the highest score for its ESG performance in the aluminium industry in the S&P Dow Jones Sustainability Indices (DJSI) Corporate Sustainability Assessment (CSA). Industry leaders are the top-performing companies in the Index.

In India, Hindalco''s aluminium manufacturing units cover the complete value chain, from bauxite mining, alumina refining, coal mining, captive power generation and aluminium smelting, to downstream value-addition of aluminium rolling, extruding, and foil making. Hindalco’s copper division in India comprises, among other facilities, a world-class custom copper smelter and captive jetty with capability to manufacture copper rods. Hindalco is one of the largest suppliers of copper to the Indian Railways and meets more than half of the country''s copper requirements.

Guided by its Purpose of building a greener, stronger, smarter world, Hindalco provides innovative solutions that nurture a sustainable planet. Today, Hindalco''s global footprint spans 52 manufacturing units across 10 countries. Its wholly owned subsidiary Novelis is the leading producer of flat-rolled aluminium products and is the world''s largest recycler of aluminium. It delivers innovative solutions to customers in the beverage cans, automobile, aerospace, and high-end speciality markets, including foil packaging, certain transportation products, architectural, industrial, and consumer durables.

Novelis operates an integrated network of technically advanced rolling and recycling facilities across North America, South America, Europe, and Asia. Novelis, which has recycling operations in 15 operating facilities across the world, recycles over 82 billion used beverage cans a year, enough to circle the globe more than 160 times.

In FY2022-23, Hindalco delivered resilient financial and operational results backed by the exceptional performance of its Indian operations, and product mix.

This resilience, despite macro-economic headwinds, was driven by higher volumes, strategic product mix, stability in operations and outstanding performance of its copper business in India. On a consolidated basis, Hindalco continued to maintain its strong balance sheet in FY2022-23, resulting in a 1.39x Net Debt-to-EBITDA of at the end of the year against 1.36x in the previous year.

FY 2022-23: Key Highlights

Achieved

• Aluminium metal production at 1,322 Kt

• Aluminium metal sales at 1,350 Kt

• Alumina production at 3,525* Kt

• Aluminium Downstream production at 350 Kt and Sales

at 354 Kt

• Record Copper Cathode Production at 407 Kt and Metal Sales at 439 Kt

• Record Copper Rods production at 347 Kt and Sales at 347 Kt

• Overall shipments in Novelis of 3,790 Kt

• Adjusted EBITDA at $1.8 billion in Novelis

• Yearly adjusted EBITDA/ton of $478 in Novelis

• Yearly Net Income from continuing operations of US$ 659 million in Novelis

• Consolidated Revenue of H2,23,202 Crore

• Consolidated EBITDA of H24,131 Crore

• Consolidated PAT of H10,097 Crore

"includes production of Utkal Alumina International Limited (Utkal Alumina) the wholly-owned subsidiary.

Key Initiatives during the Year

Through its cost-optimisation initiatives across the value chain, Hindalco India successfully enhanced its operational efficiencies and lowered the overall cost of production across all its facilities.

Factors such as Utkal Alumina''s low-cost alumina, better coal mix and improved operational efficiencies contributed to Hindalco being able to reduce the overall cost of production across its Indian operations.

Hindalco''s sustainable business model and its strong focus on expanding the portfolio of downstream products in India will enable it to nearly double its existing downstream capacity in the next five years. Hindalco''s acquisition of Hydro''s Kuppam Extrusions facility and the copper CCR facility of Polycab (Ryker Base) in India in the previous financial year has also delivered positive results in margin expansion in the value-added segment.

Utkal Alumina, with its current capacity of over 2.3 million tonnes, is on its way to improve debottlenecking by 350 Kt and expand its capacity to around 2.6 million tonnes by FY2023-24.

In line with its growth strategy of organic expansions,

Hindalco is progressing well on its announced investments in downstream value-added products and capex, which will be spread out between FY23 and FY28 across the businesses of aluminium, copper, specialty alumina and resource securitisation through new commercial coal mines. These investments amount to about $ 1.13 billion. To reduce its dependency on external sources, and strengthen the supply chain and improve the quality of coal, the Company is acquiring captive coal mines in India. The Company''s intent is to build a larger value-added product portfolio over the next few years and delink this business from the volatility of global aluminium prices.

Novelis launched a multi-year strategy to transform and improv< the profitability of its business through significant investments in new capacity and capabilities across all operating regions. It remains committed to this strategy with $3.3 billion worth of organic growth expansion projects, expected to be completed in the next five years. These investments in new capacities and facilities shall be funded by its stable cash flow generation.

Of the estimated range of total investments, ~$3.0 billion investments has been earmarked for the US region.

Hindalco''s digital transformation initiative LEAD (Leverage, Efficient, Augment and Digital Savvy) has been designed to impart employees with the analytical skills and insights needed to take decisions with speed and confidence. LEAD will help the Company capture benefits across the entire manufacturing value chain, from increasing production capacity, reducing material losses, to improving customer service and delivery times and reducing environmental impact.

In addition to retaining its position as top ESG scorer in the aluminium industry in the 2022 S&P Dow Jones Sustainability Indices (DJSI) Corporate Sustainability Assessment (CSA), Hindalco was also recognised as a ''Sustainability Leader'' S&P Global Gold Class category in the Dow Jones Sustainability Yearbook for 2022 and 2023.

Industry Analysis

i. Aluminium - Industry Review & Outlook

In Calendar Year (''CY'') 2022, the Global GDP grew by 3.4%. In the same year, the global production of aluminium increased 2% yoy to ~69 million tonnes, while global consumption was flattish at 69 million tonnes due to inflation-led slowdown in demand. Hence, global markets were balanced in the year. In a region-wise split in CY2022, production in China grew 4% yoy to 40.2 million tonnes, led by increases in Yunnan, Gansu, and Inner Mongolia.

Aluminium consumption in China grew by 1% to 40.6 million tonnes led by the sharp increase in demand for EVs and solar power capacity installations. However, the demand was subdued in the sectors of building and construction, packaging, and consumer durables. With consumption of 40.6 million tonnes, and production of 40.3 million tonnes, China saw a deficit of 0.4 million tonnes.

In the rest of the world, production of aluminium was flattish yoy at ~28.9 million tonnes in CY2022. A major drop in production was seen in the European region but was offset by the increased production in the Middle East, Central & South America, and India. The global transport segment grew on account of pent-up demand in this sector. However, other sectors like consumer durables and construction saw some headwinds. Hence, overall consumption declined by 1% yoy to 28.6 million tonnes, with a marginal surplus of 0.3 million tonnes in CY2022. (See Figure 1 and 2)

Table 1: Global Production and Consumption (in Million Tons)
Particulars	CY 2019	CY2020	CY 2021	CY 2022
Production	63.3	64.7	67.4	69.1
Consumption	64.6	62.9	69.0	69.2
Metal Balance Surplus/(Deficit)	(1.3)	1.8	(1.6)	(0.1)

With the global markets being balanced, inventory levels were also stable at 9.3 million tonnes. In CY2022, the global prices of aluminium averaged at US$2,703/tonne as against US$2,480/ tonne in CY2021. Global aluminium prices witnessed significant volatility all through CY2022. In Q1CY22, prices saw a spike due to the impact of the Russia-Ukraine war on the global economy.

In Q2CY22, the slowdown in the Chinese markets on account of China''s Zero COVID policy led to the decline in global aluminium prices. In the second half of CY22, prices continued to slide as a result of tightening of monetary policy and global recessionary fears. The graph here shows the pricing trend over the past seven years:

China Demand Drivers
Sectors	Demand Drivers
Transport	Significant aluminium demand due to rising EV sales both in domestic and exports.
Construction	Monetary stimulus to stabilise demand
Packaging	Stable demand from food and pharmaceutical
Foil stock	sectors
Electrical	Sharp growth in solar and wind installations. Current capacity of wind and solar is ~800 GW (~2/3rd of 2025 target of 1200 GW)
Consumer durables	Stable domestic demand.

The Indian market is likely to see a broad-base growth across all sectors. Imports of aluminium products, including scrap, continue to remain a major concern for domestic aluminium producers. Over the last few years, imports of flat rolled products (including foils) have seen a surge in imports at dumped prices from China and FTA countries.

The regional premiums also saw volatility during CY2022.

The average spot Main Japanese Port (MJP), duty-paid European Rotterdam Ingot and US Midwest premium was $99/t, $462/t and $30 cents/lb respectively in CY2022, versus $156/t, $268/t and $27 cents/lb respectively in CY 2021.

Domestic Consumption

Indian Consumption: As economic activity resumed, domestic consumption saw significant improvement across all sectors. Domestic consumption is likely to grow by 15% yoy in FY2022-23. However, import of aluminium continues to be a concern for domestic players. Overall imports, including scrap, touched ~2.5 million tonnes in FY2022-23 from ~2.3 million tonnes in FY2021-22.

The Table (table 2) shows the sector-wise change in domestic consumption of aluminium in FY2022-23 vs previous year.

Table 2: Sector Wise Domestic Consumption for FY2022-23 vs FY2021-22
Sector	FY2021-22/ FY2022-23
Electrical	20-25%
Building and construction	10-20%
Auto	10-15%
Industrial and Defence	5-15%
Print	0-10%
Packaging	10-20%
Consumer Durables	0-5%
Others	0-5%
Overall India Consumption	15%

Outlook

In CY2023, global GDP growth rate is likely to be around 2.8%, as per the IMF projections. India and China, the two largest emerging market economies, are expected to contribute to around half of the global growth in CY2023, current outlook remains uncertain amid high inflation, tight monetary policy, the ongoing Russia-Ukraine conflict, and the lingering impact of three years of COVID-19. Overall, advanced economies are likely to grow by 1.3% impacted by inflation-led slowdown, while the emerging economies are likely to grow by 4%.

Overall, in CY2023, global primary aluminium demand is likely to experience a flattish growth to around 69.5 million tonnes. Global production is expected to grow by 2% to over 70 million. Hence, the market is likely to be in a surplus. Production in the world, excluding China, is expected to increase by ~1% to around 29 million tonnes. Primary aluminium supply in China is likely to grow by ~2% to around 41 million tonnes in CY2023. Consequently, inventories are likely to grow to 9.8 million tonnes by the end of CY2023.

World Excluding China Demand Drivers
Sectors	Demand Drivers
Transport	Government provides purchase incentives to the buyers of EVs. Overall sales of cars and commercial vehicle likely to increase by 5% in CY2023 due to pent-up demand.
Construction	To face headwinds due to elevated interest rates
Consumer Durables	Slowdown in demand due concerns of recession
Packaging	Substitution against PET bottles in Europe and North America.

The government has supported the aluminium industry by imposing Anti-Dumping Duty (''ADD'') on imports of flat-rolled products from China.

ii. Copper - Industry Review & Outlook

In CY2022, on a yearly basis, overall global production of refined copper grew by approximately 1.9% to 24.7 million tonnes. China''s production increased by around 3% yoy, whereas in the rest of the world growth was up by 1.1% yoy.

In CY2022, on a yearly basis, global consumption of refined copper increased by around 2% to 24.9 million tonnes against 24.5 million tonnes in CY2021.

Copper consumption in China grew by ~2% yoy to 13.6 million tonnes, whereas in the world (excluding China) consumption grew by ~1% yoy at 11.3 million tonnes in CY2022. The global deficit was 0.2 million tonnes in CY22 versus 0.3 million tonnes on CY2021.

In CY2022, on a yearly basis, global consumption of refined copper increased by around 2% to 24.9 million tonnes against 24.5 million tonnes in CY2021. Copper consumption in China grew by ~2% yoy to 10.6 million tonnes, whereas in the world (excluding China) consumption grew by ~1% yoy at 14.1 million tonnes in CY2023. The global deficit was 0.2 million tonnes in CY22 versus 0.3 million tonnes on CY2021.

Table 3: Global Production and Consumption (in Million Tons)

Particulars	CY2021	CY2022
Production	24.2	24.7
Consumption	24.5	24.9
Metal Balance Surplus/ (Deficit)	(0.3)	(0.2)

On a yearly basis, domestic demand for refined copper increased by 22% to 746 KT in FY2022-23 from 612 KT in FY2021-22. Of this, the share of imports was 24% at 177 KT in FY2022-23 versus 26% at 158 KT in FY2021-22, reflecting a yoy decline of 11%.

The benchmark TC/RC for CY2023 was finalised at 88/8.8 (22.6 c/lb) between miners and smelters, which is ~35% higher than CY2022.

For CY2023, while fundamentally the market is expected to be in surplus of ~ 240 KT - which should support spot TC/RC during Q1CY2023 - multiple disruptions in some large mines in Panama, Indonesia, and Peru adversely affected the spot TC/RC resulting in it sliding lower than the annual benchmark TC/RC.

Outlook

Global demand for refined copper is expected to increase by ~2% in CY2023. China is expected to grow by ~1.8% and the rest of world is expected to grow by ~3.5%. Demand for refined copper in India is likely to improve and revert to pre-COVID levels of around 790 Kt in FY2023-24.

The world copper mine supply grew by 3.5% in CY2022 mainly on account of ramp up in output from new mines in Congo, Peru, etc. The ramp up of projects will continue to support concentrate supply in 2023, but high level of disruptions will restrict annual growth rate to 2.3%. While the copper market is likely to be balanced in CY2024, deficit is expected to emerge in CY2025. Recycling along with product substitutions shall be key in helping to mitigate some of this gap.

iii. Novelis - Global Flat Rolled Products (‘FRP’) -Industry Review & Outlook

We believe that the global long-term demand for aluminium-rolled products will remain strong, on the back of anticipated economic growth, material substitution, and sustainability considerations including increased environmental awareness around polyethylene terephthalate plastics. Disruptions in demand for aluminium- rolled products caused by the pandemic and semiconductor shortages in the automotive industry have moderated.

However, we believe the challenging inflationary and geopolitical environment has increased economic uncertainty and is negatively impacting near-term demand in some end markets such as building and construction.

In addition, we are seeing reduced can sheet demand in the near term, attributed to can-makers reducing their excess inventory as they adjust to a more moderated level of demand.

Despite the current market uncertainty, we believe that the long-term demand for aluminium-rolled products would remain intact. Increasing customer preference for sustainable packaging options and package mix shift towards infinitely recyclable aluminium are driving higher demand for aluminium beverage packaging worldwide.

We believe that the long-term demand for aluminium automotive sheet will continue to grow, primarily driven by the benefits of using lightweight aluminium in vehicle structures and components. Automakers have aligned themselves to the stricter government regulations regarding emissions and fuel economy, while prioritising improvement of vehicle safety and performance. This has led to an increase in the use of high-strength steel.

We are also seeing an increased demand for aluminium for EVs, as aluminium''s lower weight can help with extended battery range.

We expect the long-term demand for building and construction and other specialty products to grow due to increased customer preference for lightweight, sustainable materials. The demand for aluminium plate in Asia is also expected to receive a boost driven by the development and expansion of industries serving aerospace, rail, and other technically demanding applications.

Shipments of aerospace aluminium plate and sheet have improved in FY2022-23, as demand for air travel has recovered to near pre-COVID levels. Looking ahead, we believe significant order backlogs for key OEMs including Airbus and Boeing will translate into growth in the future. Our multi-year supply agreements have positioned us to benefit from this future demand.

FY2022-23 was challenging, with added pressure from softer demand in some end markets and intensified cost inflation driven by macro-economic and geo-political uncertainty. However, the Company managed to mitigate some of these headwinds through a combination of hedging, passing costs to customers, favourable pricing environments, and increased benefits from recycling.

While these headwinds will curb the Company''s near-term margins, the fundamentals driving the long-term demand for aluminium products remain intact. Novelis continues to be disciplined in its approach to capital investment, prioritising growth investments to meet increasing customer demand and sustainability goals across the value chain.

For a region-wise detailed business overview, please refer to the 10K filed by Novelis Inc. dated May 10, 2023 for the year ended

a. Hindalco Aluminium Operational Overview

The Company delivered a resilient performance in its aluminium business in FY2022-23 supported by higher volumes and better operational efficiencies. The production of aluminium stood at 1.322 million tonnes in FY2022-23 versus 1.294 million tonnes in the previous year.

Overall alumina production stood at 3.525 million tonnes versus 3.235 million tonnes in FY2021-22. Utkal Alumina recorded production of 2.311 million tonnes in FY2022-23, and continues to be the most economical and efficient alumina producer globally, providing strong support to most of Hindalco''s India smelting facilities, leading to better cost optimisation and quality input material (alumina).

The overall third-party sales of metal in all forms was at 1.350 million tonnes in FY2022-23 against 1.302 million tonnes in FY2021-22, up 4% yoy on account of market recovery in FY2022-23. Production of aluminium VAP was flat yoy at 350 Kt in FY2022-23 vs 349 Kt in the previous year. Third-party sales of aluminium VAP was higher by 2% at 354Kt in FY2022-23 vs 348 Kt in FY2021-22.

Financial Overview Aluminium Upstream

Revenue for Hindalco''s aluminium upstream segment was up 7%, at ''33,010* Crore in FY 2022-23 from ''30,844* Crore in FY 2021-22 on account of higher volumes. EBITDA was down 33% at ''8,402 Crore versus ''12,496 Crore a year earlier impacted by inflationary pressures. The EBITDA margins were at 25.5% in FY2022-23, continues to be one of the best in the industry.

*The above numbers are without elimination of Inter-segment revenue.

('' Crore)
Description	FY2022-23	FY2021-22	Change
Revenue	33,010	30,844	7%
EBITDA	8,402	12,496	(33%)

Note: In the consolidated financial statements, within the aluminium segment, the significant entities are Hindalco and Utkal Alumina International Ltd. Utkal Alumina is a wholly owned subsidiary of Hindalco and supplies a substantial quantity of its production to Hindalco hence we have analyzed the combined performance of Hindalco''s aluminium business along with Utkal Alumina.

Aluminium Downstream

Revenue for Hindalco''s aluminium downstream segment was ''11,009* Crore in FY 2022-23 in line with previous year. Record EBITDA at ''627 Crore up 64% versus ''382 Crore a year earlier as a result of better pricing and volumes.

Financial Overview

Copper segment revenue for FY 2022-23 was at ''41,702* Crore (vs. ''36,723* Crore in FY2021-22), up 14% on account of higher global prices of copper and higher volumes in FY2022-23. Copper business recorded an all-time high EBITDA of ''2,253 Crore (vs. ''1,390 Crore in FY 2021-22) up 62% yoy, on account of higher volumes of Copper Cathode Rods, better operational efficiency and Tc/Rc in FY2022-23.

*The above numbers are without elimination of Inter-segment revenue.

('' Crore)
Description	FY2022-23	FY2021-22	Change
Revenue	11,009	11,009	0%
EBITDA	627	382	64%

*The above numbers are without elimination of Inter-segment revenue

('' Crore)
Description	FY2022-23	FY2021-22	Change
Revenue	41,702	36,723	14%
EBITDA	2,253	1,390	62%

b. Copper

Operational Overview

The copper business delivered its best-ever operational and financial performance during FY2022-23. Production of copper cathode was 407 Kt in FY2022-23, up 13% from the previous year. Production of continuous cast rods was at a record 347 Kt ii FY2022-23 versus 259 Kt in FY2021-22.

Total Copper metal sales in all forms were at a record 439 Kt in FY2022-23 up by 9% compared to 405 Kt in the previous year which was in-line with its higher production and overall market demand. The sales of Copper VAP (Copper Rods) were at a record 347 Kt in FY2022-23 versus 262 Kt in the previous year up by 33% yoy. The share of VAP (Copper Cathode Rods) to total metal sales was 79% in FY 2022-23, from 65% in the previous year.

c. Novelis

Operational Overview

- Novelis Inc., is the global leader in flat-rolled aluminium products and the world''s largest recycler of aluminium.

Driven by its purpose of shaping a sustainable world, Novelis works alongside its customers to provide innovative solutions to the beverage can, automotive, aerospace and speciality markets (which include foil packaging, certain transportation products, architectural, industrial, and consumer durables).

It operates an integrated network of technically advanced rolling and recycling facilities across North America, South America, Europe, and Asia, and leverages its global manufacturing and recycling footprint to consistently deliver high-quality products around the world.

In FY2022-23, Novelis reported an Adjusted EBITDA of $1.811 billon vs $2.045 billon, a drop of 11% yoy, primarily due to lower shipments, inflationary environment, higher energy costs due to geopolitical instability, and less favorable metal benefits. These headwinds were partially offset by higher product pricing, including some cost passthroughs to customers, and favorable product mix.

Driven mainly by lower adjusted EBITDA, Net Income (without special items) from continuing operations is down 16% yoy at $781 million in FY 2022-23 against $934 million in FY 2021-22.

($ Million
Description	FY2022-23	FY2021-22	Change
Net Sales	18,486	17,149	8%
Adjusted EBITDA	1,811	2,045	(11)%
Net Income/ (loss) w/o Exceptional Item*	781	934	(16)%
*Tax-effected special items may include restructuring & impairment, metal price lag, gain/loss on assets held for sale, loss on extinguishment
of debt, loss/gain on sale of business.

Financial Analysis and Outlook

The financial statements of Hindalco Industries Limited and its subsidiaries are prepared in accordance with the Indian Accounting Standards (referred to as ''Ind AS'') prescribed under section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules, as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the consolidated financial statements which forms part of this Integrated Annual Report.

Statement of Profit & Loss

In FY2022-23, total shipments were down by 2% over the past year, at 3.790 million tonnes. This was a result of lower beverage can shipments on account of customer inventory reductions in the latter half of the fiscal year, as the broader beverage supply chain normalised post-pandemic, and also due to lower demand for specialty products in a less robust macro-economic climate.

In FY2022-23, total shipments were down by 2% over the past year, at 3.790 million tonnes. This was a result of lower beverage can shipments on account of customer inventory reductions in the latter half of the fiscal year, as the broader beverage supply chain normalised post-pandemic, and also due to lower demand for specialty products in a less robust macro-economic climate.

In FY2022-23, the share of beverage can sheet shipments were 58%, automotive body sheet shipments were at 19%, and specialities and aerospace shipments were at 20% and 3%, respectively. Novelis leveraged its extensive recycling footprint and favourable market conditions to utilise 61% recycled content in its shipments in the reporting period.

The company operates in four key geographies: North America, Europe, Asia, and South America. In North America in FY2022-23 total shipments were at 1,515 Kt up from 1,467 Kt in FY2021-22, on the back of recovery in the automotive end market that was previously impacted by semiconductor chip shortages. In Europe, the Company shipped 998 Kt in FY2022-23, a decline from 1,038 Kt in FY2021-22 due to weaker consumer demand in the beverage can, and specialties markets. In Asia, Novelis

shipped 678 Kt of rolled products in FY2022-23 versus 737 Kt in the previous year predominantly due to destocking of beverage cans by customers in the Americas. In South America, Novelis shipped 599 Kt in FY2022-23 down from 616 Kt in the previous year due to the impact of customer destocking in this region.

In FY2022-23, Novelis reported an overall EBITDA/tonne of US$478 versus US$530/tonne in the last year.

Financial Overview

Novelis'' net sales in FY2022-23 were at $18.5 billion, up 8%, higher average aluminium prices, higher product pricing and favorable product mix, partially offset by a 2% decrease in total flat rolled product shipments.

(? in Crore)
Description	Hindalco Standalone		Consolidated
	FY2022-23	FY2021-22	FY2022-23	FY2021-22
Revenue from Operations	76,878	67,653	2,23,202	1,95,059
Earnings Before Interest, Tax and Depreciation (EBITDA)
Novelis*			14,543	15,229
Aluminium Upstream			8,402	12,496
Aluminium Downstream			627	382
Copper			2,253	1,390
Inter-segment Profit/ (Loss) Elimination (Net)			414	(264)
Unallocable Income/ (Expense) - (Net) & GAAP Adjustments			(2,108)	823
Total EBITDA	8,061	11,828	24,131	30,056
Depreciation & Amortisation (including impairment)	1,927	1,847	7,294	6,884
Finance Cost	1,300	1,417	3,646	3,768
Earning before Exceptional Items, Tax & Share in Profit/(Loss) in Equity accounted Investments	4,834	8,564	13,191	19,404
Share in Profit/ (Loss) in Equity Accounted Investments (Net of Tax)		-	9	6
Earning before Exceptional Items and Tax	4,834	8,564	13,200	19,410
Exceptional Income/ (Expenses) (Net)	41	(107)	41	164#
Profit Before Tax (After Exceptional Items)	4,875	8,457	13,241	19,574
Tax Expense	1,549	2,950	3,144	5,373
Profit/ (Loss) from Continuing Operations	3,326	5,507	10,097	14,201
Profit/ (Loss) from Discontinued Operations	-	-	-	(471)
Profit/ (Loss) After Tax	3,326	5,507	10,097	13,730
Other Comprehensive Income / (Loss)	1,702	(397)	7,460	(1,148)
Total Comprehensive Income	5,028	5,110	17,557	12,582
Basic EPS - Continuing Operations (?) in ''	-	-	45.42	63.85
Basic EPS - Discontinued Operations (?) in ?	-	-	-	(2.12)
Basic EPS (?) in ?	14.96	24.76	45.42	61.73

* As per US GAAP

#Pertains to the Consolidated Exceptional Income / (Expenses) for the year ended March 31, 2022, ?418 Crore, which represents the principal portion of (a) PIS/COFI NS related tax credit income in Brazil of ?358 Crore (net of litigation cost of ''9 Crore) for FY22 and (b) tax rebates for sales to Manaus, Brazilian Free Trade Zone ?60 Crore for FY22, as it is included in the results of Novelis segment.

EBITDA

Consolidated EBITDA for FY 2022-23 was lower by 20% to ''24,131 Crore from ''30,056 Crore in the previous year. This was due to lower EBITDA in the aluminium business in India and higher input costs. The EBITDA margin in FY 2022-23 was at 10.8% compared to 15.4% in FY 2021-22. The graphs below show the consolidated EBITDA split by businesses in FY 2022-23 and trends over the past five years.

Appropriations to Reserves
Appropriations	FY2022-23	FY2021-22
Opening Balance in Retained Earnings and Other Comprehensive Income	15,280	11026
Total Comprehensive Income for the Current Year	5,028	5,110
Dividends paid	(890)	(667)
Hedging (Gain)/ Loss and cost of hedging transferred to non-financial assets	-	(41)
Employee Share Based Transactions	(3)	2
Transferred to Debenture Redemption Fund	1500	(150)
Closing Balance in Retained Earnings and Other Comprehensive Income	20,915	15,280

The graphs below show the split of Consolidated Revenues by businesses in FY2022-23 and the trend of revenues over the past five years.

Depreciation and amortization

(including net impairment loss/ (reversal) of non-current assets)

Depreciation and amortisation (excluding net impairment loss/ (reversal) of non-current assets) increased to ''7,086 Crore in FY2022-23 from ''6,729 Crore in FY2021-22. This increase is due to reorganisation/amortisation activities on account closure of certain outdated processes at Novelis''s Richmond plant in North America amounting to ''139 Crore, and the suspension of certain plants and equipment amounting to ''65 Crore in FY2022-23.

Exceptional Income/ (Expense)

In FY2022-23, total exceptional income was at ''41 Crore compared to ''164 Crore in FY2021-22. This decline in exceptional income can be attributed to the reversal of certain provisions made in FY2017-18 and FY2018-19 related to Cross Subsidy Surcharge (CSS) and Additional Surcharge (ASC).

This reversal was affected pursuant to the undertaking given by MSEDCL (Maharashtra State Electricity Distribution Co. Ltd.) to Maharashtra Electricity Regulatory Commission (MERC) on 29th July 2022 to refund CSS and commence the ASC refund.

Taxes

Provision for taxes was at ''3,144 Crore in FY2022-23 against ''5,373 Crore in FY2021-22. This decrease was due to lower profitability of the Company in FY2022-23, and the Group''s decision to write back its net deferred tax liability amounting to ''609 Crore, during the reporting period.

Profit/ (Loss) after tax

Profit After Tax (PAT) in FY2022-23 was at ''10,097 Crore down 26% from ''13,730 Crore a year ago. The net profit margin in FY2022-23 was at 4.52% versus 7.04% in FY2021-22. The PAT for continuing operations in the reporting period saw a decline of 29% at ''10,097 Crore versus ''14,201 in the previous year.

Profit after Tax

(D Crore)

Dividend

For the year ended March 31, 2023, the Board of Directors of your Company has recommended dividend of ''3.00 per equity share of face value of '' 1/- each (Previous year ''4.00) to equity shareholders.

Consolidated Financial Statements

Revenue

Hindalco''s consolidated revenue was up 14% at ''2,23,202 Crore in FY2022-23 compared to ''1,95,059 Crore in FY2021-22, largely influenced by higher global aluminium prices, and local market premiums.

Finance Cost

Finance Cost decreased 3% and was at ''3,646 Crore in FY 202223 from ''3,768 Crore in FY 2021-22. This was mainly on account of repayment of ''6,000 Crore, Redeemable Non-Convertible Debentures (NCDs) and pre-payment of Utkal Alumina International Limited term loan of '' 2,574 Crore scheduled in September, 2030 and repayment of a term loan of ''76 Crore in Hindalco in FY2022-23.

Consolidated Net Debt to EBITDA
The consolidated balance sheet continued to remain strong with the Net Debt to EBITDA at 1.39 times at the end of March 2023 versus 1.36 times at the end of March 2022. (Net Debt to EBITDA = Consolidated Business EBITDA/Consolidated Net Debt)
Financing & Debt Redemption a) Redemption of Secured Non-Convertible Debentures
Your Company has redeemed the following Secured, Listed and Non-Convertible Debentures on its maturity dates.
Date of Allotment	Coupon Rate	Amount ('' in Crore)	Date of Maturity
April 25, 2012	9.55%	3000	April 25, 2022
June 27, 2012	9.55%	1500	June 27, 2022
August 02, 2012	9.60%	1500	August 02, 2022
b) Issue of Non-Convertible Debentures
During the year under review, your Company raised ''700 Crore through issuance of Unsecured, Listed, Rated, Redeemable, NonConvertible Debentures (NCDs) of face value of ''1,00,000 each on private placement basis. Details pertaining to such issue is mentioned as below:
Coupon Rate 0f No. of NCDs Allotment	Total Amount ('' in Crore)	Tenor	Maturity Date
7.60% Unsecured, Listed, Rated, Redeemable, Non-Convertible January 18, 2023 70,000 Debentures	700	14 months	March 18, 2024
The aforesaid debentures are listed on National Stock Exchange of India Limited.

vii. Net Profit Margins

The Consolidated Net Profit Margins as on 31st March 2023 stands at 4.52% compared to 7.04% as on 31st March 2022. The decline is on account of lower consolidated profits recorded during the reporting period. It is calculated as Net Profit/Net Sales.

Consolidated Cash flow

Cash generated from operations for Hindalco Consolidated stands at ''19,208 Crore in FY 2022-23 versus ''16,838 Crore in FY 2021-22. The table below shows the comparative movement of Cash flows:

Key Financial Ratios

i. Debtors Turnover (Days)

The Consolidated Debtors Turnover Days on 31st March 2023 was 30 days compared to 32 days on 31st March 2022. This displays the Company''s consistency in managing its credit with customers and also reflects the Company’s strong financial position with respect to its customers. The Debtor Turnover (Days) is calculated as Average Debtors/ Total Consolidated Sales * 365 days.

ii. Inventory Turnover (Days)

The Consolidated Inventory Turnover Days on 31st March 2023 was at 77 days versus 79 days at the end of 31 March 2022. This indicates the Company’s effective management of its inventory levels throughout the year. Inventory (days) is calculated by dividing the Average Inventory by the Cost of Goods Sold (Cost of Sales Depreciation) * 365 days.

iii. Interest Coverage Ratio

The Consolidated Net Interest Coverage Ratio on 31st March 2023 stands at 6.62 times compared to 7.87 times on 31st March 2022. This is lower from the previous year because of lower earnings (EBIT). This ratio reflects the Company’s ability and strength to meet its interest obligations.

iv. Current Ratio

The Consolidated Current/Liquidity Ratio as on 31st March 2023 stands at 1.51 times versus 1.30 times at the end of 31 March 2022 and is reflective of the Company''s strengthening of liquidity or solvency position compared to the previous year.

v. Debt to Equity Ratio

The Consolidated Debt-to-Equity Ratio as on 31st March 2023 is well below 1.0x, at 0.64x times compared to 0.82x times as on 31st March 2022. This is indicative of the Company’ strong balance sheet and ability to meet its current short-term obligations.

vi. Return on Net Worth (RoNW)

The Consolidated Return on Net Worth as on 31st March 2023 is 11.67%, compared to 18.97% on 31st March 2022. This was lower from the previous year due to the lower profits in the reporting period. This is calculated as Profit After Tax/Average Net Worth

vi. Operating Margins

The Consolidated Operating Margins for FY2022-23 stands at 10.25% versus 14.61% in FY2021-22 indicating lower operating profit in the reporting period compared to the previous year. Operating Margin is calculated as Operating Profit/Net Sales.

Particulars	(J Crore) Year ended
	31/03/2023	31/03/2022
A. CASH FLOW FROM OPERATING ACTIVITIES
Operating Cashflow before working capital changes	22,445	29,726
Changes in working capital	(457)	(9,132)
Cash generated from operations before Tax	21,988	20,594
(Payment)/Refund of Direct Taxes	(2,733)	(3,773)
Net Cash generated/ (used) -Operating Activities - Continuing Operations	19,255	16,821
Net Cash Generated/ (Used) - Operating Activities - Discontinued Operations	(47)	17
Net Cash Generated/ (Used) - Operating Activities (a)	19,208	16,838
B. CASH FLOW FROM INVESTMENT ACTIVITIES
Net Capital Expenditure	(9,742)	(5,355)
Disposal of Investments in Subsidiaries (Net)/Business	24	66
(Purchase) / Sale of treasury instrument (Net)	(214)	4,226
Acquisition of business, net of cash acquired	-	(412)
Investment in equity accounted investees	(17)	(1)
Loans & Deposits (given) / received back (Net)	1,393	(6,209)
Interest and dividends received	479	239
Investment in Equity Shares at FVTOCI	(57)	363
Others	13	9
Net Cash Generated/ (Used) - Investing Activities - Continuing Operations	(8,121)	(7,074)
Net Cash Generated/ (Used) - Investing Activities - Discontinued Operations	-	-
Net Cash Generated/ (Used) - Investing Activities (b)	(8,121)	(7,074)
C. CASH FLOW FROM FINANCING ACTIVITIES
Equity Raised / Debentures Redeemed	-	6
Treasury shares acquired & Proceeds from Shares Issued by ESOP Trust	(125)	(79)
Net Debt inflows/Outflows	(5,485)	(2,775)
Interest & Finance Charges paid	(3,845)	(3,250)
Dividend Paid (including Dividend Distribution Tax)	(890)	(667)
Net Cash generated/ (Used) - Financing Activities - Continuing Operations	(10,345)	(6,765)
Net Cash Generated/ (Used) - Financing Activities - Discontinued Operations	-	-
Net Cash Generated/ (Used) - Financing Activities (c)	(10,345)	(6,765)
Net Increase/(decrease) in Cash and Cash Equivalents (a) (b) (c)	742	2,999

Standalone Performance

On Standalone basis, your Company registered a revenue of D76,878 Crores for the fiscal year 2023 vs D67,653 Crores in the previous year up 14% on account of higher volumes and prices of copper in FY23. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at D8,061 Crores, down 32% compared to the last year, impacted by unsupportive macros and higher input costs. Depreciation(including net impairment loss/(reversal) of non-current assets) was up 4% at D1,927 Crore in FY23 versus D1,847 Crores in FY22. The Finance Cost was lower on Year by 8% at D1,300 Crores in FY23 versus D1,417Crores in FY22. This reduction in finance cost was mainly due to overall reduction in the average cost of long-term loans on account of repayment of high cost loans such as the NCDs worth D6.000 Crore during the year. The Profit before Tax (and Before Exceptional Items) stood at D4,834 Crore, down 44% compared to the previous year due to lower EBITDA. Net Profit for FY23 stood at D3,326 Crores as compared to Dw5,507 Crore down 40% Year on Year compared to the previous year.

Business Outlook

Hindalco''s relentless focus is on product innovation, better efficiencies, complete digitalisation, and organic expansions with a diversified product mix and cost competitiveness.

The Company continues to focus on cash conservation while maintaining adequate liquidity and deliver sustained performance while catching up with market recovery. Its longterm strategic investments in Novelis and the India downstream expansion projects will enhance its capabilities across the FRP and the Extrusion segments in the country.

Demand for aluminium sheet across specialties markets, including electronics, electric vehicle battery enclosures, painted products, container foil, and building and construction markets also remains strong over the long-term, despite current economic headwinds impacting near-term demand for building and construction and some industrial products.

The automotive segment is poised to display strong near-and long-term demand and is expected to grow at a CAGR of 11% over the next five years. This expansion will be led by elevated levels of pent-up demand, supported by rising consumer demand for vehicles with a higher share of aluminium like EVs, and easing of supply chain challenges with the availability of semi-conductor chips and recovery in vehicle production levels.

The aerospace segment is also expected to remain strong with travel picking up after the removal of pandemic restrictions. Aircraft OEMs are forecasting a strong growth in aircraft build rates over the next decade.

In this sector, sustainability is also gaining importance leading to higher consumption of aluminium. However, inflationary cost pressures that began in FY 2021-22, resulting from global supply chain disruptions and geopolitical instability impacted the availability and prices of materials and services, including freight, energy, coatings, and alloys like magnesium. The disruptions intensified during the reporting period, and are expected to continue for the foreseeable future.

From Q4-FY22, Novelis has been impacted by the rise in energy prices globally, especially in Europe. The Russia-Ukraine conflict further exacerbated the situation, leading to reduced manufacturing and industrial demand. The Company expects this situation to continue until energy prices and economic conditions stabilise. Other costs, such as labour and borrowing costs, have been influenced by inflation and higher interest rates. To counter this, the Company has implemented cost-control measures across our global operations, with a focus on employment, professional services, and travel costs. However, there is no assurance that it will be able to mitigate these higher costs in the future.

In India, the acquisition of Hydro''s Kuppam extrusions facility and Polycab''s Ryker CCR helped bolster Hindalco''s presence in the upper end of the value-added market and further strengthen its long-term sustainable business model.

Domestic copper demand is driven largely by rods, which is the downstream product for the copper business. Hindalco''s strategy of enhancing copper VAP capacity through copper rods and copper inner grooved tubes will help it gain a larger market share and meet the growing demand for copper in the domestic market.

To boost the Company''s position as a sustainability leader in the industry, Hindalco has established strategic priorities and allocated capital aimed at promoting organic growth in both India and Novelis. These priorities also focus on enhancing value through ESG-driven practices.

Research, Development & Technology

Company''s Research, Development & Technology (RD & T) activities are focused on developing and commercializing premium differentiated products, improving our competitive cost position, product quality and environmental sustainability.

To support these goals, we are managing a pipeline of projects at four Hindalco Innovation centres in collaboration with corporate and external research institutes. The project portfolio addresses near and mid-term needs, as well as the exploration of future opportunities.

This year members of Hindalco Innovation Centre Team continued development in the area of making our processes greener & sustainable and value added products & applications.

These initiatives helped our plants to mitigate challenges of raw material quality, reducing specific energy consumption and carbon footprint, cost effective management of waste generated during processing, recovery of value from by-product as well as any waste products. Specific programs have also been initiated to adopt new digitalisation techniques such as soft sensors, digital twins, etc. The predictive and prescriptive models based on AI /ML data analytics coupled with physics based models are helping better process control & achieve desired process performance. These tools also help in understanding the requirement of existing and prospective customers, and provide a better service, in order to increase your company''s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, challenging & pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Bauxite & Alumina RD&T: Hindalco Innovation Centre (''HIC'') Alumina at Belagavi is focused on bauxite ore & alumina refining processes and specialty alumina, hydrate products & their applications in different market segments. The projects on improving productivity of Refineries & hydrate product quality were successfully implemented. This year key projects on development for Low Soda Hydrate, white hydrate. Hydratable alumina for castables, spherical alumina for advanced refractory & special hydrates for FRP composite applications were successfully developed and commercialised in collaboration with operations & marketing team.

Team along with Aditya Birla Science & Technology Company Private Limited (''ABSTC''), an Aditya Birla Group Corporate R&D successfully demonstrated trials of novel process for production of 4N High Purity alumina (99.99%). The process knowhow is protected by filing 3 patents.

Primary Aluminium RD&T: In collaboration with ABSTC, we have developed expertise in advanced pot design and process control to reduce the specific energy consumption. The range of technology solutions are being implemented, which includes next generation Cu-insert collector bars, digital twin to predict current efficiency, advance process control logic, at smelters. In our journey of creep capacity increase, we have developed novel HiPot 400 KA cell design, the cell lining pilots are in progress at Mahan & Aditya smelter. Team has also developed advance process control for Hirakud smelter which is under implementation.

Aluminium downstream RD&T: HIC-Semifab team along with SMEs are continuing research on optimising the product quality and also developing new products and applications.

Our technology team is also focusing on new coating for both extrusion & FRP products segment. Towards greening the planet, technology team has facilitated development of light weighting applications in transport segment and new products for battery technology & electrical vehicles.

Copper RD&T: HIC-Copper along with ABSTC is focusing on improving the smelter productivity and CCR product quality. Blend adviser, soft sensor for matter grade & temperature prediction, optimum operating region for production of high quality CCR were developed & implemented under digital initiatives this year. Team also participated in start-up and optimising the process conditions for new Cu-Mg wire rod at Bhiwadi.

Your company also has series of collaborative programs with IITs, CSIR labs and domestic & international start-ups which enables your company to develop & build competencies in select areas, to create long term value to business. We actively evaluate new transformational technologies including battery technology, decarbonisation, etc. These engagements along with in-house research has resulted in increased filing of patent applications and also publications in international journals & conferences. The RD&T activities thus span a wide range of present and future needs of Hindalco.

Sustainability

At Hindalco, sustainability is the foremost priority and the Company strives to create value from revenue streams that benefit both the planet and people. The Company''s strong commitment to ESG is reflected in its remarkable performance in the DJSI CSA assessments, where it achieved the highest ESG score in the aluminium industry for the third year in a row. Through collaboration and by working closely with stakeholders across the value chain, Hindalco has demonstrated its commitment to addressing critical sustainability issues. This approach reflects its plan for mutual growth, thereby earning the trust of all partners in the process.

The Apex Sustainability Committee, chaired by the Managing Director, drives sustainability at the highest level ensuring the implementation and monitoring of sustainability initiatives across the organisation. Hindalco''s task forces and ESG SPOCs from all functions work together to bring about positive change with task forces focusing on ground-level implementation of sustainability initiatives and ESG SPOCs taking up projects to further the cause of ESG implementation.

A roadmap to achieve net carbon neutrality by 2050 has been established, and the Company has already installed 100 MW of renewable energy capacity, with plans to scale it up to 300 MW by 2025. Through various energy-efficiency projects and pilot demonstrations of technologies in the pipeline, the Company has showcased its sustainability efforts.

The Company''s goal is to achieve overall water positivity by 2050; with a sub-target of making its mining operations water positive by 2025. Towards this, it has ramped up its freshwater conservation efforts by using water from treated and rainwater sources. With an aim to achieve Zero Waste in Landfill by 2050, Hindalco extracts value from the waste generated and has amplified its material recycling. The Company is committed to protecting biodiversity and has developed BMPs for critical sites in collaboration with IUCN, aiming to achieve No Net Loss by 2050. The Sustainable Mining Charter and KPIs under seven thematic areas are the other crucial steps taken by Hindalco to make its mining vertical more sustainable.

Building safer workplaces and fostering a high-performance work culture for its employees, launching initiatives to increase their productivity and supporting their mental and physical health are some of the steps taken to ensure the well-being of the organisation''s workforce. Hindalco engages with local communities to ensure mutual prosperity, and this is achieved through programmes in education, healthcare, livelihood, infrastructure, and social reforms. The Company strongly believes in inclusive growth. This motivates Hindalco to deploy all the resources necessary to bring about a positive change in the spaces in which it operates and in society at large. The initiatives and performance are detailed in the ’Our Capitals’ section of this report.

Safety

As a responsible corporate citizen, Hindalco is fully dedicated to human health and safety. All the plants and mines follow occupational health and safety management standards that integrate occupational health, hygiene, and safety responsibilities into everyday business. A strong safety culture is required to prevent fatalities and achieve good safety performance. Supported by the efforts made to further strengthen its safety culture, Hindalco''s safety performance this year has been the best in its history. In FY2022-23, we achieved an LTIFR of 0.25-a 24% reduction on a yoy basis—and TRIFR of 0.69-a 5% decline from last year.

While there were no fatalities among employees, the Company lost two contract workmen to work-related injuries. Hindalco regrets the loss of these valuable lives and will work to strengthen its safety culture to achieve a Zero Harm status.

Hindalco''s entire operations are audited every year and all the businesses are set to meet the defined health and safety performance requirements and defined targets.

In FY2022-23, cross-entity safety audits were led by business heads/cluster heads. Audits conducted under the leadership of business heads is an industry-first move, and clearly shows the commitment of Hindalco’s senior leaders towards safety and the goal of becoming a Zero-harm organisation.

During the reporting year, the focus on Contractor Management System (CSM) was intensified to establish a strong and continuous performance evaluation of contractors across Hindalco. This was done via Contractor Field Safety Audits.

The Serious Injuries and Fatality (SIF) prevention programme, which was introduced in FY2021-22, has started delivering results. With these programmes, the Company currently has 10 technical safety standards, nine administrative safety standards, four occupational health standards and 10 guidance notes. These standards and procedures help the Company maintain a consistent approach in managing major hazards across its operations. To effectively implement the standards,

137 new Subject Matter Experts (SMEs) have been trained and developed. This is in addition to the 1,308 SMEs developed over the past few years.

The Behaviour-based Safety Programme established at Hindalco has set a milestone through the reinforcement of safe behaviours and reduction in unsafe behaviours.

Hindalco invested approximately 4.21 man-days towards classroom safety training per person (including direct employees and contract workmen) this year, against a set target of 3 man-days. The focus was more on on-the-job training, resulting in a 51% increase in man-hours dedicated to training compared to the previous year.

A good safety culture depends heavily on the participation of line function employees. Which is why the Company has set up safety task forces and six safety sub-committees at each unit, for employees to participate in safety programs.

Each member of each task force and sub-committee is deemed a Safety Officer and contributes to the safety of the units and mines at every level. Going further, the Company constituted the Safety 360 (off-the-job safety) task force, comprising members from factory, colonies, schools, contractors'' family, school, and college students, SMEs, etc. This task force has the responsibility of driving various safety awareness campaigns and off the job safety enhancements for our internal as well as external stakeholders.

In FY2022-23, Hindalco completed Qualitative Exposure Assessment (QIEA) and Quantitative Exposure Assessment (QnEA) studies of all its manufacturing facilities and mining operations. By the end of FY2022-23, more than 98% of the recommendations to emerge from the studies were implemented, and progress has been positive across all recommendations.

In FY2022-23, the Company continued to offer psychological safety training sessions to its employees. Each unit also ran a comprehensive wellness programme recognising the value of good physical and mental health of employees, their families, and the community. Hindalco has an active Crisis Management Plan that ensures an appropriate response to all crisis, natural disasters, or other emergencies, at all units and mines.

Human Capital

Hindalco''s workforce comprising 36,000 employees worldwide has always been its biggest asset in driving cultural transformation in the Company and in aligning with its Purpose of building a Greener, Stronger and Smarter future.

The Great Place to Work Institute certified Hindalco as a ''Great Place to Work'' in 2022 for the second consecutive time. In comparison to the last survey, there has been a remarkable jump of 12 points in Trust levels and a jump of 16 points in Fairness. Pride, as always, stands out as an area of strength while Credibility and Respect have shown steep growth.

This signifies that the efforts towards establishing Hindalco as a High Performing Contemporary Organisation is yielding results. Hindalco added one more feather to its cap with the Great Place To Work Institute certifying it as India''s 40 Best Workplaces in Health & Wellness, based on the Company''s psychologically and emotional healthy work culture that inspires high performance. A high Workplace Wellness Index© is a testimony to Hindalco''s focus on the well-being of employees.

The sixth edition of Shillim, branded ''Shillim 365'', is meant to ensure the practice of adopting the culture journey all through the year. The emphasis on creating a high-performance culture was the inspiration for taking Shillim 365 to the shop floor. With the active collaboration of over 2,800 employees across the organisation, 30 ''Shillim 365'' workouts have been conducted so far.

These sessions aim to foster dialogue with every member of the workforce to generate ideas from all levels, emphasise on continuous improvement, and implement valuable inputs across the Company. This bottom-up approach of including employees at each level with ''Apni Zimmedari'' as the tagline for their contributions towards making Hindalco an HPCO.

This approach also helps in creating more opportunities of involving employees in decisions affecting them directly and can strengthen uniform implementation of the ideas and Innovation practices across the organisation.

The amplified focus on building the leadership pipeline, investing in talent development is helping the Company take bold bets on people, resulting in their placement in leading positions in newer plants and upcoming projects. Hindalco''s multi-pronged talent management strategy continues to focus on hiring young talent, creating structured training and development initiatives, promoting gender diversity, and building technical and specialist capability. This has also helped the Company venture into newer technical areas of capability building. The organisation''s human rights policy safeguards its employees and contractual workmen against harassment and discrimination. Focused efforts have been made to enhance employee productivity through various tailored programs focusing on their well-being. By investing in people and culture, Hindalco continues to inspire its workforce to go above and beyond and deliver consistent superior performance even in the most challenging times.

Internal Controls & their Adequacy

The Company''s internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate. A strong culture of internal controls is pervasive throughout the Group. Regular internal audits at all locations are undertaken to ensure that the highest standards of internal control are maintained. The effectiveness of a business’ internal control environment is a component of senior management performance appraisals. The primary aim of the internal control system is to manage business risks with a view to enhance shareholder value and safeguard the Group’s assets. It provides reasonable assurance on the internal control environment and against material misstatement or loss. The Company has in place a robust mechanism to deal with Internal audit that involves having a dedicated Assurance & Control function having personnel specialised in the field of the subject and having two internal auditors duly appointed by the Audit Committee and Board., viz. M/s. Ernst & Young for the Aluminium Business and M/s. Suresh Surana & Associates for the Copper business. The Audit Committee discusses audit plans, findings and observations made by the internal auditors at its meetings. The findings made by the internal auditors are reviewed and suggestions implemented.

DISCLOSURES IN TERMS OF THE PROVISIONS OF THE COMPANIES ACT,

2013 (''the Act'') & SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015 (''SEBI Listing Regulations"

A. Board of Directors (‘Board’)

(i) Number of Meetings

The Board met five times during the year, details of which are given in the Corporate Governance Report forming part of the Integrated Annual Report.

(ii) Appointments and Resignations

a) Appointments/Re-Appointments

i. Ms. Alka Bharucha (DIN: 00114067) completed her first term of five years as Independent Director of the Company on July 11, 2023. On recommendation of the Nomination & Remuneration Committee (''NRC'') and the Board of Directors, the Shareholders of the Company approved the re-appointment of Ms. Bharucha as an Independent Director of the Company for a second term of five years commencing from July 11, 2023 upto July 10, 2028. The said approval was received on February 09, 2023 by way of a special resolution passed through Postal ballot.

ii. Mr. Praveen Kumar Maheshwari (DIN: 00174361) was reappointed as the Whole-time Director of the Company for a period of one year effective May 28, 2022 upto May 27, 2023. Based on the recommendation of the NRC, the Board of Directors, at its meeting held on May 24, 2023, re-appointed Mr. Maheshwari as the Whole-time Director for a further period effective from May 28, 2023 to March 31, 2024, subject to approval of the shareholders at the ensuing Annual General Meeting.

b) Resignations/Retirements/Retirement by rotation

i. During the year under review, no director has resigned.

ii. Mrs. Rajashree Birla (DIN: 00022995) is due to retire by rotation at ensuing Annual General Meeting and being eligible, offers herself for reappointment.

Mrs. Rajashree Birla has given required declaration under the Act.

Resolution seeking the re-appointment of Mr. Praveen Kumar Maheshwari & Mrs. Rajashree Birla along with the brief profiles, forms part of the Notice of the 64^th Annual General Meeting.

(iii) DECLARATION OF INDEPENDENCE

[S. 149(6),150(1) & Schedule IV of the Act along with rules thereunder &

R. 16(1)(b), 25(8)]

The Independent Directors have submitted declarations that each of them meets the criteria of independence.

In the opinion of board there has been no change in the circumstances affecting their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience of all Independent Directors on the Board. Further based on declaration received from directors, the Board confirms, that the Independent Directors fulfil the conditions.

(iv) Board Evaluation

The Board evaluated the effectiveness of its functioning, the performance of its committees, the Chairman, Independent Directors, Non-Executive Directors, and Executive Directors.

The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, the performance of individual directors was divided into Executive, NonExecutive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, external knowledge etc. Board members have evaluated Independent Directors, Nonexecutive Directors, Executive Directors, Committee and Chairman of the Board.

Outcome of the Evaluation

The results of Board evaluation was satisfactory. Board fully agreed and rated 100% on its functioning, skill sets and working atmosphere. Independent Directors scored well on expressing their views and in understanding the Company and its requirements. Non Executive Directors scored well in all aspects of evaluation. Executive Directors are action oriented and ensures timely implementation of the Board decisions. Board is completely satisfied with the functioning of various Committees. Board has full faith in the Chairman in leading the Board effectively and ensuring contribution from all its members.

The manner in which the evaluation has been carried out has been set out in the Corporate Governance Report, which forms part of this Integrated Annual Report.

B. Committees of The Board

The Board has constituted six committees, viz. Audit Committee, Corporate Social Responsibility Committee, Risk Management Environment Social and Governance (ESG) Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee,

Finance Committee and is authorised to constitute other functional Committees, from time to time, depending on business needs.

During the year under review a Functional Committee named ''Capital Raising Committee'' was constituted for deciding on various matters related to the issue of 7.60% Unsecured, Listed, Rated, Redeemable, Non-Convertible Debentures of ''700 Crore.

Details with respect to the composition, terms of reference, number of meetings held, etc. of the above Committees are included in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

C. Key Managerial Personnel (KMPs)

[S. 203 of the Act]

During the period under review, the Key Managerial Personnel of your Company are:

1) Mr. Satish Pai, Managing Director;

2) Mr. Praveen Kumar Maheshwari, Chief Financial Officer & Whole Time Director;

3) Mr. Anil Malik, Company Secretary, until November 30, 2022; and

4) Ms. Geetika Anand, Company Secretary & Compliance Officer w.e.f. December 1, 2022

D. Remuneration of Directors and Employees

[. 136,S. 197(12) of the Act & Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

The names and other particulars of Top 10 employees ought to be set out in the Directors'' Report, as an addendum thereto. However, the Report and Accounts are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Disclosures pertaining to remuneration and other details is attached as Annexure I to this Report.

E. Employee Stock Option Schemes and Share Based Employee Benefits

Employee stock options is a conditional share plan for rewarding performance on pre-determined performance criteria and continued employment with the Company.

In terms of the provisions of applicable laws and pursuant to the approval of the Board and the members of the Company, the NRC has duly implemented the following schemes:

(a) Employee Stock Option Scheme -2006 ("Scheme 2006")

(b) Hindalco Industries Limited Employee Stock Options Scheme-2013 ("Scheme 2013")

(c) Employee Stock Option Scheme 2018'' ("Scheme 2018")

(d) ''Hindalco Industries Limited Employee Stock Option and Performance Stock Unit Scheme 2022'' ("Scheme 2022")

The above Schemes are in line with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEB Regulations"). The details as required to be disclosed under the SBEB Regulations can be accessed at www.hindalco.com

A certificate from Secretarial Auditors, with respect to the implementation of the Company''s ESOS schemes, would be placed before the shareholders at the ensuing Annual General Meeting. A copy of the same will also be available for inspection through electronic mode.

F. Related Party Transactions

[Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014 & R.23 of SEBI Listing Regulations]

During year under review, all the contract(s)/ arrangement(s)/transaction(s) entered into by the Company with its related parties were in compliance with the applicable provisions of the Act and the SEBI Listing Regulations.

Prior omnibus approval of the Audit Committee is obtained for such related party transactions, which are foreseen and of repetitive nature.

Pursuant to the said omnibus approval, details of transactions entered into are also reviewed by the Audit Committee on a periodic basis.

Further, all the related party transactions entered into during year under review were on an arm''s length basis and in the ordinary course of business of the Company.

In terms of the revised materiality thresholds as per the amended Listing Regulations, 2015, approval of the Shareholders was obtained for certain material related Party transactions by way of a Postal Ballot. The said approval was received on February 09, 2023 by way of a special resolution passed through Postal ballot.

Since, there were no transactions requiring disclosure under provisions of the Act, Form AOC-2 does not form a part of this report.

Details of RPTs entered into by the Company, in terms of Ind AS-24 have been disclosed in the notes to the standalone/consolidated financial statements forming part of this Report.

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions. The Policy can be accessed on the Company''s website at www.hindalco.com

G. Dividend Distribution Policy

[R. 43A of SEBI Listing Regulations]

Your Company has formulated a Dividend Distribution Policy, with an objective to provide the dividend distribution framework to the Stakeholders of the Company. The policy sets out various factors, which shall be considered by the Board in determining the dividend pay-out. The policy is annexed as Annexure II to this Report and is also available on the website of the Company i.e. www.hindalco.com

H. Subsidiary, Associates & Joint Venture Companies

[R.129(3) of the Act read with Companies (Accounts) Rules, 2014]

A statement containing salient features of financial statements of your Company''s subsidiaries, associates and joint venture companies are provided, in the prescribed Form AOC-1, as Annexure III to this Report.

The Company has adopted a policy on determination of material subsidiaries in line with the SEBI Listing Regulations. The policy aims to determine the Material Subsidiaries of the Company and to provide the governance framework for such subsidiaries.

Utkal Alumina International Limited & Novelis Inc. are the material unlisted subsidiaries of your Company. Your Company does not have any material listed subsidiary Company. The Audit Committee and the Board reviews the financial statements, significant transactions, investments, working of all subsidiary Companies, and the minutes of unlisted subsidiary Companies are placed before the Board.

The financial statements of your Company''s subsidiaries and policy on determination of material subsidiaries may be accessed at www.hindalco.com

I. Corporate Social Responsibility

[S. 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014]

The Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee for the financial year ending March 31, 2023 were Mr. Yazdi Dandiwala, Independent Director,

Mr. Askaran Agarwala, Non-Executive Director and Mr. Satish Pai: Managing Director. Dr. Pragnya Ram, Group Executive President, Group Head - CSR, Legacy Documents & Archives & Corporate Communication is a permanent invitee to the Committee.

Your Company also has in place a CSR Policy and the same is available on Company''s website viz. www.hindalco. com The Committee recommends to the Board what all activities are to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates.

Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations. During the year, the Company has spent 36.04 Crores and has transferred 9.5 Crores to unspent CSR account relating to ongoing project.

The Annual Report on CSR activities is attached as Annexure IV to this Integrated Annual Report.

J. Conservation of Energy, Technology and Foreign Exchange Earnings & Outgo

[S. 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014]

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is given in Annexure V to this Report.

K. Risk Management

[R. 21 of SEBI Listing Regulations]

Pursuant to the requirement of Securities and Exchange Board of India (Listing and Disclosures Requirement) Regulations, 2015, the Company has constituted Risk Management Committee (RMC), which is mandated to review the risk management plan/process of your company. The Company has in place a Risk Management Policy which has been uploaded on the website of the Company at www.hindalco.com

Our risk management is guided by our Enterprise Risk Management Policy which is regularly reviewed by Risk Management and ESG Committee. The policy is applicable across all our operations. We follow both bottom-up and top-down approach to risk management. The Board-level Risk Management and ESG committee (''RM&ESG''), headed by one of the Board members, is the apex body that oversees risk management across the organisation.

The committee meets every quarter and provides guidance and strategic directions to manage risks.

Hindalco ERM framework is developed in accordance with COSO and ISO 31000. The framework is fully integrated with our strategic priorities. During the reporting period, we bolstered the framework to adapt to the BAN I world and embraced the RAAT (Resilience, Attention, Adaption, Transparency) approach.

The Chief Risk Officer (CRO) is responsible for the functioning of enterprise risk management and heads the central risk management team. The latter is the custodian

of the risk management process at all locations. To manage the risks at the grassroots we have an established team structure at cluster, site, and department levels. These teams are responsible for implementing risk mitigation plans and report to the Risk Management Head at regular intervals. Risk management and compliance with risk procedures are a part of the Key Result Areas (KRAs) of senior management and is linked to their variable incentives.

The company remained vigilant about rapid shifts in consumer preferences, dynamic geo-political environment, increasing impacts of climate change and a swiftly evolving regulatory landscape and therefore integrated approach of risk management with the decision-making helped managing risks proactively. Identification and monitoring of Key risk indicators and mitigation plans has enabled us to become resilient to uncertainties and deliver the performance.

The risk management framework is audited internally and externally during the Integrated Management System (IMS) audits. In addition, we regularly monitor and evaluate existing and emerging risks.

L. Vigil Mechanism

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company''s Code of Conduct. Adequate safeguards are provided against victimisation to those who avail of the

mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

The vigil mechanism is available on your Company''s website viz. www.hindalco.com

M. Nomination Policy and Executive Remuneration Policy/Philosophy

The Company''s remuneration policy is directed towards rewarding performance based on review of achievements. The remuneration policy is in consonance with existing industry practice. There has been no change in the policy during the year.

The Remuneration Policy of your Company, as formulated by the Nomination and Remuneration Committee of the Board of Directors, is given in Annexure VI to this Report and is also available on your Company''s website at www.hindalco.com

N. Business Responsibility and Sustainability Report (‘BRSR’)

[R.34(2)(f) of SEBI Listing Regulations]

The Securities and Exchange Board of India (''SEBI''), in May, 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report. A separate section on BRSR forms part of this Integrated Annual Report.

O. Directors’ Responsibility Statement

[S. 134(3) (c) of the Act]

Your Directors state that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures if any;

b) accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2023 and of the profit of your company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records

in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a ''going concern'' basis;

e) Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f) Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

g) the Company has been in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India

P. Auditors : FY23
Statutory Auditor	• M/s Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009) had been appointed as the Statutory Auditors of the Company in the 63rd Annual General Meeting to hold office for a period of five (5) years to the conclusion of 68th Annual General Meeting.
	• Statutory Auditor’s Report do not contain any qualification, reservation, adverse remark or disclaimer and and therefore, do not call for any further comments under Section 134(3)(f) of the Act.
Secretarial Auditor	• M/s BNP & Associates, Practising Company Secretaries had been appointed by the Board to conduct the secretarial audit of the Company.
	• The Secretarial Audit Report for the financial year ended March 31, 2023 forms part of this report as Annexure VII and confirms that the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations or non-compliances.
	• The Secretarial Audit Report of its unlisted material subsidiary i.e Utkal Alumina is annexed as Annexure VIIA to this report.
Cost Auditor	• M/s. Nanabhoy & Co., Cost Accountants were appointed as the Company''s Cost Auditor.
	• The cost accounts and records of the Company are duly prepared and maintained by the Company as required under Section 148(1) of the Act pertaining to cost audit.
Internal Auditors	• M/s. Ernst & Young LLP were appointed as the Company''s Internal Auditor of Aluminium Business.
	• M/s Suresh Surana & Associates LLP were appointed as the Company''s Internal Auditor of Copper Business.
	• Internal Audit Reports are placed on halfyearly basis before the Audit Committee for their review.

Q. Corporate Governance

[Para C,E of Schedule Vof SEBI Listing Regulations]

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the SEBI. The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms part of this Annual Report.

Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the SEBI Listing Regulations and M/s. Dilip Bharadiya & Associates, Company Secretaries, vide their certificate, have confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the SEBI Listing Regulations. The said certificate is annexed as Annexure VIII to this Report.

R. Particulars of Loans, Guarantees and Investments

[S186 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014]

Details of Loans, Guarantee and Investments are given in the notes to Financial Statements of this Integrated Report.

S. Extract of Annual Return

[S.923) of the Act read with Companies (Management and Administration) Rules, 2014]

An extract of the Annual Return of your Company for the financial year ended March 31, 2023 is available at Company''s website www.hindalco.com

T. Disclosures pursuant to the “Sexual Harassment of Women at the workplace (Prevention, Prohibition and Redressal) Act, 2013”

Your Company has in place a policy on Prevention of Sexual Harassment at Workplace, which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (''POSH Act''). The objective of this policy is to provide an effective complaint redressal mechanism if there is an occurrence of sexual harassment. This policy is applicable to all employees, irrespective of their level.

Your Company has also set up an Internal Complaints (IC) Committee at all our locations which is duly constituted in compliance with the provisions of the POSH Act. Further, the Company also conducts interactive sessions for all the employees, to build awareness amongst employees about the policy and the provisions of the POSH Act.

During the year under review, the Committee has received 9 complaints, all of which were disposed of with appropriate action.

U. Awards & Recognitions

• In addition to the accolades/awards mentioned in the Social Report, we received the following Awards & Recognitions during the year.

• Hindalco recognised as ''India''s Best Employers among Nation Builders'' for the second consecutive year (2023) by Great Place to Work® Institute.

• Hindalco is among top 40 of India''s best workplaces in Health and Wellness 2022 by The Great Place to Work® Institute.

• Hindalco is in the top 1% S&P Global ESG score in the aluminium industry in 2022 (a score of 83/100) Hindalco continues to be a part of S&P Global Sustainability Yearbook 2023 for the second consecutive year.

• Hindalco won award for Environmental and Social Initiatives at KPMG ESG Conclave and Awards ’23.

• Hindalco’s Integrated Annual Report FY 2021-22 won India’s best Annual Report Award in the Mining and Metals Sector, by The Free Press Journal & Grant Thornton Bharat LLP.

• Hindalco emerges as one of the ''Top Leadership Factories of India'' for creating leaders at scale by Great Manager Institute®.

• Aditya unit conferred Corporate Governance and Sustainability Vision Award 2023 in CSR category by Indian Chamber of Commerce.

• Mahan unit CPP wins ’Excellent Energy Efficient Unit’ in National Award for Excellence in Energy Management by CII.

• Mahan unit gets first-runner up award for ''Indian Manufacturer of the Year'' at the India Manufacturing Excellence Awards by Frost & Sullivan.

• Aditya Aluminium unit bags Golden Bird National Award (Platinum Category) for its Vision Centre project.

• Aditya and Mahan plants bag ''Gold at the India Green Manufacturing Challenge Award''

• Muri Alumina Refinery receives Gold Award at IRIM (International Research Institute for Manufacturing) Annual Awards 2023.

• Utkal plant won the IMC RBNQ Performance Excellence Award 2022 in manufacturing category.

• Utkal plant won 9th CSR Times Award 2022 during 9th CSR Summit in December 2022.

• Renukoot unit won ''Excellent Energy Efficient Unit'' award from CII in September 2022

V. Other Disclosures

In terms of the applicable provisions of the Act and the

SEBI Listing Regulations, your Company additionally

discloses that, during the year under review:

• there was no change in the nature of business of your Company;

• it has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules,

2014. Thus, as on March 31, 2023, there were no deposits which were unpaid or unclaimed and due for repayment, hence, there has been no default in repayment of deposits or payment of interest thereon;

• it has not issued any shares with differential voting rights;

• it has not issued any sweat equity shares;

• it has not made application or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 and

• it has not made any one-time settlement for the loans taken from the Banks or Financial Institutions.

• there were no material changes and commitments affected the financial position of your Company between end of financial year and the date of report;

• there was no revision in the financial statements;

• Mr. Satish Pai: Managing Director is a director on the Board of Novelis Inc, wholly owned subsidiary.

He is in receipt of annual fee of US$ 1,50,000 in the calendar year 2023 from Novelis;

• Mr. Praveen Kumar Maheshwari: Whole Time Director and Chief Financial Officer has not received any commission/ Remuneration from your Company''s subsidiaries;

• there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future

• there were no frauds reported by the Auditors u/s 143(12) of the Act.

Cautionary Statement

Statements in this "Management Discussion and Analysis" describing the Company''s objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company''s operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company''s principal markets, changes in the government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations.

The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information events or otherwise.

Appreciation

We would like to record by gratitude and appreciation to all our stakeholders, including the Central and State Government Authorities, Stock Exchanges, Financial Institutions, Analysts, Advisors, Local Communities, Customers, Vendors, Business Partners, Shareholders, and Investors forming part of the Hindalco family for their continued support during the year. Your faith and vote of confidence hold in good stead, and motivate us in pursuing greater opportunities, responsible growth and enhanced delivery on our strategy. Let us also take this opportunity to thank our employees, whose enthusiasm, energy, and zeal, help us progress along our vision. The contribution our people make is the base on which we build further, and is integral to Hindalco''s high performing culture.

For and on behalf of the Board

Satish Pai Kailash Nath Bhandari

Managing Director Independent Director DIN: 06646758 DIN: 00026078

Place: MumbaI Dated: July 12, 2023

---

Mar 31, 2022

Your Directors have pleasure in presenting the 63^rd Annual Report and the audited standalone and consolidated financial statements of your company for the year ended 31st March, 2022.

Financial Highlights

'' in Crore
	Consolidated		Standalone
	2021-22	2020-21	2021-22	2020-21
Revenue from Operations	1,95,059	1,32,008	67,653	42,701
Other Income	1,136	1,199	535	650
Profit Before Interest, Tax and Depreciation (PBITDA)	29,638	18,896	11,828	4,884
Depreciation and Amortisation	6,729	6,628	1,752	1,708
Impairment Loss/(Reversal) of Non Current Assets (Net)	155	138	95	140
Finance Costs	3,768	3,738	1,417	1,469
Profit before Exceptional Items and Tax Share in Profit / (Loss) in Equity Accounted Investments	18,986	8,392	8,564	1,567
Share of Equity Accounted Investments	6	5	-	-
Profit before Exceptional Items and Tax	18,992	8,397	8,564	1,567
Exceptional Items	582	(492)	(107)	7
Profit before Tax	19,574	7,905	8,457	1,574
Tax Expenses	5,373	2,723	2,950	581
Profit/ (Loss) for the year from Continuing Operations	14,201	5,182	-	-
Profit/ (Loss) for the Year from Discontinued Operations	(464)	(2,066)	-	-
Tax Expense/ (Benefit) of Discontinued Operations	7	(367)	-	-
Profit/ (Loss) for the year from DiscontinuedOperations	(471)	(1,699)	-	-
Profit/ (Loss) for the year	13,730	3,483	5,507	993
Other Comprehensive Income / (Loss)	(1,148)	4,784	(397)	3,780
Total Comprehensive Income	12,582	8,267	5,110	4,773
Basic EPS - Continuing Operations (?)	63.85	23.30	-	-
Basic EPS - Discontinued Operations (?)	(2.12)	(7.64)	-	-
Basic EPS (?)	61.73	15.66	24.76	4.46
Appropriations to Reserves :				'' in Crore
Appropriations			2021-22	2020-21
Opening Balance in Retained Earnings and Other Comprehensive Income			11,026	6,624
Total Comprehensive Income for the Current Year			5,110	4,773
Dividends paid			(667)	(222)
Hedging (Gain)/ Loss and cost of hedging transferred to non financial assets			(41)	(1)
Employee Share Based Transactions			2	2
Transferred to Debenture Redemption Fund			(150)	(150)
Closing Balance in Retained Earnings and Other Comprehensive Income			15,280	11,026

Dividend:

For the year ended 31^st March, 2022, the Board of Directors of your Company has recommended dividend of '' 4.00 per share (Previous year '' 3.00 per share) to equity shareholders.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme and out of the Share Capital Suspense before the Book Closure for payment of dividend will rank paripassu with the existing shares and shall also be entitled to receive the aforesaid dividend.

In terms of provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, herein after referred to as " Listing Regulations" your Company has formulated a Dividend Distribution Policy. The Policy is given in Annexure I to the Annual Report and is also accessible from your Company''s Website www.hindalco.com.

Overview and State of the Company''s Affairs:

The Standalone and Consolidated Financial Statements for the Financial Year ended 31st March, 2022 have been prepared in accordance with the Indian Accounting Standards (IND AS) as notified by the Ministry of Corporate Affairs.

Standalone full year highlights

Your Company registered a revenue of '' 67,653 crores for the fiscal year 2022 vs '' 42,701 crores in the previous year up 58% on account of higher global prices of aluminium and copper in FY22 versus EBIDTA of '' 4,884 crores in FY21. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at '' 11,828 crores, up 142% compared to the last year, on account of higher profitability in Aluminium business supported by improved macros, higher volumes, and cost optimization. Depreciation was up 3% at '' 1,752 crore in FY22 versus '' 1,708 crores in FY21. The Finance Cost was lower on Year by 4% at '' 1,417 crores in FY22 versus '' 1,469 crores in FY21. This reduction in finance cost was mainly due to overall reduction in the average cost of long-term loans on account of re-financing. The Profit before Tax (and Before Exceptional Items) stood at '' 8,564 crore, up by 447% compared to the previous year due to higher EBITDA. Net Profit for FY22 stood at '' 5,507 crores as compared to '' 993 crore up 455% Year on Year compared to the previous year.

Consolidated Full Year Highlights

Hindalco''s Consolidated Revenue stood at '' 1,95,059 crore for FY22 compared to '' 1,32,008 crore in the previous year up 48% on account of higher global prices of aluminium and copper in FY22 versus FY21. The Company recorded consolidated EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of '' 29,638 crore, up by 57% due to favorable macros, strategic product mix and an improved performance by the downstream business in FY22 versus FY21. Consolidated Profit before Tax (and Before Exceptional Items) was '' 18,992 crore in FY22, up by 126% compared to the previous year on account of higher EBITDA. Net Profit after Tax in FY22, stood at '' 13,730 crores compared to '' 3,483 crores in the previous year up 294% Year on Year on account of exceptional performance by India Business in FY22. For detailed analysis, refer to the Management Discussion and Analysis section of the Integrated Annual Report.

Highlights of the Company''s Subsidiaries:

1. Utkal Alumina International Limited

Utkal Alumina revenues were '' 4,594 crore in FY22 compared to '' 2,787 crore in FY21 up by 65% because of higher transfer pricing compared to last year on account of higher average global alumina prices in FY22 versus FY21. The EBITDA for FY22 stood at '' 2,215 crore higher by 62% compared to '' 1,371 crore in FY21. The Profit after Tax in FY22 was '' 1,099 crore versus '' 605 crore in FY21 up by 82% Year on Year on account of higher EBITDA in FY22. (Refer to the table below for comparison in FY22 versus FY21 key financial number).

Particulars (? in Crore)	FY22	FY21	% Change
Revenue	4,594	2,787	65%
EBITDA	2,215	1,371	62%
PAT	1,099	605	82%

During the year, all these expansion projects are in line with Company''s Capital Allocation framework, focussed on value enhancing growth, its product enrichment, maintaining a robust capital structure for maximising shareholder value.

Human Resources:

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centred around accountability is in place. We feel this is critical to enable us retain our competitive edge.

Research and Development

Your Company''s Research & Development (R&D) activities are focused on developing and commercializing premium differentiated products, improving our competitive cost position, product quality and environmental sustainability. To support these goals, we are managing a pipeline of projects that address near and mid-term needs, as well as the exploration of future opportunities. This year R&D team continued development in the area of making our processes greener & sustainable and value added products & applications. These initiatives helped our plants to mitigate challenges of raw material quality, reducing specific energy consumption and carbon footprint, cost effective management of waste generated during processing, recovery of value from by-product as well as any waste products. Specific programs have also been initiated to adopt new digitalisation techniques such as soft sensors, digital twins, etc. The predictive and prescriptive models based on AI /ML data analytics coupled with physic based models are helping better process control & achieve desired process performance. These tools also help in understanding the requirement of existing and prospective customers, and provide a better service, in order to increase your company''s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, enabling pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Your Company already operates three Hindalco Innovation Centres (HIC), one HIC-Alumina at Belagavi working on R&D of bauxite ore, alumina refining and specialty alumina, hydrate products and their application in different end uses; as well as waste management; and one HIC-SemiFab located at Taloja, near Mumbai, working in the area of tribology, energy and environment management and aluminium fabricated products and new applications. Additionally, R&D Team at Birla Copper, Dahej, is focusing on maximisation of copper recovery as well recovery of various metal values, such as, Selenium, Tellurium, Nickel, Bismuth, etc., from the effluent generated in the plant and value added applications of the solid wastes. In addition, your company engages the Aditya Birla Group''s corporate

There is no material change in the Schemes and the aforementioned schemes are in compliance with SEBI ( Share Based Employee Benefits) Regulations, 2014.

Corporate Governance

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices.

The entire report on Corporate Governance forms part of Integrated Annual Report.

Directors'' Responsibility Statement

As stipulated in Section 134(3)(c) of the Companies Act, 2013 ("the Act"), your Directors subscribe to the "Directors'' Responsibility Statement" and confirm that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b) the accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2022 and of the profit of your company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a going concern basis;

e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f) your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Energy, Technology and Foreign Exchange:

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 is set out in Annexure II to this Report.

2. NoveLis Inc.

The Performance highlights of NoveLis Inc. are provided in detail for FY22 versus FY21 in the Management Discussion and Analysis Section of the Integrated Annual Report.

Key Initiatives

In India operations, Hindalco successfully completed its 500Kt UtkaL''s Alumina refinery brownfield capacity expansion in FY22. This project was at a capital outlay of around '' 1,500 crore. This has strengthened the Company''s integration and boosted the availability of best- in-class alumina and in a reduction of the overall cost of production in FY22.

In FY22, Hindalco made two acquisitions valued $79 million of Hydro''s Kuppam Extrusion facility in India to expand its presence in the upper end of the value-added to enhance our capabilities in high-end extrusions and a fabricated solutions and a Copper cCr facility of Ryker (now Asoj) with capacity of 225 kt, expanding overall capacities in the value-added segment. This will not only enhance the Company''s capabilities but also help the Company to move towards a more sustainable business model.

In addition to the above, Hindalco announced certain organic growth investments in India in the businesses of Aluminium, Copper, Specialty Alumina and also Resource Securitisation over the next five years in the range of $3.0-3.3 billion, including some certain projects which are under appraisal. The company continues to focus on its downstream strategy to increase its downstream capacities in the Flat Rolled Products, Extrusions and other flat rolled products. All these investments are mainly targeted towards catering the rising demand of downstream products in the domestic market.

Novelis has identified more than $4.5 billion of potential organic capital investment opportunities to grow Novelis'' business through debottlenecking, recycling, and new capacity investments over the next five years focused on increasing capacity and capabilities that meet growing customer demand and align with its sustainability commitments. This includes expansion of cold rolling and recycling capacity in Zhenjiang, China, a highly advanced recycling center for automotive in the U.S. and a recycling center at UAL joint venture in South Korea.

This also includes Novelis'' $2.5 billion greenfield, fully integrated rolling and recycling plant in Bay Minette, Alabama. This new U.S. plant will support strong demand for sustainable beverage can and automotive aluminum sheet and advance towards a circular economy.

Novelis continues to focus on its safe integration of Aleris'' continuing operations to drive several strategic benefits and is expected to generate over $220 million in synergies, through traditional integration cost synergies and strategic synergies created by enhancing and integrating operations in Asia.

research and development centre, Aditya Birla Science and Technology Company Private Limited ("ABSTCPL"), for conducting R&D in select areas of work through chartered R&D projects. These are based on the domain expertise and R&D facilities available in ABSTCPL. ABSTCPL''s forte of having multidisciplinary teams of technical experts, scientists and engineers, enables your company to develop building competencies in select areas, as a long term value to business. Both the HICs at Belagavi and Taloja as well as ABSTCPL are DSIR, GOI recognised R&D Centres. Parallelly, we also work with different R&D institutes of national and international reputes to develop technologies for our mutual benefits. The engagement has resulted into patent applications, which have been and will be assigned to your company on the grant of the patent.

Consolidated Financial Statements:

The Consolidated Financial Statements for the year ended 31st March, 2022 have been prepared by your Company in accordance with the provisions of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 "Listing Regulations" and forms part of the full Annual Report.

Employee Stock Option Schemes:

ESOS - 2006

During the year ended 31^st March 2022, the Company has allotted 391,304 fully paid-up equity share of '' 1/- each of the Company (Previous year 65,652) on exercise of options under ESOS 2006.

ESOS - 2013:

During the year ended 31st March 2022, the Company has allotted 97,173 fully paid-up equity share of '' 1/- each of the Company (Previous year 3,95,908) on exercise of options under ESOS 2013.

ESOS - 2018:

During the year, the Company has granted 18,72,984 stock options (Previous year 5,82,240) and 612,560 RSUs (Previous year 20,487) under ESOS 2018. Hindalco Employee Welfare Trust has transferred 8,78,968 fully paid-up equity share of '' 1/- each of the Company during the year on exercise of Options under ESOS 2018.

The details of Stock Options and Restricted Stock Units granted under the above-mentioned Schemes are available on your Company''s website viz. www.hindalco.com.

A certificate from the statutory auditor on the implementation of your Company''s Employees Secretarial Option Schemes wi ll be placed at the ensuing Annual General Meeting for inspection by the members.

Policy on appointment and remuneration of Directors and Key Managerial Personnel:

The Nomination and Remuneration Committee has formulated the remuneration poLicy of your company which is attached as Annexure IV to the Integrated Annual Report.

Meetings of the Board:

The Board of Directors of your Company met Seven times during the year, detaiLs of which are given in the Corporate Governance Report forming part of the Integrated Annual Report.

Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing and DiscLosures Requirement) Regulations, 2015, the Directors has carried annual performance evaluation of Board, Independent Directors, Non Executive Directors, Executive Directors, Committee and Chairman of the Board.

The evaLuation framework focused on various aspects of the Board and Committees such as review, timeLy information from management etc. Also, the performance of individual directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, externaL knowLedge etc.

Board members have evaluated Independent Directors, Non executive Directors, Executive Directors, Committee and Chairman of the Board. The resuLt of evaLuation was satisfactory and meets the requirements of the Company. Board fuLLy agreed and rated 100% on its functioning, skiLL sets and working atmosphere. Independent Directors scored weLL on expressing their views and in understanding the Company and its requirements. Non-Executive Directors scored weLL in understanding the Company and its requirements and keep themseLves current on the areas to be discussed. Executive Directors are action oriented and ensures timeLy implementation of the Board decisions. Board is completely satisfied with the functioning of various Committees. Board has fuLL faith in the Chairman in Leading the Board effectiveLy and ensuring contribution from all its members.

Audit Committee:

The Audit Committee comprises Mr. K.N. Bhandari, Independent Director, Mr. Vikas BaLia, Independent Director & Mr. Y.P. DandiwaLa, Independent Director. Mr. Satish Pai :Managing Director and Mr. Praveen Kumar Maheshwari: Chief FinanciaL Officer and WhoLe-Time Director are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of the Integrated Annual Report.

Particulars of Employees:

In accordance with the provisions of Section 197(12) of the Companies Act,2013 ("the Act"), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, in Line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to aLL Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure III to the Integrated Annual Report.

Directors:

Board constitution and changes:

Mr.Kumar MangaLam BirLa (DIN: 00012813) wiLL retire from office by rotation at Annual General Meeting, and being eligible, offers himseLf for reappointment. Mr. Kumar MangaLam BirLa has given required declaration under Companies Act, 2013.

Mr. Praveen Kumar Maheshwari (DIN:00174361) is re-appointed as the WhoLe-time Director for a term of 1 Year w.e.f. 28th May, 2022, subject to shareholders approval at the ensuing Annual GeneraL Meeting. He is aLso the Chief Financial Officer of the Company.

Brief resume of the Directors being appointed and re-appointed form part of the Notice of the ensuing Annual General Meeting.

The Board recommends, re-appointment of Mr. Kumar MangaLam BirLa and Mr. Praveen Kumar Maheshwari. Item seeking your approvaL is incLuded in the Notice convening the Annual General Meeting.

Brief resumes of the directors being appointed/ reappointed form part of the notice of the ensuing Annual General Meeting.

All the directors being appointed/reappointed have given required declaration under Companies Act, 2013 and Listing Regulations.

Independent Directors Statement:

Independent Directors on your Company''s Board have submitted decLarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

Key Managerial Personnel:

In terms of provisions of Section 203 of the Companies Act, 2013, Mr. Satish Pai: Managing Director, Mr. Praveen Kumar Maheshwari : Chief FinanciaL Officer and WhoLe Time Director and Mr. AniL MaLik: Company Secretary are the Key ManageriaL Personnel of your Company.

Vigil Mechanism:

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company''s Code of Conduct. Adequate safeguards are provided against victimisation to those who avaiL of the mechanism and direct access to the Chairman of the Audit Committee in exceptionaL cases is provided to them.

The vigiL mechanism is avaiLabLe on your Company''s website viz. www.hindaLco.com.

Auditors Statutory Auditors

M/s. Price Waterhouse & Co. Chartered Accountants LLP (ICAI Registration No. 304026E/E-300009) were appointed as the Statutory Auditors of the company to hoLd office from the conclusion of Fifty Eighth Annual General Meeting held in 2017 tiLL the concLusion of the Sixty third AnnuaL GeneraL Meeting of the Company, to be held in the Calendar year 2022.

The Company has received confirmation from the Auditors to the effect that their appointment, if made, wiLL be in accordance with the Limits specified under the Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with RuLe 4 of Companies (Audit & Auditors) Rules 2014.

The Board is of the opinion that continuation of M/s. Price Waterhouse & Co. Chartered Accountants LLP, as Statutory Auditors wiLL be in the best interests of the Company and therefore, the members are requested to consider their reappointment as Statutory Auditors of the Company, for a term of five years, from the concLusion of the ensuing AnnuaL General Meeting, till the Annual General Meeting to be held in the calendar year 2027, at such remuneration mutually agreed and approved by the Board.

The observation made in the Auditor''s Report are selfexpLanatory and therefore, do not caLL for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have

on the recommendation of the Audit Committee, appointed M/s. Nanabhoy & Co., Cost Accountants, Mumbai as Cost Auditors, to conduct the cost audit of your Company for the financiaL year ending 31st March, 2023, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resoLution seeking Member''s ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act,

2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting the Secretarial Audit of your Company for the financiaL year ended 31^st March, 2022. The Report of the SecretariaL Auditors is annexed herewith as Annexure V to the Integrated Annual Report.

The SecretariaL Audit Report does not contai n any quaLification, reservation or adverse remark.

As per Regulation 24A of the Listing Regulations, material unlisted subsidiaries of a listed entity incorporated in India is required to annex a SecretariaL Audit Report issued by a Company Secretary in practice. In compLiance with the above requirement, the SecretariaL Audit Report of UtkaL ALumina International Limited, a material subsidiary of your Company, is given in Annexure VB to the Annual Report. The Secretarial Audit Report do not contain any quaLification, reservation or adverse remark.

Environment Protection and Pollution Control

Your Company is committed to sustainable development. A detailed report of the Company''s initiatives and commitment to environment conservation is part of the Integrated Annual Report.

Particulars of Loans, Guarantees and Investments:

Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) RuLes,

2014 are given in the notes to Financial Statements of the Integrated Report.

Corporate Social Responsibility:

In terms of the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with Companies (Corporate SociaL Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility

Other Disclosures:

• There were no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report.

• Your Company has not issued any shares with differential voting.

• There was no revision in the financial statements.

• Your Company has not issued any sweat equity shares.

• Mr. Satish Pai is a director on the Board of NoveLis Inc, wholly owned subsidiary. He is in receipt of annuaL fee of US$ 1,50,000 in the caLendar year 2022. Mr. Praveen Kumar Maheshwari: WhoLe Time Director and Chief Financial Officer has not received any commission/ Remuneration from your Company''s subsidiaries.

• There is no change in the nature of business.

• During the year under review, your Company has not accepted any fixed deposits from the public faLLing under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2022, there were no deposits which were unpaid or uncLaimed and due for repayment.

• There are no significant and materiaL orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

• There were no frauds reported by the Auditors u/s 143(12) of the Companies Act, 2013.

("CSR") Committee which is chaired by Mrs. Rajashree BirLa. The other Members of the Committee for the Financial year ending 31^st March 2022 were Mr. Y.P. DandiwaLa, Independent Director, Mr. A.K. AgarwaLa, Non Executive Director and Mr. Satish Pai: Managing Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee.

Your Company also has in place a CSR Policy and the same is available on your Company''s website viz. www.hindaLco. com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations. During the financial Year 2021-22 the Company has spent '' 38 Crores under Section 135 of the Companies Act, 2013 on CSR activities , which is more than 2% of average net profits of the Company for immediately preceeding three financial years.

The Annual Report on CSR activities is attached as Annexure VI to the full Annual Report.

Risk Management

Pursuant to the requirement of Securities and Exchange Board of India (Listing and Disclosures Requirement) Regulations, 2015, the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/process of your company.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Risk Management Committee.

Contracts and Arrangements with Related Parties

During the financial year, your Company entered into related party transactions which were on arm''s length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015. The related party transactions have been approved by the Audit Committee and Board of your Company, as required under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 .

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company''s website viz. www.hindalco.com.

Extract of Annual Return:

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 ("the Act") read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31st March 2022 is available at www.hindaLco.com .

Business Responsibility Report:

As per Listing Regulations, a separate section of Business Responsibility Report forms part of Integrated Annual Report.

Internal Control System and Their Adequacy:

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined by the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal auditors, the process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Internal Financial Control

Your directors confirm having Laid down internal financial controls and that such internal financial controls are adequate and were operating effectively

Subsidiary, Joint Ventures or Associate Companies:

The financial statements of your Company''s subsidiaries and related information have been placed on the website of your Company viz. www.hindaLco.com

In accordance with the provisions of the section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financiaL position of each of the subsidiaries, associates and Joint Venture is attached as Annexure VII to this Report.

The names of Companies which have become or ceased to be subsidiaries, Joint Ventures and associates are also provided in the aforesaid statement.

• As per the requirement of the SexuaL Harassment of Women at the WorkpLace (Prevention, Prohibition and Redressal) Act, 2013, your Company has complied with provisions reLating to the constitution of InternaL Complaint Committee under POSH.

• Directors of your Company hereby state and confirm that the Company has compLied with aLL the appLicabLe Secretarial Standards.

Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of CoaL, the Ministry of ChemicaLs and FertiLizers and various State Governments. Your Directors thank the FinanciaL Institutions and Banks associated with your Company for their support as weLL.

Your Company''s employees are instrumental in your Company scaLing new heights, year after year. Their commitment and contribution is deepLy acknowLedged.

Your involvement as Shareholders is greatly valued. Your Directors Look forward to your continuing support.

For and on behalf of the Board

Satish Pai K.N. Bhandari

Managing Director Independent Director DIN:06646758 DIN:00026078

PLace: Mumbai Dated: 22nd JuLy, 2022

---

Mar 31, 2021

Dear Shareholders,

Your Directors have pleasure in presenting the 1^st Integrated Annual Report and 62^nd Annual Accounts of your company for the year ended 31^st March, 2021.

FINANCIAL HIGHLIGHTS

'' in Crore
	Consolidated		Standalone
	2020-21	2019-20	2020-21	2019-20
Revenue from Operations	131985	118144	42701	40242
Other Income	1222	1186	650	739
Profit Before Interest, Tax and Depreciation (PBITDA)	18896	15536	4884	4403
Depreciation and Amortisation	6628	5091	1708	1708
Impairment Loss/(Reversal) of Non Current Assets (Net)	138	44	140	-
Finance Costs	3738	4197	1469	1679
Profit before Exceptional Items and Tax Share in Profit / (Loss) in Equity Accounted Investments	8392	6204	1567	1016
Share of Equity Accounted Investments	5	4	-	-
Profit before Exceptional Items and Tax	8397	6208	1567	1016
Exceptional Items	(492)	(284)	7	(64)
Profit before Tax	7905	5924	1574	952
Tax Expenses	2723	2157	581	332
Profit/ (Loss) for the year from Continuing Operations	5182	3767	-	-
Profit/ (Loss) for the Year from Discontinued Operations	(2066)	-	-	-
Tax Expense/ (Benefit) of Discontinued Operations	(367)	-	-	-
Profit/ (Loss) for the year from Discontinued Operations	(1699)	-	-	-
Profit/ (Loss) for the year	3483	3767	993	620
Other Comprehensive Income / (Loss)	4784	(2723)	3780	(3400)
Total Comprehensive Income	8267	1044	4773	(2780)
Basic EPS - Continuing Operations (?)	23.30	16.94	-	-
Basic EPS - Discontinued Operations (?)	(7.64)	-	-	-
Basic EPS (?)	15.66	16.94	4.46	2.79
Appropriations to Reserves :				'' in Crore
Appropriations			2020-21	2019-20
Opening Balance in Retained Earnings and Other Comprehensive Income			6624	9865
Total Comprehensive Income for the Current Year			4773	(2780)
Dividends paid			(222)	(316)
Transition Impact - Leases (Ind AS 116)			-	(9)
Hedging (Gain)/ Loss and cost of hedging transferred to non financial assets			(1)	14
Employee Share Based Transcations			2	-
Transferred to Debenture Redemption Fund			(150)	(150)
Closing Balance in Retained Earnings and Other Comprehensive Income			11026	6624

Dividend:

For the year ended 31^st March,2021, the Board of Directors of your Company has recommended dividend of '' 3.00 per share (Previous year '' 1.00 per share) to equity shareholders.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme and out of the Share Capital Suspense before the Book Closure for payment of dividend will rank paripassu with the existing shares and shall also be entitled to receive the aforesaid dividend.

In terms of provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, herein after referred to as "Listing Regulations" your Company has formulated a Dividend Distribution Policy. The Policy is given in Annexure I to this Report and is also accessible from your Company''s website www.hindalco.com.

OVERVIEW AND STATE OF THE COMPANY''S AFFAIRS:

The Standalone and Consolidated Financial Statements for the Financial Year ended 31st March, 2021 have been prepared in accordance with the Indian Accounting Standards (IND AS) as notified by the Ministry of Corporate Affairs.

Standalone full year highlights

Your Company registered a revenue of '' 42,701 crores for the fiscal year 2021 vs '' 40,242 crores in the previous year up 6% on account of higher global prices of aluminium and copper in FY21 versus FY20. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at '' 4,884 crores, up 11% compared to the last year, on account of higher profitability in Aluminium business supported by improved macros, cost optimization and a strong market recovery, partially offset by lower profitability in copper business impacted by lockdown due to COVID and lower TC/RC in FY21. Depreciation was flat Year on Year at '' 1708 crore in FY21 versus FY20. The Finance Cost was lower on Year by 13% at '' 1,469 crores in FY21 versus '' 1,679 crores in FY20. This reduction in finance cost was mainly due to overall reduction in the average cost of long-term loans on account of re-financing. The Profit before Tax (and Before Exceptional Items) stood at '' 1,567 crore, up by 54% compared to the previous year due to higher EBITDA. Net Profit for FY21 stood at '' 993 crores as compared to '' 620 crore up 60% Year on Year compared to the previous year.

Consolidated Full Year Highlights

Hindalco''s Consolidated Revenue stood at '' 1,31,985 crore for FY21 compared to '' 1,18,144 crore in the previous year up 12% on account of higher global prices of aluminium and copper in FY21 versus FY20. The Company recorded consolidated EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of '' 18,896 crore, up by 22% due to favorable macro and lower input costs in FY21 versus FY20. Consolidated Profit before Tax (and Before Exceptional Items) was '' 8,397 crore in FY21, up by 35% compared to the previous year on account of higher EBITDA and lower interest costs. Net Profit after Tax in FY21, stood at '' 3,483 crores compared to '' 3,767 crores in the previous year down 8% Year on Year mainly on account of loss due to discontinued operations in FY21 due to loss booked on the divestiture of automotive assets in Aleris business acquired by Novelis during the year. For detailed analysis, refer to the Management Discussion and Analysis section of the Integrated Annual Report.

Highlights of the Company''s Subsidiaries:

1. UtkaL Alumina International Limited

Utkal Alumina revenues were '' 2,764 crore in FY21 compared to '' 2,653 crore in FY20 up by 4% because of higher transfer pricing compared to last year on account of higher average global alumina prices in FY21 versus FY20.

The EBITDA for FY21 stood at '' 1,371 crore higher by 38% compared to '' 992 crore in FY20. The Profit after Tax in FY21 was '' 605 crore versus '' 317 crore in FY20 up by 91% Year on Year on account of higher EBITDA in FY21. (Refer to the table below for comparison in FY21 versus FY20 key financial number)

Particulars	FY2020-21	FY2019-20	% Change
Revenue	2,764	2,653	4%
EBITDA	1,371	992	38%
PAT	605	317	91%

2. NoveLis Inc.

The Performance highlights of NoveLis Inc. are provided in detail for FY21 versus FY20 in the Management Discussion and Analysis Section of the Integrated Annual Report.

Key Initiatives

In India operations, the 500Kt Utkal''s Alumina refinery brownfield capacity expansion is on track with mechanical completion by Q1FY22-end and commercial production to begin in Q2FY22. This project is at a capital outlay of around '' 1,500 crore. This will further help strengthen the Company''s integration and boost the availability of best- in-class alumina and in a reduction of the overall cost of production going forward.

In the downstream expansion projects in India, the Company made a good progress, announcing its plans to set up a 34,000-tonne extrusion plant at Silvassa. The new plant will service the fast-growing market for extruded aluminium products in the western and southern regions. This is a '' 730-crore project with intention to build a larger value-added product portfolio over the next few years. The on-going downstream expansion projects will not only enhance the Company''s capabilities but also help the Company to become further delinked from the volatility of global aluminium prices and thus move towards a more sustainable business model.

On April 14, 2020, Novelis closed its acquisition of Aleris Corporation. Novelis'' acquisition of Aleris is expected to provide a strong pro-forma financial profile, many strategic benefits including securing an integrated manufacturing footprint in China, further portfolio diversification with the addition of aerospace and building and construction, as well as new technology and operational capabilities. Novelis is focused on the safe integration of Aleris'' continuing operations to drive several strategic benefits.

Novelis'' greenfield expansion projects of 200 Kt automotive finishing facility in Guthrie, Kentucky in the US and additional 100 Kt of Auto finishing line in China, were both commissioned and have started its commercial shipments in Q4FY21. Customer qualification continues to ramp up at both facilities to meet strong demand for lightweight, automotive aluminum sheet.

The rolling, casting and recycling capacity in Pinda, Brazil to meet growing customer demand is also expected to be commission by the end of FY22. In addition to this, Novelis investment to expand and upgrade recycling capacity at its Greensboro facility in the US is also expected to be completed by end of FY22.

During the year, the Company announced its capital allocation framework on a consolidated basis with a clear roadmap to deleveraging, profitable growth via organic expansions in India as well as in Novelis and distribution of shareholder returns.

HUMAN RESOURCES

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centred around accountability is in place. We feel this is critical to enable us retain our competitive edge.

RESEARCH AND DEVELOPMENT

Your Company''s Research & Development (R&D) activities are focused on providing innovative, cost-effective and sustainable solutions to support consistent growth of business. The R&D activities of your Company i nclude process, product and application development, to develop short term as well as long term solutions to the issues faced by nonferrous sector, such as, raw material quality, cost effective management of waste generated during processing, recovery of value from by-product as well as any waste products, developing better understanding of the science of processes, reducing the specific energy consumption and carbon footprint etc. Specific programs have also been initiated to foster better understanding of the requirement of existing and prospective customers, and to provide a better service through application development, so as to increase your company''s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, enabling pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Your Company already operates three Hindalco Innovation Centres (HIC), one HIC-Alumina at Belagavi working on R&D of bauxite ore, alumina refining and specialty alumina, hydrate products and their application in different end uses; as well as waste management; and one HIC-SemiFab located at Taloja, near Mumbai, working in the area of tribology, energy and environment management and aluminium fabricated products and new applications. Additionally, R&D Team at Birla Copper, Dahej, is focusing on maximisation of copper recovery as well recovery of various metal values, such as, Selenium, Tellurium, Nickel, Bismuth, etc., from the effluent generated in the plant and value added applications of the solid wastes generated, namely, copper slag and phospho-gypsum. In addition, your company engages the Aditya Birla Group''s corporate research and development centre, Aditya Birla Science and Technology Company Private Limited ("ABSTCPL"), for conducting R&D in select areas of work through chartered R&D projects. These are based on the domain expertise and R&D facilities available in ABSTCPL. Parallelly, we also work with different R&D institutes of national and international reputes to develop technologies for our mutual benefits. The engagement has resulted into patent applications, which have been and will be assigned to your company on the grant of the patent. ABSTCPL''s forte of

having multidisciplinary teams of technical experts, scientists and engineers, enables your company to develop building competencies i n select areas, as a long term value to business. Both the HICs at Belagavi and Taloja as well as ABSTCPL are DSIR, GOI recognised R&D Centres.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements for the year ended 31st March, 2021 have been prepared by your Company in accordance with the provisions of the Companies Act, 2013, ("the Act") read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of "Listing Regulations" and forms part of the Integrated Annual Report.

EMPLOYEE STOCK OPTION SCHEMES ESOS - 2006

During the year ended 31^st March 2021, the Company has allotted 65,652 fully paid-up equity share of '' 1/- each of the Company (Previous year 3,59,415) on exercise of options under ESOS 2006.

ESOS - 2013

During the year ended 31st March 2021, the Company has allotted 3,95,908 fully paid-up equity share of '' 1/- each of the Company (Previous year 3,33,027) on exercise of options under ESOS 2013.

ESOS - 2018

During the year, the Company has granted 582,240 stock options (Previous year 307,716) and 20,487 RSUs (Previous year 72,355) under ESOS 2018.

Hindalco Employee Welfare Trust has transfered 60,707 fully paid-up equity share of '' 1/- each of the Company during the year on exercise of Options under ESOS 2018.

The details of Stock Options and Restricted Stock Units granted under the above-mentioned Schemes are available on your Company''s website viz. www.hindalco.com.

A certificate from the statutory auditor on the implementation of your Company''s Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the members.

There is no material change in the Schemes and the aforementioned schemes are in compliance with SEBI ( Share Based Employee Benefits) Regulations, 2014.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices.

The entire report on Corporate Governance forms part of Integrated Annual Report.

ABRIDGED ANNUAL REPORT

MCA General circular No. 20/2020 dated 5^th May 2020 and General Circular No. 02/2021 dated 13^th January,2021 states that considering prevailing situation and owing to difficulties involved in dispatching of physical copy of financial statements (including Board''s report, Auditor''s report or other documents required to be attached therewith), such statements shall be sent only by email to the members and to all other persons so entitled. Therefore Company has decided neither to print Full Integrated Annual Report nor prepare Abridged Annual Report. You are kindly requested to take note of the same.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 134(3)(c) of the Companies Act, 2013 "the Act", your Directors subscribe to the "Directors'' Responsibility Statement" and confirm that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b) the accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March,2021 and of the profit of your company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a going concern basis;

e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f) your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 is set out in Annexure II to this Report.

PARTICULARS OF EMPLOYEES

In accordance with the provisions of Section 197(12) of the Companies Act,2013 "the Act", read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, in Line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to aLL Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company.

Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure III to this Report.

DIRECTORS

Board constitution and changes

Mr. Askaran AgarwaLa (DIN: 00023684) wiLL retire from office by rotation at the ensuing AnnuaL GeneraL Meeting, and being eLigibLe, offers himseLf for reappointment.

Mr. Satish Pai (DIN:06646758) is re- appointed as the Managing Director for a term of 3 years w.e.f. 1st August 2021, subject to sharehoLder''s approvaL at the ensuing AnnuaL General Meeting.

Mr. Praveen Kumar Maheshwari (DIN:00174361) is reappointed as the WhoLe-time Director for a term of 1 Year w.e.f. 28th May, 2021, subject to sharehoLders approvaL at the ensuing Annual General Meeting. He is also the Chief Financial Officer of the Company.

Brief resume of the Directors being re-appointed form part of the Notice of the ensuing Annual General Meeting.

The Board recommends, re-appointment of Mr. Askaran AgarwaLa, Mr. Satish Pai and Mr. Praveen Kumar Maheshwari. Item seeking your approvaL is incLuded in the Notice convening the Annual General Meeting.

ALL the directors being appointed/reappointed have given required decLaration under Companies Act, 2013 and Listing Regulations.

Independent Directors

Independent Directors on your Company''s Board have submitted decLarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and ReguLation 16(1)(b) of the Listing Regulations.

five years i.e., to hoLd office from the concLusion of the Fifty Eighth AnnuaL General Meeting heLd in 2017 tiLL the concLusion of the Sixty third AnnuaL GeneraL Meeting of the Company, to be heLd in the CaLendar year 2022.

The observation made in the Auditor''s Report are seLf expLanatory and therefore, do not caLL for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment RuLes, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. R. Nanabhoy & Co., Cost Accountants, Mumbai as Cost Auditors, to conduct the cost audit of your Company for the financiaL year ending 31st March, 2022, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payabLe to the cost auditor is required to be pLaced before the Members in a generaL meeting for their ratification. AccordingLy, a resoLution seeking Member''s ratification for the remuneration payabLe to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed BNP& Associates, Company Secretaries, Mumbai as SecretariaL Auditor for conducting the Secretarial Audit of your Company for the financial year ended 31^st March, 2021. The Report of the SecretariaL Auditors is annexed herewith as Annexure VA to the Annual Report.

The SecretariaL Audit Report does not contain any quaLification, reservation or adverse remark.

As per Regulation 24A of the Listing Regulations, material unListed subsidiaries of a Listed entity incorporated in India is required to annex a SecretariaL Audit Report issued by a Company Secretary in practice. In compLiance with the above requirement, the SecretariaL Audit Report of UtkaL ALumina InternationaL Limited, a materiaL subsidiary of your Company, is given in Annexure VB to the AnnuaL Report. The SecretariaL Audit Report do not contain any quaLification, reservation or adverse remark.

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

Your Company is committed to sustainabLe deveLopment. A detaiLed report of the Company''s initiatives and commitment to environment conservation is part of Integrated Annual Report.

ALL Independent Directors of your Company except Mr. Anant Maheshwari have registered their name in the data bank maintained with the Indian Institute of Corporate Affairs. Action is being taken to register the name of Mr. Anant Maheshwari.

Appointment and remuneration of Directors and Key Managerial Personnel

The Nomination and Remuneration Committee has formuLated the remuneration poLicy of your company which is attached as Annexure IV to this Report.

Our Executive pay aims to strike the appropriate baLance between key components: (i) Fixed Cash compensation (Basic SaLary ALLowances) (ii) AnnuaL Incentive PLan (iii) Long-Term Incentives (iv) Perks and Benefits.

The AnnuaL Incentive pay-outs to Executive Directors are tied to reLevant financial and operationaL metrics achievement and their individual performance. The financiaL and operationaL metrics are annuaLLy aLigned with priorities/ focus areas for the business. AdditionaLLy, SustainabiLity Targets form part of performance metrics for Annual Incentive Pay for the Managing Director.

The remuneration of the Managing Director and the WhoLe time Director is in Line with the poLicy of the Company and trend prevaiLing in the Corporate sector in the country. The dividend recommended to the equity sharehoLders( 300% for FY 21) is aLso in Line with the performance and poLicy of the Company. The detaiLs of remuneration of the Managing and WhoLe Time Director with the median remuneration of empLoyees are provided in detaiL in Annexure III to this Report. Further the detaiLs of remuneration received from subsidiary company is also part of this report.

The Company shaLL recover the amount from the remuneration of Managing Director if required as per the reLevant provisions of the Companies Act, 2013.

Meetings of the Board

The Board of Directors of your Company met Six times during the year, detaiLs of which are given in the Corporate Governance Report forming part of the Integrated Annual Report.

Annual Evaluation

Pursuant to the provisions of the Companies Act,2013 and Listing Regulations, the Directors has carried annual performance evaLuation of Board, Independent Directors, Non Executive Directors, Executive Directors, Committee and Chairman of the Board.

The evaLuation framework focused on various aspects of the Board and Committees such as review, timeLy information from management etc. Also, the performance of individual

directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, externaL knowLedge etc.

Board members have evaLuated Independent Directors, Non executive Directors, Executive Directors, Committee and Chairman of the Board. The resuLt of evaLuation was satisfactory and meets the requirements of the Company. Board fuLLy agreed and rated 100% on its functioning, skiLL sets and working atmosphere. Independent Directors scored weLL on expressing their views and in understanding the Company and its requirements. Non-Executive Directors scored weLL in understanding the Company and its requirements and keep themseLves current on the areas to be discussed. Executive Directors are action oriented and ensures timeLy impLementation of the Board decisions. Board is compLeteLy satisfied with the functioning of various Committees. Board has fuLL faith in the Chairman in Leading the Board effectiveLy and ensuring contribution from aLL its members.

AUDIT COMMITTEE

The Audit Committee comprises of Mr. K.N. Bhandari, Independent Director, Mr. Vikas BaLia, Independent Director and Mr. Y.P. DandiwaLa, Independent Director.

Mr. Satish Pai : Managing Director and Mr. Praveen Kumar Maheshwari: Chief FinanciaL Officer and WhoLe-Time Director are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of the Integrated Annual Report.

KEY MANAGERIAL PERSONNEL

In terms of provisions of Section 203 of the Companies Act,2013, Mr. Satish Pai: Managing Director, Mr. Praveen Kumar Maheshwari : Chief FinanciaL Officer and WhoLe Time Director and Mr. AniL MaLik: Company Secretary are the Key Managerial Personnel of your Company.

VIGIL MECHANISM

Your Company has in place a vigil mechanism for directors and empLoyees to report concerns about unethicaL behaviour, actuaL or suspected fraud or vioLation of your Company''s Code of Conduct. Adequate safeguards are provided against victimisation to those who avaiL of the mechanism and direct access to the Chairman of the Audit Committee in exceptionaL cases is provided to them.

The vigiL mechanism is avaiLabLe on your Company''s website viz. www.hindaLco.com.

AUDITORS Statutory Auditors

M/s. Price Waterhouse & Co. Chartered Accountants LLP (Registration No. 304026E/E-300009), are the Statutory Auditors of the Company who are appointed for a period of

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to Financial Statements of the Integrated Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

In terms of the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and any amended thereof the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee for the Financial year ending 31^st March 2021 were Mr. Y.P. Dandiwala, Independent Director, Mr. A.K. Agarwala, Non Executive Director, Mr. Satish Pai: Managing Director and Mr. D. Bhattacharya: Non Executive Director. Dr. Pragnya Ram, Group Executive President & Group Head - CSR, Legacy Documentation & Archives is a permanent invitee to the Committee.

Your Company also has in place a CSR Policy and the same is available on your Company''s website viz. www.hindalco. com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations. During the financial Year 2020-21 the Company has spent '' 40.50 Crores under Section 135 of the Companies Act, 2013 on CSR activities, which is more than 2% of average net profits of the Company for last three financial years.

The Annual Report on CSR activities is attached as Annexure VI to this Report.

RISK MANAGEMENT

Pursuant to the requirement of Listing Regulations, the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/ process of your company.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Risk Management Committee.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions. There are no material transactions with any related party as defined under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI (Listing Obligations and Disclosures Requirement) Regulations,2015. The related party transactions have been approved by the Audit Committee and Board of your Company as required under the Companies Act 2013 and SEBI (Listing Obligations and Disclosures Requirement) Regulations, 2015.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company''s website viz. www.hindalco.com .

ANNUAL RETURN

In terms of the provisions of the Companies Act, 2013 ("the Act") read with the Companies (Management and Administration) Rules, 2014, the Annual Return of your Company for the financial year ended 31st March, 2021 is available on the website of the Company.

BUSINESS RESPONSIBILITY REPORT

As per Listing Regulations, a separate section of Business Responsibi lity Report forms part of Integrated Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined by the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal auditors, the process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL FINANCIAL CONTROL

Your directors confirm having laid down internal financial controls and that such internal financial controls are adequate and were operating effectively

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES

The financial statements of your Company''s subsidiaries and related information have been placed on the website of your Company viz. www.hindalco.com.

In accordance with the provisions of the section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and Joint Venture is attached as Annexure VII to this Report.

The names of Companies which have become or ceased to be subsidiaries, Joint Ventures and associates are also provided in the aforesaid statement.

OTHER DISCLOSURES

• There were no material changes and commitments affecti ng the financial position of your Company between end of financial year and the date of report.

• Your Company has not issued any shares with differential voting.

• There was no revision in the financial statements.

• Your Company has not issued any sweat equity shares.

• Mr. Satish Pai is a director on the Board of Novelis Inc, wholly owned subsidiary. He is in receipt of annual fee of US$ 1,50,000 in the calendar year 2021 . Mr. Praveen Kumar Maheshwari: Whole Time Director and Chief Financial Officer has not received any commission/ Remuneration from your Company''s subsidiaries.

• There is no change in the nature of business.

• During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2021, there were no deposits which were unpaid or unclaimed and due for repayment.

• There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future.

• There were no frauds reported by the Auditors u/s 143(12) of the Companies Act,2013.

• As per the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company has complied with provisions relating to the constitution of Internal Complaint Committee under POSH.

• Directors of your Company hereby state and confirm that the Company has complied with all the applicable Secretarial Standards.

• The cost accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by your Company.

APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company''s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Satish Pai K.N. Bhandari

Managing Director Independent Director DIN:06646758 DIN: 00026078

Place: Mumbai Dated: 2nd July, 2021

---

Mar 31, 2018

Dear Shareholder,

The Directors have pleasure in presenting the 59^th Annual Report and the audited standalone and consolidated financial statements of your company for the year ended 31^st March, 2018.

FINANCIAL HIGHLIGHTS (Rs. Crore)

	Standalone		Consolidated
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations	43,435	39,383	1,15,809	1,02,631
Other Income	948	1,005	1,105	1,111
Earnings before Interest, Tax and Depreciation (EBITDA)	6,072	5,819	15,025	13,558
Depreciation including impairment	1,617	1,428	4,606	4,469
Finance Costs	1,901	2,323	3,911	5,742
Profit before Exceptional Items and Tax	2,554	2,068	6,508	3,348
Share of Equity Accounted Investments	-	-	(125)	(25)
Profit before Exceptional Items and Tax	2,554	2,068	6,383	3,323
Exceptional Items	(325)	85	1,774	(8)
Profit before Tax	2,229	2,153	8,157	3,315
Tax Expenses	792	596	2,074	1,433
Profit/ (Loss) for the period	1,437	1,557	6,083	1,882
Other Comprehensive Income (Loss)	957	536	2,991	(18)
Total Comprehensive Income	2,394	2,093	9,074	1,864
Basic EPS	6.45	7.56	27.3	9.22

Appropriations to Reserves

(Rs. Crore)

Appropriations	2017-18	2016-17
Opening Balance in Retained Earnings and Other Comprehensive Income	8,847	7,143
Total Comprehensive Income for the Current Year	2,394	2,093
Dividends paid	(291)	(239)
Transferred to Debenture Redemption Fund	(150)	(150)
Closing Balance in Retained Earnings and Other Comprehensive Income	10,800	8,847

Dividend:

For the year ended 31^st March, 2018, the Board of Directors of your Company has recommended dividend of Rs.1.20 per equity share (Previous year Rs.1.10 per equity share) to equity shareholders.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme and out of the Share Capital Suspense, and before the Book Closure for payment of dividend will rank pari passu with the existing shares and shall also be entitled to receive the aforesaid dividend.

In terms of provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, herein after referred to as “Listing Regulations” your Company has formulated a Dividend Distribution Policy. The Policy is given in Annexure-I to the Full Annual Report and is also accessible from your Company’s Website www.hindalco.com.

OVERVIEW AND STATE OF THE COMPANY’S AFFAIRS:

Standalone Full year highlights

Hindalco registered a revenue of Rs.43,435 crore for the fiscal year 2018 vs Rs.39,383 crore in the previous year. EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) stood at Rs.6,072 crore, up

4 percent compared to the previous year, on the back of stable operations with supporting macros despite increasing input costs. Depreciation was higher by 13 percent due to progressive capitalization and certain reclassification in FY18. The Finance Cost was down by 18 percent at Rs.1,901 crore on account of prepayment and reduction in pricing of the project loans. Profit before Tax (and Before Exceptional Items) stood at Rs.2,554 crore, up by 24 percent compared to the previous year. Net Profit for FY18 stood at Rs.1,437 crore in FY18 as compared to Rs.1,557 crore in the previous year.

Consolidated Full Year Highlights

Hindalco’s consolidated Revenue stood at Rs.1,15,809 crore for FY18 compared to Rs.102,631 crore in the previous year, on the back of excellent operating performance of all the businesses and better realisations. The Company recorded highest ever consolidated PBITDA (Profit before Interest, Tax, Depreciation and Amortisation) of Rs.15,025 crore, up by 11 percent supported by stable operations and improving efficiencies across all businesses. Consolidated Profit before Tax (and Before Exceptional Items) almost doubled and stood at Rs.6,508 crore, up by 94 percent compared to the previous year on account of strong overall business performance and savings in interest outgo. Net Profit in FY18, trebled at Rs.6,083 crore up by 223% compared to the previous year.

For detailed analysis, refer to the Management Discussion and Analysis section of the Full and Abridged Annual Report.

Highlights of the Company’s Subsidiaries:

(a) Utkal Alumina International Ltd.

Utkal Alumina revenues has grown to Rs.2,863 Crore in FY 18 compared to Rs.2,375 Crore in FY 17 up 21% as a result of excellent operating performance. The EBITDA for FY 18 stood at Rs.1187 Crore up 77% compared to Rs.672 Crore in FY 17. The Profit after tax in FY 18 was Rs.561 Crore v/s ‘ (114) Crore in FY17.

(Rs. Crore)

Particulars	FY18	FY17	% Growth
Revenue	2863.37	2374.81	21%
EBITDA	1186.55	672.02	77%
PAT	561.29	(114.18)

(b) Novelis Inc.

Performance highlights of Novelis Inc. are provided in the Management Discussion and Analysis section of the Full and Abridged Annual Report.

Key Initiatives

The Company successfully commissioned the new Continuous Cast Rod Plant (CCR-3) in Copper in Dahej during the year. This will further enhance the copper rod capacity of its Dahej Plant. The Work on Utkal’s brown field capacity expansion by 500 Kt commenced during the year and is expected to be completed in 30 months with a total capital outlay of around Rs.1,300 crore, which will provide further strength to its integration and availability of best in class alumina to its smelters.

During the fiscal year 2018, Novelis completed JV to establish Ulsan Aluminium in South Korea, by selling approximately 50% its ownership to Kobe Steel for US$ 314 million which have helped to unlock the value. Novelis with its objective to invest in world class assets and technical capabilities to position itself to meet the increasing global demand for aluminium from the Automotive market, announced its plans to setup a 200 Kt automotive finishing facility in Guthrie, Kentucky, US which is expected to be commissioned in CY 2020. Novelis has agreed to acquire the operating facilities and manufacturing assets at its plant in Sierre, Switzerland, that has been historically leased.

HUMAN RESOURCES:

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centred around accountability is in place. We feel this is critical to enable us retain our competitive edge.

RESEARCH AND DEVELOPMENT

Your Company’s Research & Development (R&D) activities are focused on providing innovative, cost-effective and sustainable solutions to support consistent growth of business.

The R&D activities of your Company include process, product and application development, to develop short term as well as long term solutions to the issues faced by nonferrous sector, such as, raw material quality, cost effective management of waste generated during processing, recovery of value from by product as well as any waste products, developing better understanding of the science of processes, reducing the specific energy consumption and carbon footprint etc. Specific programs have also been initiated to foster better understanding of the requirement of existing and prospective customers, and to provide a better service through application development, so as to increase your company’s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, enabling pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Your Company already operates two Hindalco Innovation Centres (HIC), one HIC-Alumina at Belagavi working on R&D of bauxite ore, alumina refining and specialty alumina, hydrate products; as well as waste management; and one HIC-SemiFab located at Taloja, near Mumbai, working in the area of tribology, energy and environment management and aluminium fabricated products and new applications. R&D Team at Birla Copper, Dahej, is focusing on maximisation of copper recovery as well recovery of various metal values, such as, Selenium, Tellurium, Nickel, Bismuth, etc., from the effluent generated in the plant. In addition, your company engages the Aditya Birla Group’s corporate research and development centre, Aditya Birla Science and Technology Company Private Limited (“ABSTCPL”), for conducting R&D in select areas of work through chartered R&D projects. These are based on the domain expertise and R&D facilities available in ABSTCPL. The engagement has resulted into patent applications, which have been and will be assigned to your company on the grant of the patent. ABSTCPL’s forte of having multidisciplinary teams of technical experts, scientists and engineers, enables your company to develop building competencies in select areas, as a long term value to business. Both the HICs at Belagavi and Taloja as well as ABSTCPL are DSIR, GOI, recognised R&D Centres.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements for the year ended 31^st March, 2018 have been prepared by your Company in accordance with the provisions of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 “Listing Regulations” and forms part of the Full Annual Report.

EMPLOYEE STOCK OPTION SCHEMES:

ESOS - 2006

During the year ended 31^st March, 2018, the Company has allotted 1,33,438 fully paid-up equity share of Rs.1/- each of the Company (Previous year 4,43,476) on exercise of options under ESOS 2006.

ESOS - 2013:

During the year ended 31^st March, 2018, the Company has allotted 15,75,374 fully paid-up equity share of Rs.1/- each of the Company (Previous year 9, 97,195) on exercise of options under ESOS 2013.

The details of Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company’s website viz. www.hindalco.com.

A certificate from the statutory auditor on the implementation of your Company’s Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the members.

There is no material change in the Schemes and the aforementioned schemes are in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices.

The entire report on Corporate Governance forms part of Full Annual Report.

ABRIDGED ANNUAL REPORT

In terms of the provision of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts of Companies) Rules, 2014 and Regulation 36 of the Listing Regulations, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the Financial Statements and Directors’ Report and other documents to the shareholders for the Financial Year 2017-18, under the relevant laws.

The Abridged Annual Report is being circulated to the members excluding the ‘Annual Report on CSR Activities’, ‘Remuneration Philosophy/ Policy’, ‘Secretarial Audit Report’, ‘Extract of Annual Return’, ‘Dividend Policy’, ‘Full Report on Corporate Governance and Shareholders’ Information’.

Members who desire to obtain the full version of the Annual Report may write to the Company Secretary at the registered office. Full version of the Annual Report is also available on the Company’s website www.hindalco.com.

DIRECTORS’ RESPONSIBILITY STATEMENT

As stipulated in Section 134(3)(c) of the Companies Act, 2013 “the Act”, your Directors subscribe to the “Directors’ Responsibility Statement” and confirm that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b) the accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2018 and of the profit of your company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a going concern basis;

e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f) your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 is set out in Annexure-II to the Full and Abridged Annual Report.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 “the Act”, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors’ Report, as an addendum thereto. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company. Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure-III to the Full and Abridged Annual Report.

DIRECTORS:

Board constitution and changes:

Mr. Kumar Mangalam Birla (DIN: 00012813) will retire from office by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for reappointment.

Mr. Kumar Mangalam Birla has given required declaration under Companies Act, 2013.

Brief resume of the director being reappointed form part of the notice of the ensuing Annual General Meeting.

Mr. Jagdish Khattar ( DIN: 00013496) has resigned as an Independent Director w.e.f 4^th May 2018 due to his personal commitment.

Ms. Alka Bharucha (DIN:00114067) is appointed as an Independent Director on the Board of the Company w.e.f 11^th July, 2018. Ms. Bharucha has given the required declarations under the Companies Act, 2013 and Listing Regulations.

The Board recommends the reappointment of Mr. Kumar Mangalam Birla and appointment of Ms. Alka Bharucha. Items seeking your approval is included in the Notice convening the Annual General Meeting.

Independent Directors Statement:

Independent Directors on your Company’s Board have submitted declarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the Listing Regulations.

Policy on appointment and remuneration of Directors and Key Managerial Personnel:

The Nomination and Remuneration Committee has formulated the remuneration policy of your company which is attached as Annexure-IV to the Full Annual Report.

Meetings of the Board:

The Board of Directors of your Company met five times during the year, details of which are given in the Corporate Governance Report forming part of the Full Annual Report.

Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Directors has carried annual performance evaluation of Board, Independent Directors, Non Executive Directors, Executive Directors, Committee and Chairman of the Board.

The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, the performance of individual directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, external knowledge etc.

The evaluation exercise has been carried out by the Board members on the basis of evaluation templates for Board, Independent Directors, Non Executive Directors, Executive Directors, Committees and Chairman of the Board. The template had various questions to be replied by the directors on aforesaid parameters. The Nomination and Remuneration Committee evaluated the performance on the basis of the response received from the Directors. Similarly, the Independent Directors evaluated the performance of non independent directors, Chairman and assessed the quality, quantity and flow of information between company management and Board.

Outcome of the evaluation exercise:

1. The Board as a whole performed satisfactorily.

2. Independent Directors are rated high in understanding the Company’s business and expressing their view during the Board meetings.

3. The Non Executive Directors scored well in all aspects.

4. Directors rated Executive Directors as action oriented and good in implementing Board decisions.

5. Board members rated high to the Chairman in leading the Board effectively.

6. Board members had shown satisfaction in functioning of the Committees.

AUDIT COMMITTEE:

The Audit Committee comprises of Mr. M.M. Bhagat, Mr. K.N. Bhandari, Mr. Y.P. Dandiwala, Independent Directors of your Company. Mr. Satish Pai: Managing Director and Mr. Praveen Kumar Maheshwari: Chief Financial Officer and Whole-Time Director are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of the Full Annual Report.

KEY MANAGERIAL PERSONNEL:

In terms of provisions of Section 203 of the Companies Act, 2013, Mr. Satish Pai: Managing Director, Mr. Praveen Kumar Maheshwari: Chief Financial Officer and Mr. Anil Malik: Company Secretary are the Key Managerial Personnel of your Company.

VIGIL MECHANISM:

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company’s Code of Conduct.

Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them The vigil mechanism is available on your Company’s website viz. www.hindalco.com.

AUDITORS

Statutory Auditors

M/s. Price Waterhouse & Co Chartered Accountants LLP (Registration No. 304026E/E-300009), are the Statutory Auditors of the Company who are appointed for a period of five years i.e., to hold office from the conclusion of the Fifty Eighth Annual General Meeting held in 2017 till the conclusion of the Sixty third Annual General Meeting of the Company, to be held in the Calendar year 2022, subject to ratification, if required, of their appointment by the Members at every Annual General Meeting till the Sixty-second Annual General Meeting.

The requirement to place the matter relating to appointment of the Auditors for ratification by the members at every Annual General Meeting is done away with vide notification dated 7^th May, 2018 issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of the Auditors, who were appointed in the Annual General Meeting held on 13^th September, 2017.

The observation made in the Auditor’s Report are self explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. Nanabhoy & Co., Cost Accountants, Mumbai as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31^st March, 2019, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member’s ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting the Secretarial Audit of your Company for the financial year ended 31^st March,2018. The Report of the Secretarial Auditors is annexed herewith as Annexure-V to the Full Annual Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

Your Company is committed to sustainable development. A detailed report of the Company’s initiatives and commitment to environment conservation is part of Sustainability & Business Responsibility Report forming part of the Full and Abridged Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to Financial Statements of the Full Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

In terms of the provisions of Section 135 of the Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee for the Financial year ending 31^st March 2018 were Mr. Jagdish Khattar, Independent Director, Mr. A.K. Agarwala, Non Executive Director, Mr. Satish Pai: Managing Director and Mr. D. Bhattacharya: Non Executive Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee.

Mr. Jagdish Khattar: Independent Director and Member of CSR Committee has resigned from the Board w.e.f 4^th May 2018. Mr. Y P. Dandiwala: Independent Director was inducted as a member of the CSR Committee in the meeting of the Board held on 16^th May, 2018.

Your Company also has in place a CSR Policy and the same is available on your Company’s website viz. www.hindalco.com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations.

During the financial Year 2017-18 the Company has spent Rs.31.09 Crore under Section 135 of the Companies Act, 2013 on CSR activities, which represent 2.33% of average net profits of the Company for last three financial years.

The Annual Report on CSR activities is attached as Annexure-VI to the Full Annual Report.

RISK MANAGEMENT

Pursuant to the requirement of Listing Regulations, the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/process of your company.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Risk Management Committee.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions which were on arm’s length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and Listing Regulations. All related party transactions have been approved by the Audit Committee of your Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company’s website viz. www.hindalco.com.

EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 (“the Act”) read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31^st March, 2018 is given in Annexure-VII to the Full Annual Report.

BUSINESS RESPONSIBILITY REPORT:

As per the Listing Regulations, a separate section of Business Responsibility Report forms part of the Full and Abridged Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has Internal Financial Control (IFC) framework commensurate with its size, scale and complexity of businesses. The framework has been designed to provide reasonable assurance with respect to reliable operational and financial information, complying with applicable laws, safeguarding of assets, prevention and detection of frauds & errors,executing transactions with proper authorization and ensuring compliance with company policies & procedures. The controls based on the prevailing business conditions and processes have been tested for operating effectiveness and no reportable material deficiencies in the design were observed.

The Internal Audit team develops an annual audit plan based on the risk profile of the businesses. The Internal Audit plan is approved by the Audit Committee, who also reviews compliance to the audit plan.

The Audit Committee has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements to strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee. The Audit Committee reviews the reports submitted by the Internal Auditors in each of its meeting, quarterly.

INTERNAL FINANCIAL CONTROL

Your directors confirm having laid down internal financial controls and that such internal financial controls are adequate and were operating effectively.

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES:

The financial statements of your Company’s subsidiaries and related information have been placed on the website of your Company viz. www.hindalco. com and also available for inspection during business hours at the registered office of your Company. Any Member, who is interested in obtaining a copy of financial statements of your Company’s subsidiaries, may write to the Company Secretary at the Registered Office of your Company.

In accordance with the provisions of the section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and Joint Venture is attached as Annexure-VIII to the Full and Abridged Annual Report.

The names of Companies which have become or ceased to be subsidiaries, Joint Ventures and associates are also provided in the aforesaid statement.

OTHER DISCLOSURES:

- There were no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report.

- Your Company has not issued any shares with differential voting.

- There was no revision in the financial statements.

- Your Company has not issued any sweat equity shares.

- Mr. Satish Pai is a director on the Board of Novelis Inc, wholly owned subsidiary. He is in receipt of annual fee of US$ 1,50,000 in the calendar year 2017. Mr. Praveen Kumar Maheshwari: Whole Time Director and Chief Financial Officer has not received any commission/remuneration from your Company’s subsidiaries.

- There is no change in the nature of business.

- During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2018, there were no deposits which were unpaid or unclaimed and due for repayment.

- There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

- There were no frauds reported by the Auditors u/s 143(12) of the Companies Act, 2013.

APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company’s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Satish Pai M.M. Bhagat

Managing Director Independent Director

DIN:06646758 DIN:00006245

Mumbai

Dated : July 11, 2018

---

Mar 31, 2017

Dear Shareholder,

The Directors have pleasure in presenting the 58^th Annual Report and the audited standalone and consolidated financial statements of your company for the year ended 31^st March, 2017.

FINANCIAL HIGHLIGHTS

Rs. Crore

	Standalone		Consolidated
	2016-17	2015-16	2016-17	2015-16
Revenue from Operations	39,383	36,713	1,02,631	1,01,202
Other Income	1,005	979	1,111	1,189
Profit Before Interest, Tax Depreciation and Amortisation	5,819	4,325	13,558	10,004
(PBITDA)
Depreciation	1,428	1,282	4,469	4,507
Finance Costs	2,323	2,390	5,742	5,134
Profit before Exceptional Items and Tax	2,068	653	3,348	362
Share of Equity Accounted Investments			(25)	172
Profit before Exceptional Items and Tax	2,068	653	3,323	534
Exceptional Items	85	-	(8)	(577)
Profit before Tax	2,153	653	3,315	(43)
Tax Expenses	596	99	1,433	498
Profit/ (Loss) for the period from Continuing Operations	1,557	554	1,882	(541)
Profit/ (Loss) from Discontinuing Operations	0.5	(2.0)	0.5	(161)
Profit/(Loss) for the Year	1,557	552	1,882	(702)
Other Comprehensive Income (Loss)	536	(1,373)	(18)	2,557
Total Comprehensive Income	2,093	(821)	1,864	1,855
Basic EPS - Rupees from Continuing Operations	7.55	(0.63)	9.22	(4.15)

Appropriations to Reserves

(Rs. Crore)

Appropriations	2016-17	2015-16
Opening Balance in Retained Earnings and Other Comprehensive Income	7,143	8,322
Total Comprehensive Income for the Current Year	2,093	(821)
Realised Gain/(Loss) on Equity FVTOCI recyled in Equity	-	15
Dividends paid	(239 )	(223)
Transferred to Debenture Redemption Fund	(150)	(150)
Closing Balance in Retained Earnings and Other Comprehensive Income	8,847	7,143

Dividend:

For the year ended 31^st March, 2017, the Board of Directors of your Company has recommended dividend of Rs.1.10 per equity share (Previous year Rs.1 per equity share) to equity shareholders.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme and out of the Share Capital Suspense, and before the Book Closure for payment of dividend will rank pari passu with the existing shares and shall also be entitled to receive the aforesaid dividend.

In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015, hereinafter referred to as “Listing Regulations” your Company has formulated a Dividend Distribution Policy. The Policy is given in Annexure-I to the Full Annual Report and is also accessible from your Company’s website: www.hindalco.com.

OVERVIEW AND STATE OF THE COMPANY’S AFFAIRS:

Standalone Full Year Highlights

Hindalco registered Revenues of Rs.39,383 crore for the fiscal year 2017. PBITDA (Profit before Interest, Tax, Depreciation and Amortisation) was Rs.5,819 Crore, up 35 percent compared to the previous year, supported by lower input cost, higher aluminium volumes and realization. Depreciation was up by 11 percent due to progressive capitalization. Interest expense was lower by 3 percent mainly on account of prepayment of loan. Net Profit for the fiscal year 2017 stood at Rs.1,557 crore, registering a growth of 182 percent versus previous year.

Consolidated Full Year Highlights

Hindalco’s consolidated Revenue stood at Rs.102,631 Crore for the fiscal year 2017. It attained a record consolidated EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) at Rs.13,558 crore, up 36 percent as compared to the earlier year. The robust performance was supported by stable operations across businesses. For the fiscal year 2017, net profit stood at Rs.1,882 crore.

For detailed analysis, refer Management Discussion and Analysis.

Key Initiatives

The Company successfully raised USD 500 million through Qualified Institutional Placement (QIP) in March 2017. This is the largest non-bank QIP in the last two years. There was a strong participation from FIIs and long- only investors, generating demand in excess of USD 1.5 billion (3x subscription). The QIP was priced at zero discount to the previous day’s closing share price.

In line with the purpose of the issue, the Company used the cash proceeds from QIP towards prepayment of Rs.4,505 crore of long term loan in April 2017 - till date the total prepayment stands at Rs.5,536 crore.

During the fiscal year 2017, Novelis refinanced its USD 2.5 billion Senior Notes and USD 1.8 billion Term Loan. As a result, annual cash interest savings of USD 79 million has been achieved along with an extended debt maturity profile for the senior notes.

Further, Novelis entered into a JV agreement with Kobe Steel in May 2017 to sell 50 per cent of ownership interest in Ulsan, South Korea facility for USD 315 million. This venture, named Ulsan Aluminium Limited, will provide synergies to both the high-quality partners.

During the year, Hindalco also divested its stake in Aditya Birla Minerals Limited, Australia.

HUMAN RESOURCES:

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centered around accountability is in place. We feel this is critical to enable us retain our competitive edge.

RESEARCH AND DEVELOPMENT

Your Company’s Research & Development (R&D) activities are focused on providing innovative, cost-effective and sustainable solutions to support consistent growth of business.

The R&D activities of your Company include process, product and application development, to develop short term as well as long term solutions to the issues faced by nonferrous sector, such as raw material quality, cost effective management of waste generated during processing, recovery of value from by product as well as any waste products, developing better understanding of the science of processes, reducing the specific energy consumption and carbon footprint etc. Specific programs have also been initiated to foster better understanding of the requirement of existing and prospective customers, and to provide a better service through application development, so as to increase your company’s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, enabling pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Your Company already operates two Hindalco Innovation Centres (HIC), one HIC-Alumina at Belagavi working on R&D of bauxite, alumina and specialty alumina products, and one HIC-SemiFab located at Taloja, near Mumbai, working in the area of aluminium fabricated products. In addition, your company engages the Aditya Birla Group’s corporate research and development centre, Aditya Birla Science and Technology Company Private Limited (“ABSTCPL”), for conducting R&D in select areas of work through chartered R&D projects. These are based on the domain expertise and R&D facilities available in ABSTCPL. The engagement has resulted into some patent applications, which have been and will be assigned to your company on the grant of the patent. ABSTCPL’s forte of having multidisciplinary teams of technical experts, scientists and engineers, enables your company to develop building competencies in select areas, as a long term value to business.

AWARDS & RECOGNITIONS

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse field. A selective list:

Central Logistics

Hindalco Central Logistics Cell recognised with the Economic Times Award for Supply Chain Management & Logistics and the Express Logistics & Supply Chain Leadership award for excellence in manufacturing supply chain engineering and logistics.

Mahan Aluminium

National Energy Conservation Award presented by the Bureau of Energy Efficiency, Ministry of Power, Government of India.

Rashtra Vibhushan Gold Award presented by the Foundation for Accelerated Mass Development (FAME), for exemplary initiatives in the field of sustainable livelihood for socio-economic development of the community around the unit.

Global CSR Excellence & Leadership Award for initiatives in community development.

India CSR Award towards sustainable livelihood initiatives for the rural community around the unit.

IDA Award presented for exemplary work in the field of “Primary & Adult Education.”

Aditya Aluminium

India CSR Award for initiatives under livelihood creation.

CII Eastern Region Award for Safety Health & Environment (SHE) with 3 Star Rating.

CII Eastern Region Productivity Award 2016 - First Prize for significant improvement in productivity.

Renukoot Aluminium Complex

BT-CSR Award presented by Bureaucracy Today and presented by Mr. Anant Geete, Union Minister, Ministry of Heavy Industries & Public Enterprises.

Hirakud Smelter & Power

Rashtra Vibhushan Gold Award 2016-17 for Excellence in Environment Protection presented by the Foundation for Accelerated Mass Development (FAME), New Delhi.

Environment Health & Safety (ESH) Award (2^nd Runners Up) 2016 presented to Hindalco Hirakud Power by the CII,Odisha at the 12^th State Level Competition on Best Practices in Environment, Safety and Health (ESH).

Muri Alumina

Greentech Gold Award for outstanding achievement in environment management in chemicals sector.

CII Eastern Region Award for Safety Health & Environment (SHE) with 3 Star Rating.

Taloja FRP

Silver Award presented by National Awards for Manufacturing Competitiveness (NAMC) 2016-17. Maharashtra State Energy Development Agency (MEDA) Energy Conservation Award for 2015-16.

Dahej Copper Complex

India CSR Award for continuous effort in covering a large number of beneficiaries year on year under the unit’s ‘Education for All’ initiative.

BT-CSR Excellence 2016 Award for promoting education, under Dahej’s ‘Education for All’ programme covering 69 adopted villages in Bharuch district and reaching out to 85 primary and secondary schools covering over 16,000 students.

FICCI CSR Award 2016 - Recognition for Commendable CSR Work Done by Birla Copper for Rural and Community Development.

Champion of the Champions Trophy in the “Energy Vertical” of GHKC & GreEnv Contest 2016-17.

Annual Excellence Award Certificate of Excellence 2015-16 presented by Container Corporation of India, for having achieved first position as Exporter at ICD Ankleshwer.

Belagavi Alumina

National Gold Award forManufacturing Competitiveness (NAMC) 2016 for its world class manufacturing process and efficient working methodologies.

Second prize for “Safe Boilers” in Mega industries category, awarded by Department of Factories, Government of Karnataka.

Second prize for “Best Safe Industry” in Mega industries category, awarded by Department of Factories, Government of Karnataka.

Alupuram Extrusions

CII - EXIM award for business excellence 2016 for displaying ‘Strong Commitment to Excel’ on the journey towards Business Excellence.

Gare Palma Coal Mines

Awarded various first and second prizes for Overall safety, Safety Management Plan, E&M, Ventilation, etc., and on Recovery during Zonal Safety and Rescue competitions, organised by the Director General of Mines Safety.

Jharkhand and Chhattisgarh Bauxite Mines

Amtipani Bauxite Mines awarded 4 Star Rating for sustainable development at the National Mining Conclave held at Raipur, presented by Ministry of Mines & Steel, Government of India.

Samri Mines awarded National Safety Award -1^st Prize (President’s award) for longest accident free period and Responsible Business Award -CSR (in organizational category).

Several first and second prizes awarded to various mines for Overall Safety performance, General Working, Engineering (Electrical & Mechanical) and housekeeping, Publicity & Propaganda, Environmental Pollution Control & Plantation, Mine Survey DGMS. First and second prizes were also awarded to various mines on Afforestation, Reclamation & Rehabilitation, Overall Performance etc., by the Indian Bureau of Mines.

West Coast Bauxite Mines

Dhangarwadi Mine won three prizes during the Mines Safety Week, including first prize for overall performance, systematic mines working, drilling, blasting & haul road and second prize for Engineering/ Maintenance. Prizes for mineral conservation, publicity & propaganda during Mines, Environment & Mineral Conservation Week programmes.

Quality Circle Awards

Teams from Hindalco units, Renukoot, Renusagar, Dahej, Hirakud, Taloja among others, earned highest level awards at the Regional and National Quality Circle Conventions, including Gold Awards and Excellence and Par Excellence awards.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements for the year ended 31^st March, 2017 have been prepared by your Company in accordance with the provisions of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of Listing Regulations and forms part of the full Annual Report.

EMPLOYEE STOCK OPTION SCHEMES:

ESOS - 2006

During the year ended 31^st March, 2017, the Company has allotted 4,43,476 fully paid-up equity share of Rs.1/- each of the Company (Previous year 3,185) on exercise of options under ESOS 2006.

ESOS - 2013:

During the year ended 31^st March, 2017, the Company has allotted 9,97,195 fully paid-up equity share of Rs.1/- each of the Company (Previous year 2,193) on exercise of options under ESOS 2013.

The details of Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company’s website viz. www. hindalco.com.

A certificate from the statutory auditor on the implementation of your Company’s Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the members.

There is no material change in the scheme and scheme is in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices.

The entire report on Corporate Governance forms part of full Annual Report.

ABRIDGED ANNUAL REPORT

In terms of the provision of Section 136(1) of the Companies Act, 2013, Rule 10 of Companies (Accounts of Companies) Rules, 2014 and Regulation 36 of the Listing Regulations, the Board of Directors has decided to circulate the Abridged Annual Report containing salient features of the balance sheet and statement of profit and loss and other documents to the shareholders for the Financial Year 2016-17, under the relevant laws.

The Abridged Annual Report is being circulated to the members excluding the ‘Annual Report on CSR Activities’, ‘Remuneration Philosophy/ Policy’, ‘Secretarial Audit Report’, ‘Extract of Annual Return’, ‘Dividend Policy’ ‘Full Report on Corporate Governance and Shareholders’ Information’.

Members who desire to obtain the full version of the Annual Report may write to the Company Secretary at the registered office. Full version of the Annual Report is also available on the Company’s website www.hindalco.com.

DIRECTORS’ RESPONSIBILITY STATEMENT

As stipulated in Section 134(3)(c) of the Companies Act, 2013 “the Act”, your Directors subscribe to the “Directors’ Responsibility Statement” and confirm that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b) the accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31^st March, 2017 and of the profit of your company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a going concern basis;

e) your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f) your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules,2014 is set out in Annexure-II to the full and Abridged Annual Report.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 “the Act”, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors’ Report, as an addendum thereto. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Office of your Company. Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure-III to the full and Abridged Annual Report.

DIRECTORS:

Board constitution and changes:

Mr. A. K. Agarwala (DIN: 00023684) will retire from office by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. Mr. A. K. Agarwala has given required declaration under Companies Act, 2013.

The Board recommends the reappointment of Mr. A. K. Agarwala. Item seeking your approval is included in the Notice convening the Annual General Meeting.

Brief resume of the director being re-appointed form part of the notice of the ensuing Annual General Meeting.

Independent Directors Statement:

Independent Directors on your Company’s Board have submitted declarations of independence to the effect that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) of the Listing Regulations.

Policy on appointment and remuneration of Directors and Key Managerial Personnel:

The Nomination and Remuneration Committee has formulated the remuneration policy of your company which is attached as Annexure-IV to the full Annual Report.

Meetings of the Board:

The Board of Directors of your Company met 6 times during the year details of which are given in the Corporate Governance Report forming part of the full Annual Report.

Annual Evaluation:

Pursuant to the provisions of the Companies Act,2013 and Listing Regulations, the Directors has carried annual performance evaluation of Board, Independent Directors, Non executive Directors, Executive Directors, Committee and Chairman of the Board.

The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, the performance of individual directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, external knowledge etc.

Board members have evaluated Independent Directors, Non executive Directors, Executive Directors, Committee, Board and Chairman. The result of evaluation was satisfactory and meets the requirements of the Company. Board fully agreed and rated 100% on its functioning, skill sets and working atmosphere. Independent Directors scored well on expressing their views and in understanding the Company and its requirements. Non-Executive Directors scored well in understanding the Company and its requirements and keep themselves current on the areas to be discussed. Executive Directors are action oriented and ensures timely implementation of the Board decisions. Board is completely satisfied with the functioning of various Committees. Board has full faith in the Chairman in leading the Board effectively and ensuring contribution from all its members.

AUDIT COMMITTEE:

The Audit Committee comprises of Mr. M.M. Bhagat, Mr. K.N. Bhandari, Mr. Y.P. Dandiwala, Independent Directors of your Company. Mr. Satish Pai: Managing Director and Mr. Praveen Kumar Maheshwari: Chief Financial Officer and Whole-Time Director are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of the full Annual Report.

KEY MANAGERIAL PERSONNEL:

In terms of provisions of Section 203 of the Companies Act, 2013, Mr. Satish Pai: Managing Director, Mr. Praveen Kumar Maheshwari: Chief Financial Officer and Mr. Anil Malik: Company Secretary are the Key Managerial Personnel of your Company.

VIGIL MECHANISM:

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company’s Code of Conduct. Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairman of the Audit Committee is available.

The vigil mechanism is available on your Company’s website viz. www.hindalco.com.

AUDITORS Statutory Auditors

M/s. Singhi & Co are the Statutory Auditors of the Company. Pursuant to the provisions of the Companies Act, 2013, M/s Singhi & Co were appointed as the auditors for a period of three years i.e. from the conclusion of the fifty-fifth Annual General Meeting until the conclusion of the fifty eighth Annual General Meeting of the Company to be held in the calendar year 2017. Pursuant to the provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors in the meeting held on 30^th May, 2017, on the recommendation of the Audit Committee, appointed M/s. Price Waterhouse & Co. Chartered Accountants LLP (Registration No. 304026E/E-300009), as the Statutory Auditors of the Company in place of M/s Singhi & Co, the retiring Statutory Auditors, for a period of five years i.e., to hold office from the conclusion of this Annual General Meeting till the conclusion of the Sixty third Annual General Meeting of the Company, to be held in the year 2022, subject to ratification of their appointment by the Members if required at every Annual General Meeting till the Sixty-second Annual General Meeting.

Resolution seeking your approval is included in the Notice convening the Annual General Meeting.

The observation made in the Auditor’s Report are self explanatory and thereofore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. Nanabhoy & Co., Cost Accountants, Mumbai as Cost Auditors, to conduct the cost audit of your Company for the financial year ending 31^st March, 2018, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member’s ratification for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed BNP & Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting the Secretarial Audit of your Company for the financial year ended 31^st March, 2017. The Report of the Secretarial Auditors is annexed herewith as Annexure-V to the full Annual Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

Your Company is committed to sustainable development. A detailed report of the Company’s initiatives and commitment to environment conservation is part of Sustainability & Business Responsibility Report forming part of the full and Abridged Annual Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans, Guarantee and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to Financial Statements of the full Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

In terms of the provisions of Section 135 of the Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee which is chaired by Mrs. Rajashree Birla. The other Members of the Committee are Mr. Jagdish Khattar, Independent Director, Mr. A.K. Agarwala, Non Executive Director, Mr. Satish Pai: Managing Director and Mr. D. Bhattacharya: Non Executive Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee. Your Company also has in place a CSR Policy and the same is available on your Company’s website viz. www.hindalco.com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations. During the financial Year 2016-17 the Company has spent Rs.28.36 Crores under Section 135 of the Companies Act, 2013 on CSR activities , which represent 2.70 % of average net profits of the Company for last three financial years.

The Annual Report on CSR activities is attached as Annexure-VI to the full Annual Report.

RISK MANAGEMENT

Pursuant to the requirement of Listing Regulations, the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/process of your company.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Risk Management Committee.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year, your Company entered into related party transactions which were on arm’s length basis and in the ordinary course of business. There are no material transactions with any related party as defined under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and Listing Regulations. All related party transactions have been approved by the Audit Committee of your Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company’s website viz. www.hindalco.com.

EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 (“the Act”) read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the financial year ended 31^st March, 2017 is given in Annexure-VII to the full Annual Report.

BUSINESS RESPONSIBILITY REPORT

As per Listing Regulations, a separate section of Business Responsibility Report forms part of the full and Abridged Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit is defined by the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal auditors, the process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL FINANCIAL CONTROL

Your directors confirm having laid down internal financial controls and that such internal financial controls are adequate and were operating effectively

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES:

The financial statements of your Company’s subsidiaries and related information have been placed on the website of your Company viz. www.hindalco. com and also available for inspection during business hours at the registered office of your Company. Any Member, who is interested in obtaining a copy of financial statements of your Company’s subsidiaries, may write to the Company Secretary at the Registered Office of your Company.

In accordance with the provisions of the Section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and financial position of each of the subsidiaries, associates and Joint Venture is attached as Annexure-VIII to the full and Abridged Annual Report.

The names of Companies which have become or ceased to be subsidiaries, Joint Ventures and associates are also provided in the aforesaid statement.

OTHER DISCLOSURES:

- There were no material changes and commitments affecting the financial position of your Company between end of financial year and the date of report.

- Your Company has not issued any shares with differential voting.

- There was no revision in the financial statements.

- Your Company has not issued any sweat equity shares.

- Mr. Satish Pai is a director on the Board of Novelis Inc, wholly owned subsidiary. He is in receipt of annual fee of US$ 150000 from Novelis Inc in the calendar year 2016. Mr. Praveen Kumar Maheshwari: Whole-Time Director and Chief Financial Officer has not received any commission/ remuneration from your Company’s subsidiary Companies.

- There is no change in the nature of business.

- During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2017, there were no deposits which were unpaid or unclaimed and due for repayment.

- There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

- There were no frauds reported by the Auditors u/s 143(12) of the Companies Act, 2013.

APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company’s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Satish Pai M.M. Bhagat

Managing Director Independent Director

DIN:06646758 DIN:00006245

Mumbai

Dated : 30^th May, 2017

---

Mar 31, 2015

Dear Shareholder,

The Directors have pleasure in presenting the 56th Annual Report and the audited standalone and consolidated financial statements of your company for the year ended 31st March, 2015.

FINANCIAL HIGHLIGHTS:

Rs. Crore

Standalone Consolidated

FY15 FY14 FY15 FY14

Revenue from Operations 34,525 27,851 1,04,281 87,695

Other Income 882 1,124 1,105 1,017

PBITDA 4,299 3,616 10,049 9,303

Depreciation 837 823 3,591 3,553

PBIT 3,462 2,793 6,458 5,751

Finance Cost 1,637 712 4,178 2,702

Profit before Exceptional Items and Tax 1,825 2,081 2,280 3,049

Exceptional Items 578 396 1,940 396

Profit before tax 1,247 1,685 340 2,653

Tax Expenses 322 272 256 525

Profit before Minority Interest and Share in profit/(loss) of 925 1,413 84 2,128 Associates

Minority Interest in Profit/ (Loss) (596) 20

Share in Profit/(loss) of Associates 175 67

Net Profit 925 1,413 854 2,175

EPS (Basic) - Rs. 4.48 7.09 4.14 10.91

Note: Certain descriptions and /or fi gures of earlier periods have been changed/regrouped to conform to current practices

The amounts proposed to be carried to reserves Standalone Accounts:

(Rs. Crore)

As at As at 31/03/2015 31/03/2014

Surplus in the Statement of Profit and Loss

Balance as at the 750.00 750.00 beginning of the year

Add: Profit for the year 925.16 1,413.33

Less: Transferred to (150.00) (150.00) Debenture Redemption Reserve

Less: Dividend on Equity (206.52) (206.46) Shares

Less: Dividend (39.29) (0.90) Distribution Tax

Less: Transferred to - (1,055.97) General Reserve

Balance as at the end of 1,279.35 750.00 the year

Dividend:

For the year ended 31st March,2015, the Board of Directors of your Company have recommended dividend of Re. 1 per share (Previous year Rs.1 per share) to equity shareholders aggregating to Rs. 246.11 crore (Previous year Rs. 241.55 Crore) including Dividend Distribution Tax.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme before the Book Closure for payment of dividend will rank pari passu with the existing shares and shall also be entitled to receive the aforesaid dividend.

OVERVIEW AND STATE OF THE COMPANY''S AFFAIRS:

Standalone results

For the year ended March 31, 2015, net sales are up by 24% with Profi t before depreciation, interest and tax growth at 19%.

Depreciation stood at Rs. 837 crore compared to Rs. 823 crore in the previous year, refl ecting a change in the manner of calculation of depreciation w.e.f. 1st April, 2014 by considering revised useful life of assets to bring it in line with Schedule II of the Companies Act, 2013.

The increase in Finance cost from Rs. 712 crore in FY14 to Rs. 1,637 crore in FY15 refl ects the lower capitalisation of finance charges in line with progressive commissioning of facilities.

Profit before exceptional items at Rs. 1,825 crore was lower by 12% compared to FY14 resulting from higher interest.

Exceptional Items (Net) of Rs. 578 crore include:

(a) Rs. 563 crore towards additional levy of Rs. 295/- per MT on extracted coal for the period up to 30th September, 2014.

(b) Rs. 258 crore towards provision for diminution in the carrying value of investments in Aditya Birla Minerals Limited, Australia, a subsidiary of the Company.

(c) Reversal of Rs. 29 crore out of the liability provided for in the previous year on account of the UP Tax on Entry of Goods into Local Areas Act, 2007 (UP Entry Tax), following completion of assessment.

(d) Foreign exchange gain of Rs. 361 crore in connection with Rs.1,394 crore received from A V Minerals (Netherlands) N. V., a wholly owned subsidiary of the Company, towards return of capital by reducing nominal value of shares.

(e) Rs. 147 crore liability provided towards Renewable Power Obligations (RPO) under the Electricity Act, 2003.

Net profi t stood at Rs. 925 crore compared to Rs. 1,413 crore in previous year.

Consolidated results

The Consolidated Revenue and Profi t before Depreciation, Interest and Taxes grew by 19% and 8% respectively, in comparison to the last year''s corresponding figures.

Net profi t was lower at Rs. 854 Crore, because of higher interest cost and exceptional items. The exceptional items (in addition to items included in standalone as mentioned above) mainly relate to a sinkhole incident at one of the subsidiary companies in Australia and change in macro-economic conditions. This has resulted in the impairment of fi xed assets, write down in value of inventories and expenses incurred towards restoration of operations.

Novelis Inc. (a wholly owned subsidiary)

Revenue of Fiscal 2015 increased 14% to $11.1 billion compared to $9.8 billion in fi scal 2014. Revenue growth was driven by record shipments of rolled aluminium products of 3,050 kilotonnes in fi scal year 2015. Higher average metal prices in fi scal year 2015 also contributed to the increase in revenues.

Novelis reported net income of $148 million for fi scal year 2015, a 42% increase from $104 million reported in fi scal 2014. Excluding certain tax-effected items, net income increased four percent to $161 million in fi scal 2015.

Adjusted EBITDA grew 2% to $902 million in fi scal 2015 compared to the $885 million reported in fi scal 2014. The increase was primarily driven by higher shipments, favourable product mix due to a strategic shift to grow automotive shipments and cost benefi ts from using a higher percentage of recycled metal inputs. Partially offsetting these gains were higher costs associated with the start-up and support of new capacity, lower pricing in some Asian markets, as well as unfavourable foreign exchange and metal price lag.

The company reported free cash flow of $71 million for the year, an $87 million increase over the prior year. Novelis generated positive free cash fl ow for fi scal year 2015 as a result of strong operating results, lower capital spending, and structural reductions to working capital, despite volatile metal prices and higher working capital requirements as it ramped up new assets.

At the end of the fi scal 2015, the company reported liquidity of $1.1 billion.

Utkal Alumina International Limited (UAIL) (a wholly-owned subsidiary)

The Alumina Refi nery at UAIL produced 1 million ton of Alumina in FY15 compared to 0.2 million ton in FY14. Of this, 288 kilotonnes of Alumina was exported, the balance was supplied to smelters at Hindalco. The cost of production of Alumina at UAIL is comparable to world benchmark cost of production.

UAIL reported an EBITDA of Rs. 261 crore. Its Net loss stood at Rs. 496 crore after interest charge of Rs. 519 crore and Depreciation of Rs. 238 crore.

Aditya Birla Minerals Limited (ABML) (a 51% subsidiary)

Aditya Birla Minerals Limited, Australia reported a net loss of AUD 219.7 million in FY15 compared to AUD 0.2 million in FY14. The sinkhole incident in March 2014 resulted in a cost of approximately $22m during the suspension period. Its Copper production volume after recommencement of operations was lower and Impairment charges of ~$219 million had an adverse impact on the Company''s fi nancials in FY15.

The suspension of operations for more than 4.5 months in FY15 resulted in signifi cantly lower operating performance compared to the previous year FY14. The Nifty Copper Sulphide Concentrator produced 12,698 metric tonnes of copper in concentrate as compared to 44,071 metric tonnes of contained copper the previous year, a decrease of 71%. The management is now focussed on implementation of various cost optimisation initiatives and rationalisation of capex spending.

ABML has resolved to undertake a review of the Company''s strategic options with a view to maximise value for all shareholders (Strategic Review). The Strategic Review will consider corporate and operational strategies, and include a review of ownership options available to the Company.

Business Reconstruction Reserve:

The Company had formulated a scheme of fi nancial restructuring under Sections 391 to 394 of the Companies Act 1956 ("the Scheme") between the Company and its equity shareholders approved by the High Court of judicature of Bombay to deal with various costs associated with its organic and inorganic growth plan. Pursuant to this, a separate reserve account titled as Business Reconstruction Reserve ("BRR") was created during the year 2008-09 by transferring balance standing to the credit of Securities Premium Account of the Company for adjustment of certain expenses as prescribed in the Scheme. Accordingly the Company had transferred Rs. 8,647.37 crore from Securities Premium Account to BRR and till 31st March, 2014, Rs. 153.04 crore and Rs. 2,068.50 crore have been adjusted against BRR in standalone and consolidated accounts respectively. During the year, following expenses has been adjusted with BRR in both accounts:

(a) Impairment loss of Rs. 62.29 crore (Net of deferred tax Rs. 32.97 crore) arising on deteriorating operating performance in one of its cash generating unit of Aluminium Business.

(b) Provision of Rs. 35.00 crore towards diminution in value of investment of Mahan Coal Limited, joint venture of the Company, and Tubed Coal Mines Limited, subsidiary of the Company, made following de-allocation of coal blocks by the Hon''ble Supreme Court.

CORPORATE DEVELOPMENTS:

There are no signifi cant and material orders passed by the regulators or courts or tribunals impacting the going concern status of the Company.

The Supreme Court of India by its judgment dated 25th August, 2014 read with its Order dated 24th September, 2014 cancelled 204 coal blocks which had been allocated earlier for the purposes of mining coal for captive consumption. These include three Coal blocks allotted to your Company jointly with others, viz. Tubed Coal Block, Mahan Coal Block, Talabira II/III coal block and one Coal block allotted to your Company i.e Talabira I Coal block in Orissa. No mining activity had commenced at Tubed, Mahan and Talabira II & III Coal Blocks.

Subsequent to the Supreme Court judgment, the Central Government promulgated Ordinances dated 21st October, 2014 and 26th December, 2014 for allotment and auction of 204 coal blocks. The Ministry of Coal has also framed Rules u/s 29 of The Coal Mines (Special Provision) Ordinance, 2014 and notifi ed on 11th December, 2014 the auction and allotment of all the above mentioned coal blocks. Your Company participated in the e-auction conducted by the Central Government for allocation of the coal blocks and has been awarded the Gare Palma IV/4 and Gare Palma IV/5 coal mines situated in Chhattisgarh, which has about 11 Million Tonnes and about 41 Million Tonnes of coal reserve respectively, Kathautia Coal Mine in Jharkhand which has about 26 Million Tonnes of coal reserve and Dumri Coal Mine in Jharkhand which has about 46 Million Tonnes of coal reserve.

Commercial production from the mines is expected to commence in Q2 of FY16. The primary consideration for obtaining the mines is to ensure your Company''s coal security.

HUMAN RESOURCES:

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centred around accountability is in place. We feel this is critical to enable us retain our competitive edge.

RESEARCH AND DEVELOPMENT

Your Company''s Research & Development (R&D) activities are focused on providing innovative, cost-effective and sustainable solutions to support consistent growth of business.

The R&D activities of your Company include process, product and application development, to develop short term as well as long term solutions to the issues faced by nonferrous sector, such as raw material quality, cost effective management of waste generated during processing, recovery of value from by product as well as any waste products, developing better understanding of the science of processes, reducing the specifi c energy consumption and carbon footprint etc. Specifi c programs have also been initiated to foster better understanding of the requirement of existing and prospective customers, and to provide a better service through application development, so as to increase your company''s market share in the chosen market space. Technical competencies developed by your company will go a long way in terms of quick absorption of technologies, enabling pushing boundaries of our processes, so as to increase the economic performance and improve our new product/ new application pipeline to address the impending market opportunities.

Your company already operates two Hindalco Innovation Centres (HIC), one HIC-Alumina at Belgaum working on R&D of bauxite, alumina and specialty alumina products, and one HIC-SemiFab located at Taloja, near Mumbai, working in the area of aluminium fabricated products. In addition, your company engages the Aditya Birla Group''s corporate research and development centre, Aditya Birla Science and Technology Company Private Limited ("ABSTCPL"), for conducting R&D in select areas of work through chartered R&D projects. These are based on the domain expertise and R&D facilities available in ABSTCPL. The engagement has resulted into some patent applications, which have been and will be assigned to your company on the grant of the patent. ABSTCPL''s forte of having multi-disciplinary teams of technical experts, scientists and engineers, enables your company to develop building competencies in select areas, as a long term value to business.

AWARDS & RECOGNITIONS

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse fi elds. A selective list:

1. Aditya Aluminium wins Kalinga Safety Award for Best Practices in Safety & CSR, presented at the Odisha State Safety Conclave.

2. Utkal Alumina International Limited wins the Think Media Best CSR Case Study Award 2014 on the theme of "Access to Quality Health Care Services".

3. Hirakud wins Greentech CSR Silver Award 2014 for its initiatives in Sustainable Livelihood in and around the unit location.

4. Hirakud Smelter wins CII Easter Region Quality Award 2014-15 (Certifi cate of Appreciation) in the large scale category.

5. Birla Copper Dahej wins Greentech CSR Silver Award 2014 for Education Upliftment in 85 surrounding Government schools.

6. Birla Copper Dahej wins Greentech Environment Gold Award 2014 for continual sustainable development approach.

7. Birla Copper Dahej wins Greentech CSR Silver Award 2014 for outstanding achievement in Safety Management System.

8. Birla Copper Dahej wins 2nd Runners Up Award & Advocacy Award at the All India Kaizen Competition organized by Baroda Productivity Council.

9. Taloja wins Greentech Safety Silver Award 2014 for excellence in Fire & Safety Management.

10. Taloja wins Greentech Environment Silver Award 2014 for continual sustainable development approach.

11. Taloja wins CII-EXIM Bank Award (Commendation Certifi cate) 2014, for Strong Commitment to Excel.

12. Mouda Works received First Prize for Best Safety Practice in a Competition organized by the National Safety Council, Vidharba Action Centre in collaboration with Directorate, Industrial Safety & Health - Government of Maharashtra.

13. Maliparbat Mines wins awards in Training, OHS, Welfare & Amenities, Safety Performance & Consciousness during the Odisha Metalliferrous Mines Safety Week programme.

14. Teams from Renukoot, Renusagar, Hirakud, Dahej win at the National level Quality Circle Conventions.

15. Belur participant wins First Prize under Trade Electrician at the National level Work Skills Competition.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements have been prepared by your Company in accordance with the provisions of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards and the provisions of the listing agreement with the Stock Exchanges and forms part of the Annual Report.

EMPLOYEE STOCK OPTION SCHEMES:

ESOS - 2006

During the year ended 31st March, 2015, the Company has allotted 373,666 fully paid-up equity share of Rs. 1/- each of the Company (Previous year 4,800) on exercise of options under ESOS 2006 for which the Company has realised Rs. 3.83 crore (Previous year Rs. 0.05 crore) as exercise money. The weighted average share price at the exercise date was Rs. 168.73 per share (Previous yearRs. 115.20).

ESOS - 2013:

During the year ended 31st March, 2015, the Company has allotted 18,848 fully paid-up equity share of Rs. 1/- each of the Company (Previous year Nil) on exercise of options under ESOS 2013 for which the Company has realised Rs. 0.22 crore (Previous year Nil) as exercise money. The weighted average share price at the exercise date was Rs. 154.54 per share (Previous year NIL).

The details of Stock Options and Restricted Stock Units granted under the above mentioned Schemes are available on your Company''s website viz. www. hindalco.com.

A certificate from the statutory auditor on the implementation of your Company''s Employees Stock Option Schemes will be placed at the ensuing Annual General Meeting for inspection by the members.

CORPORATE GOVERNANCE

Your Directors reaffi rm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices and has implemented all of its stipulations.

As required by Clause 49 of the Listing Agreement of Stock Exchanges, a separate section on Corporate Governance, together with a certifi cate from your Company''s statutory auditors, forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 134(3)(c) of the Companies Act, 2013 "the Act", your Directors subscribe to the "Directors'' Responsibility Statement" and confi rm that:

a) in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b) the accounting policies selected have been applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March,2015 and of the profi t of your company for that period;

c) proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on a going concern basis;

e) your Company had laid down internal fi nancial controls and that such internal fi nancial controls are adequate and were operating effectively;

f) your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE:

The information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Companies (Accounts) Rules,2014 is set out in Annexure-I to this Report.

PARTICULARS OF EMPLOYEES:

In accordance with the provisions of Section 197(12) of the Companies Act,2013 "the Act" read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company excluding the aforesaid information about the employees. Any Member, who is interested in obtaining these particulars about employees, may write to the Company Secretary at the Registered Offi ce of your Company.

Disclosures pertaining to remuneration and other details as required under section 197(12) read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as Annexure-II.

DIRECTORS:

Board constitution and changes:

The Board of Directors of the Company had appointed existing Independent Directors viz. Mr. M.M. Bhagat, Mr. N.J. Jhaveri, Mr. K.N. Bhandari, Mr. Jagdish Khattar and Mr. Ram Charan as Independent Directors under the Companies Act, 2013 for a term of fi ve years which was also approved by the members in the Annual General Meeting held on 24th September, 2014.

All Independent Directors have given declarations that they meet the critera of Independence as laid down under Section 149(6) of the Companies Act,2013 and Clause 49 of the Listing Agreement.

At the same Annual General Meeting Mr. A.K. Agarwala and Smt. Rajashree Birla were reappointed as the Directors of the Company.

In the Financial Year 2014-15, our Independent Director Mr. C.M. Maniar passed away, hence ceased to be a Director w.e.f 29th June, 2014.

Mr. Kumar Mangalam Birla and Mr. Satish Pai retire from offi ce by rotation, and being eligible, offer themselves for reappointment. Brief resumes of the directors being reappointed form part of the notice of the ensuing Annual General Meeting.

Policy on appointment and remuneration of Directors and Key Managerial Personnel:

The Nomination and Remuneration Committee has formulated the remuneration policy of your company which is attached as Annexure-III to this Report.

Meetings of the Board:

The Board of Directors of your Company met 8 times during the year details of which are given in the Corporate Governance Report forming part of Annual Report.

Annual Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Directors has carried annual performance evaluation of Board, Independent Directors, Non Executive Directors, Executive Directors, Committee and Chairman of the Board. The Nomination and Remuneration Committee approved the evaluation framework and during the year, the fi rst evaluation cycle was completed by the Company.

The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, the performance of individual directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, external knowledge etc.

Board members were requested to evaluate Independent Directors, Non executive Directors, Executive Directors, Committee and Chairman of the Board. The results of evaluation were shared with the Board of Directors.

AUDIT COMMITTEE:

The Audit Committee comprises of Mr. M.M. Bhagat, Mr. K.N. Bhandari, Mr. N.J. Jhaveri, Independent Directors of your Company. Mr. D. Bhattacharya: Managing Director, Mr. Satish Pai: Deputy Managing Director and Mr. Praveen Kumar Maheshwari: Chief Financial Offi cer are the permanent invitees. Further details relating to the Audit Committee are provided in the Corporate Governance Report forming part of this Annual Report.

KEY MANAGERIAL PERSONNEL:

In terms of provisions of Section 203 of the Companies Act,2013, Mr. D. Bhattacharya: Managing Director, Mr. Satish Pai: Deputy Managing Director, Mr. Praveen Kumar Maheshwari : Chief Financial Offi cer and Mr. Anil Malik: Company Secretary are the Key Managerial Personnel of your Company.

VIGIL MECHANISM:

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your Company''s Code of Conduct. Adequate safeguards are provided against victimisation to those who avail of the mechanism and direct access to the Chairman of the Audit Committee in exceptional cases is provided to them.

The vigil mechanism is available on your Company''s website viz. www.hindalco.com.

AUDITORS

Statutory Auditors

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014,, M/s Singhi & Co, Chartered Accountants were appointed as Statutory Auditors of the Company from the conclusion of fi fty fi fth Annual General Meeting held on 24th September,2014, until the conclusion of fi fty-eighth Annual General meeting to be held in the calendar year 2017, subject to ratifi cation of their appointment at every Annual General Meeting.

Resolution seeking your ratifi cation is included in the Notice convening the Annual General Meeting. The observation made in the Auditor''s Report are self explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

Cost Auditors

In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company have on the recommendation of the Audit Committee, appointed M/s. Nanabhoy & & Co., Cost Accountants, Mumbai as Cost Auditors, to conduct the cost audit of your Company for the fi nancial year ending 31st March, 2016, at a remuneration as mentioned in the Notice convening the Annual General Meeting. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratifi cation. Accordingly, a resolution seeking Member''s ratifi cation for the remuneration payable to Cost Auditors forms part of the Notice of the ensuing Annual General Meeting.

Secretarial Auditors

Pursuant to provisions of Section 204 of the Companies Act,2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed BNP& Associates, Company Secretaries, Mumbai as Secretarial Auditor for conducting the Secretarial Audit of your Company for the financial year ended 31st March,2015. The Report of the Secretarial Auditors is annexed herewith as Annexure-IV.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

Your Company is committed to sustainable development. A separate chapter in this report deals at length with your Company''s initiatives and commitment to environment conservation.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 are given in the notes to Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY:

In terms of the provisions of Section 135 of the Companies Act, 2013 ("the Act") read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which is chaired by Mrs. Rajashree Birla.

The other Members of the Committee are Mr. N.J. Jhaveri, Independent Director, Mr. A.K. Agarwala, Non Executive Director and Mr. D. Bhattacharya, Managing Director. Dr. Pragnya Ram, Group Executive President, Corporate Communication & CSR is a permanent invitee to the Committee. Your Company also has in place a CSR Policy and the same is available on your Company''s website viz. www.hindalco.com. The Committee recommends to the Board activities to be undertaken during the year.

Your Company is a caring corporate citizen and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages around plant locations.

The Annual Report on CSR activities is attached as Annexure-V forming part of this report.

RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted Risk Management Committee, which is mandated to review the risk management plan/process of your company.

Risk evaluation and management is an ongoing process within the Organization. Your Company has comprehensive risk management policy which is periodically reviewed by the Risk Management Committee.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

During the fi nancial year, your Company entered into related party transactions which were on arm''s length basis and in the ordinary course of business. There are no material transactions with any related party as defi ned under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company''s website viz. www.hindalco.com.

EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 ("the Act") read with the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of your Company for the fi nancial year ended 31st March, 2015 is given in Annexure-VI to this report.

BUSINESS RESPONSIBILITY REPORT:

As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate section of Business Responsibility Report forms part of this Annual Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Your Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defi ned by the Audit Committee.

The Internal Audit Department monitors and evaluates the effi cacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal auditors, the process owners undertake corrective action in their respective areas and thereby strengthen the controls. Signifi cant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

INTERNAL FINANCIAL CONTROL

Your directors confi rm having laid down internal fi nancial controls and that such internal fi nancial controls are adequate and were operating effectively

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES:

The fi nancial statements of your Company''s subsidiaries and related information have been placed on the website of your Company viz. www.hindalco. com and also available for inspection during business hours at the registered offi ce of your Company. Any Member, who is interested in obtaining a copy of fi nancial statements of your Company''s subsidiaries, may write to the Company Secretary at the Registered Offi ce of your Company.

In accordance with the provisions of the section 129 (3) of the Act, read with the Companies (Accounts) Rules, 2014, a report on the performance and fi nancial position of each of the subsidiaries, associates and Joint Venture is attached as Annexure-VII to this Report.

The names of Companies which have become or ceased to be subsidiaries, Joint Ventures and associates are also provided in the aforesaid statement.

OTHER DISCLOSURES:

— There were no material changes and commitments affecting the fi nancial position of your Company between end of fi nancial year and the date of report.

— Your Company has not issued any shares with differential voting.

— There was no revision in the fi nancial statements.

— Your Company has not issued any sweat equity shares.

— Mr. D. Bhattacharya and Mr. Satish Pai are directors on the Board of Novelis Inc, wholly owned subsidiary. They are in receipt of annual fee of US$ 1,55,000 and US$ 1,50,000 respectively in the calendar year 2014.

— There was no change in the nature of business.

— During the year under review, your Company has not accepted any fi xed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2015, there were no deposits which were unpaid or unclaimed and due for repayment.

Further, as the Company had not accepted any deposit under Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules, 1975, in the previous year(s) and as there were no deposits which were unclaimed and due for repayment, as on March 31, 2014, there has been no default in repayment of deposits or payment of interest thereon during the year under review.

APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Hon''ble Ministers, Secretaries and other offi cials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company''s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai Kumar Mangalam Birla

Dated : 28th May, 2015 Chairman

(DIN: 00012813)

---

Mar 31, 2014

Dear Shareholder,

The Directors have pleasure in presenting the 55th Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2014.

As the Management Discussion and Analysis Section of the Annual Report focuses on your Company''s strategies for growth and the performance review of the businesses/operations of the Company in depth, your Board is providingonly a brief overview in this Report.

FY 2014, was a watershed year for your company. All the Greenfield projects viz. Aditya Aluminium and Mahan Aluminium as well as Alumina Refi nery under Utkal Alumina International Ltd, a wholly owned subsidiary of the Company, have commenced operations. All these projects are ramping up their capacity utilization.

In July 2013, Novelis began the commissioning phase of two automotive sheet finishing lines at Oswego, its New York facility. The construction of new automotive sheet finishing plant in Changzhou, China is also on track.

In December 2013, Novelis announced plans to further expand its global production of aluminium automotive sheet products by building a third finishing line at its Oswego, New York facility and a second fi nishing line at its Nachterstedt, Germany facility. These projects are expected to begin commissioning in late calendar year 2015. Each of these will add approximately 120 kt of auto-finishing capacity. With these expansions, the Novelis'' global automotive sheet capacity will rise to approximately 900 kt per year.

FINANCIAL PERFORMANCE

Standalone performance for the year ended March 31, 2014 witnessed the net sales grew by 7% with Profi t before depreciation, interest and tax growth at 13%. Interest costs went up significantly consequent to higher borrowing and capitalization of some assets at projects. Due to higher interest cost and exceptional items, the standalone Net Profi t was lower at Rs. 1,413 crore.

An exceptional item of Rs. 396 crore relates to a liability of Rs. 324 crore under The UP Tax on Entry of Goods into Local Areas Act, 2007 (UP Entry Tax) and a Liability of Rs. 72 crore under The Madhya Pradesh Gramin Avsanrachna Tatha Sarak Vikas Adhiniyam (MPGATSVA). Both these levies have been contested by the Company and appeals against these are pending before the Hon''ble Supreme Court.

The Consolidated Revenue as well as Profi t before Depreciation, Interest and Taxes extended by 9% and 5% respectively in comparison to the last year''s corresponding fi gures. Net profi t was lower at Rs. 2,175 crore, because of higher interest and depreciation and exceptional items.

BUSINESS RECONSTRUCTION RESERVE

The Company had formulated a scheme of financial restructuring under sections 391 to 394 of the Companies Act 1956 ("the Scheme") between the Company and its equity shareholders approved by the High Court of judicature of Bombay to deal with various costs associated with its organic and inorganic growth plan. Pursuant to this, a separate reserve account titled as Business Reconstruction Reserve ("BRR") was created during the year 2008-09 by transferring balance standing to the credit of Securities Premium Account of the Company for adjustment of certain expenses as prescribed in the Scheme. Accordingly, the Company has transferred Rs. 8,647.37 crore from Securities Premium Account to BRR and till 31st March, 2013, Rs. 66.98 crore has been adjusted against BRR.

During the year, a provision of Rs. 86.06 crore has been made for diminution in value of investment in Hindalco-Almex Aerospace Limited, a subsidiary of the Company. The entire amount of provision has been adjusted against BRR.

DIVIDEND

For the year ended 31st March, 2014, the Board of Directors of the Company have recommended dividend of Rs. 1.00 per share (Previous year Rs. 1.40 per share) to equity shareholders aggregating to Rs. 241.55 crore (Previous year Rs. 313.60 crore) including Dividend Distribution Tax.

Equity shares that may be allotted upon exercise of Options granted under the Employee Stock Option Scheme and out of the Share Capital Suspense, and before the Book Closure for payment of dividend will rank paripassu with the existing shares and shall also be entitled to receive the aforesaid dividend.

SUMMARY FINANCIALS

Rs. Crore

Consolidated Standalone

2013-14 2012-13 2013-14 2012-13

Revenue from Operations (Net) 87,695.5 80,192.8 27,850.9 26,056.9

Profit before Interest, Depreciation/ Amortisation and Tax 9,303.5 8,849.0 3,616.3 3,186.8 (PBIDT)

Less: Finance Costs 2,701.6 2,079.1 711.7 436.0

Less: Depreciation and Amortisation 3,552.8 2,861.1 823.3 704.2

Profit before Exceptional Item and Tax 3,049.1 3,908.8 2,081.4 2,046.6

Exceptional Item 396.0 - 396.0

Profit Before Tax 2,653.1 3,908.8 1,685.4 2,046.6

Tax Expense 524.9 885.7 272.1 347.4

Profit After Tax 2,128.2 3,023.1 1,413.3 1,699.2

Add: Share in Profit/(Loss) of Associates 66.8 (15.8)

Less: Minority Interest 20.0 (19.6)

Profit for the Year 2,175.0 3,026.9 1,413.3 1,699.2

Balance brought forward from Previous Year 2,853.0 1,182.3 750.0 400.0

Adjustment on Acquisition, disposal and change in holding (0.2) (0.1) interest in Group Companies

Surplus available for Appropriation 5,027.8 4,209.1 2,163.3 2,099.2

Appropriations:

- General Reserve 1,062.9 901.8 1,056.0 899.5

- Debenture Redemption Reserve 151.0 150.6 150.0 150.0

- Proposed Dividend 206.5 268.1 206.5 268.1

- Corporate Dividend Tax 37.7 34.8 0.9 31.7

- Transfer on Capital Reduction (86.1) -

- Special Reserve 1.0 0.8

- Balance carried to Balance Sheet 3,654.8 2,853.0 750.0 750.0

5,027.8 4,209.1 2,163.3 2,099.2

ESOS 2006

During the year ended 31st March, 2014, the Company has allotted 4,800 fully paid-up equity share of Rs. 1/- each of the Company (Previous year 40,760) on exercise of options under ESOS 2006 for which the Company has realisedRs. 0.05 crore (Previous year Rs. 0.40 crore) as exercise money. The weighted average share price for the year ended 31st March, 2014 over which options exercised was Rs. 115.20 (Previous year Rs. 117.41).

ESOS 2013

During this year, the Company has instituted Employee Stock Option Scheme 2013 ("ESOS 2013"), under which the Company may grant 5,462,000 stock options and restricted stock units (RSU) to the permanent employees in the management cadre and Managing/Whole time Directors of the Company and its subsidiary companies in India and abroad, in one or more tranches. The ESOS 2013 is administered by the Compensation Committee of the Board of Directors of the Company ("the Committee"). The option exercise price would be determined by the Committee whereas the RSU exercise price shall be the face value of the equity shares of the Company as on the date of grant of RSUs. Each option and each RSU entitles the holders to apply for and be allotted one fully paid-up equity share of Rs. 1/- each of the Company upon payment of exercise price during exercise period. The options will vest in 4 equal annual instalments after one year of the date of grant whereas RSU will vest at the end of three years from the date of grant. The maximum period of exercise is 5 years from the date of vesting and these option/ RSU do not carry rights to dividends or voting rights till the date of exercise. Further, cancelled/ lapsed options and RSU are also available for grant.

In terms of ESOS 2013, during the year ended 31st March, 2014 the Company has granted 1,930,004 stock options and 1,931,289 RSUs to the eligible employees of the Company and some of its subsidiary companies.

Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 is given in Annexure –A.

FINANCE

We continued with further fi nancing initiatives to strengthen our balance sheet and progress on the chartered growth path. During the year, Your Company refi nanced project loans for all three greenfield projects and this resulted in an annual savings to the tune of Rs. 350 Crore in interest payments.

In accordance with the provisions of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009, the Company had allotted 150,000,000 warrants on a preferential basis to the Promoter Group on 22nd March, 2012 entitling them to apply for and obtain allotment of one equity share of Rs. 1/- each fully paid-up at a price of Rs. 144.35 per share against each such warrant at any time after the date of allotment but on or before the expiry of 18 months from the date of allotment in one or more tranches for which the Company has received Rs. 541.31 crore being 25% against these warrants. The Promoter Group Companies applied for conversion of warrants into equity shares at predetermined price, accordingly the Company has issued and allotted 150,000,000 equity shares of Rs. 1/- each at a premium of Rs. 143.35 per share on 20th September, 2013 to the Promoter Group on payment of balance amount of these warrants. The entire amount so received has been utilised for various Greenfield and brownfield projects expenditure.

FIXED DEPOSITS

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

AWARDS & RECOGNITIONS

Renukoot Aluminum Complex wins Greentech HR Platinum Award, in the Best Strategy category, the highest in this segment.

Renukoot Aluminium Complex wins Greentech Silver award for CSR presented by the Greentech Foundation New Delhi

Renukoot Aluminium Complex wins Greentech Platinum Environment Award for environmental excellence, presented by the Greentech Foundation, New Delhi

Renukoot Complex wins the Janeshwar Mishra Exports Award, for 2009-10, First Prize in Engineering & Builders Hardware Category, presented by the Uttar Pradesh Export Promotion Bureau, Department of MSME, Government of U.P. in September 2013.

Renusagar Power Division wins the Greentech Safety Gold Award-2013 in the Thermal Power Sector, presented by the Greentech Foundation, New Delhi, for its outstanding achievements in the field of Occupational Health and Safety.

Renusagar Power Division wins the Safety Innovation Award-2013 in Power Plant category, presented by the Institute of Engineers (India) for its outstanding innovative achievements in the field of Occupational Health and Safety.

Renusagar Power Division Hospital wins the FICCI Healthcare Excellence Award 2013''.

Dahej Copper Complex wins Greentech Environment Platinum Award 2013, for its environmental initiatives such as water conservation by recycling of plant effl uents, utilization of solid wastes, installation of continuous ambient air quality monitoring stations, development of green belt at plant and township .

Dahej Copper Complex wins Greentech Silver Award-2013 for its outstanding CSR work in the 85 surrounding Government Schools, where Dahej has contributed towards improvement in education.

Hirakud Smelter wins the CII (ER) Quality Award in the Large & Medium Scale category, in recognition of its pursuit of Total Quality Management.

Hirakud Smelter wins 2nd Prize in Longest Accident free period till 2009 from Directorate of Factories & Boilers, presented at Bhubaneswar in February 2014

Talabira-I Coal Mines wins the IME Journal Mining Innovation Award 2012 for Innovative Mine Development and Production System with blast free coal mining

Taloja Rolling Plant was awarded the Employers'' Federation of India (EFI) National Award- 2013, for Excellence in Employee Relations.

Taloja Rolling Plant wins National Safety Awards presented by the National Safety Council (Maharashtra Chapter) for Longest Accident Free Period 2012 and Lowest Accident Frequency Rate, 2012.

Taloja Rolling Plant awarded Best Supplier in aluminum metal category by Tata Toyo Radiators for the year 2013-14.

Alupuram Extrusions team earned third place in the Productivity Competition conducted by the Indian Institution of Industrial Engineering, Kerala Chapter, held in April 2013.

Muri Alumina Plant wins Greentech Environment Gold Award for environmental excellence, in recognition of its achieving a major target to reduce water and energy consumption.

Belgaum Alumina Plant wins the Government of Karnataka State Export Excellence Gold Awards, under the product category Chemicals & Plastics for medium/large enterprises for the years 2011-12 and 2012-13. The award was presented on 21st February 2014.

Belgaum Plant - Boilers is awarded "First Prize" in "Best Safe Industrial Boiler", by the Karnataka State Safety Institute, Department of Factories & Boilers, Government of Karnataka, at the State Level Safety Competition held on the eve of 43rd National Safety Day Celebrations - 2014.

Lohardaga Mines Division wins 1st Prize of Overall performance during Metalliferous Mine Safety Week Celebration-2013 held under the aegis of Directorate General of Mines Safety, Ranchi Region.

Lohardaga Mines Division wins 1st and 2nd Prize respectively of Overall performance under the category of Fully Mechanized mines during Mine Environment and Mineral Conservation Week Celebration 2013-14, held under the aegis of Indian Bureau of Mines, Ranchi Region.

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

Your Company is committed to sustainable development. Your Company is a signatory to the Global Compact and subscribes to the principle of triple-bottom line accountability.

A separate chapter in this report deals at length with your Company''s initiatives and commitment to environment conservation.

HUMAN RESOURCES

Several innovative people - focused initiatives have been instituted at the Group level, and these are translated into action at all of the Group Companies. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centredaround accountability is in place. We feel this is critical to enable us retain our competitive edge.

CORPORATE GOVERNANCE

Your Directors reaffirm their continued commitment to good corporate governance practices. Your Company fully adheres to the standards set out by the Securities and Exchange Board of India for Corporate Governance practices and has implemented all of its stipulations.

As required by Clause 49 of the Listing Agreement of Stock Exchanges, a separate section on Corporate Governance, together with a certifi cate from your Company''s statutory auditors, forms part of this Annual Report.

There has been news item about pending investigation in respect of allocation of a coal block to the Company. Your Directors wish to reassure you that the project fully deserved allocation of coal block on its own merits and that no illegality has been committed in this regard. Your Company has produced all documents in support thereof to the investigating agencies.

BUSINESS RESPONSIBILITY REPORT

As per Clause 55 of the Listing Agreement with the Stock Exchanges, a separate section of Business Responsibility Report forms part of this Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors subscribe to the "Directors'' Responsibility Statement" and confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the accounting policies selected have been applied consistently, and judgements and estimates are made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the profi t or loss of your Company for that period;

iii) proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud, and other irregularities; and

iv) the annual accounts have been prepared on a going concern basis.

CONSOLIDATED FINANCIAL STATEMENTS AND RESULTS OF SUBSIDIARY COMPANIES

Consolidated Financial Statements have been prepared by your Company in accordance with the applicable Accounting Standards (AS-21, AS-23 and AS-27) issued by the Institute of Chartered Accountants of India and the provisions of the listing agreement with the Stock Exchanges. Together with the Auditors'' Report, these form part of the Annual Report.

In terms of the General Circular of the Ministry of Corporate Affairs (MCA), Government of India, the copy of Balance Sheet, Statement of Profi t and Loss, Directors'' Report, Auditors'' Report, etc., of the subsidiary companies is not attached with the Annual Report of the Company. The related information on the Annual Accounts of the subsidiary companies shall be made available to the shareholders of the Company and of the subsidiary companies, who shall seek such information at any point of time. The Annual Accounts of the subsidiary companies will also be kept for inspection by any shareholder at the Registered Offi ce of the Company and that of the subsidiary companies concerned. The Statement pursuant to Section 212 of the Companies Act, 1956, containing the details of the Company''s subsidiaries and the gist of the financial performance of the subsidiary companies forms part of the Consolidated Financial Statements of this Annual Report.

Novelis Inc (wholly owned subsidiary)

Shipments of fl at rolled products increased from 2,786 kt in fiscal 2013 to 2,895 kt in fiscal 2014. The recent rolling expansion in Pindamonhangaba (Pinda) facility, coupled with the strong demand in Brazil, contributed to the higher shipments and strong operating results in South America. Shipments were also up in Europe in fiscal 2014 compared to fiscal 2013, driven by higher automotive and can product shipments. The recent rolling expansion project in South Korea contributed to the higher shipment levels in Asia region. Shipments in North America were down compared to the prior year, as can product shipments were lower.

Under US GAAP, Novelis reported "Net income" of $104 million for the year ended March 31, 2014, compared to $203 million in the year ended March 31, 2013. Cash fl ow provided by operating activities was $702 million compared to $203 million in the previous year.

Aditya Birla Minerals Limited (51 per cent subsidiary)

Aditya Birla Minerals Limited, Australia reported a net loss of AUD 0.2 million in FY14 compared to loss of AUD 8.3 million in FY13. Mount Gordon mines operations is currently placed under care and maintenance and various strategic options are being evaluated including divestment. Nifty mines is currently under suspension post development of a sink hole on March 20, 2014.

PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956

Information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, stipulated under Section 217(1)(e) of the Companies Act, 1956, is set out in a separate statement, attached to this Report and forms part of it as Annexure "B".

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are to be set out in the annexure to the Directors'' Report. Having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Report and Accounts as set out therein are being sent to all members of the Company excluding the information about the employees. Any member, interested in obtaining such particulars, may write to the Company Secretary at the Registered Offi ce of the Company.

AUDITORS

The observations made in the Auditors'' Report are self- explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

COST AUDITORS

The Board of Directors of your Company have on the recommendation of Audit Committee appointed M/s R. Nanabhoy & Co. Cost Accountants, Mumbai to conduct the cost audit of your Company for the financial year ending 31st March, 2015 at a remuneration as Mentioned in the Notice convening the AGM, subject to ratifi cation of remuneration by Members of your Company.

The Audit Committee has received a certifi cate from Cost Auditors certifying their independence and arm''s length relationship with your Company in accordance with the Companies (Cost Audit Report) Rules 2011 the due date for fi ling Cost Audit Report in XBRL for the financial year ended 31st March 2013 was 30th September 2013 vide SRN No. S22374656 with the Ministry of Corporate Affairs, New Delhi.

APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other offi cials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial

Institutions and Banks associated with your Company for their support as well.

Your Company''s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

D. Bhattacharya – Managing Director

M.M. Bhagat – Director

Mumbai

Dated : 29th day of May, 2014

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Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 54th Annual Report along with the audited annual standalone and consolidated accounts of your Company for the year ended 31st March, 2013.

1. Financial Performance

The FY 13 was one of the toughest years for non-ferrous metal industry. Globally Aluminum prices continued to remain depressed, plagued with overcapacity, inventory overhang to add to the weak sentiments for the commodities.

In the Indian context, slowdown in manufacturing sector and power sector impacted demand in a low pricing (LME) scenario, the cost continued to remain high, primarily driven by high crude prices. While the prices of crude and its derivatives continued to remain globally high, depreciating rupee resulted in an additional burden. The coal prices continued to increase in India, even as the Global coal prices cooled off.

Financial Performance Summary (Rs. Crore)

Standalone Consolidated

Year Year Year Year Ended Ended Ended Ended Particulars 31/03/2013 31/03/2012 31/03/2013 31/03/2012

Revenue from Operations 26,057 26,597 80,193 80,821

EBITDA 2,204 3,105 7,837 8,184 Other income 983 616 1,012 783

Profit Before Interest, Tax, Depreciation and Amortisation 3,187 3,721 8,849 8,967

Depreciation 704 690 2,861 2,864

Finance Costs 436 294 2,079 1,758

Profit Before Tax 2,047 2,737 3,909 4,345

Tax Expenses 348 500 886 786

Net Profit Before Minority Interest and Share in Associates 1,699 2,237 3,023 3,559

Share in Profit/(Loss) of Associates (Net) (16) 50

Minority Interest (20) 211

Net Profit for the Period 1,699 2,237 3,027 3,397

Basic EPS 8.88 11.69 15.81 17.74

2. Standalone Results

The Standalone revenue for the year is flat at Rs. 26,057 crore as in FY 12. Profit before interest and depreciation was Rs. 3,187 crore vs. Rs. 3,721 crore in FY 12. This was achieved despite a significantly lower LME and a constant escalation of input costs, largely mitigated by improved efficiencies and higher other income.

Net profit for the year stood at Rs. 1,699 crore vs. Rs. 2,237 crore in FY 12.

The Financial Year 2013 was marked by consistently low Aluminium LME and constantly increasing costs. As a result, Aluminium companies across the globe suffered during this year. However, Hindalco was able to mitigate impact of the above factors by improved efficiencies and higher volumes. Consequently, the Company''s results in this business segment stand out on almost every parameter in the peer group - both domestic and international.

3. Consolidated Results

Despite a sluggish market and headwinds in all businesses of the Company, the Consolidated Revenue as well as Profit before Depreciation, Interest and Tax for the year at Rs. 80,193 and Rs. 8,849 crore, respectively, compare well with last year''s corresponding figures. With regard to segment results, Aluminium Segment has done particularly well by maintaining its EBIT at Rs. 4,388 crore on consolidated basis.

Net profit attributable to the shareholders stood at Rs. 3,027 crore.

4. Dividend

For the year ended 31st March, 2013, the Board of Directors of the Company have recommended dividend of Rs. 1.40 per share (Previous year Rs. 1.55 per share) to equity shareholders aggregating to Rs. 313.60 crore (Previous year Rs. 344.89 crore) including Dividend Distribution Tax of Rs. 45.56 crore for the year ended 31 st March, 2013.

5. Appropriations:

Allocation and Appropriations of surplus in the statement of Profit and Loss account in FY13 are as under:

Summary of appropriation FY 13 FY 12 of Profit and Loss Account

Balance as at the beginning of the year 400.00 350.00

Add: Profit for the year 1,699.20 2,237.20

Less: Transferred to Debenture Redemption Reserve (150.00) -

Less: Dividend on Equity Shares - (a) (268.05) (296.76)

Less: Dividend Distribution Tax - (a) & (b) (31.67) (38.41)

Less: Transferred to General Reserve (899.48) (1,852.03)

Balance as at the end of the year 750.00 400.00

(a) Dividend on Equity Shares and Tax on Dividend include Rs. 0.01 crore (Previous year Rs. 0.01 crore) pertaining to previous year for Equity shares issued before the record date of dividend.

(b) Tax on Dividend is net of Rs. 13.89 crore (Previous year Rs. 9.73 crore) being dividend distribution tax paid by a subsidiary.

6. Growth Plans underway in Aluminium

Your Company is pursuing various brownfield and greenfield growth oppurtunities in Aluminium as described below:

Projects - in India

Estimated Actual or estimated Capacity Location Description of Expansion (at full Commission Date/ capacity) Progress Update

Hirakud, Odisha Smelter Expansion 52 Kt

Captive Power Plant 100 MW Under Commissioning Expansion

Rolling Plant 135 Kt Partially Commissioned

Rayagada, Odisha Alumina Refinery 1500 Kt

(Utkal Alumina) Under Commissioning Captive Power Plant 90 MW

Bargawan, Aluminium Smelter 360 Kt First Metal Tapped, Madhya Pradesh commissioning being (Mahan Aluminium) Captive Power Plant 900 MW undertaken in phased manner

Lapanga, Odisha Aluminium Smelter 360 Kt 2013

(Aditya Aluminium) Captive Power Plant 900 MW

All these ongoing projects of the Company with a cumulative investment of around Rs. 28,000 crores have either been commissioned or are in advanced stages of commissioning/implementation.

Project - Overseas

Estimated Actual or Estimated Capacity Location Description of Expansion (at full Commission Date/ capacity) Progress Update

North America

Oswego, NY Automotive Sheet 200 Kt Mid CY 2013

Finishing Plant

Europe

Nachterstedit, Germany Recycling Expansion 250 Kt Mid CY 2014

Asia

Ulsan and Yeoungiu, Rolling Expansion 350 Kt Mid CY 2013 South Korea

Yeoungiu, South Korea Recycling Expansion 265 Kt October 12

Changzhou, China Automotive Sheet 120 Kt End CY 2014 Finishing Plant

South America

Pinda Brazil Rolling Expansion 220 Kt December 12

Pinda, Brazil Can coating line 100 Kt End CY 2013

Pinda, Brazil Recycling expansion 190 Kt End CY 2013

7. Finance

Financial closure of Aditya Smelter was achieved of Rs. 9,896 crore. The tenure of the loan has been kept at 12.50 years to allow the project to have enough operational cash surplus for servicing the loan. The Company received an overwhelming response from the lenders despite a tight credit market.

Debenture Issue: To further augment financial resources, the Company has issued 10-year 9.55 per cent and 9.60 per cent secured redeemable non-convertible debentures for a total amount of Rs. 4,500 crore and Rs. 1,500 crore respectively on private placement basis. These debentures are listed on the wholesale debt market segment of National Stock Exchange (NSE). Repayment of Term Loan: During the year, your Company also repaid the loan taken earlier of Rs. 5,143 crore.

8. Consolidated Financial Statements

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

9. Management Discussion and Analysis Report

The Management Discussion and Analysis Report forming part of Directors'' Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), forms part of the Annual Report. The report provides a strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

10. Corporate Governance

Your Directors reaffirm their commitment to the corporate governance standards as prescribed by the Listing Agreement with the Stock Exchange(s). A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

11. Directors'' Responsibility Statement

Your Directors affirm that the audited accounts containing financial statements for the financial year 2012-13 are in full conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly, the form and substance of transactions carried out during the year, and reasonably present the Company''s financial condition and results of operations. These statements were audited by the statutory auditors of the Company, M/s. Singhi & Co., Chartered Accountants.

Your Directors further confirm that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper expl anations rel ating to material departures, if any;

(ii) the accounting policies have been selected and applied consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the annual accounts have been prepared on a going-concern basis.

Your Company''s internal Auditors have conducted periodic audits to provide reasonable assurance that the established policies and procedures have been followed.

12. Novelis Inc. (wholly owned subsidiary)

The performance of Novelis was negatively impacted by pricing pressures from competitors, supply chain disruptions due to the implementation of a new ERP system in two North American plants, as well as production challenges and softer demand.

Shipments of flat rolled products are marginally lower at 2,786 Kt for the year ended 31st March, 2013, compared to 2,838 Kt in the prior year. Net sales was 11% lower, primarily driven by a 15% decline in average aluminium prices and a fall in flat rolled product volumes by 2%.

13. Aditya Birla Minerals Limited (51 per cent subsidiary)

The Company''s copper production extended by 16% mainly on account of restart of Mt Gordon mine. Sales volume is up by 14% compared to the previous year. The revenue in value terms was sustained. Profitability was adversely affected given lower realisation of copper compared to the previous year and higher average unit cost of production, because of higher volume from Mt Gordon operations at higher cost.

At Nifty, the ore mined was 2.27 million tonnes up by 8% over the previous year. At Mt Gordon, the ore mined was 1.10 million tonnes representing a step up of 59% over the previous year.

Mt Gordon mines operations is currently placed under care and maintenance.

14. Employee Stock Options Scheme ESOS-2006

The shareholders of the Company has approved an Employee Stock Options Scheme ("ESOS-2006"), formulated by the Company, under which the Company may issue 6,475,000 options to its permanent employees in the management cadre, in one or more tranches, whether working in India or out of India, including the Whole-Time Directors of the Company. Each option when exercised would be converted into one fully paid-up equity share of Rs. 1/- each of the Company. The ES0S-2006 is administered by the Compensation Committee of the Board of Directors of the Company ("the Committee"). Under the ESOS 2006, the Committee has granted 3,545,550 options to its eligible employees in three tranches. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Options Scheme) Guidelines, 1999, is given in Annexure-A.

ES0S-2013

At a meeting held on 28th May, 2013, the Board of Directors approved the formulation of a new Employee Stock Options Scheme, viz., "Hindalco Industries Limited Employee Stock Options Scheme-2013" (ESOS-2013) in terms of the SEBI Guidelines. The Board mandated the existing ESOS Compensation Committee to implement and administer the ESOS-2013. Resolutions seeking your approval for introduction and implementation of ESOS- 2013 and granting such number of Stock Options exercisable into not more than 54,62,000 equity shares of Rs. 1/- each to the permanent employees, including any Managing or Whole-time Director(s) of your Company and its holding and/or subsidiary companies are included in the Notice convening the Annual General Meeting together with the Explanatory Statement.

15. Particulars as per Section 217 of the Companies Act, 1956

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

In accordance with the provisions of Sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the Directors'' Report, as an addendum thereto. However, as per the provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the Company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the Company.

16. Fixed Deposits

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

17. Directors

In accordance with Article 146 of the Articles of Association of the Company, Mr. Kumar Mangalam Birla, Mr. Askaran Agarwala retire from office by rotation and, being eligible, offer themselves for reappointment.

Mr. Jagdish Khattar was appointed as a Director in casual vacancy caused due to demise of Mr. E.B. Desai and holds office upto the forthcoming Annual General Meeting, and is eligible for reappointment.

The term of appointment of Mr. D. Bhattacharya as Managing Director is expiring on 30th September, 2013. The Board has reappointed him as Managing Director for the further period of five years w.e.f 30th September, 2013. The approval of the members in the ensuing Annual General Meeting would be sought for his reappointment.

During the year, Mr. Satish Pai was appointed as an Additional Director under Section 260 of the Companies Act, 1956, and as a Whole-time Director for a period of five years. The approval of the members in the ensuing Annual General Meeting would be sought for his appointment, subject to approval of Central Government.

18. Awards and Recognitions

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse fields. A selective list:

- Renukoot Complex wins Greentech Safety Gold Award-2012 in the Mining & Metals category, for exemplary efforts towards Occupational Health and Safety, presented by Greentech Foundation, New Delhi.

- Renukoot Complex wins the Safety Innovation Award-2012, for implementing innovative safety management systems, presented by the The Institute of Engineers (India).

- Renukoot Complex wins the Greentech CSR Gold Award-2012, presented by Greentech Foundation, New Delhi. The award recognises the noteworthy efforts towards "Land and Watershed Management" carried out in various villages surrounding Renukoot, Renusagar and Mines Division - Jharkhand & Chattisgarh.

- Renukoot Complex wins the Greentech Environment Excellence Gold Award-2012 under the category of Mining & Metal Sector for its outstanding efforts towards Environment Management by Greentech Foundation, New Delhi.

- Renukoot Complex is conferred the Golden Peacock National Quality Award- 2012, in the Mining & Metals sector, presented by the Institute of Directors, for its efforts towards "Quality", meeting international parameters.

- Renukoot Complex wins Greentech Platinum Award for Best HR Practices 2012-13, in the Best Strategy category, presented by Greentech Foundation, New Delhi.

- Renusagar Power Plant wins the Greentech Environment Excellence Gold Award-2012, for the fifth consecutive year, for its outstanding contribution towards Environment Management System, presented by Greentech Foundation, New Delhi.

- Renusagar Power Plant wins Greentech Safety Gold Award-2012, in the power Plant category, for exemplary efforts in Occupational Health and Safety, presented by Greentech Foundation, New Delhi.

- Renusagar Power Division wins the Safety Innovation Award-2012, in the Power Sector category, for outstanding achievement in safety management, presented by Institute of Directors.

- Renusagar was awarded the Greentech Training Excellence Gold Award-2012 and 3rd Annual Greentech HR Award-2013 for Training Excellence, by Greentech Foundation, Delhi.

- Dahej Harbour & Infrastructure Ltd. (DHIL), wins the Gujarat Star Award (Runners Up) 2011-12, as the "Dry Bulk/ Break Bulk Handling Port of the Year", for its impressive performance and improvements in the areas of vessel turnaround time in port, increased productivity and accident-free operations.

- Dahej Copper Complex wins the Greentech Gold Environment Award- 2012, for its outstanding achievement in Environment Management.

- Muri Alumina Plant wins the Greentech Gold Environment Award-2012, presented by Greentech Foundation, New Delhi.

- Hirakud Power Plant wins CII Odisha Award- 2012 (2nd Runners Up), for Best Practices in Environment, Safety and Health.

- Taloja Rolling Plant wins the overall title for "Maharashtra Safety Awards-2011", competition organised by the National Safety Council - Maharashtra Chapter, in the Heavy Engineering category for its commendable safety performance, Scheme-I, Lowest Average Accident Frequency Rate.

- The Quality Circles from Renukoot earned Six Gold Medals and one Silver Medal at the Kanpur Chapter Convention.

- The Quality Circles of Renusagar earned "Par Excellence" awards at the national convention of Quality Circle Forum of India.

- Quality Circle of Birla Copper Dahej won the Bronze medal at Gujarat State Level Quality Circle Competition-2012, organised by Quality Circle Forum of India.

- Hirakud Quality Circle won the Best Analysis & Process Award at the 17th All Odisha Quality Circle Convention.

- Hirakud members earned the Certificate of Appreciation at the 12th CII National Supervisory Skill Competition in Repair & Maintenance Category.

Jharkhand & Chhattisgarh Mines Division

- National Safety Awards for 2009-10 and 2010-11 presented to Samri Mines Division during 2012.

- Overall Best in Mines Safety Week-2012 and "Minerals Exploration & Minerals Conservation Week-2012 Award" to Bagru Hill Bauxite Mines during 2012-13, for Ranchi region.

- Mr. D Bhattacharya, Managing Director, received the "Fray International Sustainability Award" for leadership in developing & applying new innovative business plans & operations for sustainability development of the Company in the environmental economic & social point of view.

19. Environment Protection and Pollution Control

Your Company is committed to sustainable development. A separate chapter in this report deals at length with your Company''s initiatives and commitment to environment conservation.

20. Auditors

The observations made in the Auditors'' Report are self-explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

M/s. Singhi & Company, Chartered Accountants and Auditors of the Company, retire, and being eligible, offer themselves for appointment.

Cost Auditors

For the Financial Year 2012-13 M/s R. Nanabhoy & Co. and M/s Mani & Co. were joint cost auditors of the Company. For timely completion of Company level audit as per the new cost audit rules and to avoid coordination and logistical issues, your directors have appointed a single cost auditor, M/s. R. Nanabhoy & Co.

In pursuance to Section 233 B (2) of the Companies Act, 1956, read with Ministry of Corporate Affairs, Cost Audit Branch Order dated 6th November 2012, your directors have appointed M/s. R. Nanabhoy & Co, cost accountants as Cost Auditors, subject to approval of the Central Government, to conduct cost audit of the Company, for the financial year 2013-14, pertaining to products or activities related to Aluminium and Aluminium Products, Inorganic Chemical and their Derivatives, Mineral Products, Miscellaneous Chemical Products, Copper and Copper Products, Pearl, Diamonds, Stones and Jewellery Articles, Mineral / Chemical Fertilizers - Others, and any other products as are covered under the subject Order of Ministry of Corporate Affairs.

The due date for filing Cost Audit Reports for the Financial Year 2011-12 was February 28, 2013 and the same was filed by the Cost Auditors on January 20, 2013.

21. General Exemption under Section 212(8) of the Companies Act, 1956

The Ministry of Corporate Affairs, Government of India vide its Circular No.5/12/2007-CL-III dated 8th February , 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company provided certain conditions are fulfilled. The Company has satisfied the conditions stipulated in the Circular and hence is entitled to the exemption. However annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies investor''s seeking such information at any point of time. The annual accounts of the subsidiary companies are available for inspection by any shareholder''s at the Registered office of the Company. The annual accounts of the subsidiary companies are also available for inspection at their respective registered office. Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS-21), the Consolidated Financial Statements prepared by the Company include financial information of its subsidiaries.

22. Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company''s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai Chairman

Dated 13th August, 2013

---

Mar 31, 2012

The Directors are pleased to present the 53rd Annual Report alongwith the audited annual Standalone and Consolidated accounts of your Company for the year ended 31st March, 2012.

1. Financial Performance

Your Company's Consolidated Revenue crossed Rs. 80,000 crore up 12% and Consolidated Net Income is at a record Rs. 3,397 crore reflecting a rise of 38%

Financial Performance Summary (Rs. Crore)

Standalone Consolidated Year Year Year Year ended ended ended ended Particulars 31/03/2012 31/03/2011 31/03/2012 31/03/2011

Revenue from Operations 26,597 23,859 80,821 72,202

Profit from Operations before Other Income and Finance Costs 2,415 2,467 5,320 5,169

Other Income 616 347 783 513

Profit before Finance Costs 3,031 2,815 6,103 5,683

Finance Costs 294 220 1,758 1,839

Profit before Tax 2,737 2,595 4,345 3,843

Tax Expenses 500 458 786 964

Profit before Minority Interest and Share in Associates 2,237 2,137 3,558 2,879

Share in Profit/ (Loss) of Associates (Net) - - 50 (57)

Profit before Minority Interest 2,237 2,137 3,608 2,822

Minority Interest - - 211 366

Net Profit for the Period 2,237 2,137 3,397 2,456

2. Standalone Results

Standalone Revenues for the year crossed the Rs. 25,000 crore mark and stood at Rs. 26,597 crore driven by higher volume and realisation.

Profit before Interest and Depreciation was Rs. 3,721 crore, an increase of over 6% compared to FY11, driven by higher volumes in the Aluminium business and higher TcRc in the Copper Business, alongwith improved efficiencies and higher other income.

In the Aluminium Business, there has been a significant increase in costs, especially in case of Coal (by 20%), Furnace oil (by 40%), Caustic Soda (by 25%) and Carbon (30%). The cost surge was partly offset by asset- sweating and improving operational efficiencies, coupled with better realisation. The Profit before Interest and Taxes was at Rs. 1,822 crore for FY12 compared to Rs. 2,004 crore in FY11.

In the Copper Business, revenues stood at Rs. 17,560 crore compared to Rs. 15,897 crore in FY11, due to higher LME and by-product revenue. Profit before interest and taxes was higher by 33% to Rs. 802 crore, due to improved efficiencies, higher TcRc and by- product credit, notwithstanding higher energy costs and a planned shutdown in FY12.

3. Consolidated Results

Hindalco's consolidated Revenue at Rs. 80,821 crore has been the highest ever.

Aided by better product mix and the depreciation of the Rupee Profit before depreciation, interest and taxes stood at Rs. 8,973 crore as against Rs. 8,441 crore in FY11.

Net profit attributable to the shareholders increased to Rs. 3,397 crore, up by 38% over FY11, this is primarily attributable to the strong performance at Novelis and Copper Business in India.

Despite economic headwinds, the balanced portfolio approach, low cost operation and strong value added downstream operations resulted in a commendable performance. With low cost advantage and strong downstream presence, Hindalco is well set for being the Last Man Standing and First Man Forward.

Segment Performance

Of the total annual revenue of Rs. 80,821 crore, Aluminium Business contributed to Rs. 62,059 crore, up 10% over the last year. Aluminium EBIT for FY12 remained flat at Rs. 4,495 crore vis-a-vis to Rs. 4,469 crore in FY11. The results were impacted by lower profits in Indian Aluminium operation due to macro-economic conditions.

In the Copper Business, revenue is higher at Rs. 18,364 crore, a rise of 16% from Rs. 15,882 crore in FY11, mainly on account of higher volumes, higher copper LME and by-product credits. EBIT of Rs. 1,119 crore vs. Rs. 1,082 crore in FY11.

4. Changes in Accounting Policy

Effective from the Financial Year 2011-12, the Company has changed its accounting policy for preparation of the consolidated financial statements relating to actuarial gains or losses arising out of actuarial valuation of long term employee benefits and post employment

benefits with respect to one of its overseas subsidiaries (Novelis Inc.). Until the previous year, the amount of actuarial gains or losses was accounted through the Statement of Profit and Loss. Consequent to the change in accounting policy, actuarial gains or losses along with related deferred tax have been adjusted against Reserves and Surplus. This is a non-cash item. Had the Company not changed the accounting policy as above, the Employee Benefits Expenses would have been higher by Rs. 1,014.91 crore, Tax Expenses would have been lower by Rs. 299.88 crore, Net Profit for the year would have been lower by Rs. 715.03 crore and Foreign Currency Translation Reserve in Reserves and Surplus would have been lower by Rs. 44.39 crore.

5. Business Reconstruction Reserve

Pursuant to a court approved scheme of financial restructuring under sections 391 to 394 of the Companies Act 1956, Business Reconstruction Reserve (BRR) was established during 2008-09 for adjustment of certain specified expenses. Accordingly, costs in connection with exiting certain business during the year have been adjusted against the BRR in the consolidated financial statements. Had this adjustment not been done, Other Expenses would have been higher by Rs. 536.33 crore, Tax Expenses would have been lower by Rs. 35.86 crore and Net Profit for the year would have been lower by Rs. 500.47 crore. A summary of adjustments made so far against BRR is given in the following table:

(Rs. in Crore) Standalone 2008-09 2009-10 2010-11 2011-12

Opening Balance 8,580.39 8,580.39 8,580.39

Add: Transfer from Securities Premium Account as per the Scheme 8,647.37

Less: Adjustment made:

(a) Impairment loss - - - - / (reversal of impairment loss) of goodwill arising on consolidation of Novelis Inc. while preparing consolidated accounts of the Group

(b) Impairment of fixed assets 66.80 - - -

(c) Interest and Finance Charges on loan taken by A V Minerals (Netherlands) B. V., a subsidiary of the Company, for acquisition of Novelis Inc. by the Company - - - -

(d) Costs in connection with exiting business - - - -

(e) Certain costs in connection with the Scheme 0.18 - - -

Closing Balance 8,580.39 8,580.39 8,580.39 8,580.39

Consolidated 2008-09 2009-10 2010-11 2011-12

Opening Balance - 4,030.50 3,726.11 7,165.40

Add: Transfer from Securities Premium Account as per the Scheme 8,647.37

Less: Adjustment Mad:

(a) Impairment loss/ (reversal of impairment loss) of goodwill arising on consolidation of Novelis Inc. while perparing consolidated accounts of the Group 3,597.30 - (3,597.30) -

(b) Impairment of fixed assets 111.30 - - -

(c) Interest and Finance Charges on long taken by A V Minerals (Netherlands) B V a subsidiary of the Company for acquistion of Novelis Inc, by the Company 544.47 304.39 158.01 -

(d) Costs in connection with exiting business 363.62 - - 500.47

(e) Certain costs in connection with the scheme 0.18 - - -

Closing Balance 4,030.50 3,726.11 7,165.0 6,664.93

6. Accounts of Idea Cellular Ltd.

Due to certain exceptional circumstances, the accounts of Idea Cellular Limited (Idea), one of the associates of the Company, were not available and hence could not be consolidated in the accounts for the year ended 31st March, 2011. The Consolidated accounts for the year include Rs. 62.02 crore being the share of profit of the Company in Idea relating to the year ended 31st March, 2011 resulting in the net profit for the current year being higher by the said amount.

7. Dividend

The Board of Directors of the Company have recommended a dividend of Rs. 1.55 per share aggregating to Rs. 344.89 crore (including dividend distribution tax of Rs. 48.14 crore) for the year ended 31st March, 2012.

8. Appropriations

Allocations and Appropriations of Surplus in Statement of Profit and Loss are as under:

Standalone: (Rs. crore)

Surplus in the Statement of Profit and Loss 31/03/2012 31/3/2011

Balance as at the beginning of the year 350.00 300.00

Add: Profit for the year 2,237.20 2,136.92

Less: Dividend on Equity Shares (296.76) (287.17)

Less: Dividend Distribution Tax (38.41) (46.59)

Less: Transfer to General Reserve (1,852.03) (1,753.16)

Balance as at the end of the year 400.00 350.00

9. Growth plans underway in Aluminium

Your Company is aggressively pursuing various brownfield and greenfield growth opportunities in Aluminium as described below:

India

Project Location Capacity Power Plant Timelines

Hirakud smelter expansion Hirakud 161 KTPA to 367 MW to 467 MW 2012 213 KTPA

Hirakud Flat Rolled Hirakud 135 KTPA NA 2012 Products [FRP] project

Utkal Alumina [UAIL] Rayagada, 1.5 mio- tonne 90 MW Captive 2012 Inter national Limited Odisha Alumina Refinery Co-generation Power with integrated Plant Bauxite Mines

Mahan Aluminium Mahan, MP 359 KTPA 900 MW CPP 2012 Aluminium Smelter

Aditya Aluminium Lapanga, 359 KTPA Odisha Aluminium Smelter 900 MW CPP 2013

Aditya Alumina Koraput; Odisha Alumina Refinery 2014 with integrated Bauxite Mines

Jharkhand Aluminium Sonahatu, Aluminium Jharkhand Smelter 2015

These above smelters (Mahan, Aditya, and Jharkhand) have dedicated coal blocks. Both Utkal and Aditya Alumina have captive Bauxite mines. The Financial Closure has been already achieved for UAIL and Mahan Aluminium. The Financial Closure for debt portion of Aditya Aluminium is currently being pursued.

Mahan Coal: The Group of Ministers constituted by the Government of India to consider environmental and developmental issues related to coal mining etc, has recommended the granting of forest clearance by the Ministry of Environment & Forest [MoEF] for the Mahan Coal block on certain conditions. In this regard, further communication from MoEF is awaited.

Brazil: The previously announced expansion of the Pinda facility in Brazil is expected to be commissioned at the end of 2012. Additionally, plans to install a new coating line for beverage can end stock and to expand the recycling capacity in the Pindamonhangaba, Brazil facility are on the anvil.

Asia: The expansion of rolling and recycling capacity in Yeongju, South Korea and Ulsan, South Korea is on schedule and are expected to become operational at the end of 2013.

During the fourth quarter of FY12, an investment of $100 million into an aluminum automotive heat treatment plant in China has been announced, this will have annual capacity of approximately 120 Kt. Construction of the new facility should begin in the fall of 2012 and it is expected that the plant to be operational in late 2014.

10. Finance

Preferential warrants - The Company has allotted 150,000,000 warrants on a preferential basis to the promoters on March 22, 2012, entitling them to apply for and obtain allotment of one equity share of Rs. 1 each at a price of Rs. 144.35 per share against each such warrant at any time on or before the expiry of 18 months from the date of allotment in one or more tranches. The Company has received an amount equal to 25 per cent of the price of each such warrant.

Debenture issue - To further augment its financial resources, the Company has issued 10 year 9.55 per cent Secured Redeemable Non-Convertible Debentures for a total amount of Rs. 3,000 crore on private placement basis on April 25, 2012. These debentures are listed on the wholesale debt market segment of National Stock Exchange (NSE).

Term Loans from Banks Rs. 5,142.99 crore :

As per original loan agreement Rs. 2,146.66 crore, Rs. 2571.49 crore and Rs. 424.84 crore are repayable in FY14, FY15 and FY16, respectively. However, in exercise of its prepayment option without payment of any fees or penalty, the Company has served a notice on all lenders to prepay this loan on June 29, 2012.

11. Consolidated Financial Statements

In accordance with the Accounting Standards AS-21 on Consolidated Financial Statements read with Accounting Standard (AS) - 23 on Accounting for investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

12. Management Discussion and Analysis Report

The Management & Discussion Analysis Report forming part of Directors' Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), forms part of Annual Report. The report provides a strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

13. Corporate Governance

Your Directors reaffirm their commitment to the corporate governance standards as prescribed by The Securities and Exchange Board of India (SEBI). A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

14. Directors' Responsibility Statement

Your Directors affirm that the financial statements for the year 2011-12 are in full conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflects fairly, the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations. These financial statements were audited by the statutory auditors of the Company, M/s. Singhi & Co., Chartered Accountants.

Your Directors further confirm that:

1) In the presentation of the financial statements, applicable Accounting Standards have been followed.

2) That the accounting policies are consistently applied, except the changes in accounting policy indicated in paragraph 4 of this report. For preparation of the financial statements certain estimates are made based on reasonable and prudent judgment so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year.

3) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4) The Directors have prepared the Annual Accounts on a going concern basis.

Your Company's internal Auditors have conducted periodic audits to provide reasonable assurance that established policies and procedures have been followed.

15. Novelis Inc. (Wholly Owned Subsidiary)

Novelis reported strong operating results in FY12 despite challenging market conditions globally. Its premium product portfolio, long- term customer base and focused business model enabled Novelis to produce solid results for the year.

Net sales for FY12 were $11.1 billion, a 5% increase compared to the $10.6 billion reported for the same period a year ago, mainly the result of favourable conversion premiums across all regions and an increase in the average aluminum prices.

Novelis's robust business model, good cost management and focus on premium products resulted in a record EBITDA per tonne of $371 for the year and the second straight year of $1 billion plus adjusted EBITDA. Shipments of aluminium rolled products totalled 2,838 Kt for FY12, compared to 2,969 Kt in FY11. The decrease in shipments was primarily a result of the overall economic slowdown and de-stocking by customers. The continued optimization of Novelis's footprint will improve its competitive position; these include the divesture of three foil plants in Europe and closure of an aluminum sheet mill in Canada. During the year, Novelis invested in major recycling initiatives in all four operating regions, including advanced equipment and technology to process diversified scrap inputs, which will enable the Company to achieve recycled content of 50 percent in its products by 2015.

During FY12, Novelis completed the acquisition of 31.3 percent of the outstanding shares of its Korean subsidiary for $ 344 million raising Novelis's ownership of the Korean subsidiary to 99%.

16. Aditya Birla Minerals Ltd [51% subsidiary]

The production of Copper remained flat at 59.7 Kt in FY12. Net profit for the year was AUD 27 million against AUD 57 million in FY11, impacted by lower production at Nifty on account of the decline in the mine grade (which was in line with the mining plan) and slower-than-expected ramp-up at Mt Gordon.

The performance of your Company's subsidiaries is covered elsewhere in this Annual Report.

The Ministry of Corporate Affairs, Government of India vide its Circular No.5/12/2007-CL-lll dated 8th February, 2011 has granted general exemption under Section 212(8) of the Companies Act,1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company provided certain conditions are fulfilled. The Company has satisfied the conditions stipulated in the Circular and hence is entitled to the exemption. However annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies investor's seeking such information at any point of time. The annual accounts of the subsidiary companies are available for inspection by any shareholder's at the Registered office of the Company. The annual accounts of the subsidiary company is also available for inspection at their respective registered office. Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS-21), the Consolidated Financial Statements prepared by the Company include financial information of its subsidiaries.

17. Employee Stock Option Scheme

The shareholders of the Company has approved on 23rd January, 2007 an Employee Stock Option Scheme ("ESOS 2006"), formulated by your Company, under which your Company may issue 3,475,000 options to its permanent employees in the management cadre, in one or more tranches, whether working in India or out of India, including its Whole Time Directors. The shareholders have also approved giving discount up to 30% of the average price of the equity shares of the Company in the immediate preceding seven day period on the stock exchange. The ESOS 2006 is administered by the Compensation Committee of the Board of Directors of the Company ("the Committee"). Each option when exercised would be converted into one fully paid-up equity share of Rs. 1/- each of the Company. The options will vest in 4 equal annual instalments after one year of the grant. The maximum period of exercise is 5 years from the date of vesting. Further, forfeited/ lapsed options are available to the Committee for grant. These options do not carry rights to dividends or voting rights till the date of exercise. Further, on 23rd September, 2011 the ESOS 2006 has been partially modified by which the Company may now issue 6,475,000 options.

However, under the ESOS 2006, so far the Committee has granted 3,545,550 options to its eligible employees in three tranches out of which 706,901 options have been forfeited/ lapsed and are available to the Committee for grant as per term of the Scheme.

The compensation cost of stock options granted to employees have been accounted by the Company using the intrinsic value method. Accordingly, Employee benefits expenses includes Rs. 1.29 crore (Previous Year Rs. 1.34 crore) being the amortization of intrinsic value for the year ending 31st March, 2012. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 is given in Annexure -A.

18. Particulars as per Section 217 of the Companies Act, 1956 The information relating to the conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under section 217 (1)(e) of The Companies Act, 1956, is set out in a separate statement attached to this report (Annexure B).

In accordance with the provisions of Section 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors' report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the company.

19. Fixed Deposits

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

20. Directors

In accordance with Article 146 of the Articles of Association of the Company, Mrs. Rajashree Birla, Mr. K. N. Bhandari and Mr. N. J. Jhaveri retire from office by rotation, and being eligible, offer themselves for reappointment.

During the year Mr. M. Damodaran was appointed as an Additional Director of the Company w.e.f 16th April, 2012 pursuant to Section 260 of the Companies Act, 1956.

21. Awards & Recognitions

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse fields. A selective list:

1. Hindalco:CII-EXIM Bank Award 2011 (Commendation Certificate) for Business Excellence.

2. Birla Copper Dahej:IMC Ramakrishna Bajaj Quality Award 2011 (Commendation Certificate).

3. Renukoot: Non-Ferrous Best Performance Award 2010-11 by the Indian Institute of Metals, Non-Ferrous Division.

4. Birla Copper Dahej:Environment Protection Award 2011, for NP/NPK Complex Fertilizer Plants, including captive Acids, presented by the Fertilizer Association of India .

5. Renukoot: National Energy Conservation Award 2011, (2nd Prize), presented by the Ministry of Power, Government of India.

6. Renukoof.Greentech Environment Platinum Award 2011 for outstanding achievement in Environment Management, presented by the Greentech Foundation, New Delhi.

7. Renusagar.Golden Peacock National Quality Award 2011 in the Service category.

8. Renusagar:Greentech Gold Safety Award 2011 in the Power Plant category for exemplary efforts towards occupational health & safety, presented by Greentech Foundation, New Delhi.

9. Renusagar:Greentech Environment Excellence Gold Award.

10. Birla Copper Dahej: Greentech Environment Gold Award.

11. Hirakud Smelter:Odisha State Safety Conclave Award 2011.

12. Hirakud Power:Cil Odisha State Award (1st Prize) for best practices in Environment, Health, Safety (ESH) for 2011.

13. Belgaum Alumina Works:Government of Karnataka State Export Excellence Award for the years 2009-10 and 2010-11, presented in March 2012.

14. Quality Circle Teams of Renukoot, Renusagar, Birla Copper Dahej and Hirakud Complex :National Quality Convention 2011 for Excellence and Distinguished performance awards.

15. Durgmanwadi, Chandgad and Lohardaga Mines Division : Awards at regional / state level, during the Mines, Safety Productivity Week, Environment Conservation Week and other such programmes.

22. Environment Protection and Pollution Control

Your Company is committed to sustainable development. Your Company is a signatory to the Global Compact and subscribes to the principle of triple-bottom line accountability.

A separate chapter in this report deals at length with your Company's initiatives and commitment to environment conservation.

23. Auditors

The observations made in the Auditors' Report are self-explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

M/s. Singhi & Company, Chartered Accountants and Auditors of the Company, retire, and being eligible, offer themselves for appointment.

In pursuance to Section 233B(2) of the Companies Act, 1956 and Notification dated 3rd June, 2011, 2nd May, 2011 and 24th January, 2012 and Order dated 30th June, 2011, your directors have appointed M/s. R. Nanabhoy & Co, cost accountants and M/s. Mani & Co, cost accountants as Cost Auditors for auditing the Cost Accounts of the Company for Financial Year 2012-13, covering the relevant Product Groups as per the statement placed under Central Excise Tariff and for the following industries as relevant to your Company;

a) Aluminium

b) Mining & Metallurgy of Ferrous & Non- Ferrous Metals

c) Fertiliser

d) Organic & Inorganic Chemicals

e) Engineering Machinery (including Electrical & Electronic Products)

The due date for filing Cost Audit Reports for the financial year 2010-2011 was 30th September, 2011 and the same was filed by the Cost Auditors on 23rd September, 2011.

24. Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company's employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai Chairman

Dated 27th June, 2012

---

Mar 31, 2011

Dear Shareholders,

The Board of Directors hereby presents the 52nd Annual Report, along with the audited annual standalone and consolidated accounts of your company for the year ended 31st March, 2011.

The year under review saw the economy recovering and with macro-economic factors remaining largely supportive, your Company strived to perform towards achieving a sustainable high-growth path. In terms of asset sweating, efficiencies and higher sales of value-added products, the year had been remarkable. However, steep cost inflation, especially towards the end of the year and volume loss in some of the Company's facilities, due to breakdowns, etc affected profit performance to some extent.

1. Financial Performance summary

The financial performance of the company for the year ended March 31, 2011 is summarized below:

(Rs. Crore)

Standalone Consolidated

Particulars FY11 FY10 FY11 FY10

Net Sales and Other Operating Revenues 23,859.2 19,522.1 72,077.9 60,707.9

Profit before Interest, Depreciation and Tax 3,502.2 3,209.8 8,432.5 10,068.5

Interest 220.0 278.0 1,839.3 1,104.1

Profit before Tax 2,594.7 2,264.6 3,843.2 6,180.8

Tax Expenses 457.8 348.9 963.8 1,828.9

Profit before Minority Interest and share in Associates 2,136.9 1,915.6 2,879.4 4,351.9

Minority Interest - - 365.9 423.7

Share in (Profit)/ Loss of Associates - - 57.1 2.7

Net Profit 2,136.9 1,915.6 2,456.4 3,925.5

Balance brought forward from Previous year 300.0 300.0 (377.1) (2,319.1)

Adjustment on Amalgamation, Acquisition and change in holding interest - - - (62.1)

Transfer from Debenture Redemption Reserve - 87.5 - 87.5

BALANCE AVAILABLE FOR

APPROPRIATIONS 2,436.9 2,303.1 2,079.3 1,631.8

APPROPRIATIONS

Special Reserve 0.5 0.5

Proposed Dividend on Equity Shares 287.2 258.3 287.7 259.9

Tax on Proposed Dividend 46.6 42.9 46.8 43.5

Transfer to General Reserve 1,753.2 1,701.9 1,752.8 1,705.0

Balance Carried to Balance Sheet 350.0 300.0 (8.5) (377.1)

Total 2,436.9 2,303.1 2,079.3 1,631.8

2. Financial Performance

Standalone Results

Revenues for the year crossed USD 5 Bn Mark

For the year ended March 31, 2011, net sales at Rs. 23,859 crore grew by 22%. Highest ever copper volumes, better product and geographic mix, by-product credit and higher realisation led by higher commodity prices enabled the company clock an impressive growth.

Input cost pressures, lower TcRc and one- timers associated with the Hirakud power outage have been some of the constraints faced in attaining even higher levels of performance.

Other Income at Rs. 317 crore was higher on account of better yields and higher treasury corpus, post the return of capital by Novelis. Interest was lower due to lower working capital borrowing coupled with lower international interest rates.

EBITDA for FY11 stood at Rs. 3,502 crore as against Rs. 3,210 crore in FY10, inclusive of a gain of over Rs. 349 crore, arising on account of AS-30 transition. FY11 EBITDA was constrained by the one-timers mentioned above.

Consolidated Results

Hindalco's consolidated revenue at Rs. 72,078 crore has been the highest ever, a growth of 19% year-on-year. Strong volumes, improved mix and higher commodity prices have been the growth drivers.

Profit before depreciation, interest and taxes stood at Rs. 8,433 crore as against Rs. 10,069 crore in FY10, which is inclusive of Rs. 2,736 crore (USD 578 million) of unrealized gains on derivatives in FY10, as against unrealised loss of Rs. 291 crore (USD 64 million) in FY11. The underlying performance of the current year sets a new record, reflecting the inherent strength of the Company's low cost business model, operational excellence, superior product mix and a balanced and de-risked portfolio.

Adjusted consolidated EBITDA rose by 25% (31% in Dollar terms) compared to FY10:

Rs. Crore FY11 FY10

EBITDA 8,433 10,069

Less:

Unrealised Gain/(Loss) on Derivatives-Novelis (291) 2,736

Transitional adjustment on adoption of AS-30-India 349

Adjusted EBITDA 8,724 6,983

Interest expenses increased from Rs.1,104 crore to Rs. 1,839 crore mainly due to one- time debt issuance cost related to the refinancing of USD 4.8 bn at Novelis in Dec- 10 and consequent higher interest in Q4. The debt issuance cost was expensed in the year of occurrence in Indian GAAP, unlike in US GAAP, where it is amortised over the life of the debt.

3. Dividend

The Board of Directors of Hindalco has recommended a dividend of Rs. 1.50 per share i.e. 150% aggregating to Rs. 287.17 crore. Together with corporate dividend tax of Rs. 46.59 crore, the total payout works out to Rs. 333.76 crore.

4. Consolidated Financial Statements

The audited standalone and Consolidated financial statements of your company, which form part of the annual report, have been prepared pursuant to Clause 41 of the Listing Agreement entered into with the Stock exchanges, in accordance with provisions of the Companies Act, 1956, the Accounting Standards AS-21 on Consolidated Financial Statements read with Accounting Standard 23 on Accounting for investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures.

Idea Cellular Limited (Idea), an associate of the Company, has not been able to adopt its accounts for the year ended 31st March, 2011 due to certain exceptional circumstances. As such, share of profit or loss in Idea for the year ended 31st March, 2011 has not been incorporated in the consolidated accounts of the Company. Share of profit of Idea accounted for in consolidated accounts of the Company for the year ended 31st March, 2010 was Rs. 66 crore. Accordingly, the numbers for the current year are not comparable with those of the previous year.

5. Utilisation of Share issue proceeds

213,147,391 equity shares of Rs. 1/- each at a premium of Rs. 129.90 were issued through Qualified Institutions Placement on 1st December, 2009. Entire amount has been spent for various ongoing projects and issue related expenses within 31st March, 2011.

6. Goodwill Impairment Reversal and Business Reconstruction Reserve

The Company had recorded goodwill on acquisition of Novelis in 2007-08. Due to the deterioration in the global economic environment and the resultant significant decrease in both the market capitalization of the Company and the valuation of the Novelis' publicly traded 7.25% Senior Notes during the 2008-09, an impairment loss of goodwill of Rs. 3,597 crore was ascertained in 2008-09. This amount was adjusted against Business Reconstruction Reserve (BRR) account created as per a Scheme approved by the Hon'ble Bombay High Court (the Court).

During the year ended March 31, 2011, the Company performed an analysis to determine whether the specific external event of exceptional nature is not expected to recur and whether the factors of exceptional nature no longer exist. Such global economic crisis was exceptional in nature which triggered impairment loss of goodwill. Consequent to the global crisis, major economies across the globe made radical changes in their regulatory environments as also introduced legislation, policy initiatives and risk management procedures to prevent recurrence of such events in the future. As such, the specific external event of exceptional nature is not expected to recur.

During 2010-11, Novelis staged a record performance in terms of revenues, profitability, free cash flow and liquidity and is now poised for transformational growth. Its credit metrics improved significantly enabling it to arrange for a debt refinancing to the tune of $4.8 billion out of which a return of capital of $1.7 billion has been made leading to recapitalization of the company.

Consequent to above, the impairment loss of goodwill of Rs. 3,597.30 crore has been reversed in 2010-11. Since the impairment loss had been adjusted against BRR in 2008-09 as per the Court approved Scheme, the reversal of impairment loss of goodwill has also been adjusted against BRR in 2010-11. Impact of this on Profit and Loss account for the year 2010-11 has been mentioned in table below:

Standalone-Higher/ (Lower) by Consolidated-Higher/ (Lower)by

2010-11 2009-10 2008-09 2010-11 2009-10 2008-09

Net Profit (Rs. Crore) - - (66.98) 3,439.29 (304.39) (4,616.87)

Basic EPS (Rs.) - - (0.44) 17.97 (1.72) (30.67)

Diluted EPS (Rs.) - - (0.44) 17.96 (1.72) (30.67)

Pursuant to a court approved scheme of financial restructuring under sections 391 to 394 of the Companies Act 1956 ("the Scheme"), Rs. 8,647.37 crore was transferred during 2008-09 to Business Reconstruction Reserve (BRR) from Securities Premium Account for adjustment of certain specified expenses. Accordingly, the following amounts have been adjusted against the BRR:

(Rs. Crore)

Standalone Consolidated

2010-11 2009-10 2008-09 2010-11 2009-10 2008-09

Opening Balance 8,580.39 8,580.39 - 3,726.11 4,030.50 -

Add: Transfer from Securities Premium Accounts per the Scheme - - 8,647.37 - - 8,647.37

Less: Adjustments made:

(a) Impairment loss/(reversal of - - - (3,597.30) - 3,597.30 impairment loss) of goodwill arising on consolidation of Novelis Inc. while preparing consolidated accounts of the group.

(b) Impairment of fixed assets - - 66.80 - - 111.30

(c) Interest and Finance Charges - - - 158.01 304.39 544.47 on loan taken by A V Minerals (Netherlands) B.V., a subsidiary of the Company, for acquition of Novelis Inc. by the Company.

(d) Costs in connection with exiting business - - - - - 363.62

(e) Certain costs in connection with the Scheme Closing Balance - - 0.18 - - 0.18

8,580.39 8,580.39 8,580.39 7,165.40 3,726.11 4,030.50

7. Management Discussion and Analysis Report

The Management & Discussion Analysis Report forming part of Directors' Report for the year under review, as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s), forms part of Annual Report. The report provides strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

8. Finance

Your company took several proactive financing measures to ensure smooth progress on these projects.

Utkal and Mahan Financing

The three projects, viz. Utkal Alumina [UAIL], Mahan Aluminium and Aditya Aluminium, with a capital outlay of USD 5 billion are at an advanced stage of execution. The equity for these projects has been financed by internal accruals and QIP issuance of USD 600 million in Nov '09.

During the year your company has achieved the financial closure of UAIL and Mahan Aluminium through debt financing for Rs. 4,906 and Rs 7,875 Crore respectively.

Novelis Refinancing:

Novelis Inc., the Company's wholly-owned subsidiary and a global leader in aluminium rolled products and beverage can recycling, has completed refinancing transactions to recapitalize its Balance Sheet. The refinancing consisted of the sale of $1.1 billion of 8.375% Senior Notes due 2017, $1.4 billion of 8.75% Senior Notes due 2020 (collectively, the "New Senior Notes") and a new $1.5 billion secured term loan credit facility.

The proceeds were used to refinance Novelis' prior secured term loan credit facility, to fund its previously announced cash tender offers for any and all of its $1.124 billion 7.25% Senior Notes due 2015 (the "7.25% Notes") and its $185.0 million 11.50% Senior Notes due 2015 (the "11.50% Notes") and to pay premiums, fees and expenses associated with the refinancing. In addition, a portion of the proceeds were used to fund a distribution of $1.7 billion as a return of capital to Novelis' parent company, AV Metals, Inc. Canada, which in turn repatriated the same as return of capital to its parent, AV Minerals (Netherlands) B.V., a fully owned subsidiary of Hindalco. Novelis also replaced its existing $800 million asset based loan ("ABL") credit facility with a new $800 million ABL facility. The new ABL terms and conditions are similar to the existing facility.

The new capital structure has strategic implications for Hindalco and Novelis. Novelis' ability to optimize its balance sheet is a testament to the management actions taken over the past two years to strengthen its core business and financial position. The refinancing provides Hindalco and Novelis with increased flexibility to address growth opportunities in order to further strengthen their global footprint.

AV Minerals (Netherlands) B.V. has used this amount for repayment of its outstanding debt and to return $650 million to Hindalco by way of reduction of the nominal value of its shares in the current quarter. On January 24, 2011, AV Minerals (Netherlands) B.V., a wholly- owned subsidiary of the Company, has reduced its nominal value of shares from Euro 1,000 per share to Euro 778.20 per share and has returned the excess paid up capital after paying up dues on partly paid-up shares. The extent of ownership interest of the Company in AV Minerals has not been affected by the reduction in the paid up capital.

The net excess paid up capital amounting to Rs. 2,962.72 crore (equivalent to Euro 477.58 million) was returned to the Company on January 25, 2011.

9. Expansion Projects

Hindalco - India

Brownfield Expansion Projects

Hirakud Smelter Expansion: The Smelter expansion at Hirakud from 155 KTPA to 161 KTPA was completed in Q4 FY11. A further expansion from 161 KTPA to 213 KTPA, along with a 100 MW Captive Power Plant [CPP] will be completed in early 2012.

The next phase of expansion of the Smelter from the proposed 213 KTPA to 360 KTPA, with a corresponding increase in CPP capacity from 467.5 MW to 967.5 MW is under evaluation. The environmental clearance for this is already in place.

Hirakud Flat Rolled Products [FRP] Project:

This project is underway for the transfer of all key equipment for FRP production from Novelis plant at Rogerstone, UK to Hirakud. In addition, orders have also been placed for related and balancing equipment. This will enable the Company to produce a wide range of superior engineering products, including can-body stock, for the local and export markets. The project is slated for completion towards end-2011. Around 2,000 people are working at the site on civil and structural jobs.

Belgaum Special Alumina: The Specials Plant expansion from 189 KTPA to 301 KTPA, with a coal based co-generation power plant. Natural gas adaptation for its rotary kilns is being evaluated.

The Company has embarked on an aspirational growth path towards which, three new Aluminium Smelters and two new Alumina Refineries are being set up in the states of Odisha, Madhya Pradesh and Jharkhand. With these projects on stream, aluminium smelting capacity will touch around 1.7 mio-tonne and alumina refining capacity around 6 mio-tonne.

Of these greenfield projects, three projects, viz. Utkal Alumina [UAIL], Mahan Aluminium and Aditya Aluminium, with a capital outlay of USD 5 billion are at an advanced stage of execution. The equity for these projects has been financed by internal accruals and QIP issuance of USD 600 million in Nov '09. The Company has achieved the financial closure of UAIL and Mahan Aluminium through debt financing. The process of financial closure for the debt component of Aditya Smelter will be launched soon.

These greenfield projects are located at remote places, without adequate infrastructure and in an uncertain regulatory environment. The Company is in the process of building necessary infrastructure to support the execution of the project, followed by transition to regular commercial operations.

While the critical long lead equipment for UAIL, Mahan and Aditya Smelters have been tied up and committed, severe inflationary pressure is being witnessed, triggered by increase in the commodity and fuel prices, for the ongoing civil and other related activities.

An overview of the Greenfield Projects is as indicated below:

Project Description Location Commissio -ning Financing

Utkal Alumina 1.5 mio-tonne Alumina Rayagada 2012 Financial Closure [UAIL] Refinery with integrated Odisha Completed with Bauxite Mines* financing of Rs. 4,906 crore

Mahan Aluminium 359 KTPA Aluminium Mahan, MP End 2011 Financial Closure Smelter & 900 MW Completed with CPP ** debt financing of Rs. 7,875 crore

Aditya Aluminium 359 KTPA Aluminium Lapanga, Early 2013 Equity part already Smelter & 900 MW Odisha tied up, debt CPP*** financing to be launched shortly

Aditya Alumina Alumina Refinery with Koraput, 2014 integrated Bauxite Mines Odisha

Jharkhand Aluminium Aluminium Smelter Sonahatu, 2015 Jharkhand

* MoEF approval for 3 mio-tonne/annum

** MoEF approval for 325 KTPA and 750 MW CPP

*** MoEF approval for 260 KTPA and 600 MW CPP

Process or seeking approvals is in progress

Utkal Alumina International Ltd (UAIL):

The construction of the alumina refinery, along with a 90 MW captive co-generation plant is in progress at UAIL, a 100% subsidiary of the Company. The output from UAIL would be sufficient to feed alumina to the Mahan and the Aditya Smelters. Contractors have mobilised more than 9,000 people at the site. The erection of major equipment like boilers, evaporators and turbines has begun.

The project performance review of some of the contracts indicates slippage in performance of certain contractors, mainly in the area of civil work. In order to avoid further slippage, some of the non-performing contractors have been suitably replaced with new contractors, who have better performance track record.

This has resulted in an additional estimated cost of Rs. 600 crore, as fresh contracts are at the current market price, with built-in bonuses referenced to the project milestone.

Some of the delayed contracts have a cascading impact on the timely execution of other contracts and have the potential to increase both time and cost of the overall project. Internal accruals and free cashflows are adequate to meet the probable overruns, which are being estimated.

Despite these overruns, the project capital cost continues to be favourably benchmarked with the capital cost of other comparable global projects.

The operating cost of this project will continue to be in the lowest cost quartile of the global cost of production and will continue to be value accretive.

Mahan Aluminium Project: This 359 KTPA Aluminium Smelter, along with 900 MW CPP, is coming up in Bargwan, Madhya Pradesh.

Contractors have mobilised about 16,000 people at the site. Engineering for the project is complete and major equipment for both the Smelter and the CPP have started arriving at the site. Civil foundation, fabrication and erection of structures have progressed substantially at both the Smelter and the CPP.

As indicated earlier, severe inflationary pressure is being witnessed, triggered by increases in commodity and fuel prices for the civil and other related activities of the project.

The project cost and timelines of these contracts are being reviewed.

The coal requirement for the CPP will be primarily met from Mahan Coal Block, being developed by Mahan Coal Limited (MCL), a joint venture between the Company and Essar Power Limited.

As communicated earlier, Mahan Coal Block was included under the category of 'No Go' area. An Empowered Group of Ministers has been set up to resolve all environment and forest issues for coal mines under "No Go" areas, meetings for which were held in February and April 2011, with the next meeting expected shortly. The Company continues to be optimistic of a favourable outcome in the matter.

The Company is in the process of finalising the arrangements for mining to fast-track the development of the mines, once the final forest clearance is received. As an interim measure, the Company has applied to the Ministry of Coal for temporary supply of coal (tapering linkage) to the Mahan CPP, until the Company's own mines commence operating at full capacity.

Expansion Projects

Novelis - South America

Pinda is the largest aluminium rolling and recycling facility in South America in terms of shipments and the only facility in South America capable of producing can-body and end-stock. Pinda recycles primarily used aluminium beverage cans and is engaged in tolling recycled metal for its customers. In response to the growing demand for the company's products in South America, a plan to invest nearly USD 300 million to expand the aluminium rolling operations in Pinda was announced earlier. This expansion will increase the plant's capacity by more than 50% to approximately 600 Kt of aluminium sheet per year. The project is expected to come on stream by late 2012.

Novelis - Asia

In May 2011, Novelis announced plans to invest approximately USD 400 million to

expand the aluminium rolling and recycling operations in South Korea, in response to the growing demand in Asia and the Middle East. The rolling expansion, which will include investments in both hot rolling and cold rolling operations, will increase aluminium sheet capacity in Asia to 1,000 Kt annually. As a response to the projected market growth in the region, this move is designed to rapidly bring to market, high-quality aluminium rolling capacity, aligned with the projected needs of a growing customer base. The new capacity is expected to be commissioned in financial year 2013. The expansion will increase Novelis' aluminium sheet capacity in Asia by more than 50% and will also include the construction of a state-of-the-art recycling centre for used aluminium beverage cans and a casting operation.

10. Subsidiaries/ Joint Venture

Indal Exports Limited was dissolved on March 4, 2011. A V Aluminium in Canada was merged with Novelis Inc.

Novelis Inc. (Wholly Owned Subsidiary of Hindalco)

Novelis is poised for Rapid Transformational Growth. It has posted a net income of USD 116 million under US GAAP. The adjusted EBITDA at a record level of USD 1.1 billion was up by 42%. Novelis reported a solid Free Cash Flow of USD 310 million.

The record results at Novelis reflect a number of ongoing initiatives to strengthen the business and prepare it for transformational growth. The global realignment of the organization towards operating as a fully integrated global company, optimizing the Company's footprint and reducing its cost base by closing underperforming and non- core plants and by investing in recycling initiatives fuelled its growth. The focus is on premium products, which now comprise over 70 percent of Novelis' product portfolio.

Other strategic initiatives like the expansion of the Company's Pinda mill in Brazil and global debottlenecking projects designed to increase capacity have been growth enablers as well.

Furthermore, refinancing and recapitalizing the business has positioned the Company to significantly invest over the next few years to capture strong market growth in its key product segments globally.

Novelis has operated its assets at or near capacity for the entire year. The Company intends to use its strong operating cash flow to fund $1.5 billion in capital expenditure over the next three years. The previously announced rolling mill expansion in Brazil and the recently announced expansion in Korea as well as strategic automotive expansion in North America are key focus areas in the near term to capitalize on future growth and solidify its position as the leading player in the global FRP industry.

Shipments of aluminium rolled products totalled 2,969 Kt for FY11, an increase of 10 percent compared to shipments of 2,708 Kt in the previous year. This increase in shipments for the year was driven by strong end-market conditions across all product segments globally, particularly in can, automotive and electronics. Net sales for FY11 were $10.6 billion, an increase of 22 percent compared to the $8.7 billion reported for FY10.

Over the next year, Novelis expects continued strong demand in its key product segments. As a result, capital expenditure for FY12 is projected to be between $550 and $600 million. Much of this capital is earmarked for strategic investments, which include Brazilian and Asian rolling mill expansions, strategic automotive capacity increase in North America and recycling initiatives across operating regions. The Company plans to primarily use its strong operating cash flow to fund this capital expenditure.

Aditya Birla Minerals Ltd [51% subsidiary of Hindalco]

Nifty mines recorded the highest copper production and also highest ore mine processed to date. Production of copper was at an all time high at 59.6 Kt despite lower copper grade. Mount Gordon has received the requisite approval for mining. Net profit for the year is AUD 57 Million against AUD 61 Million in FY10.

The Ministry of Corporate Affairs, Government of India vide its Circular No. 5/ 12/2007-CL-III dated 8th February, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary Companies to the balance sheet of the Company provided certain conditions are fulfilled. The Company has satisfied the conditions stipulated in the Circular and hence is entitled to the exemption. However, annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies investor's seeking such information at any point of time. The annual accounts of the subsidiary companies are available for inspection by any shareholder's at the Registered office of the Company. The annual accounts of the subsidiary company is also available for inspection at their respective registered office.

Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS-21), Consolidated Financial Statements prepared by the Company include financial information of its subsidiaries.

11. Employee Stock Option Scheme

The shareholders of the Company has approved an Employee Stock Option Scheme ("ESOS 2006"), formulated by the Company, under which the Company may issue 3,475,000 options to its permanent employees in the management cadre, in one or more tranches, whether working in India or out of India, including the Whole Time Directors of the Company. The shareholders have also approved giving discount up to 30% of the average price of the equity shares of the Company in the immediate preceding seven day period on the stock exchange. The ESOS 2006 is administered by the Compensation Committee of the Board of Directors of the Company ("the Committee"). Each option when exercised would be converted into one fully paid-up equity share of Re. 1/- each of the Company. The options will vest in 4 equal annual instalments after one year of the grant. The maximum period of exercise is 5 years from the date of vesting. Further, forfeited/ lapsed options are available to the Committee for grant.

During the year, under ESOS 2006, 572,160 options have been granted as Tranche III to its eligible employees as on 3rd September, 2010. However, under the ESOS 2006, so far the Committee has granted 3,545,550 options to its eligible employees in three tranches out of which 701,274 options were forfeited/ lapsed and are available to the Committee for grant as per term of the Scheme.

The compensation cost of stock options granted to employees have been accounted by the Company using the intrinsic value method. Accordingly, employee cost includes Rs. 1.34 crore (Previous year Rs. 1.00 crore) being the amortization of intrinsic value for the year ending 31st March, 2011.

Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 is given in Annexure – A.

12. Particulars as per Section 217 of the Companies Act, 1956

The information relating to the conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under section 217(1)(e) of The Companies Act, 1956, is set out in a separate statement attached to this report (Annexure B).

In accordance with the provisions of Sections 217(2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors' report, as an addendum thereto. However, as per the provisions of section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the company.

13. Fixed Deposits

The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

14. Directors

In accordance with Article 146 of the Articles of Association of the Company, Mr. M.M. Bhagat , Mr. C.M. Maniar and Mr. S.S.Kothari retire from office by rotation, and being eligible, offer themselves for reappointment.

During the year Mr. Ram Charan was appointed as an Additional Director of the Company w.e.f 12th February, 2011 pursuant to Section 260 of the Companies Act, 1956.

15. Corporate Governance

Your Directors reaffirm their commitment to the corporate governance standards as prescribed by The Securities and Exchange Board of India (SEBI). A separate section on Corporate Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

16. Group Structure

Pursuant to intimation from the promoters, the names of the promoters and entities comprising "Group" are disclosed in the Annual Report for the purposes of the SEBI (Substantial Acquistions of Shares and Takeovers) Regulations, 1997.

17. Directors' Responsibility Statement

Your Directors affirm that the audited accounts containing financial statements for the financial year 2010-11 are in full conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Company's financial condition and results of operations. These statements were audited by the statutory auditors of the Company, M/s. Singhi & Co., Chartered Accountants.

Your Directors further confirm that:

1) In the presentation of the Annual Accounts, applicable Accounting Standards have been followed.

2) That the accounting policies are consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year.

3) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4) The Directors have prepared the Annual Accounts on a going-concern basis.

Your Company's internal Auditors have conducted periodic audits to provide reasonable assurance that established policies and procedures have been followed.

18. Awards & Recognitions

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse fields. A selective list:

- Renukoot Unit received the "NIPM Gold Award for Best HR Practices" for the year 2010 by National Institute of Personal Management (NIPM).

- Renukoot Unit awarded the Greentech Gold Safety Award 2010 for Occupational Health and Safety Management in the Mining & Metals sector, by the Greentech Foundation, New Delhi.

- Renukoot Unit received the Greentech Environment Excellence Gold Award-2010 in the Metals sector for its efforts towards Environment Management by Greentech Foundation, New Delhi.

- Renukoot Unit recognised with the "Golden Peacock Award for Corporate Social Responsibility" for the year 2010.

- Renukoot Unit was presented the Greentech HR Excellence Silver Award for 2010 for excellence in Training.

- Renukoot Unit selected for "Best Exporter Award" for 2010 by the Container Corporation of India for contributing to India's economic progress through significant volume of exports.

- Renukoot Unit earned the National Energy Conservation Award (Second Prize) 2010, in the Metals Sector, presented by the Ministry of Energy, Government of India.

- Renukoot Unit received the Silver Certificate of "Indian Manufacturing Excellence Award – 2010" by the Economic Times and Frost & Sullivan

- Birla Copper received the Greentech Environment Excellence Gold Award-2010 in the Mining & Metals sector for its efforts towards Environment Management by Greentech Foundation, New Delhi.

- Birla Copper was awarded the Greentech Silver Safety Award 2010 for Occupational Health and Safety Management in the Mining & Metals sector by the Greentech Foundation, New Delhi.

- Renusagar Power Division received the Greentech Safety Gold Award 2011 in Power Sector for outstanding achievement in Safety Management by Greentech Foundation, New Delhi.

- Renusagar Power Division received the Greentech Gold Award 2010 in Thermal Power Sector for outstanding achievement in Environment Management by Greentech Foundation, New Delhi.

- Renusagar Power Division received the "Commendation for Safety Innovation Award 2010" by the Institution of Engineers (India).

- Renusagar Power Division received the "Special Commendation for the Golden Peacock Environment Management Award 2010" by the Institute of Directors, New Delhi.

- Hirakud Power Plant awarded Third Prize in the State level CII Orissa Award for Best Practices in Environment, Safety & Health – 2010

- Hirakud Power was awarded the Greentech Environment Excellent Gold Award - 2010 in the thermal power sector category.

- Hirakud Smelter earned a Certificate of Appreciation for commendable efforts towards Energy Conservation, presented by CII, Kolkata.

- Muri Alumina Plant was selected for the National Award for Excellence in Water Management 2010 - "Beyond the Fence" category, for the indigenous work being done by the unit, outside the fence as a Corporate Citizen and fulfilling its Corporate responsibilities.

- Taloja Rolling Plant received an award- cum-recognition from TATA TOYO Radiators Limited for helping them in their Import Substitution (High Impact Localisation- around 32 crore is their purchase per year) of one of their key supplies.

Quality Circle Awards

- Gold Awards to four Hindalco Renukoot Quality Circle Teams, Kushal, Vaibhav, Pragati, Nirantar, at the International Quality Circle Competition (IQCC 2010) held at Hyderabad

- Silver & Bronze Awards to Hindalco Hirakud Power Quality Circle Teams, Aryan & Power respectively at the International Convention on Quality Concept Circle (ICQCC-2010) held at Hyderabad.

- Quality Circle teams from Renukoot, Hirakud and Birla Copper Dahej Units excelled at the National QC Convention (NCQC 2010) winning Par Excellence, Excellence, Distinguished and Runners Up Awards.

Individual

- Mr. D. Bhattacharya, Managing Director, Hindalco selected for the prestigious Qimpro Gold Standard Business Award for 2010, given to a leader who has successfully implemented world-class quality practices in an organisation / institution.

- Global Corporate Excellence Award presented to Mr D. Bhattacharya, Managing Director, Hindalco for his exceptional efforts towards growth and promotion of non-ferrous metals industry in India. Presented by Corporate Monitor in association with the Department of Metallurgical Engineering and IT, Banaras Hindu University, Varanasi.

- Vishwakarma Rashtriya Puruskar awarded to four Renukoot Workers – Messrs A K Jha, D.S. Bist, Ravindra Kumar, and P.S. Rana, presented by the Ministry of Labour & Employment, Government of India.

- Prime Minister's Shram Awards 2010 to five Renukoot Workers : Mr Bhanwar Singh awarded Shram Bhusan Award and Messrs Mahendra Nath Gupta, Prem Narain awarded the Shram Veer Award while Messrs Hari Kant Gupta, Lallan Prasad received the Shram Shree Award, presented by the Ministry of Labour & Employment, Government of India.

- Prime Minister's Shram Award 2010 to Mr. Jayanti Patel from the Phosphoric Acid plant of Birla Copper Dahej unit, who earned the Shram Veer Award presented by the Labour Department, State Government of Gujarat.

19. Environment Protection and Pollution Control

Your Company is committed to sustainable development. Your Company is a signatory to the Global Compact and subscribes to the principle of triple-bottom line accountability.

A separate chapter in this report deals at length with your Company's initiatives and commitment to environment conservation.

20. Auditors

The observations made in the Auditors' Report are self-explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

M/s. Singhi & Company, Chartered Accountants and Auditors of the Company, retire, and being eligible, offer themselves for appointment.

In pursuance to Section 233-B of the Companies Act, 1956 your Directors have appointed M/S Nanabhoy & Co. to conduct the cost audit of Aluminium Business, Fertiliser Business, Captive Power Plant at Renusagar and Co-Generation Plant at Dahej and Renukoot and M/S Mani & Co. to conduct the cost audit of Aluminium Business at Alupuram, Belgaum, Muri, Taloja, Belur, Hirakud, Mouda, Kollur and Captive Power Plant at Hirakud and Muri for the year 2011- 2012 subject to the approval of Central Government.

21. Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Directors place on record their deep appreciation for the exemplary contribution made by employees at all levels. Their dedicated efforts and enthusiasm have been pivotal to your Company's growth.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai Chairman

Dated the 30th Day of May,2011

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Mar 31, 2010

The Directors are pleased to present the 51st Annual Report along with the audited annual accounts for the year ended 31st March, 2010.

The severe downturn witnessed in the previous year was arrested and macro economic factors showed signs of recovery. Several measures taken by your Company started yielding results in the form of higher production, lower cost and higher sale of value-added products. Your Company also successfully placed QIP of USD 600 Million during the year under review.

Financial Performance

Your Company s Consolidated Revenue crossed USD 12.8 Billion mark during the year. The consolidated EBIDTA was at USD 2.1 Billion i.e. Rs.10,069 Crore. Business Performance is amongst the best ever with highest net profit.

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

Standalone Results

For the year ended 31 March 2010, net sales at Rs.19,536 crore were higher by 7%. The highest ever metal volume, better product and geographic mix, despite subdued commodity prices helped improve the company s performance. The superior operational performance in terms of highest ever metal production and substantial cost savings on improved efficiencies were negated by adverse macro-economic factors, which were pronounced in both the businesses.

In the Aluminium Business, lower Rupee-LME eroded profit by around Rs.750 crore. Additionally, Rs.100 crore was lost on account of the higher coal cost at Renusagar Power. Copper Business, which benefitted from higher contracted TcRc (Treatment charges and Refining charges), lost Rs.750 crore on lower by-product credit, in terms of sulphuric acid realisation and lower fertiliser subsidy. Against this backdrop,

the performance of both the Businesses was satisfactory. Other income at Rs.260 crore was lower by Rs.377 crore, on account of low treasury corpus, post repayment of bridge loan in November 2008, which was taken for Novelis acquisition and for higher project spending. Abundant liquidity kept short-term rates low. This also affected yields on the company’s investments which are mostly in liquid plans. It also reduced the cost of working capital borrowing. As a result, the interest and financing charges also reduced from Rs.337crore in FY09 to Rs.278 crore in FY10.

Arising from the announcement of the Institute of Chartered Accountants of India dated 29th March, 2008 on Accounting for Derivatives, the Company has decided for early adoption of Accounting Standard (AS) 30 on Financial Instruments : Recognition and Measurement, in so far as it relates to derivative accounting, from 1st April, 2009. Accordingly, net loss arising on fair valuation of outstanding derivatives as on 01st April, 2009 amounting to Rs. 230.58 crore (net of deferred tax of Rs. 118.73 crore) has been adjusted against General Reserves following transitional provisions. Accounting for all derivatives from 1st April, 2009 have been done as prescribed under the AS. As a result, net gain / (loss) of Rs. (236.12) crore and Rs. 167.75 crore & Rs. 246.09 crore for the year ended 31st March, 2010 have been included under Sales and Raw Materials Consumed & Other Expenses (in Manufacturing and Other Expenses), respectively, with consequential impact on profit for the year ended 31st March, 2010. The figures of the current year in respect of above items are, therefore, not comparable with those of the previous year.

Consolidated Results

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

Further, change in the status of Idea Cellular Ltd. from joint venture to associate w.e.f from 1st January 2009 for the purpose of consolidation, also resulted in proportionate revenue from Idea not being included in the consolidated revenues.

Profit before depreciation, interest and taxes soared to a record level of Rs.10,069 crore from Rs. 3,661crore in FY09.Consolidated result include pre-tax adjustment for unrealised derivative gain/(Loss) of Rs. 2,736.4 crore in FY 10 and (Rs. 2,380.7) crore in FY 09 at Novelis.

Aluminium Business revenue fell by 11% to Rs.48,091 crore on the back of lower LME and lower demand in first half of the year. Earning before interest and tax turned around from a loss of Rs. 425 crore to a profit of Rs. 5,998 crore. This reflects steady improvements in operations across the board. Copper business revenue increased by 13% to Rs.12,575 crore and EBIT trebled from Rs. 374 crore to Rs. 1,003 crore.

(Rs. in Crores)

Standalone Consolidated

Financial Results for the year ended 31.03.2010 31.03.2009 31.03.2010 31.03.2009

Net Sales and Operating Revenues 19,536.28 18,219.65 60,722.11 65,962.95

Profit before Tax 2,264.56 2,690.32 6,180.76 (604.92)

Provision for Current Tax 374.20 478.11 554.30 872.53

Provision for Deferred Tax 87.90 121.40 1,377.59 (1,689.36)

Provision for Fringe Benefit Tax 0.00 11.37 0.00 12.19

Tax adjustment for earlier years (Net) (113.17) (150.83) (102.98) (149.11)

Profit before Minority Interest 1,915.63 2,230.27 4,351.85 348.83

Minority Interest 0.00 0.00 423.70 (171.78)

Share in Profit / (Loss) of Associates (Net) 0.00 0.00 2.68 36.72

Net Profit 1,915.63 2,230.27 3,925.47 483.89 Appropriations:

Debenture Redemption Reserve 0.00 5.00 0.00 5.00

Capital Reserve 0.00 0.00 0.00 1.50

Capital Redemption Reserve 0.00 0.41 0.00 0.41

Special Reserve 0.00 0.00 0.48 0.92

Dividend on Preference Shares 0.00 0.02 0.00 0.02

Dividend Tax on Preference Shares 0.00 0.01 0.00 0.01

Proposed Dividend on Equity Shares 258.32 229.58 259.91 231.16

Tax on Proposed Dividend 42.90 39.02 43.48 39.61

Transfer to General Reserve 1,701.91 1,956.23 1,704.96 1,958.55

Dividend

Your Directors have recommended a dividend of Rs.1.35 per share i.e. @135% per equity share for the financial year ended March 31, 2010 amounting to Rs.258.32 crore.

Together with the Corporate Dividend Tax of Rs. 42.90 crore, the total payout works out to Rs. 301.22 crore.

Growth plans underway in Aluminium

Your Company is aggressively pursuing various brownfield and greenfield growth opportunities in Aluminium as described below:

Project Commissioning

Hirakud Smelter

155 KTPA to 161 KTPA Q2FY11

161 KTPA to 213 KTPA Q4FY12

Flat Rolled Products at Hirakud Q2FY12

Utkal Alumina Project Q2FY12

Mahan Aluminium Project Q2FY12

Aditya Aluminium Project Q3FY12

Aditya Refinery Project Q1FY14

Jharkhand Aluminium Project Q1FY14

Further to the above, the smelting capacity at Hirakud is intended to be expanded from the proposed 213 KTPA to 360 KTPA with corresponding increase in back-up captive power from proposed 467.5 MW to 967.5 MW. The Company undertakes to appropriately finance the project.

To debottleneck and increase capacity, primarily in South America and Asia, Novelis has increased its capital expenditure plan by approximately USD 150 Million or 148 per cent for fiscal 2011 compared to the previous year. A significant amount is aimed at expanding its rolling operations in Brazil. This investment will increase capacity by over 50 per cent and better support the increasing demand for flat rolled products in the region. The expansion is expected to be completed by late 2012.

The details of the projects are covered in greater detail as the part of Management Discussion and Analysis section.

Finance

The Authorised Capital of the Company has increased from Rs. 200.00 crore to Rs. 215.00 crore by way of increase of 15,00,00,000 equity shares of Re. 1 each pursuant to a resolution passed at the Annual general meeting held on 18 September, 2009.

Upon allotment of 213,147,391 equity shares of Re 1 each at a premium of Rs 129.90 through Qualified Institutions Placement (QIP) on

1st December, 2009, paid-up capital of the Company has increased by Rs. 21.31 crore. The total amount received against QIP is Rs. 2,790.10 crore. Out of this amount Rs. 396 crore has been spent for various ongoing projects (including issue related expenses) till 31st March, 2010 and the balance amount has been invested temporarily in mutual funds.

Consolidated Financial Statements

In accordance with Accounting Standards AS-21 on Consolidated Financial Statements read with Accounting Standard 23 on Accounting for investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the audited Consolidated Financial Statements are provided in the Annual Report.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report forming part of Directors’ Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s), forms part of Annual Report. The report provides strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

Corporate Governance

Your Directors reaffirm their commitment to the corporate governance standards as prescribed by The Securities and Exchange Board of India (SEBI). A separate section on Corporate

Governance together with a certificate from the Auditors of the Company regarding full compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of Annual Report.

Directors Responsibility Statement

Your Directors affirm that the audited accounts containing financial statements for the financial year 2009-10 are in full conformity with the requirements of the Companies Act, 1956. They believe that the financial statements reflect fairly, the form and substance of transactions carried out during the year and reasonably present the Company s financial condition and results of operations. These statements were audited by the statutory auditors of the Company, M/s. Singhi & Co., Chartered Accountants.

Your Directors further confirm that:

1) In the presentation of the Annual Accounts, applicable Accounting Standards have been followed. However, the deviation from the Accounting Standard has been caried out with reference to the Scheme of arrangement, approved by the court for the purpose of preparing Consolidated Financial Statements. Refer Notes on Accounts for details of the same.

2) That the accounting policies are consistently applied and reasonable, prudent judgment and estimates are made so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year.

3) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4) The Directors have prepared the Annual Accounts on a going-concern basis.

Your Company s Internal Auditors have conducted periodic audits to provide reasonable assurance that established policies and procedures have been followed.

Subsidiaries/ Joint Venture

A wholly-owned subsidiary by the name Mauda Energy Limited has been incorporated on 5th October 2009 for generation of power to be used captively.

In terms of the facility agreement for foreign currency borrowing of US$ 981.80 Million availed by A V Minerals (Netherlands) B.V., a wholly owned subsidiary, the Company has entered into a deed of pledge of registered shares in A V Minerals (Netherlands) B.V. in favour of HSBC Bank USA, N.A. as pledgee.

Novelis

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

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

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

Aditya Birla Minerals

Aditya Birla Minerals Limited, the Australian subsidiary, reported profit after tax of AUD 61.4 Million as against a loss of AUD 76.0 Million in the previous year. Sustained cost management resulted in turnaround in financial performance. Lower production was mainly due to loss of production of copper in concentrate at Mt. Gordon and cathode production at Nifty oxide operations which were put under care and maintenance as a management decision. The drop in overall production was partly off-set by 13.8% increase in Nifty s production of copper in concentrate.

FY10 FY09

Copper Production (MT) 57,093 70,11

EBIT (AUD 000) 93,259 (103,605)

PAT (AUD 000) 61,440 (76,019)

The performance of the subsidiaries is covered elsewhere in this Annual Report.

Your Company has applied to the Central Government for grant of an exemption to your Company under Section 212(8) of the Companies Act, 1956, from attaching a copy of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and the Report of the Auditors to all the Subsidiary Companies. Subject to receipt of the approval, aforesaid documents are not being attached with the financial statements of your Company. These documents can be requested by any member, investor of the company / subsidiary company. Further, in line with the Listing Agreement and in accordance with the Accounting Standard 21 (AS-21), Consolidated Financial Statements prepared by the Company include financial information of its subsidiaries.

Employee Stock Option Scheme

The shareholders of the Company has approved an Employee Stock Option Scheme ( ESOS 2006 ), formulated by the Company, under which the Company may issue 3,475,000 options to its permanent employees in the management cadre, in one or more tranches, whether working in India or out of India, including the Whole Time Directors of the Company. Each option when exercised would be converted into one fully paid-up equity share of Re. 1/- each of the Company. The ESOS 2006 is administered by the Compensation Committee of the Board of Directors of the Company ( the Committee ). Under the ESOS 2006, the Committee has granted 2,973,390 options to its eligible employees in two tranches. Disclosure pursuant to the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 is given in Annexure –A.

Particulars as per Section 217 of the Companies Act, 1956

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

In accordance with the provisions of sections 217 (2A), read with the Companies (Particulars of Employees) Rules, 1975, the names and other particulars of employees are to be set out in the directors report, as an addendum thereto. However, as per the provisions of Section 219 (1) (b)(iv) of the Companies Act, 1956, the report and accounts, as therein set out, are being sent to all members of the company excluding the aforesaid information about employees. Any member, who is interested in obtaining such particulars about employees, may write to the Company Secretary at the Registered Office of the company.

Fixed Deposits

Your Company was accepting Fixed Deposits from the Employees. Acceptance of such fixed deposits has been discontinued from FY 2009-10. The total outstanding deposits are Rs. 0.33 crore as at 31st March, 2010.

Directors

In accordance with Article 146 of the Articles of Association of the Company, Mr. Kumar Mangalam Birla, Mr. E.B. Desai and Mr. A.K. Agarwala retire from office by rotation, and being eligible, offer themselves for reappointment.

Awards & Recognitions

Several accolades have been conferred upon your Company, in recognition of its contribution in diverse fields. A selective list:

1. Renukoot unit was awarded the Greentech Safety Gold Award 2009 for Occupational Health and Safety Management and the Greentech Environment Gold Award 2009 for environmental excellence, in the Mining and Metal Sector, presented by Greentech Foundation, New Delhi.

2. Renukoot unit was awarded the prestigious “Golden Peacock National Quality Award – 2010”.

3. Amity International Business School conferred on Renukoot unit the “Amity Corporate Excellence Award” for its notable initiatives in Corporate Social Responsibility.

4. Institute of Engineers (India) awarded Renukoot unit with the “Safety Innovation Award-2009” in the metals sector for its exemplary initiatives in Occupational Health and Safety.

5. Renusagar Power Division was awarded the “Golden Peacock Environment Management Award 2009”.

6. Renusagar Power Division received the “Rajiv Gandhi National Quality Award 2008,’’ Commendation Certificate presented by the Bureau of Indian Standard (BIS).

7. Renusagar Power Unit was awarded the Greentech Environment Excellence Gold Award 2009, in Thermal Power Plant Category, by Greentech Foundation, New Delhi.

8. CII has conferred the Energy Efficient Unit award to Renusagar Power Division during the 10 National Awards for Excellence in Energy Management-2009 .

9. Hirakud Smelter unit was awarded the National Energy Conservation Award 2009, ranking first in the Aluminium Sector.

10. Hirakud Smelter unit awarded the Greentech Safety Silver Award 2009 for Occupational Health and Safety Management presented by GreenTech Foundation, New Delhi.

11. Hirakud Power Unit was globally recognised as one of the top six power plants for its environment friendly operations by the POWER Magazine.

12. Hirakud Power Unit was awarded the Greentech Environment Gold Award 2009 for best environment management and practices, and the Greentech Safety Silver Award 2009, by Greentech Foundation, New Delhi.

13. Your Company s Mines earned awards in Environment, Safety, Mining Practices during the Mines Safety Week and Mineral Conservation Week programmes at regional levels.

14.Birla Copper Dahej was awarded the Greentech Environment Gold Award for its exemplary environmental practices and performance and the Greentech Safety Silver Award, presented by Greentech Foundation, New Delhi.

Environment Protection and Pollution Control

Your Company is committed to sustainable development. Your Company is a signatory to the Global Compact and subscribes to the principle of triple-bottom line accountability.

A separate chapter in this report deals at length with your Company s initiatives and commitment to environment conservation.

Auditors

The observations made in the Auditors Report are self-explanatory and do not call for any further comments under Section 217 (3) of the Companies Act, 1956.

M/s. Singhi & Company, Chartered Accountants and Auditors of the Company, retire, and being eligible, offer themselves for appointment.

Human Resource Development

Your Company continuously strives to foster a culture of high performance. Your Management has infused a lot of rigor and intensity in its people development processes and in honing skill sets. Its HR processes are absolutely aligned to organizational goals. The implementation of People Soft HRMS (Human Resource Management System), the variable pay plan and job bands have been institutionalized. Ongoing learning, refreshing HR systems in line with global benchmarks, aligning rewards and recognition with performance, have enabled your Company sustain its reputation of a meritocratic organization. The Group s Corporate Human Resources function has played and continues to play an integral role in your Company s Talent Management Processes.

Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Honorable Ministers, Secretaries and other officials of the Ministry of Mines, Ministry of Coal, the Ministry of Chemicals and Fertilizers and various State Governments. Your Directors thank the Financial Institutions and Banks associated with your Company for their support as well.

Your Company s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged.

Your involvement as Shareholders is greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Mumbai

Dated the 4th Day of June, 2010 Chairman