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Hindalco Industries Ltd Management Discussions

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Jul 15, 2024|09:39:55 AM

Hindalco Industries Ltd Share Price Management Discussions

(Including Management Discussion and Analysis)

Dear Shareholders,

The Board of Directors of Hindalco Industries Limited ("Your Company" or "the Company") is pleased to present 64th (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 worlds largest aluminium rolling and recycling company, a major copper player, and one of Asias 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, Hindalcos 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. Hindalcos 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 countrys copper requirements.

Guided by its Purpose of building a greener, stronger, smarter world, Hindalco provides innovative solutions that nurture a sustainable planet. Today, Hindalcos 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 worlds 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 H 10,097 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 Aluminas 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.

Hindalcos 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. Hindalcos acquisition of Hydros 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 Companys 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 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 $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.

Hindalcos 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)

Figure 1 : Prim ry Production

(in Million Tons)

Table 1: Global Production and Consumption (in Million Tons)

Particulars CY 2019 CY 2020 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 Chinas 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:

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

FY2021-22/
Sector 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 Slowdown in demand due concerns of recession
Durables
Packaging Substitution against PET bottles in Europe and
North America.

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 Foil stock Stable demand from food and pharmaceutical sectors Sharp growth in solar and wind installations.
Electrical Consumer durables Current capacity of wind and solar is ~800 GW (~2/3rd of 2025 target of 1200 GW) 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.

Refined Copper Production

(in Million Tons)

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. Chinas 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.

Refined Copper Consumption

(in Million Tons)

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 aluminiums 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 Companys 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 March 31, 2023.

Hindalco – SWOT Analysis

India Aluminium
Strengths Weakness Opportunities Threats
• Fully Integrated business model • Commodity product (upstream)

• Immense headroom for a growing market in India; per capita aluminium consumption in India at 1/4th of global average

• Global aluminium price volatility, Forex and raw material price volatility

• Smaller Market Share in Extrusion & Foils

• Dominant player in India across upstream and downstream

• Competition from China in the downstream

• Upstream business linked to global aluminium price volatility.

• Rising Aluminium Consumption in the end use segments like Building & Construction, Automotive, Packaging, and Consumer Durables

• Utkal - among the worlds most economical and efficient Alumina producers; with capacity of ~2.3 Mt in FY2022-23 and further de-bottlenecking project of 350Kt is under-way
• Rising imports of scrap

• Increasing imports of VAP from the Free Trade Agreement (‘FTA) countries.

• Substitution opportunity versus steel, uPVC, wood, among others

• Increased focus on value- added products (VAP) will enable the Company to be delinked from volatility in global prices of aluminium.

• Light-weighting initiatives in commercial vehicles, personal mobility, etc. leading to a higher Aluminium adoption in the country.

• Domestic availability/shortage of resources (mainly coal)

• Market Leadership in Flat Rolled Products.
• PLI scheme for White Goods and proactive trade measures by the Government to help in import substitution.

 

Strengths Weakness Opportunities Threats
• Diverse, high-value product portfolio with unmatched global presence and scale • Capacity is constrained until capacity expansion projects underway are completed

• Strong long-term demand in Cans and Automotive with strong recycling and sustainability value proposition offered by aluminium. Demand for specialties moves with GDP growth rate and benefits from sustainability proposition. Aerospace sector is growing with aircraft build rates and growing presence in China

• Supply chain disruption and high- cost inflation

• Long term contracts while providing volume stability, create time lag between inflation and ability to pass on higher costs to customers

• Geo-political instability, increasing tariffs, protectionist measures and cybersecurity risks

• Worlds largest recycler of aluminium
• Strong customer base with long term contracts
• Premium pricing enabled by innovative product offerings in tight-capacity, high-growth end markets

• Increasing competition for scrap input materials

• Build on existing sustainability leadership by expanding recycling capabilities

• Market leader in a more recession resistant beverage packaging end-market
• Digitalising the value chain, including implementing a ‘Plant of the Future operating model to drive efficiency gains and overall operational excellence

Copper

Strengths Weakness Opportunities Threats
• A balanced portfolio of revenue streams to tide through volatile market

• Dependence on imported Copper concentrate

• Immense headroom for growth due to lower consumption vs global average

• Mine Disruptions

• Duties & Free Trade Agreement and trade politics

• Secured concentrate supply via long-term contracts with miners

• Strong demand for copper, particularly in EV and electrical segments

• Focus on VAP like copper rods and Inner Grooved Tubes (IGT), first-of-its-kind special alloys, and copper and e-waste recycling

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 Hindalcos 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.

The trends of total alumina production, and aluminium production and sales in the past five years has been as follows:

Tot l Alumin Production

(in Million Tons)

Financial Overview

Aluminium Upstream

Revenue for Hindalcos aluminium upstream segment was up 7%, at Rs. 33,010* Crore in FY 2022-23 from Rs. 30,844* Crore in FY 2021-22 on account of higher volumes. EBITDA was down 33% at Rs.8,402 Crore versus Rs.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.

(Rs. 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 Hindalcos aluminium business along with Utkal Alumina.

Aluminium Downstream

Revenue for Hindalcos aluminium downstream segment was

Rs.11,009* Crore in FY 2022-23 in line with previous year. Record EBITDA at Rs.627 Crore up 64% versus Rs.382 Crore a year earlier as a result of better pricing and volumes.

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

(Rs. Crore)

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

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 in 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.

Financial Overview

Copper segment revenue for FY 2022-23 was at Rs.41,702* Crore (vs. Rs.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 Rs.2,253 Crore (vs. Rs.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

( Rs. Crore)

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

c. Novelis

Operational Overview

Novelis Inc., is the global leader in flat-rolled aluminium products and the worlds 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, 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.

Shipments (Kt) nd EBITDA

($/tonne)

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 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) 781 934 (16)%
w/o Exceptional 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 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

( Rs. in Crore)

Hindalco Standalone

Consolidated
Description 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 - 9 6
Tax)
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 (Rs.) in Rs. - - 45.42 63.85
Basic EPS - Discontinued Operations (Rs.) in Rs. - - - (2.12)
Basic EPS (Rs.) in Rs. 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, Rs.418 Crore, which represents the principal portion of (a) PIS/COFINS related tax credit income in Brazil of Rs.358 Crore (net of litigation cost of Rs.9 Crore) for FY22 and (b) tax rebates for sales to Manaus, Brazilian Free Trade Zone Rs.60 Crore for FY22, as it is included in the results of Novelis segment.

Appropriations to Reserves

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

Dividend

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

Consolidated Financial Statements

Revenue

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

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

Consolid ted Revenue split by Business for FY 2022-23

EBITDA

Consolidated EBITDA for FY 2022-23 was lower by 20% to

Rs.24,131 Crore from Rs.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.

Finance Cost

Finance Cost decreased 3% and was at Rs. 3,646 Crore in FY 2022-23 from Rs. 3,768 Crore in FY 2021-22. This was mainly on account of repayment of Rs.6,000 Crore, Redeemable Non-Convertible Debentures (NCDs) and pre-payment of Utkal Alumina International Limited term loan of Rs. 2,574 Crore scheduled in September, 2030 and repayment of a term loan of Rs.76 Crore in Hindalco in FY2022-23.

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 Rs.7,086 Crore in FY2022-23 from Rs.6,729 Crore in FY2021-22. This increase is due to reorganisation/amortisation activities on account closure of certain outdated processes at Noveliss Richmond plant in North America amounting to Rs.139 Crore, and the suspension of certain plants and equipment amounting to Rs.65 Crore in FY2022-23.

Exceptional Income/ (Expense)

In FY2022-23, total exceptional income was at Rs.41 Crore compared to Rs. 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 Rs. 3,144 Crore in FY2022-23 against Rs.5,373 Crore in FY2021-22. This decrease was due to lower profitability of the Company in FY2022-23, and the Groups decision to write back its net deferred tax liability amounting to Rs.609 Crore, during the reporting period.

Profit/ (Loss) after tax

Profit After Tax (PAT) in FY2022-23 was at Rs. 10,097 Crore down 26% from Rs. 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 Rs.10,097 Crore versus Rs. 14,201 in the previous year.

Profit fter T x

( D Crore)

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.

Amount
Date of Allotment Coupon Rate Date of Maturity
(Rs. in Crore)
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 Rs.700 Crore through issuance of Unsecured, Listed, Rated, Redeemable, Non-Convertible Debentures (NCDs) of face value of Rs.1,00,000 each on private placement basis. Details pertaining to such issue is mentioned as below:

Coupon Rate Date of Allotment No. of NCDs Total Amount (Rs. in Crore) Tenor Maturity Date
7.60% Unsecured, Listed, Rated, Redeemable, Non-Convertible Debentures January 18, 2023 70,000 700 14 months March 18, 2024

The aforesaid debentures are listed on National Stock Exchange of India Limited.

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 Companys consistency in managing its credit with customers and also reflects the Companys 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 Companys 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 Companys 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 Companys 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.

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 Rs. 19,208 Crore in FY 2022-23 versus Rs.16,838 Crore in FY 2021-22. The table below shows the comparative movement of Cash flows:

(Rs. Crore)

Year ended
Particulars 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

Hindalcos 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 long-term 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 Hydros Kuppam extrusions facility and Polycabs Ryker CCR helped bolster Hindalcos 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. Hindalcos 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 Companys 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

Companys 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 companys 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 Companys 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. Hindalcos 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 Companys 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 organisations 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, Hindalcos 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. Hindalcos 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 Hindalcos 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

Hindalcos 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 Indias 40 Best Workplaces in Health & Wellness, based on the Companys psychologically and emotional healthy work culture that inspires high performance. A high Workplace Wellness Index? is a testimony to Hindalcos 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. Hindalcos 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 organisations 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 Companys 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 Groups 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 64th 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, 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.

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 Rs. 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 Companys 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 arms 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 Companys 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 Companys 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 Companys 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 Companys 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.

Rs.. 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 BANI 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 Companys 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 Companys website viz. www.hindalco.com

M. Nomination Policy and Executive Remuneration Policy/Philosophy

The Companys 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 Companys 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 Auditors 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 Companys 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 Companys Internal Auditor of Aluminium Business.
• M/s Suresh Surana & Associates LLP were appointed as the Companys Internal Auditor of Copper Business.
• Internal Audit Reports are placed on half- yearly basis before the Audit Committee for their review.

Q. Corporate Governance

[Para C,E of Schedule V of 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

[S.186 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.92(3) 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 Companys 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 ‘Indias Best Employers among Nation Builders for the second consecutive year (2023) by Great Place to Work? Institute.

• Hindalco is among top 40 of Indias 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.

• Hindalcos Integrated Annual Report FY 2021-22 won Indias 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 Companys subsidiaries; • there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys 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 Companys 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 Companys operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Companys 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 Hindalcos 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

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