5.1 Cost of Freehold land includes cost of 43.75 acre (previous year 43.75 acre) of land handed over to Govt. of Odisha against which the alienation process is yet to be completed.

5.2 The Company incurred ' 0.80 crores (previous year ' 0.81 crores) for the year ended 31st March, 2023 towards expenses relating to short-term leases and leases of low-value assets. The total cash outflow for leases is ' 4.08 crores (previous year ' 4.13 crores) for the year ended 31st March, 2023, including cash outflow of short-term leases and leases of low-value assets.

5.3 The Company has two wind power plants (WPP) in the state of Rajasthan and one wind power plant in the state of Maharashtra. Based on the indication from external and internal information to the Company, impairment assessment was carried out for both plants at Rajasthan & Maharashtra.

5.3.1 For the two WPPs at Rajasthan, the Company had a power purchase power agreement (PPA) for 3 years with Jodhpur Vidyut Vitran Nigam Ltd., Rajasthan which could not be extended since 01.04.2019. Since power generation is a continuous process, the Company has been injecting the power to the grid which is recorded by the DISCOM. However, the Rajasthan Renewable Energy Corporation Ltd (RRECL) had offered the Company to accept ' 2.44 per unit for both WPP at Ludherva and Devikot and execute the PPA. The Company filed an appeal in the Hon’ble High Court of Rajasthan for extension of PPA which is still pending. In view of non-existence of PPA and continuous generation, impairment assessment was done upto the useful life of the assets.

5.3.2 The Company has a long term (25 years) PPA with NTPC Vidyut Vyapar Nigam Ltd. (NVVNL) for supply of a minimum of 100 MU per month from its WPP at Sangli, Maharashtra with a unit (KWH) rate of ' 2.92. Considering the quantum of investment made by the Company and the rate considered for the long term PPA, an impairment assessment has been carried out upto the useful life of the assets.

6.1. The amount of capital work in progress includes directly attributable expenses of ' 166.81 crore (previous year ' 152.90 crore) for 5th Stream Alumina Refinery expansion.

6.2 The Company on 27.09.2017, had awarded a contract favouring M/s Regen Powertech. Pvt. Ltd. for supply, erection and commissioning of 25.5MW Wind Power Project (WPP) at Kayathar, Tamilnadu for a value of ' 163.13 crore. The agency had executed ' 119.63 crore worth of work till FY 2018-19. Thereafter, there was no progress in execution due to financial crisis and liquidity issue of the agency.

Insolvency resolution process was initiated against the Company under Insolvency and Bankruptcy Code, 2016. The Hon’ble National Company Law Tribunal (NCLT), Chennai passed the Resolution Plan on 01.02.2022 which was not acceptable to the Company. Aggrieved with the order, the Company preferred an appeal to the Hon’ble National Company Law Appellate Tribunal (NCLAT).

As there was no progress in the project since 2018-19 and the stringent conditions mentioned in the said order, the Company has considered these as indication for impairment assessment of the project and provided for ' 79.25 crore as on 31.03.2023 (as on 31.03.2022'44.26 crore).

Notes: 7.1 User right represent Company’s share in jointly owned asset.

7.2 The Company has been granted lease to operate its Bauxite Mines at Panchpatmali, Odisha and Coal Mines at Angul, Odisha by the Government of Odisha. In this connection, the Company has paid Net present value (NPV) for forest land, compensatory afforestation, wild life management and other related payments which are capitalized as intangible assets under Mining Rights and amortized on straight line basis as per the Accounting Policy of the Company.

7.3 Utkal D&E coal blocks were allocated to the Company on 02.05.2016 by the Ministry of Coal, Govt. Of India with total mining reserve of 176.05 MT(Million Tonnes). On execution of mining lease on 25.03.2021 (Utkal D) and 20.01.2023 (Utkal E), the mining rights worth ' 54.79 crore in FY 2021-22 and ' 73.26 crore during the year have been capitalised.

Commencement of Mining Operation at Utkal-D Coal Mine was started w.e.f. 09.11.2022. Intimation regarding the same was sent to Deputy Director Mines, Talcher on 09.11.2022. Top soil removing, overburden cutting for opening of coal seams have been done during the period of 09.11.2022 to 31.03.2023. Seam was exposed & samples were collected by Coal Controller Organisation (CCO), Ministry of Coal office for annual grade declaration for FY 2023-24. Coal Production has started from 01.04.2023.

16.B.1 The earmarked balance of ' 61.88 crore (previous year ' 75.90 crore) with scheduled banks includes the amount deposited towards unclaimed dividend amounting to ' 4.25 crore (previous year ' 4.29 crore) and ' 11.22 crore as lien for issuance of Bank Guarantee to participate in Bauxite mines bidding. The balance amount of ' 46.40 crore (previous year ' 71.61 crore) represents deposits with State Bank of India as per direction of the Hon'ble High Court of Odisha with regard to disputed differential electricity duty.

Recently Energy Department, Govt. of Odisha have passed a resolution (Resolution No. -11797, dtd. : 30.11.2022) for One Time Settlement (OTS) of arrear Electricity Duty (ED) and interest of consumers as on dtd. 31.03.2022, who generate energy for captive consumption and not depositing the ED due to court case / litigation etc.

The Company has opted for the OTS scheme and filed necessary papers after the Confederation of Captive Power Plants, Odisha (in which the Company is a member) withdrew the legal case in the Hon'ble High Court, Odisha. As per the condition laid out in the OTS scheme, 10% of the outstanding demand raised by the Authority amounting to ' 27.83 crore has been paid during the year from the escrow account created as per order of the Hon'ble High Court. The final settlement under the scheme is yet to be completed.

16.B.2 Amount due for credit to Investor's Education and Protection Fund at the end of the current year ' Nil (previous year ' Nil).

(i) The Company has only one class of equity shares having par value of ' 5 each. Each holder of equity shares is entitled to one vote per share and carries proportionate right to dividends declared by the Company based on their holdings.

(ii) Buy back:

During 2018-19 the Company bought back 6,73,11,386 number of equity shares of ' 5 each which led to decrease in equity share capital from ' 966.46 crore to ' 932.81 crore. During 2020-21, the Company further bought back 2,89,85,711 numbers of equity shares of ' 5 each which led to decrease in the equity share capital from ' 932.81 crore to ' 918.32 crore.

(iii) Disinvestment:

During the year 2018-19, the Government of India divested 8,89,86,323 Nos. of equity shares through Bharat ETF. Consequent to buyback and transfer of shares through ETF

by Government of India during 2018-19, the holding of Government of India has come down from 1,16,37,17,107 Nos (60.20%) as on 31.03.2018 to 97,00,81,517 Nos (51.99%) as on 31.03.2019.

During the year 2019-20, Government of India further divested 92,88,506 Nos. of equity shares through Bharat 22 ETF upon which the holding of Government of India has come down from 97,00,81,517 Nos (51.99%) as on 31.03.2019 to 96,07,93,011 Nos. (51.50%) as on 31.03.2020.

During the 2020-21, consequent upon buy-back of equity shares, the holding of Government of India has come down from 96,07,93,011 Nos. (51.5%) as on 31.03.2020 to 94,17,93,011 Nos. (51.28%) as on 31.03.2021.

19.2 During the year 2018-19, the Company had bought back 6,73,11,386 number of fully paid equity shares of ' 5 each on December 4, 2018 at an offer price of ' 75 per share. The aggregate consideration paid was ' 504.83 crore. Post buyback, the paid up equity share capital of the Company is reduced by ' 33.65 crore from ' 966.46 crore to ' 932.81 crore. The premium amount ' 471.18 crore is appropriated from general reserve. The shares were extinguished on December 7, 2018 and in terms of the provisions of Companies Act, 2013, a sum of ' 33.65 crore was transferred from general reserve to capital redemption reserve.

During the year 2020-21, the Company bought back 2,89,85,711 number of fully paid equity shares of ' 5 each on March 10, 2021 at an offer price of ' 57.50 per share. The aggregate consideration paid was ' 166.67 crore. Post buyback, the paid up equity share capital of the Company is reduced by ' 14.49 crore from ' 932.81 crore to ' 918.32 crore. The premium amount ' 152.18 crore is appropriated from general reserve. The shares were extinguished on March 17, 2021 and in terms of the provisions of Companies Act, 2013, a sum of ' 14.49 crore was transferred from general reserve to capital redemption reserve.

19.3 During the year, the Company has paid Final Dividend for FY 2021-22 at ' 1.50 per equity share amounting to ' 275.49 crore. The Company has paid first tranche of Interim dividend for FY 2022-23 at ' 1.00 per equity share amounting to ' 183.66 crore on February 14, 2023 and the second tranche of Interim dividend at ' 2.50 per equity share amounting to ' 459.16 crore was paid on March 31, 2023. With this the total payout is ' 642.82 crore. During the preceding year, the Company had paid Final Dividend for FY 2020-21 at ' 1 per equity share amounting to ' 183.66 crore. The Company had also paid first tranche Interim dividend at ' 2 per equity share amounting to ' 367.33 crore & second tranche of Interim Dividend at ' 3 per equity share amounting to ' 550.99 crore for financial year 2021-22.

25.4 Recently Energy Department, Govt. of Odisha have passed on a resolution (Resolution No-11797, dtd-30.11.2022) for One Time Settlement (OTS) of arrear Electricity Duty (ED) and interest of consumers as on dt. 31.03.2022, who generate energy for captive consumption and not depositing the ED due to court case/litigation etc.

The Company has opted for the OTS scheme and filed necessary papers after the Confederation of Captive Power Plants, Odisha (in which the Company is a member) withdrew the legal case in the Hon’ble High Court, Odisha. As per the condition laid out in the OTS scheme, 10% of the outstanding demand raised by the Authority amounting to ' 27.83 crore has been paid during the year from the escrow account created as per order of the Hon’ble High Court. The final settlement under the scheme is yet to be completed.

25.5 Consequent upon amendment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 with effect from 28th March, 2021, as per Section 8A(8) which provides that the period of mining leases, other than the mining leases granted through auction, shall be extended on payment of such additional amount as specified in the Fifth Schedule. Based on demand raised by IBM through I3MS portal for royalty, the Company has paid DMF and NMET along with additional royalty for Both North & Central Block and South Block of Panchapatmali Bauxite Mines till November 2022.

Ministry of Mines, Govt. of India vide letter dated 31.1.2023 has clarified that additional royalty payment in respect of government companies are applicable in case of extension of lease under 8A(8) of the Act or grant of fresh lease to Govt. Companies where area are reserved after 2015 as per Section 17A(2C) of Mines and Mineral (Development and Regulation) Act , 2015. Panchpatmali (South Block) and Panchpatmali (Central and North block) mining leases of the Company have been deemed to be granted for 50 years i.e. up to 19.07.2029 and 16.11.2032 respectively in accordance with the rule 3(1) of Mineral (Mining by Government Company Rule, 2015 (now Rule 72(1) of M(OAHCEM) CR, 2016. Thus these leases of the Company have not been extended under Section 8A(8) read with Rule 72(2)&(3) of M(OAHCEM)CR, 2016.

Ministry of Mines, Govt. of India has also requested to Govt. of Odisha that no additional royalty may be charged from the Company till the completion of lease period of 50 years for both the Mines and the additional Royalty already paid by the Company so far in respect of these two mining leases may be adjusted in lieu of future Royalty payments.

In the absence of any communication from Govt. of Odisha on the subject of additional Royalty on Bauxite, the Company has continued the existing practice of recognition of liability towards additional Royalty from 01.12.2022 to 31.3.2023.

Claims against the Company not acknowledged as debt includes:

i. Demand from various statutory authorities towards income tax, sales tax, excise duty, custom duty, service tax, entry tax and other government levies. The Company is contesting the demands before the respective appellate authorities. It is expected that the ultimate outcome of these proceedings will be in favour of the Company and will not have any material adverse effect on the Company’s financial position and results of operation.

ii. Claims of contractors for supply of materials/services pending with arbitration/courts have arisen in the ordinary course of business. The Company reasonably expects that these legal actions will be concluded and determined in favour of the Company and will not have any material adverse effect on the Company’s results of operation or financial position.

iii. Claim from PSUs includes the energy compensation charges and the delayed payment surcharge on the same, since 2005, demanded by Odisha Hydro Power Corporation Limited (OHPC) towards loss of power generation by the Corporation due to drawal of water from the reservoir at Upper Kolab, Koraput by NALCO Refinery at M&R Complex.

iv. The claims against the company are mostly due to demands raised by the IT department at assessment stage. These claims are on account of multiple issues

of disallowances such as disallowance in respect of additional depreciation under section 32(i)(iia), disallowance of peripheral development expenses, provision for non-moving stores and spares, treatment of short term capital gain and not allowing loss under long term capital gain and treating the same as business income, disallowance u/s 14A etc. These matters are sub-judice and pending before various appellate authorities. The Company, including its tax advisors, expect that its position will likely be upheld on the ultimate resolution in view of the decisions already available in favour of the Company by higher appellate forums being CIT(A) / ITAT (Jurisdictional). Thus it will not have a material adverse effect on the Company’s financial position and in the results of operations. Hence, there is no uncertainty in tax treatment which will affect the determination of taxable profit (loss), tax bases, unused tax losses, unused tax credits, and tax rates of the Company.

The Company has reviewed the disputed income tax matters and the demands raised by the Department/ Authorities considering the probable outcome of the dispute and possibilities of outflow of resources and disclosed as on 31.03.2023 accordingly.

33.A. Employee benefit Plans 33.A.1 Defined contribution plans

a) Pension fund: The Company pays fixed contribution to the trustee bank of Pension Fund Regulatory and Development Authority (PFRDA), which in turn invests the money with the insurers as specified by the employee concerned. The company’s liability is limited only to the extent of fixed contribution.

33.A.2 Defined benefit plans

a) Provident fund: The provident fund of the company is managed by an exempted trust under section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Both the employees and the Company make monthly contributions to the provident fund at a specified percentage of employees salary. The Company contributes major part of the fund to the Trust, which invests the funds in permitted securities as per the statute. The remaining part is contributed to the Government administered Pension Fund.

The Company has an obligation to pay minimum rate of return to the members as specified by Government of India. As per the condition of exemption, the Company shall make good for the deficiency, if any, between the return from the investments of the Trust and the notified interest rate by the Government. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in profit and loss under employee benefits expense.

b) Gratuity: Gratuity payable to employees as per The Payment of Gratuity Act subject to a maximum of ' 20,00,000/. The gratuity scheme is funded by the Company and is managed by a separate trust. The liability for gratuity under the scheme is recognised on the basis of actuarial valuation.

c) Post retirement medical benefit: The benefit is available to retired employees and their spouses who have opted for the benefit. Medical treatment as an in-patient can be availed from the Company’s hospital/Govt. Hospital/ hospitals as per company’s rule. They can also avail treatment as out patient subject to maximum ceiling of expenses fixed by the Company. The liability under the scheme is recognised on the basis of actuarial valuation. The scheme is funded by the Company and is managed by a separate trust.

d) Settling-in-benefit: On superannuation/retirement/termination of service, if opted for the scheme, the transfer TA is admissible to the employees and / or family from the last head quarters to the hometown or any other place of settlement limited to distance of home town. Transport of personal conveyance shall also be admissible. The liability for the same is recognised on the basis of actuarial valuation.

e) NALCO Benevolent Fund Scheme : The objective of the scheme is to provide financial assistance to families of the members of the scheme who die while in employment of the Company. As per the scheme there will be contribution by members @ ' 30/- per member per death, in the event of death of a member while in the service of the company and matching contribution is made by the Company. The liability for the same is recognised on the basis of actuarial valuation.

f) NALCO Retirement Welfare Scheme : The objective of the scheme is to provide financial assistance as a gesture of goodwill as post retirement support to employees retiring from the services of the company. As per the scheme the recovery from each employee member would be ' 10/- per retiring member. The Company would provide equivalent sum as matching contribution. The liability for the same is recognised on the basis of actuarial valuation.

g) Superannuation gift scheme: The objective of the scheme is to recognise the employees superannuating or retiring on medical ground from the services of the Company. The scheme includes a gift item worth of ' 25000/- per retiring employees to be presented on superannuation/ retirement. The liability for the same is recognised on the basis of actuarial valuation.

33.A.3 Other long term employees benefits

a) Compensated absences : The accumulated earned leave, half pay leave & sick leave is payable on separation, subject to maximum permissible limit as prescribed in the leave rules of the Company. During the service period encashment of accumulated leave is also allowed as per the Company’s rule. The liability for the same is recognised on the basis of actuarial valuation. The obligation is funded by the Company and is managed by a separate trust.

b) Long Service Reward : The employee who completes 25 years of service are entitled for a long service reward which is equal to one month basic pay and DA. The liability for the same is recognised on the basis of actuarial valuation.

c) NEFFARS : In the event of disablement/death, on deposit of prescribed amount as stipulated under the scheme, the Company pays monthly benefit to the employee/ nominee at their option upto the date of notional superannuation. The liability for the same is recognised on the basis of actuarial valuation.

The employee benefit plans typically expose the Company to actuarial risks such as actuarial risk, investment risk, interest risk, longetivity risk and salary risk:-

i. Actuarial risk: It is the risk that employee benefits will cost to the Company more than expected. This can arise due to one of the following reasons:

a. Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in obligation at a rate that is higher than expected.

b. Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption then the gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.

c. Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption then the gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

ii. Investment risk: For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

iii. Interest risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

iv. Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

v. Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants beyond assumed plan will increase the plan’s liability.

Note: In pursuance to Section 115BAA of the Income Tax Act, 1961 notified by the Government of India through Taxation Laws (Amendment) Ordinance, 2019, the Company had an irrevocable option of shifting to a lower tax rate foregoing other tax incentives and non applicability of Minimum alternate Tax. The Company exercised the said option for lower rates of taxes and the taxes have been recognised accordingly. The applicable rate for the current year is 25.168% (previous year 25.168%).

37 - Segment information

37.1 Products from which reportable segments derive their revenues

Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of segment performance focuses on the types of goods delivered. The directors of the company have chosen to organise the Company around differences in products. No reporting segment have been aggregated in arriving at the reportable segments in the Company. Specifically, the Company's reportable segment under Ind AS 108- Operating Segments are as follows:

i) Chemical segment

ii) Aluminium segment

The Company has considered Chemicals and Aluminium as the two primary operating business segments. Chemicals include Calcined Alumina, Alumina Hydrate and other related products. Aluminium includes Aluminium ingots, wire rods, billets, strips, rolled and other related products. Bauxite produced for captive consumption for production of alumina is included under chemicals and power generated for captive consumption for production of Aluminium is included under Aluminium segment. Wind Power Plant commissioned primarily to harness the potential renewable energy sources is included in the unallocated Common segment.

39.2 Financial risk management objectives

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and

credit risk, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which not only covers the

foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks.

The objectives of the Company's risk management policy are, inter-alia, to ensure the following:

i) Sustainable business growth with financial stability;

ii) Provide a strategic framework for Company’s risk management process in alignment with the strategic objectives including the risk management organisation structure;

iii) That all the material risk exposures of Company, both on and off-balance sheet are identified, assessed, quantified, appropriately mitigated and managed and

iv) Company’s compliance with appropriate regulations, wherever applicable, through the voluntary adoption of international best practices, as far as may be appropriate to the nature, size and complexity of the operations.

The risk management policy is approved by the board of directors. The Internal Control Team would be responsible to evaluate the efficacy and implementation of the risk management system. It would present its findings to the Audit Committee every quarter. The Board is responsible for the Company’s overall process of risk management. The Board shall, therefore, approve the compliance and risk management policy and any amendments thereto, and ensure its smooth implementation.

39.3 Market risk

Market risk is the risk of any loss in future earnings (spreads), in realizable fair values (economic value) or in future cash flows that may result from a change

in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange

rates, liquidity and other market changes. The Company may also be subjected to liquidity risk arising out of mismatches in the cash flows arising out of sales proceeds and funds raised and loan repayments/prepayments. Future specific market movements cannot be normally predicted with reasonable accuracy.

39.4 Foreign currency risk management

Foreign currency risk emanates from the effect of exchange rate fluctuations on foreign currency transactions. The overall objective of the currency risk management is to protect the Company's income arising from changes in foreign exchange rates. The policy of the Company is to avoid any form of currency speculation. Hedging of currency exposures shall be effected either naturally through offsetting or matching assets and liabilities of similar currency, or in the absence of thereof, through the use of approved derivative instruments transacted with reputable institutions. The Currency risk is measured in terms of the open positions in respective currencies vis-a-vis the Company’s operating currency viz. INR. A currency gap statement shall be prepared to find the gap due to currency mismatch.

The fluctuation in foreign currency exchange rates may have impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective consolidated entities.

The Company undertakes transactions denominated in foreign currency; consequently, exposures to exchange rate fluctuations arise. Exchange rate are managed within approved policy parameters utilising forward foreign exchange contracts.

39.4.1 Foreign currency sensitivity analysis

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 10%.

The following analysis is based on the gross exposure as of the relevant balance sheet dates, which could affect the income statement. There is no exposure to the income statement on account of translation of financial statements of consolidated foreign entities.

39.5 Other price risks

39.5.1 Equity price sensitivity analysis

The Company is not exposed to equity price risk arising from equity instruments as all the equity investments are held for strategic rather than trading purposes.

39.6 Credit risk management

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks. There is no significant credit exposure as advance collection from customer is made.

Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as loans and receivables, trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

39.7 Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

Company has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding liquidity management requirements. The Company manages liquidity risk by maintain adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and financial liabilities.

43. Regrouping of previous year’s figures

Previous year’s figures have been regrouped/rearranged wherever considered necessary to make them comparable