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Auditor Report of Hindustan Copper Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of Hindustan Copper Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Note No 35 of General Notes on Accounts to the financial statements:

1) Vide Clause No. 1(i)(a) & (b) which describes the uncertainty related to the outcome of various lawsuits filed and claims of demand raised against the Company by various authorities/parties and its financial impact on the financial statements of the company. The Company has treated those demands as disputed and not acknowledged as debt in the books and treated the same as Contingent Liabilities, the total amount of which comes to Rs.43526.66 Lac

2) Vide Clause No. 9 which describes the balances under the head Sundry Creditors, Claims Recoverable, Loans & Advances, Sundry Debtors and Deposits from and with various parties/Govt. Dept. etc. have not been confirmed in number of cases.

3) Vide Clause No. 30 which describes that domestic sales during the year have been reduced by Rs.582.65 lac being rectification of sales of anode slime wrongly credited to the sales account in the preceding F.Y. 2014-15.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required under the Companies (Auditor''s Report) Order, 2016 ("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-I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required under section 143(5) of the Act, we give in the Annexure-II a statement of our replies to the directions /additional directions issued by the Comptroller and Auditor General of India (C & AG)

3. As required under section 143(3) of the Act, we report, to the extent applicable, 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) In our opinion, provisions under section 164(2) of the Act, regarding disqualification of Directors are not applicable to a Government company in terms of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs.

(f) With respect to the adequacy of internal financial control over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in the Annexure-III, and

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) 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 financial statements (vide Clause No. 1(i) (a) of Note No. 35 of General Notes on Accounts) and our comments made in paragraph ''Emphasis of Matter''.

ii. The Company did not have any material foreseeable losses on long term contract including derivative contracts.

iii. According to the information and explanations given to us, there were no amounts which were required to be transferred to Investor Education and Protection Fund by the company.

(Referred to in our report of even date)

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its Fixed Assets.

(b) Fixed Assets of the company have not been physically verified by the management during the year pursuant to company''s accounting policies (Vide Clause No.3.6 of Note No. 2 of Significant Accounting Policies read with Clause No 28 of Note No. 35 of General Notes on Accounts) and as such, question of material discrepancies, if any, and its treatment in the books of account does not arise this year. However in terms of aforesaid policy, the fixed assets were last physically verified in the preceding financial year 2013-14.

(c) The Company has taken steps to maintain Register of Land and Building (Immovable Property) showing the details of title deeds held in the name of the Company or otherwise including total number of such cases and whether the same are leasehold/freehold.

In the absence of complete maintenance of such Register, we could not comment whether title deeds of all the immovable properties are held in the name of the Company or otherwise However, as stated in Clause No. 3 of Note No. 35 of General Notes on Accounts, the title deed for leasehold land received from the State Government and certain freehold lands acquired through nationalization in accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972 in respect of Indian Copper Complex (ICC) have not yet been executed in favour of the Company and in Clause No 6 of Note No 35 of General Notes on Accounts, title deeds were not obtained/held in the name of the company in respect of office flat at SCOPE Complex, Delhi and Jaipur office for book value of Rs.73.32 Lac (Previous year Rs.78.59 Lac) as well as Land & Building for book value of Rs.6037.30 Lac (Previous year Nil ) of Gujarat Copper Project (GCP).

However, the amount of gross block and net block of immovable property as on the balance sheet date have been shown in the financial records.

(ii) (a) According to the information and explanations given to us, the inventories of Finished Goods, Raw Materials and Store & Spares except those lying with contractors/ third parties have been physically verified by the management during the year. In our opinion, the periodicity of physical verification of inventory is reasonable. The company has noticed certain discrepancies on such verification of Store & Spares between the physical stock and book record, which were not material considering the size of the company and the nature of its business, and the same has been properly dealt with in the books of account.

(iii) According to information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and as such, reporting under this clause is not applicable to the Company.

(iv) According to information and explanations given to us, the company has not advanced any loan, given any guarantee or provided any security in connection with such loan and given/made any loan/ investment within the meaning of section 185 and 186 of the Companies Act, 2013 and as such, reporting under this clause is not applicable to the Company.

(v) According to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of Section 73 to 76 or any other relevant provision of the Companies Act, 2013 and the rules framed thereunder and as such, reporting under this clause is not applicable to the Company.

(vi) According to the information and explanations given to us, maintenance of cost records by the Company has been specified by Central Government under sub section (1) of section 148 of the Companies Act, 2013. We have broadly reviewed such cost records and we are of the opinion that, prima facie, such accounts and records have been made and maintained.

(vii) (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, Cess and other statutory dues with the appropriate authorities where applicable. There is no arrear of outstanding statutory dues as at 31st March 2016 for a period of more than six months from the date they became payable excepting Rs.1019.46 Lac towards Water Cess payable to Water Resources Department, Govt. of Jharkhand since the financial year 1999-2000.

(b) According to the records of the Company and information and explanations given to us, the following are the details of disputed dues in respect of income tax, sales tax, entry tax, service tax, duty of custom, duty of excise, value added tax and Cess as on 31st March 2016:

Name of Nature of Dues Period to which Forum where Amount the Statue the amount dispute is (Rs. in lac) relates pending

West Bengal State Sales Tax/ 2004-05 Dy.Commissioner 10.46 Value Added VAT * (RSOE) (Appeal) Tax Act,

West Bengal State Sales Tax/ 2006-07 FAST TRACK 20.96 Value Added VAT * (RSOE) COURT Tax Act, BENCH-V

West Bengal State Sales Tax/ 2008-09 Sr. Jt. Commissioner 50.12 Value Added VAT * (RSOE) (Appeal) Tax Act,

West Bengal State Sales Tax/ 2010-11 Additional 4.73 Value Added VAT * (RSOE) Commissioner Tax Act, (Appeal)

Central Sales Central Sales Tax 2007.08 Commissioner 345.11 Tax Act * (ICC) of Commercial Taxes, Jamshedpur

Central Excise Central Excise 1985-86 CESTAT 60.60 Act * (ICC)

Central Excise Central Excise 1997-98 TO CESTAT 203.52 Act 1999-00 * (ICC)

Central Excise Central Excise 1995-96 CESTAT 15.65 * (ICC)

Central Excise Central Excise 2000-01 TO CESTAT 1501.76 Act 2003-2004 * (ICC)

Central Excise Central Excise 2000-2001 TO CESTAT 283.40 Act 2001-2002 * (ICC)

Central Excise Central Excise 1996-97 CESTAT 1.46 Act * (ICC)

Central Excise Central Excise 1998 Supreme Court 16.00 Act * (ICC) of India

Madhya Pradesh Entry Tax 1994-95 Commissioner 5.38 Value Added * (MCP) (Appeals) Tax Act, Jabbalpur

Madhya Pradesh State Sales Tax/ 2009-2010 Sales tax Authority 34.47 Value Added VAT * (MCP) (Bhopal) Tax Act,

Madhya Pradesh State Sales Tax/ 2011-12 Sales tax Authority 16.66

Value Added VAT * (MCP) (Bhopal) Tax Act,

Madhya Pradesh State Sales Tax/ 2012-13 Sales tax Authority 99.89 Value Added VAT * (MCP) (Bhopal) Tax Act,

Central Excise Central Excise 2006-07 TO Customes, Excise 394.97 Act 2011-12 & Service Tax * (MCP) Appalate Tribunal, New Delhi

Central Excise Central Excise 2005-06 TO Commissioner 64.19 Act 2007-08 Central Excise * (MCP)

Central Excise Central Excise 1998-99 TO Commissioner 1717.24 Act 2014-15 Central Excise * (KCC)

Central Sales State Sales Tax/ 2007-08 Rajasthan Tax 2.84 Tax Act VAT * (KCC) Board,Ajmer

Rajasthan Value Entry Tax 2007-08 TO Dy.Commissioner 311.67 Added Tax Act, 2014-15 Appeal (Bikaner) *(KCC)

Central Excise Central Excise 2007-08 TO CESTAT 538.35 Act 2014-15 * (TCP)

Maharashtra State Sales Tax/ 1994-95 Appellate Authority 18.81 Value Added VAT * (TCP) Tax Act,

Maharashtra State Sales Tax/ 2008-09 Joint Commissioner, 51.17 Value Added VAT * (TCP) Sales Tax Tax Act,

Income Tax Act Income Tax 2005-06, Commissioner of 404.42 2007-08,2009-10 Income Tax & 2011-12 (Appeal) * (CO)

GRAND TOTAL 6173.83

*RSOE - Regional Sales Office East, *ICC - Indian Copper Complex *MCP -Malanjkhand Copper Project

*TCP -Taloja Copper Project, * KCC - Khetri Copper Complex, *CO - Corporate Office

(viii) According to information and explanations given to us, the Company has no due for repayment of loans or borrowings to financial institutions, banks or government and dues to debenture holders. However, the company has obtained term loan from Export Import Bank of India (EXIM Bank) during the year. The repayment of installment of principal amount is not due in the year under audit and payment of interest thereon is being made regularly.

(ix) According to information and explanations given to us, the company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year. However, the Company has obtained term loan from EXIM Bank and such term loan was applied for the purpose for which the same was raised.

(x) According to information and explanations given to us, no fraud by the company or any fraud on the Company by its officers and employees has been noticed or reported during the year.

(xi) According to the information and explanations give to us, provisions of section 197 of the Companies Act, 2013 regarding managerial remuneration are not applicable to the Government Company in terms of Notification No G.S.R. 463(E) dated 05.06.2015 issued by Ministry of Corporate Affairs and as such, reporting under this clause is not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi company and as such, reporting under this clause is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards, where applicable.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and as such, reporting under this clause is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him/her and as such, reporting under this clause is not applicable to the Company.

(xvi) In our opinion, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and as such, reporting under this clause is not applicable to the Company.

(Referred to in our report of even date)

Report pursuant to directions/additional company specific directions issued by office of the Comptroller and Auditor General of India (C& AG) under Section 143(5) of the Companies Act, 2013

Impact on the Accounts & Sl Directions Actions Taken No. Financial Statements

1. Whether the In the absence of Register of Land showing Gross Block & Net Block of company has clear/ details of freehold and leasehold land vis-a- Leasehold/ Freehold Land, title/ lease deeds for vis title/lease deeds of those lands being wherever applicable, have freehold land and reconciled with each other, we are unable to been duly shown in the leasehold land state the area of freehold and leasehold land accounts and financial respectively? If not, for which title/lease deeds are not available statements. Hence there is no please state the area with the Company. However, as stated in impact on the accounts and of freehold and Clause No. 3 & 6 to Note No. 35 of General financial statements. leasehold land for Notes on Accounts, leasehold land received which title/ lease from State Government as well as freehold deeds are not land acquired through nationalization in available? accordance with Indian Copper Corporation (Acquisition of Undertaking) Act, 1972, in respect of Indian Copper Complex (ICC) and leasehold land of Rs.3461.23 lac in respect of Gujarat Copper Project (GCP), have not yet been executed in favour of the Company.

2. Whether there are According to the information and No such cases, hence there is any cases of waiver / explanations given to us, there was no case no impact on the accounts and write off of debts/ of waiver of debts/loans/ interest etc. during financial statements. loans/interest etc., if the year under audit. yes, the reasons there for and the amount involved.

3 Whether proper Proper records are maintained for the Inventories of Rs.1.64 lac as on records are main- inventories lying with third parties. 31.03.2016 are lying with third tained for inventories party and there is no impact lying with third par- on the accounts and financial ties & assets received statements. as gift from Government or other au The company has not received any gift from No such cases, hence there is thorities. Government or other authorities during the no impact on the accounts and year. financial statements.

Additional Company Specific Directions

1. Whether the account- The accounting treatment of mine Since the accounting ing treatment of mine development expenditure in respect of open treatment of mine development expendi- cast mines as well as underground mine, in development expenditure in ture in respect of open our opinion, is adequate as summarized respect of open cast mines as cast mines as well as below well as underground mine is underground mine is adequate, there is no impact adequate? on the accounts and financial statements.

Impact on the Accounts &

Sl Directions Actions Taken No. Financial Statements

1. In respect of open cast mines: The expenditure on removal of waste and overburden is capitalized and the same is amortized in relation to actual ore production during the year and the stripping ratio of the mine as determined by the company at the weighted average rate. Subsequently, if any ore is reclaimed from overburden, the same is valued on the basis of opening rate of mine development expenditure.

2. In case of underground mines: The expenditure on development of a new mine in all cases and on subsequent development of a working mine is capitalized and amortized on the basis of ore raised during the year and the mineable ore reserves estimated from time to time. The ore obtained during development activity is adjusted against such expenditure at its derived realizable value.

For A. Kayes & Co

Place : Kolkata Chartered Accountants

Date: 30th May,2016 Firm Registration No. 311149E

CA.A.K.GHOSH

Partner

Membership No. 052933


Mar 31, 2015

We have audited the accompanying financial statements of Hindustan Copper Limited (hereinafter referred to as "the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (hereinafter referred to as "the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Clause no.:- 1(i)(b) and 1(ii) of Note No.:- 35 of General Notes on Accounts to the financial statements which describes the uncertainty related to the outcome of various pending legal cases filed against the Company by various parties as also tax related appeal cases filed by the company and its financial impact in the financial statement of the company. The Company has treated those demands as disputed and not acknowledged as debt in the books and treated the same as Contingent Liabilities. The total amount of such pending disputed litigations comes to Rs. 53191.27 lac.

Our opinion is not modified in respect of this matter.

Other Matters

a) Total sales turnover during the year was reduced by reversal of export sales of Rs. 3581.17 lac and also of Sundry Debtors relating to export sales accounted for in the previous year 2013-14, (Refer Clause No.:- 14 of Note-35 General Notes on Accounts).

b) Balances under the head Sundry Debtors, Sundry Creditors, Loans & Advances from and to various parties, Claims Recoverable, Deposit from and to various parties etc. have not been confirmed in number of cases ( Refer Clause No.:- 9 of Note-35 General Notes on Accounts).

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("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-I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by the Companies Act, 2013 under section 143(5), we give in the Annexure-II a statement on the matters directed by C& AG.

3. As required by Section 143(3) of the Act, we report, to the extent applicable, 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 and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the management, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) 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 financial statement (Refer Clause no.: 1(i) (b) and 1(ii) of Note No.: 35 of General Notes on Accounts) and our comments made in first paragraph of this report under "Emphasis of Matter".

ii. The Company did not have any material foreseeable losses on long term contract including derivative contracts.

iii. According to the information and explanations given to us the Company is not required to transfer any amount to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(Referred to in our report of even date attached)

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) Fixed Assets of the company have not been physically verified by the management during the year under audit pursuant to company's Accounting policy (Clause No. 3.6 of Note No. 2 of Significant Accounting Policies read with Clause no.:- 29 of Note No.:- 35 of General Notes on Accounts) and as such question of major discrepancies and it's treatment in books of account does not arise this year. However in terms of aforesaid policy, the fixed assets were physically verified during the previous year 2013-14.

(ii) (a) As explained to us, the inventories of Finished Goods, Raw Materials and Store and spares except those lying with contractors/ third parties have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) According to information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stock and book record were not material considering the size of the company and the nature of its business, and the same has been properly dealt with in the books of account.

(iii) According to information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore, reporting under sub clauses (a) and (b) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened in order to be commensurate with the size of the company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major continuing failure to correct major weakness in internal control system.

(v) According to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of Section 73 to 76 or any other relevant provision of the Companies Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under sub section 1 of section 148 of the Companies Act, 2013 and we are of the opinion that, prima facie, such accounts and records have been made and maintained.

(vii) (a) According to the records of the Company and information and explanations given to us, the

Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth tax, Service Tax, Custom duty, Excise duty, Value Added Tax, Cess and other statutory dues with the appropriate authorities. Employees State

Insurance is not applicable on the Company. There is no arrear of outstanding statutory dues as at 31st March 2015 for a period of more than six months from the date they became payable excepting Rs.951.60 lacs towards Water Cess.

(b) According to the records of the Company and information and explanations given to us, the following are the details of disputed dues in respect of Income Tax, Sales Tax, Wealth Tax, Entry Tax, Service Tax, Custom Duty, Value Added Tax, Excise Duty and Cess as on 31st March 2015:

Name of Nature of Dues Period to which the Statue the amount relates

West Bengal State Sales Tax/VAT 2004-05 Value Added ( Regional Sales Tax Act, Office-East)

West Bengal State Sales Tax / VAT 2006-07 Value Added (Regional Sales Tax Act, Office-East)

West Bengal State Sales Tax/ VAT 2008-09 Value Added (Regional Sales Tax Act, Office-East)

West Bengal State Sales Tax/ VAT 2010-11 Value Added (Regional Sales Tax Act, Office-East)

Central Sales Central Sales Tax 2007-08 Tax Act (Indian Copper Complex, Ghatsila Unit)

Central Central Excise 1985-86 Excise Act (Indian copper Complex, Ghatsila Unit)

Central Central Excise 1997-98 TO 1999-00 Excise Act (Indian copper Complex, Ghatsila Unit)

Central Central Excise 1995-96 Excise Act (Indian copper Complex, Ghatsila Unit)

Central Central Excise 2000-01 TO 2003-2004 Excise Act (Indian copper Complex, Ghatsila Unit)

Central Central Excise 2000-2001 TO 2001-2002 Excise Act (Indian copper Complex, Ghatsila Unit)

Central Central Excise 1996-97 Excise Act (Indian copper Complex, Ghatsila Unit)

Name of the Statute Forum where Amount dispute is pending (Rs.in lacs)

West Bengal Value Added Tax Act, Dy. Commissioner (Appeal) 10.46

West Bengal Value Added Tax Act, Sr. Jt. Commissioner 0.96 ( Appeal)

West Bengal Value Added Tax Act, Sr. Jt. Commissioner 50.12 ( Appeal)

West Bengal Value Added Tax Act, Additional Commissioner 4.73 (Appeal)

Central Sales Tax Act Commissioner of 345.11 Commercial Taxes, Jamshedpur

Central Excise Act CESTAT 60.60

Central Excise Act CESTAT 203.52

Central Excise Act CESTAT 15.65

Central Excise Act CESTAT 1501.76

Central Excise Act CESTAT 283.40

Central Excise Act CESTAT 1.46

Name of Nature of Dues Period to which the Statue the amount relates

Central Central Excise 1998 Excise Act (Indian copper Complex, Ghatsila Unit)

Madhya Entry Tax 1994-95 Pradesh (Malanjkhand Value Added Copper Project) Tax Act,

Madhya State Sales Tax/ VAT 2009-2010 Pradesh (Malanjkhand Value Added Copper Project) Tax Act,

Madhya State Sales Tax/ VAT 2011-12 Pradesh (Malanjkhand Value Added Copper Project) Tax Act,

Central Central Excise 2006-07 TO 2011-12 Excise Act (Malanjkhand Copper Project)

Central Central Excise 2005-06 To 2007-08 Excise Act (Malanjkhand Copper Project)

Central Central Excise 1998-99 TO 2014-15 Excise Act (Khetri Copper Complex)

Service Service Tax 1998-99 TO 2013-14 Tax Act (Khetri Copper Complex)

Rajasthan Central Sales Tax 2007-08 Value Added (Khetri Copper Complex) Tax Act,

Rajasthan Central Sales Tax 2009-10 Value Added (Khetri Copper Complex) Tax Act,

Rajasthan Central Sales Tax 2010-11 Value Added (Khetri Copper Complex) Tax Act,

Rajasthan Entry Tax 2004-05 TO 2014-15 Value Added (Khetri Copper Complex) Tax Act,

Property Tax Property Tax 2006-07 TO 2012-13 Act (Khetri Copper Complex)

Name of the Statute Forum where Amount dispute is pending (Rs.in lacs)

Central Excise Act CESTAT 16.00

Madhya Pradesh Value Added Tax Act Commissioner 5.38 (Appeals) Jabbalpur

Madhya Pradesh Value Added Tax Act, Sales tax Authority 34.47 (Bhopal)

Madhya Pradesh Value Added Tax Act, Sales tax Authority 16.66 (Bhopal)

Central Excise Act Customs, Excise & 394.97 Service Tax Appellate tribunal, New Delhi

Central Excise Act Commissioner 64.19 Central Excise

Central Excise Act Asst. / Joint/ 1647.13 Dy.Commissioner Central Excise

Service Tax Act CESTAT/ 76.53 Asst. Commissioner/ Commissioner/

Rajasthan Value Added Tax Act, Rajasthan Tax 2.84 Board, Ajmer

Rajasthan Value Added Tax Act, Dy. Commissioner 15.58 (Appeal), Bikaner

Rajasthan Value Added Tax Act, Dy. Commissioner 16.35 (Appeal), Bikaner

Rajasthan Value Added Tax Act, Supreme Court, 661.96 New Delhi

Property Tax Act High Court, Jaipur 1655.16



Name of Nature of Dues Period to which the Statue the amount relates

Income Income Tax 2004-05, 2006-07, Tax Act 2008-09, 2010-11 & 2011-12 (Head Office)

Central Central Excise 2007-08 TO 2014-15 Excise Act (Taloja Copper Project)

Maharashtra State Sales Tax/ VAT 1994-95 Value Added (Taloja Copper Project) Tax Act,

Name of the Statute Forum where Amount dispute is pending (Rs.in lacs)

Income Tax Act Commissioner of 4538.86 Income Tax (Appeal)

Central Excise Act CESTAT 481.63

Maharashtra Value Added Tax Act, Appellate Authority 18.81

Total: 12124.29

(c) According to the information and explanations given to us the Company is not required to transfer any amount to the investor education and protection fund in accordance with the relevant provisions of the Companies Act,1956 (1 of 1956) and rules made there under.

(viii) The Company has no accumulated losses as at 31st March 2015 and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year.

(ix) According to information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

(x) According to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to information and explanations given to us, the Company has not obtained any term loan during the year.

(xii) As reported by the management , certain financial irregularities/fraudulent transactions in Sales and Debtors records were committed in earlier years as stated vide Clause No.16 of Note No.:- 35 -General Notes on Accounts of financial statement. The management did not declare the same as fraud at that time. The principal amount and some portion of the interest involved has since been recovered by the company. Necessary provision was made for uncovered portion of interest and penal interest on overdue interest amounting to Rs.50.59 lac in the previous financial year 2013-14. Further investigations with regard to other issues are still going on. However, during the course of our audit, no fraud on or by the company has been noticed or reported in respect of the current financial year 2014-15.

Place : New Delhi For A.Kayes & Co. Date : 28th May, 2015 Chartered Accountants. Firm's registration No. 311149E

CA. R.N.Chattopadhyay Partner Membership No. 066774


Mar 31, 2014

We have audited the accompanying financial statements of Hindustan Copper Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the general Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The Company''s inventories include Rs.6543.29 lakh being the amount computed by the company for the first time as cost of 27.50 lakh tonnes of Lean Ore as disclosed vide Clause 12 of Note No. 35 to the accounts (General Notes on Accounts). Prior to this year, Such Lean Ore was never taken into valuation of inventory by the company. This is a change in Accounting of Inventories of the company during the year under review.

Had the above change not been made, the cost of sales (change in inventory) would have been increased by Rs.6543.29 lakh and income tax, Net Profit and Shareholders'' fund would have been reduced by Rs.2224.06 lakh, Rs.6543.29 lakh, and Rs.4319.23lakh respectively.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (c)in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Clause 15 of Note no. 35 to the accounts (General Notes on Accounts) referred to in the financial statements which describe the Old Liabilities and Provisions Not Required being Written Back during the year under review amounting to Rs.1510.51 lakh.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required under provisions of section 227(3) of the Companies Act, 1956, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account .

d. except for the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(Referred to in our report of even date attached)

1 (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The fixed assets have been physically verified by the management during the year under audit pursuant to company''s Accounting policy (Clause c.5 of Note No. 2 to the Accounts of Significant Accounting Policies) and discrepancies, if any, have been properly dealt with in the books of account.

(c) In our opinion, the disposals of fixed assets during the year are not of significant value and do not affect the going concern basis.

2 (a) As explained to us, the inventories of Finished Goods, Raw Materials and Store and spares except those lying with contractors/ third parties have been physically verified by the manage- ment during the year. In our opinion, the frequency of verification is reasonable.

(b) According to information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company is main- taining proper records of inventory and the discrepancies noticed on verification between the physical stock and book record were not material considering the size of the company and the nature of its business, and the same has been properly adjusted in the accounts, save and except that the company has for the first time taken into inventory account 27.50 lakh tonnes of Lean Ore valued at Rs.6543.29 lakh vide Clause No. 12 of Note No. 35 to the Accounts (General Notes on Accounts).

3 (a) According to information and explanations given to us the company has not granted any loans, secured or unsecured to or from companies, firms or other parties covered in the register main- tained under section 301 of the Companies Act, 1956. Therefore, reporting under other related sub clauses is not applicable to the company.

(b) According to information and explanations given to us the company has not taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register main- tained under section 301 of the Companies Act, 1956. Therefore, reporting under other related sub clauses is not applicable to the company.

4 In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened in order to be commensurate with the size of the company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not observed any major weaknesses continuing in the internal control system.

5 Based on the audit procedures applied by us and according to the information and explanations given to us, there was no transaction that needed to be entered in the Register required to be maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party in the financial year.

6 According to the information and explanations given to us, the company has not accepted any deposit from the public within the meaning of Section 58A, 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 are not applicable to the Company.

7 The company has its Internal Audit System commensurate with the size and nature of its business.

8 We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been maintained.

9 (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax/VAT, Wealth tax, Service Tax, Custom duty, Excise duty, Cess and other statutory dues with the appropriate authorities wherever applicable and there is no undisputed amount payable in respect of the aforesaid statutory dues as at 31st March 2014 for a period of more than six months from the date they became payable, excepting Rs.890.03 Lakhs towards Water Cess.

(b) According to the records of the Company and information and explanations given to us, the following are the details of disputed dues in respect of Income Tax, Sales Tax, Entry Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess as on 31st March 2014:

Name of Nature of Dues Period to which the Statue the amount relates

West Bengal State Sales Tax/ 2004-05 Value Added VAT (RSOE) Tax Act

West Bengal State Sales Tax/ VAT 2006-07 Value Added (RSOE) Tax Act

West Bengal State Sales Tax/ VAT 2008-09 Value Added (RSOE) Tax Act

West Bengal State Sales Tax/ VAT 2010-11 Value Added (RSOE) Tax Act

Jharkhand State Sales Tax/ VAT 2002-03 Value Added (ICC) Tax Act

Jharkhand State Sales Tax/ VAT 2003-04 Value Added (ICC) Tax Act

Central Sales Central Sales Tax 2003-04 Tax Act (ICC)



Name of the Statue Forum where Amount dispute is pending (Rupees in lacs)

West Bengal Value Added Tax Act Dy. Commissioner 10.46 (Appeal)

West Bengal Value Added Tax Act Sr. Jt. Commissioner 0.96 (Appeal)

West Bengal Value Added Tax Act Sr. Jt. Commissioner 50.12 (Appeal)

West Bengal Value Added Tax Act Additional Commissioner 4.73 (Appeal)

Jharkhand Value Added Tax Act Dy. Commissioner of Commercial Taxes, 40.55 (Adj.) Jamshedpur

Jharkhand Value Added Tax Act Dy. Commissioner of 16.81 Commercial Taxes(Adj.), Jamshedpur

Central Sales Tax Act Dy. Commissioner of 3.21 Commercial Taxes(Adj.), Jamshedpur



Name of Nature of Dues Period to which the Statue the amount relates

Jharkhand State Sales Tax/ VAT 2004-05 Value Added (ICC) Tax Act

Central Sales Central Sales Tax 2004-05 Tax Act (ICC)

Jharkhand State Sales Tax/ VAT 2005-06 Value Added (ICC) Tax Act

Central Sales Central Sales Tax 2005-06 Tax Act (ICC)

Central Central Excise 1985-86 Excise Act (ICC)

Central Excise Central Excise 1997-98 TO Act 1998-99 (ICC)

Central Excise Central Excise 1995-96 Act (ICC)

Central Excise Central Excise 2000-01 TO Act 2003-2004 (ICC)

Central Excise Central Excise 2000-2001 TO Act 2001-2002 (ICC)

Central Excise Central Excise 1996-97 Act (ICC)

Madhya Pradesh Entry Tax 1994-95 Value Added (MCP) Tax Act

Madhya Pradesh State Sales Tax/ VAT 2009-2010 Value Added (MCP) Tax Act

Central Excise Central Excise 2007-08 TO Act 2010-11 (MCP)

Central Excise Central Excise 2013-14 Act (MCP)

Central Excise Central Excise 2007-08 Act (MCP)

Name of the Statue Forum where Amount dispute is pending (Rupees in lacs)



Jharkhand Value Added Tax Act Jharkhand High Court 68.67

Central Sales Tax Act Jharkhand High Court 4.41

Jharkhand Value Added Tax Act Dy. Commissioner of 86.34 Commercial Taxes (Adj.), Jamshedpur

Central Sales Tax Act Dy. Commissioner of 4.34 Commercial Taxes(Adj.), Jamshedpur

Central Excise Act CESTAT 60.60

Central Excise Act CESTAT 203.52

Central Excise Act CESTAT 15.65

Central Excise Act CESTAT 1501.76

Central Excise Act CESTAT 283.40

Central Excise Act CESTAT 1.46

Madhya Pradesh Value Added Tax Act Commissioner (Appeals) 5.38 Jabbalpur

Madhya Pradesh Value Added Tax Act Sales tax Authority 34.47 (Balaghat)

Central Excise Act Asst. Commissioner 394.97 Central Excise

Central Excise Act Commissioner Central 117.63 Excise

Central Excise Commissioner Central 64.19 Excise

Name of Nature of Dues Period to which the Statue the amount relates

Central Excise Central Excise 1998-99 TO Act 2013-14 (KCC)

Rajasthan Value State Sales Tax/ VAT 2009-10 TO Added Tax Act 2010-11 (KCC)

Rajasthan Value Entry Tax 2004-05 TO 2013-14 Added Tax Act (KCC)

Property Tax Property Tax 2006-07 TO 2012-13 Act

Income Tax Income Tax 2008-09 & 2011-12 Act (HO)

Central Excise Central Excise 2007-08 TO 2013-14 Act (TCP)

Maharashtra State Sales Tax/ VAT 1994-95 Value Added (TCP) Tax Act



Name of the Statue Forum where Amount dispute is pending (Rupees in lacs)

Central Excise Act Asst. / Joint/ Dy. Commissioner Central Excise 442.69

Rajasthan Value Added Tax Act Dy. Commissioner 28.74 Appeal (Bikaner)

Rajasthan Value Added Tax Act Dy. Commissioner 502.79 Appeal (Bikaner)

Property Tax Act High Court, Jaipur 2070.26

Income Tax Act Commissioner of 3767.36 Income Tax (Appeal)

Central Excise Act CESTAT 448.01

Maharashtra Value Added Tax Act Appellate Authority 16.81

Total: 10250.29

10 According to information and explanations provided to us, the Company has no accumulated losses as at 31st March 2014 and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year.

11 Based on our audit procedures and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 Based on our of records, we are of the opinion that the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 According to information and explanations provided to us, in our opinion the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15 According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16 According to information and explanations given to us, the Company has not obtained any term loan during the year under audit.

17 According to the information and explanations given to us and on an overall examination of the balance sheet of the company we report that no funds raised on short term basis have been used for long term investment.

18 The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year under audit. Therefore, reporting under this clause is not applicable to the company.

20 The Company has not raised any money during the year covered by audit by way of public issue.

21 According to information and explanations given to us, certain financial irregularities were committed as stated vide Clause No. 16 of Note No.35 to the accounts (General Notes on Accounts). Since the management has not declared the same as fraud, we could not state whether the same as fraud pending decision of legal proceedings / FIR filed in this regard.

For A.KAYES & CO. For S R I ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 311149E Firm Registration No. 305109E

CA.A.KAYES CA I. PASHA

Partner Partner

Membership No. 050363 Membership No. 013280

Place : New Delhi Dated : 24th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Hindustan Copper Ltd ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 ofthe Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order,2003 ("the order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Sec 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, and

e. in our opinion, reporting in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 is not applicable to the company, being a government company, as per Notification No. GSR 829(E) dated October 21, 2003 issued by the Department of Company Affairs.

(Referred to in our report of even date attached)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The fixed assets of the Company have not been physically verified by the management during the year under audit pursuant to company''s Accounting Policy (Note no.2.c.5) and as such, major discrepancies, if any, could not be ascertained and not commented upon. Last physical verification of fixed asset was done in the Financial Year 2010-2011. In our opinion it should be done in a phased manner so as to cover entire fixed assets atleast once in every three years and the company''s Accounting Policy should be suitably modified.

(c) In our opinion, the disposals of fixed assets during the year are not of significant value and do not affect the going concern concept.

2. (a) As explained to us, the inventories of Finished Goods, Raw Materials and Stores and Spares except those lying with contractors / third parties have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) According to information and explanations given to us, the procedures of physical verification of inventory followed by the management appear to be reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material considering the size of the company and the nature of its business and the same have been properly adjusted in the accounts.

3. (a) According to information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, reporting under other related sub clauses is not applicable to the company.

(b) According to information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, reporting under other related sub clauses is not applicable to the company.

4. In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened in order to be commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. We have not observed any major weakness continuing in the internal control system.

5. Based on the audit procedures applied by us and according to the information and explanations given to us, there was no transaction that needed to be entered in the Register required to be maintained under Section 301 of Companies Act, 1956, exceeding the value of Rs. five lacs in respect of any party in the financial year.

6. According to information and explanations given to us, the Company has not accepted any deposits from the public. Hence, the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975 are not applicable to the Company.

7. The Company has its Internal Audit System commensurate with its size and nature of its business.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of Cost Records under section 209 (1)(d) of the Companies Act, 1956 and we are of the opinion that, prima facie, the prescribed accounts and records have been maintained.

9. (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income Tax, Sales Tax/ Vat, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities, and there is no undisputed amount payable in respect of the aforesaid statutory dues as at 31st March, 2013 for a period of more than six months from the date they became payable, excepting Rs. 833.82 Lacs towards Water Cess.

(b) According to the records of the Company and the information and explanations given to us, the following are the details of disputed dues in respect of Income Tax, Sales Tax, Entry Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess as on 31st March, 2013:

STATEMENT OF DISPUTED STATUTORY LIABILITIES (Rs. in lac)

Name of Nature of Period to which the the Statue the Dues amount relates

1985-86

1995-96

1996-97

FROM 1997-98 TO 1999-00

1998-99

The Central EXCISE 1999-00 Excise Act, DUTY 1944 2000-01

FROM 2000-01 TO 2001-02

FROM 2000-01 TO 2003-04

2002-03

2003-04

2005-06

2006-07

2007-08

2007-08 TO 2010-11

2008-09

2009-10

2009-10 & 2010-11

2010-11

2011-12

2012-13

Income Tax INCOME Act 1961 TAX 2006-2007

2008-2009

1994-95

1994-95

SALES State Value TAX/VAT 2002-03 Added Tax Acts 2003-04

2004-05

2005-06

2007-08

2009-10

Entry Tax ENTRY FROM 2004-05 TO 2012-13 Act TAX

TOTAL

Name of the Statute Forum where dispute is AMOUNT pending

The Central Excise Act, 1944 CESTAT 60.60

CESTAT 15.65

CESTAT 1.46

CESTAT 203.52

ASST COMMISSIONER 51.40

ASST COMMISSIONER 40.20

DY COMMISSIONER 35.40

CESTAT 283.40

CESTAT 1501.76

ASST COMMISSIONER/COMMISSIONER/CESTAT 83.70

ASST COMMISSIONER/JOINT COMMISSIONER 63.90

ASST COMMISSIONER 36.56

JOINT COMMISSIONER 8.47

ASST COMMISSIONER / COMMISSIONER 74.01

ASST COMMISSIONER 3.95

ASST / ADDL / DY COMMISSIONER / 447.22 COMMISSIONER / CESTAT

DY COMMISSIONER / COMMISSIONER 59.85

COMMISSIONER 103.40

ADDL COMMISSIONER / COMMISSIONER 140.96

COMMISSIONER 22.03

ASST COMMISSIONER / COMMISSIONER 77.12

Income Tax Act 1961 COMMISSIONER OF INCOME TAX(APPEALS) 1750.71

COMMISSIONER OF 4 INCOME TAX (APPEALS) 4.70

COMMISSIONER (APPEALS) / JABALPUR 5.38

APPELATE AUTHORITY / MAHARASHTRA 16.81

DY.COMMISSIONER (ADJUDICATION) / 40.55 JHARKHAND

State Value Added Tax Acts DY.COMMISSIONER (ADJUDICATION) / 20.01 JHARKHAND

DY.COMMISSIONER (ADJUDICATION) / 73.09 JHARKHAND

DY.COMMISSIONER (ADJUDICATION) / 90.68 JHARKHAND

DY.COMMISSIONER (APPEALS) / BIKANER 0.06

DY.COMMISSIONER (APPEALS) / BIKANER 14.03

Entry Tax Act DY.COMMISSIONER (APPEALS) / BIKANER 250.50

TOTAL 5581.08

10. According to the information and explanation provided to us, the Company has no accumulated losses as at 31st March, 2013 and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year.

11. Based on our audit procedures and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. Based on our examination of records, we are of the opinion that the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. According to the information and explanation provided to us, in our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the Company has not given any Guarantee for loans taken by others from banks or financial institution.

16. According to the information and explanations given to us, the company has not taken any term loan during the year under audit.

17. On an overall examination of the Balance Sheet of the Company and according to information and explanations given to us, we report that funds raised by the company on short term basis have not been used for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debenture during the year under audit. Therefore, reporting under this clause is not applicable to the company.

20. The Company has not raised any money during the year covered by audit by way of public issue

21. According to the information and explanations given to us, the financial irregularities stated vide Clause 15 of Note No.35 are under the initial stage of investigation. Since the management has not yet reported the same as fraud pending final investigation, we state that no fraud on or by the company has been reported during the course of audit.

For S. Ghose & Co. For A. Kayes & Co.

Chartered Accountants Chartered Accountants

Firm Registration No.302184E Firm RegistrationNo.311149E

CA.Chandan Chattopadhay CA. Amrul Kayes

Partner Partner

Membership No. 051254 Membership No. 050363

Place: Mumbai

Date: 23rd May, 2013


Mar 31, 2012

1) We have audited the attached Balance Sheet of M/s. Hindustan Copper Limited as at 31st March 2012, the Profit & Loss Account and the Cash Flow Statement of the company for the year ended on that date annexed hereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, 2003 (as amended), issued by the Central Government under Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4) The financial statements have been drawn up on the basis of in-house estimates referred to in paragraph 2 of Accounting Policies, being a technical matter; we have relied upon the same.

5) Further to our comments in the Annexure referred to in Paragraph 3 here-in-above we report that:

a. We have 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 such books;

c. The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. Section 274(l)(g) of the Companies Act, 1956, requiring disclosure of disqualification of directors is not applicable to Government Companies vide notification no GSR 829(E) Dated 21.10.03 issued by Department of Corporate Affairs, Ministry of Finance, Government of India.

In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with notes thereon, give in the prescribed manner the information required by the Companies Act, 1956, and give a true and fair view in conformity with the accounting principles generally accepted in India :-

(i) in the case of the Balance Sheet, of the state of affarrs of the company as at 31st March, 2012 ;

(ii) in the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

(Referred to in paragraph 3 of our report of even date)

1 In respect of its Fixed Assets :

(a) The company has in general maintained proper records showing full particulars including quantitative details and location of fixed assets.

(b) The fixed assets have not been physically verified during the current year pursuant to Accounting Policy No. 3.5. In our opinion, it should be done in a phase wise manner so as to complete and cover the entire fixed assets verification at least once in every three years.

(c) During the year, the company has not disposed off any fixed assets of substantial nature which would affect the going concern status of the company.

2 In respect of its Inventories :

(a) Physical verification of the inventory has been carried out during the year by Management. In our opinion frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations made available to us, the procedure of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

3 The company has neither granted nor taken any loans to/ from companies, firms or other parties listed in the register maintained under Sec. 301 of the Companies Act, 1956. In view of the same, the question of the terms and conditions including rates of interest being prima facie prejudicial to the interest of the company does not arise.

4 In our opinion and according to the explanations given to us, there is an adequate internal control system with regard to purchase of inventory, fixed assets including high value contracts, transportation contracts and sale of goods commensurate with the size of the company. Further, on the explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5 (a) According to the information and explanations given to us, there is no transaction which needs to be entered in the register maintained under Section 301 of the Companies Act, 1956. b) In our opinion and according to the information and explanations given to us, the company has not entered into any contracts or arrangements exceeding rupees five lakhs in value in respect of any party in pursuance of contracts or arrangements entered in the register to be maintained under Section 301 of the Companies Act, 1956.

6 In our opinion and according to the information and explanations made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7 The company has adequate Internal Audit system commensurate with the size and nature of its business.

8 We have broadly reviewed the cost records maintained by the company for the items prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records and accounts have been maintained. However, we have not made a detailed examination of such accounts and records.

9 In respect of statutory dues:

(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues payable in respect of provident fund, Investors education fund and Protection fund, Employees' state Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty, Land Tax, Electricity Duty and Cess and any other material statutory dues applicable to it with appropriate authority during the year.

According to the information and explanations given to us, undisputed amounts payable in respect of Royalty and Water Cess outstanding for a period of more than six months from the date they become payable were in aggregate of Rs 1445.49 lac as at 31* March 2012 (As given in annexure attached)

(b) According to the information and explanations given to us, details of dues of Sales Tax, Excise Duty, Entry Tax, Property Tax, Terminal Tax and Export / Municipality Tax amounting to Rs 14006.26 lac net of deposits made have not been deposited on account of disputes pending at various forum. (As given in annexure attached)

10. The Company does not have accumulated losses as at 31st March 2012 and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to Banks and Financial Institution.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the provision of any special statute applicable to chit fund / nidhi/ mutual benefit fund/societies is not applicable to the company.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the company has not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment of the Company.

18. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debentures during the year.

20. The company has not raised any funds by way of public issue during the year.

21. According to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

UNDISPUTED LIABILITIES FOR MORE THAN SIX MONTHS

(Rs. in lac)

PARTICULARS AMOUNT

ROYALTY 672.69

WATER CESS 772.80

TOTAL 1445.49

STATEMENT OF DISPUTED STATUTORY LIABILITIES (Rs. in lac)

SL. PARTICULAR YEAR FORUM AT WHICH AMOUNT NO. MATTER IS PENDING

1 EXCISE DUTY 1985-86 CESTAT 60.60 1995-96 CESTAT 15.65

1996-97 CESTAT 1.46

FROM 1997-98 TO 1999-00 CESTAT 203.52

1998-99 ASST COMMISSIONER/ HIGH COURT 135.23

1999-00 ASST/ADDL COMMISSIONER 116.52

2000-01 ASST COMMISSIONER 21.94

FROM 2000-01 TO 2003-04 COMMISSIONER (ADJUDICATION) 1501.76

FROM 2000 -01 TO 2001-02 COMMISSIONER (ADJUDICATION) 283.40

2001-02 DY COMMISSIONER 70.80

2002-03 ASST COMMISSIONER 3.25

2002-03 CESTAT 69.50

2003-04 ASST /ADDL /JOINT COMMISSIONER 91.79

2005-06 ADDL/JOINT COMMISSIONER 43.94

2007-08 ASST COMMISSIONER 9.86

2007-08 TO 2010-11 ASST COMMISSIONER 82.52

2008-09 ADDL/DY COMMISSIONER 28.05

2008-09 CESTAT 253.92

2008-09 ASST COMMISSIONER 17.08

2009-10 DY COMMISSIONER 1.01

2009-10 ASST COMMISSIONER 196.27

2009-10 & 2010-11 ASST COMMISSIONER 103.41

2010-11 ADDL COMMISSIONER 14.01

2010-11 ASST COMMISSIONER 126.95

2010-11 TRIBUNAL 3.51

2011-12 COMMISSIONER (APPEAL) 1.34

2 PROPERTY TAX FROM 1994-95 TO 1998-99 & FROM 2005 -06 TO 2009-10 HIGH COURT, JABALPUR 1032.47

FROM 2006 -07 TO 2011-12 HIGH COURT, JAIPUR 1707.55

3 SALES TAX 1991-92 TRIBUNAL / MAHARASHTRA 7.34

1994-95 COMMISSIONER (APPEALS) / JABALPUR 5.38

1994-95 DYCOMMISSIONER (APPEALS) / BIKANER 2.14

1994-95 TRIBUNAL/MAHARASHTRA 17.81

1995-96 DYCOMMISSIONER (APPEALS) / BIKANER 1.80

1996-97 DY COMMISSIONER (APPEALS) / BIKANER 34.06

1997-98 DY COMMISSIONER (APPEALS) / BIKANER 33.83

2000-01 DY COMMISSIONER (APPEALS) / BIKANER 0.95

2001-02 DY COMMISSIONER (APPEALS) / BIKANER 6.00

2002-03 DY COMMISSIONER (APPEALS) & CTO / BIKANER 109.74

2002-03 DY COMMISSIONER (ADJUDICATION) / JHARKHAND 40.55

2003-04 DY COMMISSIONER (ADJUDICATION) / JHARKHAND 20.01

2004-05 DY COMMISSIONER (ADJUDICATION) / JHARKHAND 73.08

2005-06 DY COMMISSIONER (ADJUDICATION) / JHARKHAND 90.69

2006-07 DY COMMISSIONER (APPEALS) / BIKANER 33.57

2007-08 DY COMMISSIONER (APPEALS) / BIKANER 0.06

4 TERMINAL TAX FROM 2000 -01 TO 2005-06 HIGH COURT, JABALPUR 7046.00

5 EXPORT/ FROM 2005-06 TO 2011 -12 HIGH COURT, JABALPUR 52.84 MUNICIPALITY TAX

6 ENTRY TAX 2007-08 DY COMMISSIONER (APPEAL) / BIKANER 233.10 TOTAL 14006.26





For AGARWAL ANIL & CO. For S GHOSE & CO.

FRN No. 003222N FRN No.302184E

Chartered Accountants Chartered Accountants

ANIL AGRAWAL CHANDAN CHATTOPADHAY

(M No. 82103) (M No. 51254)

Partner Partner

Place: Kolkata Date :29th May, 2012


Mar 31, 2011

1) We have audited the attached Balance Sheet of M/s. Hindustan Copper Limited as at 31 st March 2011, the Profit & Loss Account and the Cash Flow Statement of the company for the year ended on that date annexed hereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, 2003 (as amended), issued by the Central Government under Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4) Without qualifying our opinion, we draw attention to :-

a) Note 5 of schedule 24 forming part of the financial statement relating to a dispute with MP State Electricity Board regarding demand of interest on electricity tariff amounting to Rs. 1218680 thousand payable at MCP which is pending for a long time and the matter is presently referred back to Hon'ble High Court, Jabbalpur by Hon'ble Supreme Court of India for reconsideration. The said amount has not been provided as liability in the accounts and disclosed as a contingent liability.

b) Note 3 of schedule 24 forming part of the financial statement relating to a dispute with the Municipal Council, Malanjkhand, has raised a demand on MCP/HCL amounting to Rs 704664 thousand on account of penalty on Terminal Tax for the period 2000-01 to 2005-06 on the ground of short payment of Terminal Tax. The matter has been contested by the company before Hon'ble District Court, Balaghat and the company paid Rs.35233 thousand towards Terminal Tax as per order of Hon'ble High Court, Jabalpur,M.P where the decision was given in favour Municipal Council. The company referred the matter to Hon'ble Supreme Court of India. The said amount has not been provided as liability in the accounts and disclosed as a contingent liability.

c) The financial statements have been drawn up on the basis of in-house estimates referred to in paragraph 2 of Accounting Policies, being a technical matter; we have relied upon the same.

5) Further to our comments in the Annexure referred to in Paragraph 3 here-inabove we report that:

a. We have 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 such books;

c. The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement, subject to what is stated herein below in paragraph 6 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) ofsection211 of the Companies Act, 1956;

e. Section 274( 1 )(g) of the Companies Act, 1956, requiring disclosure of disqualification of directors is not applicable to Government Companies vide notification no GSR 829(E) Dated 21.10.03 issued by Department of Corporate Affairs, Ministry of Finance, Government of India.

6) We further report that:-

A) Pending confirmations and reconciliation, in case of some of the balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances and Sundry Debtors remain as per book balance the impact of which can not be quantified at this stage. (Ref.NoteNo. 12 on Schedule No. 24 of Notes to Accounts).

b) The effect of qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details.

Subject to the matter referred to in paragraph 6(a) & (b) above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with notes thereon, give in the prescribed manner the information required by the Companies Act, 1956, and, give a true and fair view in conformity with the accounting principles generally accepted in India :-

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31 st March, 2011;

(ii) in the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date)

1 In respect of its Fixed Assets:

(a) The company has in general maintained proper records showing full particulars including quantitative details and location of fixed assets.

(b) The fixed assets have been physically verified during the current year. In our opinion, it should be done in a phase wise manner so as to complete and cover the entire fixed as sets verification at least in every three years.

(c) During the year, the company has not disposed off any fixed assets of substantial nature which would affect the going concern status of the company.

2 In respect of its Inventories:

(a) Physical verification of the inventory has been carried out during the year by Management. In our opinion frequency of verification is reasonable. In our opinion, non-moving store should be ascertained every year.

(b) In our opinion and according to the information and explanations made available to us, the procedure of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

3 The company has neither granted nor taken any loans to/ from companies, firms or other parties listed in the register maintained under Sec. 301 of the Companies Act, 1956. In view of the same, the question of the terms and conditions including rates of interest being prima facie prejudicial to the interest of the company does not arise.

4 In our opinion and according to the explanations given to us, there is an adequate internal control system with regard to purchase of inventory, fixed assets including high value contracts, transportation contracts and sale of goods commensurate with the size of the company. Further, on the explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5 (a) According to the information and explanations given to us, there is no transaction which needs to be entered in the

register maintained under Section 301 ofthe Companies Act, 1956.

b) In our opinion and according to the information and explanations given to us, the company has not entered into any contracts or arrangements exceeding rupees five lakhs in value in respect of any party in pursuance of contracts or arrangements entered in the register to be maintained under Section 301 ofthe Companies Act, 1956.

6 In our opinion and according to the information and explanations made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58 A and 58AA or any other relevant provisions ofthe Companies Act, 1956 and the rules framed there under.

7 Company has Internal Audit system commensurate with its size and nature of business. However, in our opinion, it needs to be reviewed, monitored strengthened further.

8 We have broadly reviewed the cost records maintained by the company for the items prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 ofthe Companies Act, 1956 and are ofthe opinion that prima facie, the prescribed records and accounts have been maintained. However, we have not made a detailed examination of such accounts and records.

9 In respect of statutory dues:

(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues payable in respect of provident fund, Investors education fund and Protection fund, Employees' state Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty, Land Tax, Electricity Duty and Cess and any other material statutory dues applicable to it with appropriate authority during the year.

According to the information and explanations given to us, undisputed amounts payable in respect of Sales Tax, Royalty, Forest land, Electricity Duty, Excise Duty and Water Cess outstanding for a period of more than six months from the date they become payable were in aggregate ofRs. 174466 thousand as at 31st March 2011 (As given in annexure attached)

(b) According to the information and explanations given to us, details of dues of Sales Tax, Excise Duty, Entry Tax, and Property Tax amounting to Rs.1271316 thousand net of deposits made have not been deposited on account of disputes pending at various forum. (As given in annexure attached)

10 The Company does not have accumulated losses as at 31st March 2011 and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11 In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to Banks and Financial Institution.

12 According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 In our opinion, the provision of any special statute applicable to chit fund / nidhi/ mutual benefit fund/societies is not applicable to the company.

14 In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments.

15 According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

16 In our opinion and according to the information and explanations given to us, the company has not availed any term loan during the year.

17 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment of the Company.

18 According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19 According to the information and explanations given to us, the company has not issued any debentures during the year.

20 The company has not raised any funds by way of public issue during the year.

21 According to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year

For RAY & CO. For AGARWAL ANIL& CO.

FRN: 313124E FRN : 003222N

Chartered Accountants Chartered Accountants

S P BASU ANIL AGRAWAL

Partner Partner

(M.No. 50209) (M.No. 82103)

Place : Kolkata Date: 28th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. Hindustan Copper Limited as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement of the company for the year ended on that date annexed hereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining on a test basis, evidences supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended), issued by the Central Government under Section 227(4A) of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Without qualifying our opinion, we draw attention to :-

(a) Note 2 of schedule 24 forming part of the financial statement relating to trade dispute with M/s Bhagawati Gases Ltd (BGL) in connection with an agreement to supply of gaseous oxygen at Khetri Copper Complex. A claim for Rs.10.80 Crores has been awarded against the company by the arbitrator. The company has filed an appeal before the Jhun Jhunu Court and the same was admitted for hearing. Based upon legal opinion obtained from a senior Supreme Court advocate and the Additional Solicitor General of India, the management considers the arbitration award is not binding on the company. Hence, claim has been disclosed under Contingent liabilities.

(b) Note 4 of schedule 24 forming part of the financial statement relating to a dispute with MP State Electricity Board regarding demand of interest on electricity tariff amounting to Rs.121.87 crores payable at MCP which is pending for a long time and the matter is presently referred back to Honble High Court, Jabalpur by Honble Supreme Court of India for reconsideration. The said amount has not been provided as liability in the accounts and disclosed as a contingent liability.

(c) The financial statements have been drawn up on the basis of in-house estimates referred to in paragraph 2 of Accounting Policies, being a technical matter; we have relied upon the same.

5. Further to our comments in the Annexure referred to in Paragraph 3 here-in-above we report that:

(a) We have 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 such books;

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement, subject to what is stated herein below in paragraph 6 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) Section 274(l)(g) of the Companies Act, 1956, requiring disclosure of disqualification of directors is not applicable to Government Companies vide notification no GSR 829(E) Dated 21.10.03 issued by Department of Corporate Affairs;

6. We further report that :-

(a) Pending confirmations and reconciliation, the balances under the heads Sundry Creditors, Claims Recoverable, Loans, Advances and some of the Sundry Debtors remain as per book balance the impact of which can not be quantified at this stage. (Re/. Note No. 11 on Schedule No. 24 of Notes to Accounts).

(b) The Grant-in-Aid received from Government of India from time to time for reimbursement to Council of Scientific & Industrial Research, Bhubaneswar, out of which Rs.1.77 crores remain undisbursed since 1994, has been credited to other income for which we have not received any documentary evidence based on which the above amount has been taken as income. (Refer to note no. 8 of Schedule 24).

(c) The effect of qualifications given above on the profit as well as assets and liabilities of the company could not be ascertained for want of details in respect of (a) above and the profit has been over stated to the extent ofRs. 1.77 crores as regard (b) above.

Subject to the matter referred to in paragraph 6(a) & (b) above, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with notes thereon, give in the prescribed manner the information required by the Companies Act, 1956, and, give a true and fair view in conformity with the accounting principles generally accepted in India :-

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010 ;

(ii) in the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

1. In respect of its Fixed Assets :

(a) The company has in general maintained proper records showing full particulars including quantitative details and location of fixed assets.

(b) The fixed assets have not been physically verified during the current year pursuant to Accounting Policy No.3.5. In our opinion, it should be done in a phase wise manner so as to complete and cover the entire fixed assets verification at least in every three years.

(c) During the year, the company has not disposed off any fixed assets of substantial nature which would affect the going concern status of the company.

2. In respect of its Inventories :

(a) Physical verification of the inventory has been carried out during the year by Management. In our opinion frequency of verification is reasonable. In our opinion, non-moving store should be ascertained every year.

(b) In our opinion and according to the information and explanations made available to us, the procedure of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records have been properly dealt with in the books of account.

3. The company has neither granted nor taken any loans to/from companies, firms or other parties listed in the register maintained under Sec. 301 of the Companies Act, 1956. In view of the same, the question of the terms and conditions including rates of interest being prima facie prejudicial to the interest of the company does not arise.

4 In our opinion and according to the explanations given to us, there is an adequate internal control system with regard to purchase of inventory, fixed assets including high value contracts, transportation contracts and sale of goods commensurate with the size of the company. Further, on the explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control system.

5 (a) According to the information and explanations given to us, there is no transaction which needs to be entered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, the company has not entered into any contracts or arrangements exceeding rupees five lakhs in value in respect of any party in pursuance of contracts or arrangements entered in the register to be maintained under Section 301 of the Companies Act, 1956.

6 In our opinion and according to the information and explanations made available to us by the management, the company has not accepted any deposit from public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under.

7 Company has appointed an out side agency as Internal Auditor of the Company during the year. We have not come across any Internal audit Report in course of our audit. As a result we are not in position to comment on whether the Internal Audit system is commensurate with size and nature of its business.

8 We have broadly reviewed the cost records maintained by the company for the items prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records and accounts have been maintained. However, we have not made a detailed examination of such accounts and records.

9 In respect of statutory dues:

(a) According to the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues payable in respect of provident fund, Investors education fund and Protection fund , Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom Duty, Entry tax, Excise Duty, Royalty, Land Tax, Electricity Duty and Cess and any other material statutory dues applicable to it with appropriate authority during the year.

According to the information and explanations given to us, undisputed amounts payable in respect of Sales Tax, Royalty, Forest land, Electricity Duty, Excise Duty and Water Cess outstanding for a period of more than six months from the date they become payable were in aggregate of Rs.849.05 lakhs as at 31 March 2010 (As given in annexure attached)

(b) According to the information and explanations given to us, details of dues of Sales Tax, Excise Duty, Entry Tax, and Property Tax amounting to Rs.16118.68 lakhs net of deposits made have not been deposited on account of disputes pending at various forum. (As given in annexure attached)

10. The Company does not have accumulated losses as at 31 March 2010 and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to Banks and Financial Institution.

12. According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the provision of any special statute applicable to chit fund / nidhi/ mutual benefit fund/ societies is not applicable to the company.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the company has not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that the funds raised on short-term basis that have not been used for long-term investment.

18. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the company has not issued any debentures during the year.

20. The company has not raised any funds by way of public issue during the year.

21. According to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year

For RAY & Co. For AGARWAL ANIL & CO.

FRN : 313124E FRN : 003222N

Chartered Accountants Chartered Accountants

SUBRATA ROY ANIL AGRAWAL

Partner Partner

(M.No. 51205) (M.No. 82103)

Place : Kolkata Date : 14th May, 2010

 
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