We have audited the accompanying standalone financial statements of National Aluminium Company Limited ( the Company ), which comprise the
Balance Sheet as at March 31, 2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the
Statement of Cash Flows for the year ended and notes to the standalone financial statements including a summary of material 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 Indian Accounting
Standards specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015, as amended and other accounting
principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, and total comprehensive income (comprising of profit and
other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements 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 standalone 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
(“ICAI”), 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 ICAI’s 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
We draw attention to
i. Note no. 28.3 and 5.4.1 regarding non-recognition of revenue and impairment assessment of related assets respectively from/of two wind power plants
located in the state of Rajasthan since 01.04.2019 in view of no fresh Power Purchase Agreement having been signed.
ii. Note no. 9.1 regarding recognition, measurement and disclosure of a financial guarantee extended to its one of the joint venture companies against
issuance of Compulsory Convertible Debentures through a backstopping arrangement.
Our opinion on the Standalone Financial Statements is not modified in respect of the above matter.
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. These 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. The key audit matters that we have identified in the current year are as follows:
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Key Audit Matter
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Response of Auditors in dealing with the matters
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1. Carrying value of Property, Plant and Equipment, Capital work-in-progress, Intangible assets and Intangible Assets under Development
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Property, plant and equipment, capital work-in-progress, intangible assets
and Intangible assets under development represent significant balances
recorded in the statement of financial position.
The 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.
• There are a number of areas where Management judgement
impacts the carrying value of property, plant and equipment,
intangible assets and their respective depreciation profiles. These
include the decision to capitalise or expense costs; the asset
life review including the impact of changes in the Company’s
strategy; and the timeliness of capitalisation, determination or
the measurement and recognition criteria for assets retired from
active use.
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Our audit procedures 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 Equipment and Ind AS 38
Intangible Assets.
• We assessed whether the carrying values and the useful lives were reasonable by
challenging Management’s 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.
• 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 2025 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, if required, in the context of impairment.
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Key Audit Matter
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Response of Auditors in dealing with the matters
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2. Valuation of employees’ defined benefit obligations and other long-term benefits
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The Company has recognised long-term employee benefit liabilities and
defined benefit obligations (net of plan asset against funded gratuity
obligation).
The valuation of employee benefit obligations is dependent on
market conditions and assumptions made. The key audit matter
specifically relates to the following key assumptions like discount
rate, inflation expectations and life expectancy assumptions. The
setting of these assumptions is complex and requires the exercise of
significant Management judgement with the support of third-party
actuary.
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Our audit procedures relating to the valuation of employees, defined benefit obligations and
other long-term benefits included the following:
• 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.
• 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.
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3. Advances and deposits in respect of tax matters under litigation continuing as assets
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The Financial Statements disclose other assets, which includes material
recoverable claims of direct and indirect tax deposits (net of provision)
including VAT and Cenvat credits which are pending adjustment/
adjudication.
Significant judgement is required in assessing the nature of these exposures
and their accounting and disclosure requirements.
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Our audit procedures relating to the advance and deposits in respect of tax matters under
litigation continuing as assets included the following:
• We obtained from Management the details of completed tax assessments and demands
and appeal orders of the appellate authority.
• We involved our internal experts to challenge the Management’s 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
Management’s 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.
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4. Valuation of deferred tax assets and liabilities
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The Company has disclosed deferred tax assets/liabilities in the Financial
Statements.
The Company operates in activities which involves application of various
provisions in income tax.
The assessment of the valuation of deferred tax assets/liabilities, 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. These include, amongst others, long¬
term future profitability and local fiscal regulations and developments.
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Our audit procedures relating to the advance and deposits in respect of tax matters under
litigation continuing as assets included the following:
• Ascertained the completeness and accuracy of the deferred tax assets/liabilities and
recognizing uncertain tax positions.
• We challenged and tested the Management’s assessment of the recoverability of the
deferred tax assets, and the probability of future cash outflows in respect of deferred tax
liabilities identified by the Company.
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5. Ascertainment, disclosure and provisioning in respect of contingent liabilities
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The 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.
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.
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Our audit procedures relating to the ascertainment, disclosure and provisioning in respect of
contingent liabilities included the following:
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.
• Reviewing orders and other communication from tax and other regulatory authorities and
management responses thereto.
• 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 Company’s
consideration;
• consulted with the Company’s 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 liabilities.
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Information Other than the Standalone Financial Statements and Auditors’ Report thereon
The Company’s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in
the Financial Performance highlights, Board’s Report including Annexure to Board’s Report, Management Discussions and Analysis, Business Responsibility
and Sustainability Report, Report on Corporate Governance, Shareholders Information and other information in the Integrated Annual Report but does not
include the standalone financial statements and our auditors’ report thereon.
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 identified above when it becomes
available, and in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of auditors’ report, we conclude that there is a material
misstatement of this information, we are required to report that fact. We have nothing to report in this regard.
When we read the other information, which we will obtain after the date of auditors’ report and if we conclude that there is a material misstatement therein,
we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone
Financial Statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and
cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS)
specified under section 133 of the Act. This 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
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, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
Auditors’ Responsibility for the Audit of 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. The 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 with
reference to standalone Financial Statements 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 management’s 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 ability of the Company 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.
• 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 and 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 deficiencies 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.
Other Matters
The Standalone Financial Statements of the Company for the year ended 31st March 2024 were audited by the previous joint statutory auditors of the
Company and they had expressed an unmodified opinion on Standalone Financial Statements vide their report dated 27 th May 2024.
Our opinion is not modified in respect of the these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s 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” a statement on the matters specified in the paragraphs 3 and 4 of the said Order, to the
extent applicable.
2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we
considered appropriate and according to the information and explanations given to us, in the “Annexure B” on the directions issued by the
Comptroller and Auditor General of India.
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. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of changes in Equity and the
Statement of Cash Flows 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.
e. We have been informed that the provisions of Section 164(2) of the Act in respect of disqualification of directors are not applicable
to the Company, being a Government Company in terms of notification no. G.S.R.463 (E) dated 5th June 2015 issued by Ministry of
Corporate Affairs, Government of India.
f. With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company
and the operating effectiveness of such controls, refer to our separate report in “Annexure C”.
g. We are informed that the provisions of Section 197 read with Schedule V of the Act, relating to managerial remuneration are not
applicable to the Company, being a Government Company, in terms of Ministry of Corporate Affairs Notification no. G.S.R. 463 (E)
dated 5th June 2015.
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. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements -
Refer Note 26 to the Standalone Financial Statements;
ii. The 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. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund
by the Company;
iv. a) The 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) The 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; and
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 18.3 to the Standalone Financial Statements:
a) The 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) The interim dividend 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. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its
books of account for the financial year ended March 31, 2025 which have the feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant transactions recorded in the software systems. Further, during the
course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail has been
preserved by the Company as per the statutory requirements for record retention.
However, The Payroll software used by the Company for maintaining Payroll records did not have an audit trail feature enabled.
Consequently, there was no audit trail maintained for transactions recorded within this particular software for the whole year.
For B M CHATRATH & CO LLP For S R B & ASSOCIATES
Chartered Accountants Chartered Accountants
F. Regd. No. 301011E/E300025 F. Regd. No. 310009E
Sd/- Sd/-
(CA Sanjay Sarkar) (CA Sarat Chandra Bhadra)
Partner Partner
Place: Bhubaneswar M.No.: 064305 M.No.: 017054
Date: 21st May 2025 UDIN: 25064305BMNYDE4886 UDIN: 25017054BMUIJC7166
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