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Company Information

Home » Market » Company Information

Hindalco Industries Ltd.

Sep 27, 04:00
482.10 +3.70 (+ 0.77 %)
 
VOLUME : 266483
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Sep 27, 03:59
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VOLUME : 6825039
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Market Cap. ( ₹ ) 108176.10 Cr. P/BV 1.63 Book Value ( ₹ ) 296.09
52 Week High/Low ( ₹ ) 490/162 FV/ML 1/1 P/E(X) 31.06
Bookclosure 23/08/2021 TTM EPS ( ₹ ) 31.06 Div Yield (%) 0.62
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

Dear Shareholders,

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

FINANCIAL HIGHLIGHTS

' in Crore

Consolidated

Standalone

2020-21

2019-20

2020-21

2019-20

Revenue from Operations

131985

118144

42701

40242

Other Income

1222

1186

650

739

Profit Before Interest, Tax and Depreciation (PBITDA)

18896

15536

4884

4403

Depreciation and Amortisation

6628

5091

1708

1708

Impairment Loss/(Reversal) of Non Current Assets (Net)

138

44

140

-

Finance Costs

3738

4197

1469

1679

Profit before Exceptional Items and Tax Share in Profit / (Loss) in Equity Accounted Investments

8392

6204

1567

1016

Share of Equity Accounted Investments

5

4

-

-

Profit before Exceptional Items and Tax

8397

6208

1567

1016

Exceptional Items

(492)

(284)

7

(64)

Profit before Tax

7905

5924

1574

952

Tax Expenses

2723

2157

581

332

Profit/ (Loss) for the year from Continuing Operations

5182

3767

-

-

Profit/ (Loss) for the Year from Discontinued Operations

(2066)

-

-

-

Tax Expense/ (Benefit) of Discontinued Operations

(367)

-

-

-

Profit/ (Loss) for the year from Discontinued Operations

(1699)

-

-

-

Profit/ (Loss) for the year

3483

3767

993

620

Other Comprehensive Income / (Loss)

4784

(2723)

3780

(3400)

Total Comprehensive Income

8267

1044

4773

(2780)

Basic EPS - Continuing Operations (?)

23.30

16.94

-

-

Basic EPS - Discontinued Operations (?)

(7.64)

-

-

-

Basic EPS (?)

15.66

16.94

4.46

2.79

Appropriations to Reserves :

' in Crore

Appropriations

2020-21

2019-20

Opening Balance in Retained Earnings and Other Comprehensive Income

6624

9865

Total Comprehensive Income for the Current Year

4773

(2780)

Dividends paid

(222)

(316)

Transition Impact - Leases (Ind AS 116)

-

(9)

Hedging (Gain)/ Loss and cost of hedging transferred to non financial assets

(1)

14

Employee Share Based Transcations

2

-

Transferred to Debenture Redemption Fund

(150)

(150)

Closing Balance in Retained Earnings and Other Comprehensive Income

11026

6624

Dividend:

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

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

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

OVERVIEW AND STATE OF THE COMPANY'S AFFAIRS:

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

Standalone full year highlights

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

Consolidated Full Year Highlights

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

Highlights of the Company's Subsidiaries:

1. UtkaL Alumina International Limited

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

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

Particulars

FY2020-21

FY2019-20

% Change

Revenue

2,764

2,653

4%

EBITDA

1,371

992

38%

PAT

605

317

91%

2. NoveLis Inc.

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

Key Initiatives

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

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

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

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

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

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

HUMAN RESOURCES

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

RESEARCH AND DEVELOPMENT

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

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

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

CONSOLIDATED FINANCIAL STATEMENTS

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

EMPLOYEE STOCK OPTION SCHEMES ESOS - 2006

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

ESOS - 2013

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

ESOS - 2018

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

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

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

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

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

CORPORATE GOVERNANCE

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

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

ABRIDGED ANNUAL REPORT

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

DIRECTORS' RESPONSIBILITY STATEMENT

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

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

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

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

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

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

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

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

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

PARTICULARS OF EMPLOYEES

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

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

DIRECTORS

Board constitution and changes

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

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

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

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

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

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

Independent Directors

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

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

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

Cost Auditors

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

Secretarial Auditors

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

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

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

ENVIRONMENT PROTECTION AND POLLUTION CONTROL

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

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

Appointment and remuneration of Directors and Key Managerial Personnel

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

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

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

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

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

Meetings of the Board

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

Annual Evaluation

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

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

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

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

AUDIT COMMITTEE

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

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

KEY MANAGERIAL PERSONNEL

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

VIGIL MECHANISM

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

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

AUDITORS Statutory Auditors

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

CORPORATE SOCIAL RESPONSIBILITY

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

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

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

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

RISK MANAGEMENT

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

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


CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

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

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

ANNUAL RETURN

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

BUSINESS RESPONSIBILITY REPORT

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

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

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

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

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

INTERNAL FINANCIAL CONTROL

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

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANIES

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

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

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

OTHER DISCLOSURES

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

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

• There was no revision in the financial statements.

• Your Company has not issued any sweat equity shares.

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

• There is no change in the nature of business.

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

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

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

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

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

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

APPRECIATION

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

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

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

For and on behalf of the Board

Satish Pai K.N. Bhandari

Managing Director Independent Director DIN:06646758 DIN: 00026078

Place: Mumbai Dated: 2nd July, 2021