national aluminium company ltd Auditors report

To the Members of

National Aluminium Company Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the Standalone Financial Statements of National Aluminium Company Limited ("the Company"), which comprise the Balance Sheet as at 31^st March, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view, in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and accounting principles generally accepted in India, of the State of Affairs of the Company as at 31^st March, 2023, and its Profit, Other Comprehensive Income, Changes in Equity and its Cash Flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements Section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone Financial Statements.

Emphasis of Matter i. We draw attention to Note No. 7.3 regarding capitalisation of Coal Mines, starting of mining operations from 09.11.2022 and declaration of start of production from 01.04.2023; and ii. We draw attention to Note No. 14.1 regarding non accounting of capital assets/ expenditure in absence of finalisation of issues arising out of

Rehabilitation and Resettlement Policy and option yet to be given by the Project Displaced Families. Our opinion is not modified in respect of above matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. ese matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. e key audit matters that we have identified in the current year are as follows:

Key Audit Matter	How the matter was addressed in our audit
1. Carrying value of Property, Plant and Equipment, Intangible assets (including Capital work-in-progress and Intangible Assets under Development)
Property, plant and equipment, capital work-in-progress (CWIP), intangible assets and Intangible assets under development represent significant balances recorded in the statement of financial position.	Our audit procedures relating to the carrying value of property, plant and equipment including intangible assets and capital work-in-progress included the following:
	• We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Indian Accounting Standards (Ind AS) 16 Property, Plant and
e evaluation of the recoverable amount of these assets requires significant judgement in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets including impairment provisions related to the assets.
	Equipment and Ind AS 38 Intangible Assets.
ere are a number of areas where management judgement impacts the carrying value of property, plant and equipment, intangible assets and their respective depreciation profiles. ese include the decision to capitalise or expense costs; the asset life review including the impact of changes in the Companys strategy; and the timeliness of	• We assessed whether the carrying values and the useful lives were reasonable by challenging managements judgements through comparing the useful lives prescribed in Schedule II to the Companies Act, 2013 and the useful lives of certain assets as per the technical assessment of the management.
capitalisation, determination or the measurement and recognition criteria for assets retired from active use.	• We compared the useful lives of each class of asset in the current year to the previous year to determine whether there were any significant changes in the useful lives of assets, and considered the reasonableness of changes based on our knowledge of the business and the industry.
	• We assessed whether indicators of impairment existed as at 31st March 2023 based on our knowledge of the business and the industry and wherever required the provision of impairment of assets/CWIP were reviewed.
	• We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life.
	• In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortisation; and in assessing the need for accelerated depreciation/amortisation,
Key Audit Matter	H flow the matter was addressed in our audit
2.Valuation of employees defined benefit obligations and other long-term benefits
e Company has recognised long-term employee benefit liabilities and defined benefit obligations (net of plan asset against funded gratuity obligation).	Our audit procedures relating to the valuation of employees, defined benefit obligations and other long-term benefits included the following:
e valuation of employee benefit obligations is dependent on market conditions and assumptions made. e key audit matter specifically relates to the following key assumptions like discount rate, inflation expectations and life expectancy assumptions. e setting of these assumptions is complex and requires the exercise of significant	• In testing the valuation, we have examined the reports of external actuarial specialists to review the key actuarial assumptions used, both financial and demographic, and considered the methodology utilised to derive these assumptions.
Management judgement with the support of third party actuary.	• We evaluated the assumptions made by management and the actuary to ensure that these are consistent with the principles of Ind AS 19 Employee Benefits.
	• Furthermore, we have examined the sensitivity analysis on the key assumptions in valuing the defined benefit obligations.
3. Ascertainment, disclosure and provisioning in respect of contingent liabilities
e Company disclosed contingent liabilities in the Financial Statements. e Company has material uncertain tax matters, both direct and indirect, under dispute involving material aggregate demand which require significant judgement to determine the possible outcome of these disputes.	Our audit procedures relating to the ascertainment, disclosure and provisioning in respect of contingent liabilities included the following:
Additionally, the Company has other on-going legal matters relating to various claims by the Government of Odisha or other agencies constituted by the State Government and by contractors/suppliers which require application of Management judgement in order to determine the likely outcome.	We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to disclosure and provisioning of contingent liabilities in accordance to Ind AS 37 Provisions, Contingent Liability and
	Contingent Assets.
	Regarding direct and indirect tax contingent liabilities, we undertook following principal audit procedures:
	• Assessment of the process and relevant controls implemented to identify tax litigations and pending administrative proceedings.
	• Assessment of assumptions used in the evaluation of potential tax risks performed by the tax department of the Company considering the legal precedence and other rulings in similar cases.
	• Discussion with the management regarding the status of the most significant disputes and inspection of the key relevant documentation.
	• Analysis of opinion received from tax experts where available.
	• Review of the adequacy of the disclosures in the notes to the financial statements. In assessing the potential exposures of the Company in respect of other contingent liabilities, we have:
	• assessed the design and implementation of controls in relation to the monitoring of known exposures;
	• referred Board and other meeting minutes to identify areas subject to Companys consideration;
	• consulted with the Companys internal legal advisors in understanding on-going and potential legal matters impacting the Company;
	• reviewed available legal opinions from experts; and
	• reviewed the proposed accounting and disclosure of actual and potential legal
4. Advances and deposits in respect of tax matters under litigation continuing as assets
e Financial Statements disclose other assets, which includes material recoverable	Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following:
claims of direct and indirect tax deposits (net of provision) including VAT and Cenvat credits which are pending adjustment/ adjudication.	• We obtained from management the details of completed tax assessments and demands and appeal orders of the appellate authority.
Significant judgement is required in assessing the nature of these exposures and their accounting and disclosure requirements.	• We involved our internal experts to challenge the managements underlying assumptions in estimating the tax liability and the possible outcome of the disputes.
	• Our internal experts also considered legal precedence and other rulings in evaluating managements position on these uncertain tax positions.
	• Additionally, we have considered opinions of legal and tax experts, wherever available, to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.
5. Valuation of deferred tax assets and liabilities
e Company has disclosed deferred tax assets/ liabilities in the Financial Statements. e Company operates in activities which involves application of various provisions in income tax.	Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following:
e assessment of the valuation of deferred tax assets/liability, resulting from temporary differences, and provisions for uncertain tax positions is significant to our audit as the calculations are complex and depend on sensitive and judgemental assumptions. ese include, amongst others, long-term future profitability and local fiscal regulations and developments.	• Ascertained the completeness and accuracy of the deferred tax assets/liabilities and recognizing uncertain tax positions.
	• We challenged and tested the Managements assessment of the recoverability of the deferred tax assets, and the probability of future cash outflows in respect deferred tax liabilities identified by the Company.
	• We also assessed the applicable local fiscal regulations and developments, in particular those related to changes in the statutory income tax rate and of the statutes of limitation, as these are key assumptions underlying the valuation of the deferred tax assets/liabilities.
	• We analysed the tax positions and evaluated the assumptions and methodologies used by the Company.
	• In addition, we also focused on the adequacy of the Companys disclosures as per Ind AS 12 Income Taxes on deferred tax assets/liabilities and assumptions used.
6. Extraction of Coal through Mine Developer and Operator (MDO)
e Company has capitalised the Coal Blocks Utkal D & Utkal E under Mining	Our audit procedures included the following:
Right with effect from 25.03.2021 and 20.01.2023 respectively. For extraction of coal, these coal mines have been given to the Mines Developer and Operator (MDO) vide agreement dated 8th March, 2022.	• Obtained an understanding of the Companys process and tested internal controls associated with the estimation and accounting of inventory of coal, liability of trade payable to MDO and Mine Closure Liability, cost of coal and other expenses and income.
As per the terms of the contract, the MDO has the responsibility of executing certain	• Discussed with the management to understand their assessment on each qualitative and quantitative factor and reviewed consistency of the Managements explanation with the underlying documentation, rules, and regulations.
capital works including payment for Mine Closure Liability and revenue works including removal of overburden and extraction of coal including its stacking at the Mines at designated places and transportation of coal to Railway Siding or site of the	• Obtained certificate from Management on availability of Inventory at the Mines.
Captive Power Plant of the Company.	• Assessed disclosures made by the Company in accordance with the requirements of Ind AS.
On transportation and receipt of coal at the site of the Company, liability with amount at agreed price per tonne, is to be provided. e expenses of overburden, day to day expenditure by the MDO for production of coal and declaration of stock of production thereof at site are required to be done by the MDO and accounting to be done by the	• Obtained necessary management representation.
Company. e price of coal is dependent on calculation based on wholesale price index relevant on period of despatch.
Considering judgements involved in estimating various elements of expenditure, income, assets and liabilities balances and appropriate time at which these are to be accounted, we have determined this to be a key audit matter.
7. Procedure adopted for awarding Contracts for expansion
e Company has planned to setup the expansion of Alumina Refinery plant of	Our audit approach was a combination of test of few contracts for assessment of internal controls and substantive procedures which included the following:
1 MTPA.
For execution of the above volume, multiple contracts for Works, Purchases & Services are required which include high inherent risk (i.e. complex calculations, significant estimation uncertainty, etc.) and control risk (i.e. possibility of human errors, circumvention by collusion, inappropriate management override).	• Obtained the Expansion budget allocation for various stages of sequential activities
e process of award requires multiple stage of appropriate evaluation of bidders which includes their, technical expertise, experience of similar execution, financial stability, human resources mobilisation, etc.	• Evaluated the design of contract assessment procedures for technical & financial parameters and the estimation of efforts required to complete the NIT (notice inviting tenders);
Assessment of appropriate evaluation includes managements judgement to ascertain the competencies through large volume of documents submitted by prospective bidders on technical parameters, responding to the queries of bidders, setting the time line for acceptance, execution, completion etc. with the support of appointed	• Tested the evaluated documents, views of EPCM, complex calculation, allocation of budgets estimation, application of index, application of statutory levies etc. to arrive at documents preparation
Engineering, Procurement, Construction, Management (EPCM). e above also includes assessment of financial parameters, matching the bid value with the estimation, evaluation of requirement of financial guarantee for any uncertainties, multiple level of management concurrences, classification of expenditure into capital or revenue and award of contracts.	• Selected a sample of contracts and through the audit efforts, analytical skills and visit to the site of constructions, wherever necessary, to identify significant variations with any subsequent changes in NIT, estimations, terms, etc.;
Further, post award contracts activities like monitoring of progress of contracts, addressing any critical issues that come in between, resolution of local conflicts involve judgement and decision making by the Company.	• Discussed with the management, EPCMs on the above significant variations to obtain their judgement or justification that has bearing on possible delays in achieving the milestones as well as cost and time overrun;
Considering the complex technical & financial assessment and calculation for selection of appropriate bidder(s), we have determined this to be a key audit matter.	• Tested few progress report of EPCM to identify the bottlenecks in execution, their suggestions, applying the corrections, milestones achieved, plan for the subsequent periods, etc.
	• Reviewed the Board/Committee notes for any specific or significant changes in estimates of scope or vendors.
	• Performed analytical procedures and tested the reasonableness of progress of the contracts that have exceeded the cost or time significantly or requires improvement in control measures.

Information Other than the Standalone Financial Statements and Auditors Report ereon

e Companys Board of Directors is responsible for the other information. e other information comprises the information contained in the Companys Annual Report but does not include the Standalone Financial Statements and our report thereon. ese reports are expected to be made available to us after the date of this auditors report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information mentioned and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action, if required.

Managements Responsibility for the Standalone Financial Statements

e Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) specified under Section 133 of the Act. is responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, Management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

e Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. e risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management;

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant de_ciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure "A" to this report a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. In compliance to directions of the Comptroller and Auditor General of India under Section 143(5) of the Act, we give in Annexure "B" to this report a statement on the matters specified therein.

3. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books; (c) e Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account; (d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended; (e) Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated

05.06.2015 issued by the Ministry of Corporate Affairs, Government of India;

(f ) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure "C"; (g) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of Section 197(16) of the Act, as amended: e provision of Section 197 read with Schedule V of the Act, relating to managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India; and (h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us: i. e Company has pending litigations, the liabilities in respect of which is either provided for or disclosed as contingent liabilities – Refer Note 27 to the Standalone Financial Statements; ii. e Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, in respect of long term contracts. As explained to us, there are no derivative contracts entered into by the Company; iii. ere has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; iv. (a) e Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; (b) e Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; (c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement; v. As stated in Para 19.3 to the Standalone Financial Statements: a. e final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the

Act, as applicable; and b. e interim dividends declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act; and vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting so_ware which has a feature of recording audit trail (edit log) facility is applicable for the Company only w.e.f. 1st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.

ANNEXURE "A"

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH 2023 OF NATIONAL ALUMINIUM COMPANY LIMITED

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date) i. (a) (A) e Company is maintaining proper records showing full particulars including quantitative details and situation of Property, Plant and Equipment including Right of Use Assets; (B) e Company is maintaining proper records showing full particulars of intangible assets; (b) Movable Property, Plant and Equipment have been physically verified by the Management every year. Pursuant to the program, movable Property, Plant and Equipment were physically verified during the year and there were no material discrepancies noticed on such verification conducted during the year; Immovable Property, Plant and Equipment have been physically verified by the Management in phased manner of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies between book records and physical assets have been noticed in respect of Immovable Property, Plant and Equipment verified during the year; (c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except the following: Out of 8,262.23 acres of freehold land and 11,320.92 acres of leasehold land owned by the Company, title/lease deeds in respect of 120.17 acres of freehold land and 1,585.11 acres of leasehold land are pending execution of title documents in favour of the Company. However, the Company has been permitted by the concerned authorities to carry on its operations on the said land. e details are as follows:

Description of Property	Gross Carrying value ( crore)	Held in name of	Whether promoter, director or their relative	Period held	Reason for not being held in name of Company	Whether disputed
17.25 Acres of Freehold land at	0.07	Govt. of Odisha	No	1982-83	Pending Registration	No
Koraput district of Odisha
46.90 Acres of Freehold land at	0.33	Industrial Development	No	1987-88	Pending Registration	No
Angul district of Odisha		Corporation of Odisha
56.02 Acres of Freehold land at	0.13	Respective Land Owners	No	1987-88	Land is in the possession	No
Angul district of Odisha					of the Company. Transfer
					of land is in the process.
845.94 Acres of Leasehold land	0.35	Govt. of Odisha	No	1982-83	Pending Registration	No
at Koraput district of Odisha
656.05 Acres of Leasehold land	1.38	Industrial Development	No	1987-88	Pending Registration	No
at Angul district of Odisha		Corporation of Odisha
1.69 Acres of Leasehold land at	-	Industrial Development	No	2018-19	Pending Registration	No
Angul district of Odisha		Corporation of Odisha
16.60 Acres of Leasehold land at	-	Industrial Development	No	2020-21	Pending Registration	No
Angul district of Odisha		Corporation of Odisha
32.03 Acres of Leasehold land at	-	Industrial Development	No	2022-23	Pending Registration	No
Angul district of Odisha		Corporation of Odisha
32.12 Acres of Leasehold land at	-	Govt. of India	No	2022-23	Pending Registration	No
Angul district of Odisha
0.66 Acres of Leasehold land at	0.09	Industrial Development	No	1987-88	Pending Registration	No
Dhenkanal district of Odisha		Corporation of Odisha

(d) e Company has not revalued any of its Property, Plant and Equipment (including Right of Use assets) and Intangible Assets during the year; (e) According to information and explanations given to us, the Company doesnt hold any benami property and therefore there are no proceedings initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988, as amended, and rules made there under; ii. (a) Inventories, except stocks in-transit, have been physically verified at reasonable intervals by the Management. In our opinion, the coverage and procedure of such verification by the Management is appropriate. No discrepancies of 10% or more in the aggregate for each class of inventory were noticed; (b) e Company has been sanctioned/renewed working capital limits in excess of rupees five crores, in aggregate, from banks on the basis of security of stocks and receivables. e Company has filed the monthly statements of stocks and receivables with the banks and the same are in agreement with the books of accounts of the Company; iii. During the year, the Company has not made investments in companies, firms, limited liability partnership or any other parties except in a joint venture company.

(a) According to the information and explanations given to us, the Company has not provided loans or provided advances in the nature of loans or stood guarantee or provided security, secured or unsecured to companies, firms, limited liability partnership or any other parties during the year. Consequently, clause (iii) (a),(c),(d),(e)and (f) of paragraph 3 of the Order are not applicable; (b) According to the information and explanations given to us and based on the audit procedures performed by us, the investment made and the terms and conditions of the investments are not prejudicial to the interest of the Company; iv. According to information and explanations given to us, Section 185 of the Act regarding loans to directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act with respect to the loans and investments made; v. According to information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of the directives issued by the Reserve Bank of India and provisions of Sections 73 to 76 of the Act and the Rules framed thereunder except for deposit taken under Nalco Employees Family Financial Assistance and Rehabilitation Scheme (NEFFARS), wherein the Company retains the terminal benefits as deposit in the event of disablement/death, the Company pays monthly benefit to the employee/nominee/legal heir at their option upto the date of notional retirement (refer note 33.A.3.c); vi. We have broadly reviewed the books and records maintained by the Company as specified by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether they are accurate and complete; vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion, the

Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Duty of Customs, Cess and other material statutory dues with the appropriate authorities. No undisputed statutory dues are outstanding for a period of more than six months from the date they became payable as at 31st March, 2023; (b) According to the information and explanations given to us, the disputed statutory dues that have not been deposited for matters under dispute and pending disposal before various authorities are stated below:

Sl. No. Nature of Statue	Nature of Disputed Statutory dues	Period to which the amount relates to	Forum where the dispute is pending	Gross disputed amount ( crore)	Amount deposited under protest/adjusted by authorities ( crore)
1 Income Tax Act,1961	Income Tax / TDS / Interest	2019-20	Commissioner of Income Tax (Appeals)	15.43	12.99
2 Central Excise Act, 1944	Central Excise	1999-2000 to 2014-15	Tribunal	404.35	10.37
		2007-08 to 2015-16	Appellate Authority	5.99	0.21
3 Finance Act 1994	Service Tax	2007-08 to 2016-17	Tribunal	7.14	2.12
		2007-08 to 2018-19	Appellate Authority	5.93	0.22
4 Custom Act 1962	Custom Duty	2000-01 to 2012-13	Tribunal	102.67	1.90
5 e Orissa VAT Act 2004	VAT	2005-06 to 2009-10	Tribunal	0.64	0.17
		2016-17 to 2017-18	Appellate Authority	0.05	-
6 e Orissa Sales Tax Act 1947	OST	1995-96 to 2002-03	Orissa High Court	1.63	0.37
		1992-93 to 2004-05	Tribunal	1.00	0.64
		2003-04	Appellate Authority	1.08	-
7 e Orissa Entry Tax Act 1999	ET	1999-2000 to 2010-11	Orissa High Court	8.79	3.56
		1999-2000 to 2013-14	Tribunal	133.43	54.81
		1999-2000 to 2015-16	Appellate Authority	75.04	8.23
8 e Central Sales Tax Act 1956	CST	1992-93 to 2008-09	Tribunal	277.52	77.84
9 Motor Vehicles Act	Road Tax	2008-09 to 2020-21	Orissa High Court	2.65	-
10 Indian Stamp (Odisha Amendment)	Stamp Duty/	2018-19	Orissa High Court	212.48	-
Act, 2013	Registration
11 Finance Act, 2010	Clean Energy Cess	2015-16, 2016-17, 2018-19	Orissa High Court	230.50	-
12 Industrial Policy Resolution, 1996, Govt. of Odisha	Land acquisition and interest thereon	1982-83, 2021-22	Orissa High Court	85.55	-
13 MMDR Act, 1957	Royalty	2011-12 to 2015-16	Orissa High Court	136.32	-
14 Water resources Dept, Govt. of Odisha	Water dispute	2014-15	Orissa High Court	119.24	-
Grand Total				1,827.46	173.44

viii. A ccording to the information and explanations given to us and on examining the books of accounts, no transactions were recorded in the books of accounts that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961; ix. (a) According to the information and explanations given to us, except bills discounting arrangement with banks, the Company does not have any loans or borrowings from any financial institutions, banks, Government or debentures holders. e Company has not defaulted in repayment of the loans obtained under the bill discounting facility; (b) e Company has not been declared as wilful defaulter by any bank or financial institution or other lender; (c) e Company has not taken any term loan during the year and hence reporting under clause (ix)(c) of paragraph 3 of the Order is not applicable; (d) On an overall examination of the standalone financial statements of the Company, the Company has not raised funds on short term basis and hence reporting under clause (ix)(d) of paragraph 3 of the Order is not applicable; (e) On an overall examination of the standalone financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its joint ventures, the Company does not have any subsidiary or associate; (f) e Company has not raised any loans on the pledge of securities held in its joint ventures during the year, the Company does not have any subsidiary or associate and hence reporting under clause (ix)(f) of paragraph 3 of the Order is not applicable; x. (a) e Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) or term loans during the year. Accordingly, clause (x) (a) of paragraph 3 of the Order is not applicable; (b) e Company has not made any preferential allotment or private placement of shares or convertible debentures (fully, partially or optionally convertible). Accordingly, clause (x) (b) of paragraph 3 of the Order is not applicable; xi. (a) According to the information and explanations given to us, no fraud by the Company or any fraud on the Company has been noticed or reported during the year; (b) No report has been filed under Sub-section (12) of Section 143 of the Companies Act by the auditors in Form ADT-4 as prescribed under Rule 13 of Companies

(Audit and Auditors) Rules, 2014 with the Central Government during the year and upto the date of this report;

(c) According to the information and explanations given to us, there are no whistle blower complaints received during the year; xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause (xii) (a), (b) and (c) of paragraph 3 of the Order is not applicable; xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the financial statements (refer Note 40); xiv. (a) e Company has an internal audit system commensurate with the size and nature of its business and (b) We have considered the reports of Internal Auditors for the period under audit, issued to the Company during the year and till the date of this report, in determining the nature, timing and extent of our audit procedure; xv. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with any director or persons connected with him as specified in Section 192 of the Act; xvi. (a) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934 and hence reporting under clause

(xvi) (a) and (b) of paragraph 3 of the Order is not applicable;

(b) According to the information and explanations given to us, the Company is not Core Investment Company (CIC) (as defined in the regulations made by Reserve

Bank of India) and there is no CIC within the Group and hence reporting under clause (xvi)(c) and (d) of paragraph 3 of the Order is not applicable; xvii. e Company has not incurred cash losses in the financial year and in the immediately preceding financial year; xviii. ere has been no resignation of the statutory auditors during the year; xix. Based on the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the

financial statements and our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts upto the date of this audit report and we neither give any guarantee nor any assurance that all the liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due; and xx. (a) According to the information and explanations given to us, there is no unspent amount towards Corporate Social Responsibility (CSR) in respect of other than ongoing projects during the year requiring a transfer to a fund specified in Schedule VII to the Act in compliance with second proviso to Sub-section (5) of Section 135 of the Act. Accordingly reporting under clause (xx)(a) of paragraph 3 of the Order is not applicable; (b) According to the information and explanations given to us, there has been no unspent amount of CSR in respect of ongoing projects during the year requiring transfer to a special account as per Section 135 (6) of the Act.

ANNEXURE "B"

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH, 2023 OF NATIONAL ALUMINIUM COMPANY LIMITED

(Referred to in paragraph 2 under the heading of "Report on Other Legal and Regulatory Requirements" of our Report of even date) Report on the directions under Section 143(5) of the Companies Act, 2013 of the Comptroller & Auditor General of India

Sl. No. Dir ections u/s 143(5) of the Act	Auditors reply on action taken on the directions	Impact on Standalone Financial Statements
	Nil
1 W hether the Company has system in place to process As per the information and explanations given to us, the Company has all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	a system in place to process all the accounting transactions through IT system. SAP-ERP has been implemented for all the processes like Financial Accounting (FI), Controlling (CO), Sales and Distribution (SD), Materials Management (MM), etc. Citrix system has been implemented for processing the payroll. Based on the information and explanations given to us and audit procedures carried out, no accounting transactions have been processed or carried outside the IT system. erefore, there are no implications on the integrity of the accounts.
2 Whether there is any restructuring of any existing loan or cases of waiver/write off of debts/ loans/ interest etc, made by a lender to the Company due to the Companys inability to repay the loan? If yes, the financial impact may be stated. Whether such cases are properly accounted for? (In case, lender is a Government Company, then this direction is also applicable for statutory auditor of the lender company).	Based on the information and explanations given to us and audit procedures carried out, there are no restructuring of any existing loan or cases of waiver/write off of debts/loans/interest made by a lender to the Company due to the Companys inability to repay the loan.	Nil
3 Whether funds (grants/subsidy etc.) received or receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilised as per its term and conditions? List the case of deviation.	Based on the information and explanations given to us and audit procedures carried out, no funds (grants/subsidy etc.) has been received/receivable by the Company from Central/State Government or its agencies for any schemes.	Nil

ANNEXURE "C"

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31^ST MARCH, 2023 OF NATIONAL ALUMINIUM COMPANY LIMITED

(Referred in paragraph 2(f) under the head "Report on Other Legal and Regulatory Requirements" of our report of even date) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of NATIONAL ALUMINIUM COMPANY LIMITED ("the Company") as of 31^st March, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

e Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). ese responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. ose Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial control system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. e procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143_6__b_ OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF NATIONAL ALUMINIUM COMPANY LIMITED FOR THE YEAR ENDED 31 MARCH 2023

e preparation of financial statements of National Aluminium Company Limited for the year ended 31 March 2023 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. e statutory auditor appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act is responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. is is stated to have been done by them vide their Audit Report dated 24 May 2023.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit of the financial statements of National Aluminium Company Limited for the year ended 31 March 2023 under Section 143(6)(a) of the Act. is supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records.

On the basis of my supplementary audit, nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors report under section 143(6) (b) of the Act.